As filed with the Securities and Exchange Commission on September 11, 1996
Registration No. 333-10359
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT
NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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IRON MOUNTAIN INCORPORATED
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 4226 04-3107342
<S> <C> <C>
(State of incorporation) (Primary Standard Industrial (IRS Employer Identification No.)
Classification Code Number)
</TABLE>
745 ATLANTIC AVENUE, BOSTON, MA 02111
(617) 357-4455
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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C. RICHARD REESE
CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
IRON MOUNTAIN INCORPORATED
745 Atlantic Avenue
Boston, MA 02111
(617) 357-4455
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
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Copies to:
<TABLE>
<CAPTION>
<S> <C>
WILLIAM J. CURRY ROBERT A. ZUCCARO
SULLIVAN & WORCESTER LLP JONES, DAY, REAVIS & POGUE
One Post Office Square 599 Lexington Avenue
Boston, MA 02109 New York, NY 10022
(617) 338-2800 (212) 326-3939
</TABLE>
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement. If
any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 11, 1996
PROSPECTUS
, 1996
$150,000,000
[LOGO] IRON MOUNTAIN INCORPORATED
% Senior Subordinated Notes due 2006
The % Senior Subordinated Notes due 2006 (the "Notes") are being
offered (the "Offering") by Iron Mountain Incorporated (the "Company" or
"Iron Mountain"). The net proceeds of the Offering will be used to repay
outstanding bank debt and certain other indebtedness and to fund a portion of
the purchase price of the Pending Acquisitions.
Interest on the Notes is payable on and , commencing
, 1997. Except as described below, the Notes are not redeemable by
the Company prior to , 2001. Thereafter, the Notes are redeemable at
the option of the Company, in whole or in part, at any time and from time to
time, at the redemption prices set forth herein plus accrued and unpaid
interest to, but excluding, the date of redemption. In addition, during the
first 36 months after the date of issuance of the Notes, the Company, at its
option, may redeem up to 35% of the initial principal amount of the Notes
with the net proceeds of one or more Qualified Equity Offerings at a
redemption price equal to %, plus accrued and unpaid interest to, but
excluding, the date of redemption; provided that at least 65% of the initial
principal amount of the Notes remains outstanding after each such redemption.
Except as set forth herein, the Company is not required to make sinking fund
or redemption payments with respect to the Notes at any time prior to
maturity. Upon the occurrence of a Change of Control, each Holder of Notes
may require the Company to repurchase such Notes at 101% of the principal
amount thereof, plus accrued and unpaid interest to, but excluding, the date
of repurchase.
The Notes will be general unsecured senior subordinated obligations of the
Company ranking junior to all existing and future Senior Debt of the Company.
The Notes will be fully and unconditionally guaranteed on an unsecured senior
subordinated and joint and several basis (the "Subsidiary Guarantees") by
substantially all of the Company's present and future Restricted Subsidiaries
(collectively, the "Guarantors"). The Subsidiary Guarantees will rank junior
to all existing and future Senior Debt of the Guarantors. As of June 30,
1996, on a pro forma basis after giving effect to the Transactions, the
aggregate outstanding principal amount of Senior Debt of the Company and the
Guarantors would have been $24.5 million.
The Notes will not be listed on any securities exchange or included in the
National Association of Securities Dealers Automated Quotation System, and
there can be no assurance that there will be a secondary market therefor.
SEE "RISK FACTORS" COMMENCING ON PAGE 10 FOR A DISCUSSION OF CERTAIN
MATERIAL FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT
IN THE NOTES OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Discounts and Proceeds to the
the Public (1) Commissions (2) Company(1)(3)
- ------------ ------------------- ------------------- -----------------
<S> <C> <C> <C>
Per Note % % %
Total $ $ $
</TABLE>
(1)Plus accrued interest, if any, on the Notes from the date of issuance.
(2)The Company and the Guarantors have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities
Act of 1933, as amended. See "Underwriting."
(3)Before deduction of expenses payable by the Company estimated to be
$800,000.
The Notes are offered by Donaldson, Lufkin & Jenrette Securities Corporation,
<PAGE>
Bear, Stearns & Co. Inc. and Prudential Securities Incorporated
(collectively, the "Underwriters") subject to prior sale, when, as and if
delivered to and accepted by the Underwriters, and subject to certain prior
conditions, including the right of the Underwriters to reject any order in
whole or in part. It is expected that delivery of the Notes will be made in
New York, New York through the facilities of the Depository Trust Company on
or about , 1996, against payment therefor in immediately available funds.
Donaldson, Lufkin & Jenrette
Securities Corporation
Bear, Stearns & Co. Inc.
Prudential Securities Incorporated
<PAGE>
[Color Coded Map of Company Systems, Logos, Graphics, etc.]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements
appearing elsewhere in this Prospectus. References to "Iron Mountain" and the
"Company" include Iron Mountain Incorporated (including predecessor entities)
and its consolidated subsidiaries, unless the context otherwise requires.
The Company
Iron Mountain is the largest records management company in the United
States, as measured by revenues. The Company is a full-service provider of
records management and related services, enabling customers to outsource
records management functions. Pro forma for the Acquisitions (as defined
herein), as of June 30, 1996, the Company managed approximately 29.6 million
Cartons* in 103 records centers in 33 markets nationwide. The Company has a
diversified base of over 19,000 customer accounts, which includes more than
half of the Fortune 500 and numerous legal, banking, healthcare, accounting,
insurance, entertainment and government organizations. The Company provides
storage and related services for all major media, including paper (which is
the dominant form of records retention and which has accounted for
approximately 85% of the Company's revenues since 1992), computer disks and
tapes, microfilm and microfiche, master audio and video tapes, film and
optical disks, X-rays and blueprints. The Company's principal services
include filing, retrieval and destruction of records, courier pick-up and
delivery, database management and customized reporting. The Company also
sells storage materials and provides consulting and other records-related
services.
The Company continues to capitalize on its leading position in the records
management industry and the industry trends of increased records retention,
outsourcing of records management and vendor consolidation. As a result, the
Company has achieved significant increases in revenues and EBITDA (as defined
herein). From 1991 to 1995, Iron Mountain's total revenues increased from
$62.8 million to $104.4 million primarily from internal growth, representing
a compound annual growth rate ("CAGR") of 13.5%. During the same period,
storage revenues grew at a 12.9% CAGR while service and storage material
sales revenues grew at a 14.6% CAGR. From 1991 to 1995, the Company's EBITDA
grew from $15.0 million to $26.1 million, representing a 14.9% CAGR. Revenues
and EBITDA for the six months ended June 30, 1996 increased 27.3% (10.2% from
internal growth and 17.1% from acquisitions) and 24.8%, respectively, over
the same period in 1995. For a discussion of the significance of EBITDA and
other measures of the Company's performance determined in accordance with
generally accepted accounting principles ("GAAP") and the Company's sources
and applications of cash flow, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Overview" and "--Liquidity and
Capital Resources."
Industry Overview
According to industry sources, organizations in the United States generate
an estimated four trillion documents each year, many of which must be
retained and remain available for reference for many years. These records may
be generally divided into two categories: active and inactive. Inactive
records, which are the principal focus of the records management industry,
consist of records that are not needed for immediate access but which must be
retained for legal or regulatory reasons or for occasional reference to
support ongoing business operations. Based on industry studies, the Company
believes that inactive records make up approximately 80% of all records. The
Company believes that the volume of inactive records is increasing for a
number of reasons, including: (i) the rapid growth of inexpensive document
producing technologies such as facsimile, desktop printing and computer
networking; (ii) increased regulatory requirements; (iii) concerns over
possible future litigation and the resulting increases in volume and holding
periods of documentation; (iv) the high cost of reviewing records and
deciding whether to retain or destroy them; and (v) the failure of many
entities to adopt or follow policies on records destruction. Despite the
growth of new "paperless" technologies, such as the Internet and e-mail,
management believes that stored information remains predominantly paper-based
and that such technologies have promoted the creation of hard copies of such
electronic information.
- -------------
* The term "Carton" is defined as a measurement of volume equal to a single
standard storage carton, approximately 1.2 cubic feet. The number of Cartons
stored does not include storage volumes in the Company's vital records
services and data protection services, which are described under "Business."
3
<PAGE>
The Company believes that it benefits from several industry fundamentals,
including: (i) the historically non- cyclical nature of the records
management industry; (ii) the continued trend towards corporate outsourcing
of records management functions; (iii) the ability of larger records
management companies to achieve economies of scale with respect to labor,
real estate costs and the utilization of management information systems; and
(iv) the ongoing consolidation of the records management industry.
The Company believes that it is one of only four records management
providers with a national operating presence, the balance being regional or,
in most instances, single-city operators. According to the Association of
Commercial Records Centers (the "ACRC"), a trade group of approximately 500
members, as of January 1994 (the latest date for which such information is
available), approximately 2,600 firms offered records storage and management
services in the United States. The Company believes that there is a trend
toward consolidation in the records management industry and that such trend
will continue to accelerate primarily because of: (i) the opportunities to
achieve economies of scale; (ii) the industry's capital requirements for
growth; (iii) customer demands for more sophisticated technology-based
solutions; and (iv) the preference of certain large, national customers to
outsource a significant portion of their records management functions to one
vendor with a national presence, such as Iron Mountain.
Financial Characteristics of Iron Mountain's Business
Iron Mountain's records management business has the following financial
characteristics:
(bullet)Recurring Revenues. Iron Mountain derives a majority of its
revenues from fixed periodic (usually monthly) fees charged to
customers for storage of records. Storage revenues have grown for
30 consecutive quarters and have represented approximately 60% of
the Company's total revenues in each of the last five years. Once
a customer places a record in storage with the Company and until
that record is destroyed or permanently removed (for which the
Company typically receives a service fee), the Company receives
recurring payments of fixed periodic fees without incurring
additional labor or marketing expenses or significant capital
costs. The stable and growing storage base also provides the
foundation for increases in revenues and EBITDA from service
activities and sales of storage materials.
(bullet)Historically Non-Cyclical Business. Iron Mountain has not
experienced a reduction of its business as a result of past
general economic downturns, although there can be no assurance
that this would be the case in the future. Management believes
that the outsourcing of records management may accelerate during
economic downturns as companies focus on reducing costs through
outsourcing non-core operating functions. In addition, management
believes that companies that have outsourced records management
are less likely during economic downturns to incur the move-out
costs and other expenses associated with switching vendors or
moving records management in-house.
(bullet)Inherent Growth from Existing Customers. The Company's customers
have on average generated additional Cartons at a faster rate than
stored Cartons have been destroyed or permanently removed. From
1992 to 1995, net Cartons from existing customers grew at an
average annual rate of 6.7%. The Company believes the consistent
growth of its storage revenues is the result of a number of
additional factors, including: (i) the trend toward increased
records retention; (ii) customer satisfaction with the Company's
services; and (iii) the costs and inconvenience of moving storage
operations in-house or to another provider of records management
services.
(bullet)Diversified and Stable Customer Base. The Company has over 19,000
customer accounts in a variety of industries. The Company
currently provides services to more than half of the Fortune 500
and numerous legal, banking, healthcare, accounting, insurance,
entertainment and government organizations. Only one of the
Company's customers accounted for more than 3% of revenues in
1993, 1994 or 1995. From 1992 to 1995, average annual permanent
removals of Cartons represented only approximately 4% of total
Cartons stored.
(bullet)Capital Expenditures Related Primarily to Growth. The Company's
business requires limited annual maintenance capital expenditures.
Maintenance capital expenditures were $1.8 million, $1.2 million
and $0.9 million in 1993, 1994 and 1995, respectively. From 1992
to 1995, over 90% of the Company's aggregate capital expenditures
were growth-related investments, primarily in racking systems, new
4
<PAGE>
buildings and leasehold improvements, equipment for new
facilities, management information systems and facilities
restructuring. These growth-related capital expenditures are
primarily discretionary and create additional capacity for
increases in revenues and EBITDA.
Business Strategy
Iron Mountain's business strategy is to increase revenues and EBITDA while
maintaining a low-cost operating structure and providing premium service. The
Company intends to generate growth by increasing its storage and service
revenues from existing customers, adding new customers and making
acquisitions. The Company's strategy is based on the following elements:
(bullet)Provide Superior Customer Service. The Company believes it has a
reputation for providing reliable, quality service based on its
more than 45 years of operations, its commitment to providing
premium customer service and the continuity and depth of its
management team. The Company has successfully implemented a
decentralized management structure that enables the Company to
respond quickly and flexibly to local customer needs. Iron
Mountain's proprietary Safekeeper(R) system enables it to quickly
provide customized records management solutions to its customers,
enhancing the quality of its services. In addition, Iron
Mountain's national operating presence allows it to better service
large organizations that require records management functions at
multiple, geographically diverse facilities.
(bullet)Capitalize on Operating Efficiencies. Iron Mountain pursues a
low-cost operating strategy based primarily on achieving economies
of scale in the areas of storage, labor and transportation,
general and administrative functions and management information
systems. Because occupancy costs are a major component of the
Company's cost of sales, its real estate management staff
aggressively seeks to minimize per Carton storage costs by
designing racking systems and operating space to maximize facility
storage efficiency, negotiating favorable facility leases,
contracting for facilities to be built to its custom
specifications, and leasing larger facilities in order to reduce
operating costs per Carton. The Company seeks to increase labor
efficiency by offering incentive compensation to all full-time
employees based upon achieving specific operating targets. Certain
operating costs, such as the maintenance of local delivery fleets,
general and administrative costs and management information
systems, offer economies of scale, providing the Company with
operating leverage and the ability to increase its efficiency
through further growth.
(bullet)Pursue Acquisition Opportunities. The Company believes that it is
well positioned to participate in the further consolidation of the
records management industry. Iron Mountain's management team has
successfully completed 17 acquisitions since the Company embarked
on a proactive acquisition strategy in mid-1994, and two
additional acquisitions are currently pending. The Company intends
to continue to make fold-in acquisitions to augment its operations
in existing markets and to make strategic acquisitions in new
geographic markets, with an emphasis on the 50 largest markets in
the United States and potentially in certain markets outside the
United States. Following an acquisition in a new market, the
Company seeks to increase its business with the acquired customer
base and to supplement that growth both with new customers and
through appropriate fold-in acquisitions. In addition, the Company
has successfully reduced the cost structure of its acquired
operations by implementing its efficient operating strategies and
leveraging its centralized administrative resources and management
information systems.
(bullet)Leverage Proprietary Safekeeper System. The Company pioneered the
application of advanced information technology to the records
management industry. Iron Mountain's proprietary Safekeeper system
provides advanced inventory control and information access,
enabling the Company to provide faster, higher quality and more
flexible solutions to its customers and to lower the costs of its
operations. Safekeeper has been designed to easily and effectively
integrate newly acquired records management companies and offer
improved levels of customer service and records management
capabilities to customers acquired through acquisitions. Iron
Mountain's Safekeeper system exploits bar-code technology to
provide a comprehensive, standardized approach to tracking,
accessing and retrieving records. Safekeeper offers
state-of-the-art records management capabilities and ease of
access to customers while featuring security functions to protect
customer information from unauthorized access. Since 1992, the
Company has invested $12.5 million to develop and refine its
management information systems, including Safekeeper.
5
<PAGE>
The Offering
<TABLE>
<S> <C>
Securities Offered $150,000,000 principal amount of % Senior Subordinated Notes due 2006
(the "Notes").
Maturity Date , 2006
Interest Payment Dates and of each year, commencing
, 1997.
Guarantees The Notes will be fully and unconditionally guaranteed on an unsecured senior
subordinated and joint and several basis (the "Subsidiary Guarantees") by
substantially all of the Company's present and future Restricted Subsidiaries
(collectively, the "Guarantors"). Each of the Guarantors has also guaranteed
unconditionally the indebtedness outstanding under the Company's existing
bank credit facility (the "Credit Agreement") and will be required to
guarantee unconditionally the indebtedness outstanding under the new bank
credit facility the Company intends to enter into with its lenders (the "New
Credit Facility"). See "Description of the Notes--Subsidiary Guarantees."
Subordination The Notes will be general unsecured senior subordinated obligations of the
Company ranking junior to all existing and future Senior Debt of the Company,
including any indebtedness that may be incurred under the Credit Agreement or
the New Credit Facility. The Subsidiary Guarantees will rank junior to all
existing and future Senior Debt of the Guarantors. As of June 30, 1996, on a
pro forma basis after giving effect to the Transactions, the aggregate
outstanding principal amount of Senior Debt of the Company and the Guarantors
would have been $24.5 million. See "Description of the Notes--Subordination."
Optional Redemption Except as described below, the Notes are not redeemable by the Company prior
to , 2001. Thereafter, the Notes are redeemable at the option of the
Company, in whole or in part, at any time and from time to time, at the
redemption prices set forth herein plus accrued and unpaid interest to, but
excluding, the date of redemption. In addition, during the first 36 months
after the date of issuance of the Notes, the Company, at its option, may
redeem up to 35% of the initial principal amount of the Notes with the net
proceeds of one or more Qualified Equity Offerings at a redemption price
equal to %, plus accrued and unpaid interest to, but excluding, the date
of redemption; provided that at least 65% of the initial principal amount of
the Notes remains outstanding after each such redemption. See "Description of
the Notes--Optional Redemption."
Mandatory Redemption Except with respect to required repurchases upon the occurrence of a Change
of Control or in the event of certain Asset Sales, the Company is not
required to make sinking fund or redemption payments with respect to the
Notes at any time prior to maturity. See "Description of the Notes--
Mandatory Redemption."
6
<PAGE>
Change of Control Upon the occurrence of a Change of Control, each Holder of Notes may require
the Company to repurchase such Notes at 101% of the principal amount thereof,
plus accrued and unpaid interest to, but excluding, the date of repurchase.
See "Description of the Notes--Repurchase at the Option of Holders--Change of
Control."
Certain Covenants The Indenture governing the Notes (the "Indenture") will contain covenants
restricting or limiting the ability of the Company and its Restricted
Subsidiaries to, among other things: (i) incur additional indebtedness,
including indebtedness ranking senior to the Notes and junior to any Senior
Debt; (ii) pay dividends or make other restricted payments; (iii) make asset
dispositions; (iv) permit liens; (v) enter into sale and leaseback
transactions; (vi) enter into certain mergers; (vii) make certain
investments; and (viii) enter into transactions with related persons. See
"Description of the Notes--Certain Covenants."
Use of Proceeds The net proceeds of the Offering will be used to repay outstanding bank debt
and certain other indebtedness and to fund a portion of the purchase price of
the Pending Acquisitions.
</TABLE>
Risk Factors
For a discussion of certain material factors that should be considered in
connection with an investment in the Notes offered hereby, see "Risk Factors"
on pages 10 to 14.
7
<PAGE>
Summary Historical and Pro Forma Information
(Dollars in thousands)
The following summary historical consolidated statements of operations and
balance sheet data of the Company as of and for each of the years ended
December 31, 1991, 1992, 1993, 1994 and 1995 have been derived from the
Company's audited consolidated financial statements. The summary historical
consolidated statements of operations and balance sheet data of the Company
for the six months ended June 30, 1995 and 1996 have been derived from the
Company's unaudited condensed consolidated financial statements. The
Company's unaudited condensed consolidated financial statements include all
adjustments, consisting of normal recurring accruals, that the Company
considers necessary for a fair presentation of the financial position and the
results of operations for those periods. Operating results for the six months
ended June 30, 1996 are not necessarily indicative of the results for the
entire year ending December 31, 1996. The summary historical and pro forma
financial data set forth below should be read in conjunction with "Pro Forma
Condensed Consolidated Financial Information" and the Notes thereto, with
"Selected Financial and Operating Information" and the Notes thereto, with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and with Iron Mountain's Consolidated Financial Statements and
the Notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
Year Ended December 31, Six Months Ended June 30,
-------------------------------------------------------------------- --------------------------------
Pro Forma
Historical Historical Pro Forma
----------------------------------------------------- ----------------
1991 1992 1993 1994 1995 1995 (1) 1995 1996 1996 (1)
------ ------ ------ ------------- ------ ----------- ------ ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Consolidated Statements of Operations Data:
Revenues:
Storage ..................$39,510 $44,077 $48,892 $54,098 $ 64,165 $ 86,689 $30,748 $39,363 $46,224
Service and Storage
Material Sales ......... 23,330 26,596 32,781 33,520 40,271 54,211 19,476 24,587 29,127
------ ------- ------- ------- -------- -------- ------- ------- -------
Total Revenues ....... 62,840 70,673 81,673 87,618 104,436 140,900 50,224 63,950 75,351
Operating Expenses:
Cost of Sales
(Excluding
Depreciation) .......... 31,375 35,169 43,054 45,880 52,277 69,853 25,112 32,383 37,594
Selling, General and
Administrative ......... 16,471 17,630 19,971 20,853 26,035 35,038 12,697 16,067 19,317
Depreciation and
Amortization ........... 7,674 5,780 6,789 8,690 12,341 18,182 5,428 7,530 9,099
------ ------- ------- ------- -------- -------- ------- ------- -------
Total Operating
Expenses ................ 55,520 58,579 69,814 75,423 90,653 123,073 43,237 55,980 66,010
------ ------- ------- ------- -------- -------- ------- ------- -------
Operating Income ........$ 7,320 $12,094 $11,859 $12,195 $ 13,783 $ 17,827 $ 6,987 $ 7,970 $ 9,341
====== ======= ======= ======= ======== ======== ======= ======= =======
Other Data:
EBITDA (2) ................$14,994 $17,874 $18,648 $20,885 $ 26,124 $ 36,009 $12,415 $15,500 $18,440
EBITDA as a Percentage
of Total Revenues ..... 23.9% 25.3% 22.8% 23.8% 25.0% 25.6% 24.7% 24.2% 24.5%
Capital Expenditures:
Growth (3) .............. -- $11,226 $13,605 $15,829(4) $ 14,395 -- $ 6,730 $10,702 --
Maintenance ............. -- 818 1,846 1,151 858 -- 592 460 --
------ ------- ------- ------- -------- -------- ------- ------- -------
Total Capital
Expenditures ...........$ 8,163 $12,044 $15,451 $16,980(4) $ 15,253 -- $ 7,322 $11,162 --
Approximate Cartons in
Storage at End of
Period (in millions)
(5) ...................... 10.8 12.6 15.5 17.7 23.3 -- 20.3 26.4 29.6
Adjusted EBITDA and As of
Credit Ratios: June 30, 1996
---------------
Adjusted EBITDA (6) ..... $39,018
Cash Interest Expense
(7) ...................... 17,952
Ratio of Adjusted EBITDA
to Cash Interest
Expense ................. 2.2x
Ratio of Net Debt to
Adjusted EBITDA (8) ... 4.4x
</TABLE>
<TABLE>
<CAPTION>
As of June 30, 1996
----------------------
Historical Pro Forma (9)
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<S> <C> <C>
Balance Sheet Data:
Cash and Cash Equivalents . $ 2,232 $ 2,232
Total Assets ................. 212,630 268,705
Total Debt ................... 118,894 174,518
Stockholders' Equity ....... 54,729 52,501
</TABLE>
(Footnotes on the following page)
8
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(Footnotes from the preceding page)
(1) Gives effect to: (i) the Completed Acquisitions (as defined herein); (ii)
the Pending Acquisitions (as defined herein); (iii) the consummation of the
Company's initial public offering of its Common Stock, par value $0.01 per
share (the "Common Stock"), which closed on February 6, 1996 (the "Initial
Public Offering") and the application of the net proceeds therefrom; (iv)
the closing under the New Credit Facility; and (v) the application of the
estimated net proceeds from the Offering, as if each had occurred as of
January 1, 1995. The Company will record, in the quarter in which the
Offering is consummated, an extraordinary loss on retirement of debt, net of
related tax benefit. As of June 30, 1996, the amount of such loss would have
been approximately $2.2 million. The pro forma statements of operations data
do not give effect to such loss. See "The Transactions," "Use of Proceeds"
and "Pro Forma Condensed Consolidated Financial Information."
(2) Earnings before interest, taxes, depreciation, amortization and
extraordinary charges ("EBITDA"). Based on its experience in the records
management industry, the Company believes that EBITDA is an important
tool for measuring the performance of records management companies
(including potential acquisition targets) in several areas, such as
liquidity, operating performance and leverage. In addition, lenders use
EBITDA as a criterion in evaluating records management companies, and
substantially all of the Company's financing agreements contain covenants
in which EBITDA is used as a measure of financial performance. However,
EBITDA should not be considered an alternative to operating or net income
(as determined in accordance with GAAP) as an indicator of the Company's
performance or to cash flow from operations (as determined in accordance
with GAAP) as a measure of liquidity. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview" and
"--Liquidity and Capital Resources" for discussions of other measures of
performance determined in accordance with GAAP and the Company's sources
and applications of cash flow.
(3) Growth capital expenditures include investments in racking systems, new
buildings and leasehold improvements, equipment for new facilities,
management information systems and facilities restructuring. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations--Liquidity and Capital Resources--Capital Investments."
(4) Includes $2,901 related to the cost of constructing a records management
facility which was sold in a sale and leaseback transaction in the fourth
quarter of 1994.
(5) The term "Carton" is defined as a measurement of the volume equal to a
single standard storage carton, approximately 1.2 cubic feet. The number
of Cartons stored does not include storage volumes in the Company's vital
records services and data protection services which are described under
"Business." Pro forma Carton information for 1995 is not available.
(6) Gives effect to (i) the Completed Acquisitions completed after June 30,
1996 and (ii) the Pending Acquisitions. Adjusted EBITDA, as defined in
the Indenture, equals the sum of (i) EBITDA of the Company and the
Restricted Subsidiaries for the most recent fiscal quarter for which
internal financial statements are available, multiplied by four, plus
(ii) Acquisition EBITDA of each business that has been acquired by the
Company since the beginning of such quarter (including any such
acquisition which is occurring on the date of the calculation),
multiplied by a fraction, (a) the numerator of which is three minus the
number of months (and/or any portion thereof) in such quarter for which
the financial results of such acquired business are included in the
EBITDA of the Company and its Restricted Subsidiaries under clause (i)
above, and (b) the denominator of which is three. In addition, the
effects of unusual or non-recurring items occurring in any relevant
period shall be excluded in the calculation of Adjusted EBITDA. With
respect to any such acquired business, Acquisition EBITDA equals the sum
of (i) EBITDA of such acquired business for its last fiscal quarter for
which financial statements are available, multiplied by four (or if such
quarterly statements are not available, EBITDA for the last fiscal year
for which financial statements are available), plus (ii) projected
quantifiable improvements in operating results (on an annualized basis)
due to cost reductions calculated in good faith by the Company or one of
its Restricted Subsidiaries, as certified by an Officers' Certificate
filed with the Trustee, without giving effect to any operating losses of
the acquired business. Such projected quantifiable savings may differ
from the cost savings used to calculate the Pro Forma Condensed
Consolidated Statement of Operations. Adjusted EBITDA is merely a
calculation utilized for purposes of debt incurrence under the Indenture
and should not be viewed as indicative of actual or future results.
(7) Cash interest expense represents total interest expense less amortization
of deferred financing costs and other non-cash interest charges for the
twelve months ended June 30, 1996 on a pro forma basis giving effect to
the Transactions (as defined herein) as if each had occurred on July 1,
1995. The calculation of cash interest expense assumes an interest rate
of 10-1/2% on the Notes.
(8) Net debt represents total debt less cash and cash equivalents and was
calculated based on the pro forma net debt as of June 30, 1996 of $172.3
million.
(9) Gives effect to: (i) the Completed Acquisitions consummated after June
30, 1996; (ii) the Pending Acquisitions; (iii) the closing under the New
Credit Facility; and (iv) the application of the net proceeds from the
Offering, as if each had occurred as of June 30, 1996. See "The
Transactions," "Use of Proceeds" and "Pro Forma Condensed Consolidated
Financial Information."
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RISK FACTORS
Prospective investors should carefully consider the following risk
factors, in addition to the other information contained in this Prospectus,
in connection with an investment in the Notes offered hereby. Certain
statements contained under "Management's Discussion and Analysis of Financial
Condition and Results of Operations," such as those regarding the goals,
beliefs or current expectations of the Company and its management with
respect to, among other things, revenue growth and future capital needs, and
other statements contained in this Prospectus regarding matters that are not
historical facts are forward-looking statements (as such term is defined in
the rules promulgated pursuant to the Securities Act of 1933, as amended).
Because such forward-looking statements include risks and uncertainties,
actual results may differ materially from those expressed in or implied by
such forward- looking statements. Factors that could cause actual results to
differ materially include, but are not limited to, those discussed herein
under "Risk Factors." The Company undertakes no obligation to release
publicly the result of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Financial Leverage; Debt Service Requirements. The Company is highly
leveraged due to the substantial indebtedness it has incurred primarily to
finance acquisitions and expand its operations. As of June 30, 1996, on a pro
forma basis, after giving effect to the Transactions, the Company would have
had $174.5 million in total indebtedness and $52.5 million in stockholders'
equity. The Company expects to continue to borrow under the New Credit
Facility and possible future credit arrangements in order to finance possible
future acquisitions and for general corporate purposes.
The ability of the Company to repay the Notes and its other indebtedness
will depend upon future operating performance, which is subject to the
success of the Company's business strategy, prevailing economic conditions,
levels of interest rates and financial, business and other factors, many of
which are beyond the Company's control. The debt service obligations of the
Company could have important consequences, including the following: (i) the
ability of the Company to obtain additional financing for future working
capital needs or for possible future acquisitions or other purposes may be
limited; (ii) a substantial portion of the Company's cash flow from
operations will be dedicated to the payment of principal and interest on its
indebtedness, thereby reducing funds available for other purposes; (iii) the
Company may be more vulnerable to adverse economic conditions than some of
its competitors and thus may be limited in its ability to withstand
competitive pressures; and (iv) the Company may be more highly leveraged than
certain of its competitors, which may place it at a competitive disadvantage.
A substantial portion of the Company's cash flow from operations is
required for debt service. Management believes that cash flow from operations
in conjunction with borrowings from existing and possible future credit
facilities will be sufficient for the foreseeable future to meet debt service
requirements and to make possible future acquisitions and capital
expenditures. However, there can be no assurance in this regard, and the
Company's leverage could make it vulnerable to a downturn in the operating
performance of its subsidiaries, a downturn in economic conditions or,
because borrowings under the New Credit Facility will bear interest at rates
which fluctuate, increases in interest rates on borrowings under the New
Credit Facility. If such cash flow were not sufficient to meet such debt
service requirements or payments of principal, the Company could be required
to sell additional equity securities, refinance its obligations or dispose of
assets in order to make such scheduled payments. There can be no assurance
that the Company would be able to effect any of such transactions or do so on
favorable terms.
Subordination; Guarantees. The Notes will be unsecured senior subordinated
obligations of the Company and will be subordinated in right of payment to
the prior payment in full of all existing and future Senior Debt of the
Company. At June 30, 1996, the Company had $103.6 million of indebtedness
outstanding that would have constituted Senior Debt. On a pro forma basis,
after giving effect to the Transactions, the Company would have had $24.5
million of Senior Debt outstanding. The Company intends to actively pursue
additional acquisitions which would likely be financed through the incurrence
of additional indebtedness. Such additional indebtedness may constitute
Senior Debt. The Indenture allows the Company to incur Senior Debt from time
to time under the New Credit Facility or otherwise, subject to certain
limitations. Upon any acceleration of the maturity of the Notes or upon any
payment or distribution of assets of the Company to creditors upon any
liquidation, dissolution, winding- up, reorganization, assignment for the
benefit of creditors, marshaling of assets or any bankruptcy, insolvency or
similar proceedings of the Company, the holders of all Senior Debt will be
first entitled to receive payment in full of all amounts due or to become due
thereon before the Holders of Notes will be entitled to receive any payment
in respect of the principal of or premium, if any, or interest on the Notes.
In addition, upon the occurrence of a
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<PAGE>
payment default or certain other defaults in respect of outstanding Senior
Debt, Holders of Notes may be prevented from receiving payments with respect
to the Notes for an extended period. See "Description of the Notes--
Subordination."
Iron Mountain's subsidiaries have guaranteed on a senior subordinated
basis its obligations under the Credit Agreement and are expected to
guarantee its obligations under the New Credit Facility. Iron Mountain's
obligations under the Credit Agreement are secured by a first priority
security interest in substantially all of its assets (including the stock of
its subsidiaries). It is expected that Iron Mountain's obligations under the
New Credit Facility will be secured by a pledge of the stock of its
subsidiaries. If Iron Mountain becomes insolvent or is liquidated or if the
indebtedness under the Credit Agreement or the New Credit Facility is
accelerated, the lenders under the Credit Agreement or the New Credit
Facility would be entitled to exercise the remedies available to a secured
lender. Accordingly, such lenders will have a prior claim on such assets of
Iron Mountain and its subsidiaries. In such event, it is possible that there
would be no assets remaining from which claims of the Holders of Notes could
be satisfied or, if any assets remained, such assets might be insufficient to
fully satisfy such claims. The Company may incur additional secured
indebtedness in the future. See "Description of the Notes--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock" and
"--Liens."
Iron Mountain is a holding company, substantially all of the assets of
which are the stock of its subsidiaries. Substantially all of the operations
of the Company are currently conducted by Iron Mountain's direct and indirect
wholly owned subsidiaries, all of which will be Guarantors, subject to the
terms of the Indenture. Management of the Company believes that separate
financial statements of such subsidiaries are not meaningful or material to
investors and therefore such statements have not been included in this
Prospectus. The Company does not currently expect that it will be required to
prepare separate financial statements for any of its subsidiaries in the
foreseeable future and does not expect to do so.
Unenforceability and Release of Guarantees. Iron Mountain's obligations
under the Notes will be guaranteed, jointly and severally, on a senior
subordinated basis by the Guarantors. To the extent that a court were to find
that (i) a Subsidiary Guarantee was incurred by a Guarantor with intent to
hinder, delay or defraud any present or future creditor or the Guarantor
contemplated insolvency with a design to prefer one or more creditors to the
exclusion in whole or in part of others, or (ii) such Guarantor did not
receive fair consideration or reasonably equivalent value for issuing its
Subsidiary Guarantee and such Guarantor (a) was insolvent; (b) was rendered
insolvent by reason of the issuance of such Subsidiary Guarantee; (c) was
engaged or about to engage in a business or transaction for which the
remaining assets of such Guarantor constituted unreasonably small capital to
carry on its business; (d) intended to incur, or believed that it would
incur, debts beyond its ability to pay such debts as they mature; or (e) was
a defendant in an action for money damages or had a judgment for money
damages docketed against it (if, in either case, after final judgment, the
judgment is unsatisfied), then in each such case, a court could avoid or
subordinate such Subsidiary Guarantee in favor of the Guarantor's other
creditors. The measure of insolvency for purposes of the foregoing will vary
depending upon the law of the jurisdiction which is being applied. Generally,
however, a company will be considered insolvent for purposes of the foregoing
if, at the time it incurs any given obligation, the sum of the company's
debts (including unliquidated or contingent debt) is greater than all the
company's property at a fair valuation, or if the present fair salable value
of the company's assets is less than the amount that will be required to pay
its probable liability on its existing debts (including unliquidated or
contingent debt) as they become absolute and matured.
To the extent any Subsidiary Guarantee were to be avoided as a fraudulent
conveyance or held unenforceable for any other reason, Holders of Notes would
cease to have any claim in respect of such Guarantor and would be creditors
solely of the Company and any Guarantor whose Subsidiary Guarantee was not
avoided or held unenforceable. In such event, the claims of the Holders of
Notes against the issuer of an invalid Subsidiary Guarantee would be subject
to the prior payment of all liabilities of such Guarantor, including without
limitation, to the extent valid and enforceable, such Guarantor's guarantee
of indebtedness of Iron Mountain under the Credit Agreement or the New Credit
Facility, as the case may be, and any other Senior Debt of Iron Mountain
guaranteed by such Guarantor. There can be no assurance that, after providing
for all prior claims, there would be sufficient assets to satisfy the claims
of the Holders of Notes relating to any voided Subsidiary Guarantee. See
"Description of the Notes--Subordination."
Based upon financial and other information currently available to it, the
Company believes that the Notes and the Subsidiary Guarantees are being
incurred for proper purposes and in good faith, and that the Company and each
Guarantor
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are solvent and will continue to be solvent after issuing the Notes or the
Subsidiary Guarantees, as the case may be, will have sufficient capital for
carrying on their businesses after such issuance and will be able to pay
their debts as they mature. There can be no assurance, however, that a court
would reach the same conclusion.
Any Guarantor may be released from its Subsidiary Guarantee at any time
upon any sale, exchange or transfer in compliance with the provisions of the
Indenture by the Company of the capital stock of such Guarantor or
substantially all of the assets of such Guarantor and, in certain other
circumstances, a Guarantor may be released from its Subsidiary Guarantee in
connection with the Company's designation of such Guarantor as an
Unrestricted Subsidiary. See "Description of the Notes--Certain
Covenants--Additional Subsidiary Guarantees."
Restrictions Imposed by Terms of Indebtedness. The Indenture will contain
covenants restricting or limiting the ability of the Company and its
Restricted Subsidiaries to, among other things: (i) incur additional
indebtedness, including indebtedness ranking senior to the Notes and junior
to any Senior Debt; (ii) pay dividends or make other restricted payments;
(iii) make asset dispositions; (iv) permit liens; (v) enter into sale and
leaseback transactions; (vi) enter into certain mergers; (vii) make certain
investments; and (viii) enter into transactions with related persons. In
addition, the Credit Agreement contains, and the New Credit Facility is
expected to contain, certain other and more restrictive covenants than those
contained in the Indenture. See "Description of New Credit Facility." This
may adversely affect the Company's ability to pursue its acquisition
strategy. The Credit Agreement also requires, and the New Credit Facility is
expected to require, the Company to maintain specific financial ratios and to
satisfy certain financial condition tests. The Company's ability to meet
those financial ratios and financial condition tests can be affected by
events beyond its control, and there can be no assurance that the Company
will meet those tests. The breach of any of those covenants could result in a
default under the New Credit Facility, the Indenture, or both. In the event
of a default under the New Credit Facility or the Indenture, the lenders
could seek to declare all amounts outstanding under the New Credit Facility,
together with accrued and unpaid interest, if any, to be immediately due and
payable. If the Company were unable to repay those amounts, the lenders under
the New Credit Facility could proceed against the collateral granted to them
to secure that indebtedness. If the indebtedness under the New Credit
Facility or the Notes were to be accelerated, there can be no assurance that
the assets of the Company would be sufficient to repay in full that
indebtedness and the other indebtedness of the Company. The Notes are
subordinated to all existing and future Senior Debt of the Company, including
indebtedness under the Credit Agreement or the New Credit Facility, as the
case may be, and the Guarantees are subordinated to all existing and future
Senior Debt of the Guarantors, including guarantees by the Guarantors of the
indebtedness outstanding under the Credit Agreement or the New Credit
Facility, as the case may be. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."
Holding Company Structure; Dependence Upon Operations of
Subsidiaries. Substantially all of the tangible assets of the Company are
held by, and substantially all of the Company's operating revenues are
derived from operations of, the Company's subsidiaries. Therefore, the
Company's ability to pay interest and principal when due to Holders of Notes
will be dependent upon the receipt of sufficient funds from such
subsidiaries. However, the Company's obligations under the Notes will be
guaranteed, jointly and severally, on a senior subordinated basis, by
substantially all of the Company's present and future Restricted
Subsidiaries.
Risk of Inability to Finance Change of Control Offer. In the event of a
Change of Control, the Company will be required to offer to purchase all
Notes then outstanding at a purchase price, in cash, equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase. There can be no assurance that the Company would be able to
obtain such funds through a refinancing of the Notes to be purchased or
otherwise, or that the purchase would be permitted under the Credit
Agreement, the New Credit Facility or the terms of other financing
instruments, as the case may be. Also, the requirement that the Company offer
to purchase all Notes then outstanding in the event of a Change of Control
may have the effect of deterring a third party from effecting a transaction
that would constitute a Change of Control. See "Description of the Notes--
Repurchase at the Option of Holders--Change of Control."
Absence of Public Market for the Notes. There is no public market for the
Notes. The Notes will not be listed on any securities exchange or included in
the National Association of Securities Dealers Automated Quotation System.
The Company has been advised by the Underwriters that, following the
completion of the Offering, the Underwriters presently intend to make a
market in the Notes; however, they are under no obligation to do so and may
discontinue any market-making activities at any time without notice. No
assurance can be given as to the liquidity of the trading market for the
Notes or that an active public market will develop or, if developed, will
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<PAGE>
continue. If an active public market does not develop or is not maintained,
the market price and liquidity of the Notes may be adversely affected. See
"Underwriting."
Risks Associated with Acquisition Strategy. The Company has pursued and
intends to continue to pursue acquisitions of records management businesses
as a key component of its growth strategy. Since mid-1994, the Company has
acquired or entered into agreements to acquire 19 companies (of which 17 have
been completed and two are pending) engaged in the records management and
related businesses for estimated cash purchase prices aggregating $103.2
million (not including contingent payments of up to $4.6 million based upon
the achievement of certain revenue targets from 1996 through 1998). See "The
Transactions" and "Recent and Pending Acquisitions." Possible future
acquisitions may be for purchase prices significantly larger than those paid
for acquisitions consummated since mid-1994. Certain risks are inherent in an
acquisition strategy, such as increasing leverage and debt service
requirements and combining disparate company cultures and facilities, which
could adversely affect the Company's operating results. The success of any
completed acquisition will depend in part on Iron Mountain's ability to
integrate effectively the acquired records management business into the
Company. The process of integrating such acquired businesses may involve
unforeseen difficulties and may require a disproportionate amount of
management's attention and the Company's financial and other resources. No
assurance can be given that the Pending Acquisitions will be completed, that
additional suitable acquisition candidates will be identified, financed and
purchased on acceptable terms, or that recent acquisitions or future
acquisitions, if completed, will be successful. See "Business--Growth
Strategy--Growth through Acquisitions."
Acquisitions by the Company in excess of $25 million individually and $50
million in the aggregate per year will require the approval of the majority
lenders under the Credit Agreement, and the New Credit Facility will contain
similar or other restrictions on acquisitions. No assurance can be given that
the lenders will consent to any acquisitions that the Company proposes to
make in excess of such limits.
The size, timing and integration of possible future acquisitions may cause
substantial fluctuations in operating results from quarter to quarter. As a
result, operating results for any quarter may not be indicative of the
results that may be achieved for any subsequent fiscal quarter or for a full
fiscal year.
Competition; Alternative Technologies. The Company faces competition from
one or more competitors in all geographic areas where it operates. The
Company believes that competition for customers is based on price, reputation
for reliability, quality of service and scope and scale of technology, and
believes that it generally competes effectively based on these factors. As a
result of this competition, the records management industry has for the past
several years experienced downward pricing pressures. While Iron Mountain
believes that this pricing climate is stabilizing, there can be no assurance
that prices will not decline further, as competitors seek to gain or preserve
market share. Should a further downward trend in pricing occur or continue
for an extended period of time, it could have a material adverse effect on
the Company's results of operations. The Company also competes for
acquisition candidates. Some of the Company's competitors may possess greater
financial and other resources than the Company. If any such competitor were
to devote additional resources to the records management business and such
acquisition candidates or to focus its strategy on the Company's markets, the
Company's results of operations could be adversely affected. In addition, the
Company faces competition from the internal document handling capability of
its current and potential customers. There can be no assurance that these
organizations will outsource more of their document management needs or that
they will not bring in-house some or all of the functions they currently
outsource. See "Business--The Records Management Industry" and
"Business--Competition."
The substantial majority of the Company's revenues have been derived from
the storage of paper documents and from related services. Such storage
requires significant physical space. Alternative technologies for generating,
capturing, managing, transmitting and storing information have been
developed, many of which require significantly less space than paper. Such
technologies include computer media, microforms, audio/video tape, film,
CD-ROM and optical disk. None of these technologies has replaced paper as the
principal means for storing information. However, there can be no assurance
that one or more non-paper-based technologies (whether now existing or
developed in the future) may not in the future reduce or supplant the use of
paper as a preferred medium, which could in turn adversely affect the
Company's business.
Casualty. The Company currently maintains and intends to continue to
maintain, to the extent such insurance is available on commercially
reasonable terms, comprehensive liability, fire, flood and earthquake (where
appropriate) and extended coverage insurance with respect to the properties
that it now owns or leases or that it
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may in the future own or lease, with customary limits and deductibles.
Certain types of loss, however, may not be fully insurable on a
cost-effective basis, such as losses from earthquakes, or may be altogether
uninsurable, such as losses from riots. In addition, 24 of the Company's 89
records management facilities are located in California and the Company
derived approximately 30% of its revenues for the six months ended June 30,
1996 from its operations in California. The Company has in the past suffered
damages and losses from an earthquake and a riot in California, which damages
and losses were substantially covered by insurance. In the future, should
uninsured losses or damages occur, the Company could lose both its investment
in and anticipated profits and cash flow from the affected property and may
continue to be obligated on any leasehold obligations, mortgage indebtedness
or other obligations related to such property. As a result, any such loss
could materially adversely affect the Company. See "Business--Insurance."
Environmental Matters. As of June 30, 1996, the Company owned or leased
approximately 6.3 million square feet of facilities. Under various federal,
state and local environmental laws, ordinances and regulations
("environmental laws"), an owner of real estate or a lessee conducting
operations thereon may become liable for the costs of investigation, removal
or remediation of soil and groundwater contaminated by certain hazardous
substances or wastes or petroleum products. Certain such laws impose cleanup
responsibility and liability without regard to whether the owner or operator
of the real estate or operations thereon knew of or was responsible for the
contamination, and whether or not operations at the property have been
discontinued or title to the property has been transferred. In addition, the
presence of such substances, or the failure to properly remediate such
property, may adversely affect the current property owner's or operator's
ability to sell or rent such property or to borrow using such property as
collateral. The owner or operator of contaminated real estate also may be
subject to common law claims by third parties based on damages and costs
resulting from off-site migration of the contamination.
Certain environmental laws govern the removal, encapsulation or
disturbance of asbestos-containing materials ("ACMs"). Such laws may impose
liability for release of ACMs and may enable third parties to seek recovery
from owners or operators of real estate for personal injury associated with
exposure to such substances. Certain facilities operated by the Company
contain or may contain ACMs. In addition, certain of the properties formerly
or currently owned or operated by the Company were previously used for
industrial or other purposes that involved the use or storage of hazardous
substances or petroleum products or the generation and disposal of hazardous
wastes, and in some instances, included the operation of underground storage
tanks ("USTs").
In connection with its former and current ownership or operation of
certain properties, the Company may be potentially liable for environmental
costs such as those discussed above and as more specifically described under
"Business--Environmental Matters." The Company has from time to time
conducted certain environmental investigations and remedial activities at
certain of its former and current facilities, but an in-depth environmental
review of the properties has not been conducted by or on behalf of the
Company.
The Company believes it is in substantial compliance with all applicable
material environmental laws. The Company has not received any written notice
from any governmental authority or third party asserting, and is not
otherwise aware of, any material environmental noncompliance, liability or
claim relating to hazardous substances or wastes, petroleum products or
material environmental laws applicable to Company operations in connection
with any of its present or former properties other than as described under
"Business--Environmental Matters." However, no assurance can be given that
there are, or as a result of possible future acquisitions there will be, no
environmental conditions for which the Company might be liable in the future
or that future regulatory action, as well as compliance with future
environmental laws, will not require the Company to incur costs for or at its
properties that could have a material adverse effect on the Company's
financial condition and results of operations.
Reliance on Executive Officers. The Company's success is partially
dependent upon the performance and continued availability of its current
executive officers. The Company does not have employment contracts with any
of its current executive officers. There can be no assurance that the Company
will be able to retain such officers, the loss of whom could have a material
adverse effect upon the Company. See "Management."
Recent Publicity. On September 3, 1996, The Boston Globe, a regional daily
newspaper, published a business news article regarding the Company. The
article contained numerous statements about the Company and quotations from
the Company's Chief Executive Officer. The article did not set forth material
information or cautionary statements relevant to an evaluation of the
statements and quotations regarding the Company in the article. Prospective
investors in the Notes should not rely on such article and should only rely upon
the information and cautionary statements contained in this Prospectus,
including "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
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THE COMPANY
Iron Mountain is the largest records management company in the United
States, as measured by revenues. The Company is a full-service provider of
records management and related services, enabling customers to outsource data
and records management functions. Pro forma for the Acquisitions, as of June
30, 1996, the Company managed approximately 29.6 million Cartons in 103
records centers in 33 markets nationwide. The Company has a diversified base
of over 19,000 customer accounts, which includes more than half of the
Fortune 500 and numerous legal, banking, healthcare, accounting, insurance,
entertainment and government organizations. The Company provides storage and
related services for all major media, including paper (which is the dominant
form of records retention and which has accounted for approximately 85% of
the Company's revenues since 1992), computer disks and tapes, microfilm and
microfiche, master audio and video tapes, film and optical disks, X-rays and
blueprints. The Company's principal services include filing, retrieval and
destruction of records, courier pick-up and delivery, database management and
customized reporting. The Company also sells storage materials and provides
consulting and other records-related services.
Iron Mountain's operations date to 1951, when a corporate predecessor
commenced storage operations in a network of underground vaults in a former
iron ore mine, focusing on the maximum-security storage of corporate vital
records in the Northeast. That company was acquired by Schooner Capital
Corporation ("Schooner") in 1975, after which its focus shifted to more
general records management. In 1988, a corporate affiliate of Schooner
acquired the Bell & Howell Records Management Company and its subsidiaries
("BHRM") for approximately $75 million. At that time, BHRM conducted storage
operations in various states, with significant operations in California. The
current Iron Mountain was incorporated in 1990 as part of a recapitalization
that consolidated the former BHRM operations with the predecessor's Northeast
operations.
The principal executive offices of the Company are located at 745 Atlantic
Avenue, Boston, Massachusetts 02111. Its telephone number is (617) 357-4455.
THE TRANSACTIONS
In connection with the Offering, the Company intends to: (i) repay all
indebtedness outstanding under the Credit Agreement; (ii) repay its 13.42%
Senior Subordinated Notes due December 14, 2000 (the "Chrysler Notes"); (iii)
repay certain indebtedness incurred by the Company in connection with a 1990
acquisition and represented by two junior subordinated notes (collectively,
the "FDS Notes"), one of which is held by Schooner; (iv) fund the purchase
price of the Pending Acquisitions described below under "Recent and Pending
Acquisitions;" and (v) enter into the New Credit Facility (the foregoing,
together with the Offering and the application of the net proceeds therefrom
and the Completed Acquisitions consummated after June 30, 1996, are referred
to collectively as the "Transactions").
Sources and Uses of Funds
The estimated sources and uses of funds in connection with the
Transactions are set forth below (in millions):
Sources of Funds:
New Credit Facility $ 13.7
Senior Subordinated Notes due 2006 150.0
------
Total Sources $163.7
======
Uses of Funds:
Repay Credit Agreement (1) $ 92.9
Repay Chrysler Notes (1) 14.8
Repay FDS Notes (1) 0.4
Purchase Price of Pending Acquisitions and
Acquisitions
Completed after June 30, 1996 (2) 47.5
Estimated Fees and Expenses (3) 8.1
Total Uses $163.7
======
(Footnotes on the following page)
15
<PAGE>
- -------------
(Footnotes from the preceding page)
(1) Balances are as of June 30, 1996.
(2) Acquisitions completed after June 30, 1996 were initially financed by
borrowings under the Credit Agreement and a portion of the net proceeds
of the Offering will be used to repay such indebtedness.
(3) Consists of estimated fees and expenses related to the Offering, the
repayment of the Credit Agreement, the Chryster Notes and the FDS Notes and
the closing of the New Credit Facility.
Repayment of Credit Agreement Indebtedness. The Company is party to the
Amended and Restated Credit Agreement dated as of January 31, 1995, as
amended (as so amended, the "Credit Agreement") among the Company, the
lenders party thereto and The Chase Manhattan Bank (National Association), as
agent for such lenders. Borrowings by the Company under the Credit Agreement
during the most recent twelve months were used to finance acquisitions and
for working capital. The Credit Agreement has a final maturity date of July
31, 2002. The weighted average interest rate on September 3, 1996 on the
indebtedness outstanding under the Credit Agreement was 8.5%.
Repayment of Chrysler Notes. Pursuant to a Note Purchase Agreement dated
as of December 14, 1990, as amended, the Company issued the Chrysler Notes in
an aggregate principal amount of $15.0 million to Chrysler Capital
Corporation. The Company will repay the Chrysler Notes in full with a portion
of the net proceeds of the Offering; the amount shown under "Uses of Funds"
above does not include related fees and expenses.
Repayment of FDS Notes. In connection with a 1990 acquisition, the Company
issued to First Document Storage Corporation of America $450,000 in principal
amount of the FDS Notes, which mature in March 2000 and bear interest at the
rate of 8% per annum. In 1991, Schooner acquired $382,500 in principal amount
of the FDS Notes as an investment. The Company intends to use a portion of
the net proceeds from the Offering to repay the FDS Notes in their entirety.
Pending Acquisitions. A portion of the net proceeds from the Offering,
together with borrowings under the New Credit Facility, will be used to fund
the Pending Acquisitions described under "Recent and Pending Acquisitions"
below.
New Credit Facility. The Company intends to replace the Credit Agreement
with the New Credit Facility. The New Credit Facility is expected to provide
the Company with revolving credit availability of up to $100 million for the
Pending Acquisitions and possible future acquisitions, working capital and
other corporate purposes, and is expected to terminate on September 30, 2001.
As was the case with the Credit Agreement, the Company's obligations under
the New Credit Facility are expected to be guaranteed by substantially all of
the Company's subsidiaries; however, unlike the Credit Agreement, the New
Credit Facility is expected to be secured only by the pledge of the stock of
such subsidiaries. See "Description of New Credit Facility" for a description
of the currently expected terms of the New Credit Facility. No assurance can
be given that the Company will enter into the New Credit Facility on these or
any other terms. The Offering is not conditioned on the closing of the New
Credit Facility.
16
<PAGE>
RECENT AND PENDING ACQUISITIONS
As part of its growth strategy, since mid-1994 the Company has acquired or
entered into agreements to acquire 19 records management businesses. Since
January 1, 1995, the Company has purchased for cash 14 such businesses (the
"Completed Acquisitions") and has entered into definitive agreements to
acquire two additional records management businesses (each a "Pending
Acquisition" and collectively, the "Pending Acquisitions" and, together with
the Completed Acquisitions, the "Acquisitions").
The total purchase price of the Completed Acquisitions was approximately
$76.3 million (not including contingent payments of up to $0.6 million based
upon the achievement of certain revenue targets during 1996 and 1997), and
the total purchase price of the Pending Acquisitions is approximately $24.0
million (not including contingent payments of up to $4.0 million based upon
the achievement of certain revenue targets during 1997 and 1998). The
Completed Acquisitions represent in the aggregate total annual revenues of
approximately $30.6 million, and the Pending Acquisitions represent in the
aggregate total annual revenues of approximately $10.2 million (calculated in
each case by reference to the revenues of each such acquired business during
the twelve months ended December 31, 1995, which calculation includes an
estimate of total revenues for the portion of 1995, if any, during which any
such acquired business was included in the Company's results of operations).
See "Pro Forma Condensed Consolidated Financial Information."
The following table presents certain information for each acquisition
completed since 1994 and for the Pending Acquisitions.
<TABLE>
<CAPTION>
Principal
State(s) of
Acquisition Operation Completion Date
- -------------------------------------------------------------------------- -------------- -----------------------
<S> <C> <C>
1994 Acquisitions
Data protection service business of Media Management Group, Inc. Connecticut June 1994
Data protection service business of Digital Equipment Corporation Massachusetts July 1994
Storage and Retrieval Concepts, Inc. Ohio October 1994
1995 Acquisitions
National Business Archives, Inc. Maryland March 1995
DataFile Services, Inc. Texas October 1995
Brooks Records Center, Inc. Delaware December 1995
Data Management Business Records Storage, Inc. Georgia December 1995
1996 Acquisitions
Nashville Vault Company, Ltd. Tennessee January 1996
Florida Data Bank, Inc. Florida January 1996
DataVault Corporation Massachusetts February 1996
Data Storage Systems, Inc. California March 1996
Brambles CRC, Inc. Ohio and
Kentucky April 1996
Records management business of Output Technologies Central Region, Inc. Missouri May 1996
Records management business of The Fortress Corporation Massachusetts
and Florida July 1996
Data Archive Services, Inc. and Data Archive Services of Miami, Inc. Florida August 1996
DKA Industries, Inc. (d/b/a Systems Record Storage) Florida August 1996
International Record Storage and Retrieval Service, Inc. New Jersey September 1996
Pending Acquisitions Status
------
Security Archives Corporation California Definitive Agreement
Mohawk Business Record Storage, Inc. Minnesota Definitive Agreement
</TABLE>
The closing of each Pending Acquisition is subject to various conditions
and no assurance can be given that either Pending Acquisition will be
completed. See "Risk Factors--Risks Associated with Acquisition Strategy."
The Offering is not conditioned upon the completion of either Pending
Acquisition, and neither Pending Acquisition is conditioned upon completion
of the Offering or the other Pending Acquisition.
17
<PAGE>
USE OF PROCEEDS
The gross proceeds from the Offering will be used: (i) to repay
indebtedness under the Credit Agreement, the Chrysler Notes and the FDS
Notes; (ii) to fund a portion of the purchase price of the Pending
Acquisitions; and (iii) to pay certain fees and expenses related to the
Offering. See "The Transactions" and "Recent and Pending Acquisitions." The
net proceeds to the Company from the Offering are estimated to be
approximately $144.7 million, after deducting underwriting discounts and
commissions and estimated Offering expenses. In the event the Pending
Acquisitions are not consummated, the available net proceeds from the
Offering will be used for possible future acquisitions and for general
corporate purposes. Prior to funding the Pending Acquisitions or to such
other use, the net proceeds from the Offering will be invested in short-term,
dividend-paying or interest-bearing investment grade securities.
CAPITALIZATION
(Dollars in thousands, except per share data)
The following table sets forth the capitalization of the Company at June
30, 1996 and pro forma to give effect to the Transactions as if they had
occurred on June 30, 1996.
<TABLE>
<CAPTION>
As of June 30, 1996
---------------------
Actual Pro Forma
------- ----------
<S> <C> <C> <C>
Cash and Cash Equivalents $ 2,232 $ 2,232
======== ========
Long-term Debt (Including Current Maturities):
Credit Agreement $ 92,850 $ --
New Credit Facility -- 13,731
Real Estate Mortgages 10,761 10,761
Senior Subordinated Notes due 2006 -- 150,000
Chrysler Notes 14,807 --
FDS Notes and Other 476 26
-------- --------
Total Long-term Debt 118,894 174,518
Stockholders' Equity:
Common Stock, $0.01 par value; 13,000,000 Shares
Authorized, 9,627,141 Issued and Outstanding 96 96
Non-voting Common Stock, $0.01 par value;
1,000,000 Shares Authorized, 500,000 Issued and
Outstanding 5 5
Additional Paid-in Capital 62,014 62,014
Accumulated Deficit (7,386) (9,614)
-------- --------
Total Stockholders' Equity 54,729 52,501
-------- --------
Total Capitalization $173,623 $227,019
======== ========
</TABLE>
18
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited Pro Forma Condensed Consolidated Balance Sheet has
been prepared based upon the unaudited historical condensed consolidated
balance sheet of Iron Mountain as of June 30, 1996 and the balance sheets as
of June 30, 1996 of the Completed Acquisitions consummated after June 30,
1996 and the Pending Acquisitions, and gives effect to: (i) such Completed
Acquisitions and the Pending Acquisitions; (ii) the closing under the New
Credit Facility; and (iii) the application of the estimated net proceeds from
the Offering (after deducting underwriting discounts and commissions and
estimated expenses of the Offering), as if each had occurred as of June 30,
1996. The following unaudited Pro Forma Condensed Consolidated Statements of
Operations for the six months ended June 30, 1996 and for the year ended
December 31, 1995 give effect to each of the above transactions and to (i)
the Completed Acquisitions which occurred before June 30, 1996 and (ii) the
Initial Public Offering and the application of the net proceeds therefrom, as
if each had occurred as of January 1, 1995. Pro forma adjustments are
described in the accompanying notes.
The following unaudited Pro Forma Condensed Consolidated Statements of
Operations are not necessarily indicative of the actual results of operations
that would have been reported if the events described above had occurred as
of January 1, 1995, nor do they purport to indicate the results of the
Company's future operations. Furthermore, the pro forma results do not give
effect to all cost savings or incremental costs that may occur as a result of
the integration and consolidation of the Acquisitions. In the opinion of
management, all adjustments necessary to present fairly such pro forma
financial statements have been made.
The pro forma condensed consolidated financial information should be read
in conjunction with "Capitalization" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and with the
Financial Statements and the Notes thereto included elsewhere in this
Prospectus.
19
<PAGE>
IRON MOUNTAIN INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1996
(In thousands)
<TABLE>
<CAPTION>
Pending and Pro Forma
Iron Completed Iron
Mountain Acquisitions (1) Adjustments Mountain
------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
Assets
Current Assets $ 25,865 $ 3,302 $ 941 (A) $ 30,108
Property, Plant and Equipment, net 103,004 6,940 4,324 (A) 114,268
Goodwill, net 72,213 20 36,037 (A) 108,270
Other Long-term Assets 11,548 480 4,031 (A) 16,059
-------- ------- ------- --------
Total Assets $212,630 $10,742 $45,333 $268,705
======== ======= ======= ========
Liabilities and Stockholders' Equity
Current Liabilities $ 23,129 $ 6,540 $ (7,385) (B) $ 22,284
Long-term Debt, net of current portion 115,700 1,185 57,439 (B) 174,324
Other Long-term Liabilities 6,769 1,281 (1,219) (B) 6,831
Deferred Rent 7,897 242 220 (B) 8,359
Deferred Income Taxes 4,406 -- -- 4,406
Stockholders' Equity 54,729 1,494 (3,722) (B) 52,501
-------- ------- ------- --------
Total Liabilities and Stockholders' Equity $212,630 $10,742 $45,333 $268,705
======== ======= ======= ========
</TABLE>
- -------------
(1) See Schedule A for detail of the Pending and Completed Acquisitions.
The accompanying Notes are an integral part of these pro forma financial
statements.
20
<PAGE>
IRON MOUNTAIN INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(In thousands, except per share data)
<TABLE>
<CAPTION>
Pending and Pro Forma
Iron Completed Iron
Mountain Acquisitions (1) Adjustments Mountain
---------- ----------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Storage $39,363 $ 6,861 $ -- $46,224
Service and Storage Material Sales 24,587 4,540 -- 29,127
------- ------- ---------- -------
Total Revenues 63,950 11,401 -- 75,351
Operating Expenses:
Cost of Sales (Excluding Depreciation) 32,383 5,540 (329) (D) 37,594
Selling, General and Administrative 16,067 4,432 (1,182) (E) 19,317
Depreciation and Amortization 7,530 750 819 (F) 9,099
------- ------- ---------- -------
Total Operating Expenses 55,980 10,722 (692) 66,010
------- ------- ---------- -------
Operating Income 7,970 679 692 9,341
Interest Expense 6,385 334 2,980 (G) 9,699
------- ------- ---------- -------
Income (Loss) before Provision
(Benefit) for Income Taxes 1,585 345 (2,288) (358)
Provision (Benefit) for Income Taxes 888 (30) (705) (H) 153
------- ------- ---------- -------
Net Income (Loss) 697 375 (1,583) (511)
Accretion of Redeemable Put Warrant 280 -- (280) (I) --
------- ------- ---------- -------
Net Income (Loss) Applicable to Common
Stockholders $ 417 $ 375 $(1,303) $ (511)
======= ======= ========== =======
Net Income (Loss) per Common and Common
Equivalent Share $ 0.04 $ (0.05)
Weighted Average Common and Common
Equivalent Shares Outstanding 9,899 400 (J) 10,299
Other Data:
EBITDA $15,500 $ 1,429 $1,511 $18,440
</TABLE>
- -------------
(1) See Schedule B for detail of the Pending and Completed Acquisitions.
The accompanying Notes are an integral part of these pro forma financial
statements.
21
<PAGE>
IRON MOUNTAIN INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(In thousands, except per share data)
<TABLE>
<CAPTION>
Pending and Pro Forma
Iron Completed Iron
Mountain Acquisitions (1) Adjustments Mountain
------- ----------------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues:
Storage $ 64,165 $22,524 $ -- $ 86,689
Service and Storage Material Sales 40,271 14,677 (737) (C) 54,211
-------- -------- ------- --------
Total Revenues 104,436 37,201 (737) 140,900
Operating Expenses:
Cost of Sales (Excluding Depreciation) 52,277 18,570 (994) (D) 69,853
Selling, General and Administrative 26,035 11,555 (2,552) (E) 35,038
Depreciation and Amortization 12,341 2,962 2,879 (F) 18,182
-------- -------- ------- --------
Total Operating Expenses 90,653 33,087 (667) 123,073
-------- -------- ------- --------
Operating Income 13,783 4,114 (70) 17,827
Interest Expense 11,838 1,814 5,751 (G) 19,403
-------- -------- ------- --------
Income (Loss) before Provision for
Income Taxes 1,945 2,300 (5,821) (1,576)
Provision for Income Taxes 1,697 102 (1,427) (H) 372
-------- -------- ------- --------
Net Income (Loss) 248 2,198 (4,394) (1,948)
Accretion of Redeemable Put Warrant 2,107 -- (2,107) (I) --
-------- -------- ------- --------
Net Income (Loss) Applicable to Common
Stockholders $ (1,859) $ 2,198 $(2,287) $ (1,948)
======== ======== ======= ========
Net (Loss) per Common and Common
Equivalent Share $ (0.24) $ (0.19)
Weighted Average Common and Common
Equivalent Shares Outstanding 7,784 2,350(J) 10,134
Other Data:
EBITDA $ 26,124 $ 7,076 $2,809 $ 36,009
</TABLE>
- -------------
(1) See Schedule C for detail of the Pending and Completed Acquisitions.
The accompanying Notes are an integral part of these pro forma financial
statements.
22
<PAGE>
SCHEDULE A
IRON MOUNTAIN INCORPORATED
SCHEDULE OF PENDING AND COMPLETED ACQUISITIONS
AS OF JUNE 30, 1996
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Acquisitions Pending Acquisitions
Completed ---------------------------------- Pending
after Security Total and
June 30, Archives Pending Completed
1996 Mohawk Corporation Acquisitions Acquisitions
---------- ----- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets $1,544 $1,488 $270 $1,758 $ 3,302
Property, Plant and Equipment, net 2,486 3,805 649 4,454 6,940
Goodwill, net 20 -- -- -- 20
Other Long-term Assets 222 231 27 258 480
------ ------ ---- ------ -------
Total Assets $4,272 $5,524 $946 $6,470 $10,742
====== ====== ==== ====== =======
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities $2,480 $3,970 $ 90 $4,060 $ 6,540
Long-term Debt, net of current portion 354 -- 831 831 1,185
Other Long-term Liabilities 1,281 -- -- -- 1,281
Deferred Rent 242 -- -- -- 242
Stockholders' Equity (Deficit) (85) 1,554 25 1,579 1,494
------ ------ ---- ------ -------
Total Liabilities and Stockholders' Equity (Deficit) $4,272 $5,524 $946 $6,470 $10,742
====== ====== ==== ====== =======
</TABLE>
The accompanying Notes are an integral part of these pro forma financial
statements.
23
<PAGE>
SCHEDULE B
IRON MOUNTAIN INCORPORATED
SCHEDULE OF PENDING AND COMPLETED ACQUISITIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pending Acquisitions
----------------------------------
Pending
Security Total and
Completed Archives Pending Completed
Acquisitions (1) Mohawk Corporation Acquisitions Acquisitions
---------------- ----- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Revenues:
Storage $3,712 $2,651 $498 $3,149 $ 6,861
Service and Storage Material Sales 1,965 2,086 489 2,575 4,540
------ ------ ---- ------ -------
Total Revenues 5,677 4,737 987 5,724 11,401
Operating Expenses:
Cost of Sales (Excluding
Depreciation) 2,773 2,357 410 2,767 5,540
Selling, General and Administrative 2,643 1,614 175 1,789 4,432
Depreciation and Amortization 331 359 60 419 750
------ ------ ---- ------ -------
Total Operating Expenses 5,747 4,330 645 4,975 10,722
------ ------ ---- ------ -------
Operating Income (Loss) (70) 407 342 749 679
Interest Expense 162 125 47 172 334
------ ------ ---- ------ -------
Income (Loss) before (Benefit) for
Income Taxes (232) 282 295 577 345
(Benefit) for Income Taxes (30) -- -- -- (30)
------ ------ ---- ------ -------
Net Income (Loss) $ (202) $ 282 $295 $ 577 $ 375
====== ====== ==== ====== =======
Other Data:
EBITDA $ 261 $ 766 $402 $1,168 $ 1,429
</TABLE>
- -------------
(1) Represents historical results of operations for each Completed
Acquisition consummated in 1996 for the period in 1996 prior to
acquisition by the Company. See "Overview" in the accompanying Notes.
The accompanying Notes are an integral part of these pro forma financial
statements.
24
<PAGE>
SCHEDULE C
IRON MOUNTAIN INCORPORATED
SCHEDULE OF PENDING AND COMPLETED ACQUISITIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Completed Acquisitions (1) Pending Acquisitions
---------------------------------------------------- ------------------------------- ------------
Pending
National Total Security Total and
Business Data Nashville Completed Archives Pending Completed
Archives Management Vault Other Acquisitions Mohawk Corporation Acquisitions Acquisitions
------ -------- ------ ----- ---------- ---- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Storage $ 758 $2,912 $ 636 $12,375 $16,681 $4,925 $ 918 $5,843 $22,524
Service and Storage
Material Sales 471 2,308 739 6,783 10,301 3,875 501 4,376 14,677
------ ------ ------ ------- ------- ------ ------ ------ -------
Total Revenues 1,229 5,220 1,375 19,158 26,982 8,800 1,419 10,219 37,201
Operating Expenses:
Cost of Sales
(Excluding
Depreciation) 712 2,543 499 9,457 13,211 4,644 715 5,359 18,570
Selling, General and
Administrative 89 1,418 327 6,407 8,241 2,834 480 3,314 11,555
Depreciation and
Amortization 55 506 122 1,522 2,205 658 99 757 2,962
------ ------ ------ ------- ------- ------ ------ ------ -------
Total Operating
Expenses 856 4,467 948 17,386 23,657 8,136 1,294 9,430 33,087
------ ------ ------ ------- ------- ------ ------ ------ -------
Operating Income 373 753 427 1,772 3,325 664 125 789 4,114
Interest Expense 14 494 61 883 1,452 269 93 362 1,814
------ ------ ------ ------- ------- ------ ------ ------ -------
Income before
Provision for Income
Taxes 359 259 366 889 1,873 395 32 427 2,300
Provision for Income
Taxes -- 87 -- 15 102 -- -- -- 102
------ ------ ------ ------- ------- ------ ------ ------ -------
Net Income $ 359 $ 172 $ 366 $ 874 $ 1,771 $ 395 $ 32 $ 427 $ 2,198
====== ====== ====== ======= ======= ====== ====== ====== =======
Other Data:
EBITDA $ 428 $1,259 $ 549 $ 3,294 $ 5,530 $1,322 $ 224 $ 1,546 $ 7,076
</TABLE>
- -------------
(1) Represents historical results of operations for each Completed
Acquisition for the period in 1995 prior to acquisition by the Company.
See "Overview" in the accompanying Notes.
The accompanying Notes are an integral part of these pro forma financial
statements.
25
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Overview
In March 1995, the Company acquired National Business Archives, Inc.
("NBA") for $15.7 million. In October 1995, the Company acquired DataFile
Services, Inc. In December 1995, the Company acquired Data Management
Business Records Storage, Inc. ("Data Management") for $14.5 million. In
December 1995, the Company also acquired Brooks Records Center, Inc. In
January 1996, the Company acquired Nashville Vault Company, Ltd. ("Nashville
Vault") for $3.5 million. In January 1996, the Company also acquired Florida
Data Bank, Inc. ("FDB"). In February 1996, the Company acquired DataVault
Corporation. In March 1996, the Company acquired Data Storage Systems, Inc.
In April 1996, the Company acquired Brambles CRC, Inc. ("CRC"). In May 1996,
the Company acquired the records management business of Output Technologies
Central Region, Inc. In July 1996, the Company acquired the records
management business of The Fortress Corporation. In August 1996, the Company
acquired Data Archive Services, Inc. and Data Archive Services of Miami, Inc.
(collectively, "DAS") and DKA Industries, Inc. In September 1996, the Company
acquired International Record Storage and Retrieval Service, Inc. The results
of operations of the Acquisitions which were consummated prior to June 30,
1996 are included in the results of operations of the Company from their
respective dates of acquisition. The historical balance sheet of the Company
at June 30, 1996 includes the acquisitions consummated prior to June 30,
1996. The aggregate purchase price of the foregoing acquisitions, excluding
NBA, Data Management and Nashville Vault, was $42.6 million (not including
contingent payments of up to $0.6 million based upon the achievement of
certain revenue targets during 1996 and 1997).
During September 1996, the Company entered into definitive agreements to
purchase Mohawk Business Record Storage, Inc. ("Mohawk") for $20.2 million
(not including contingent payments of up to $4.0 million based upon the
achievement of certain revenue targets during 1997 and 1998) and Security
Archives Corporation for $3.8 million. The closing of each Pending
Acquisition is subject to various conditions, and no assurance can be given
that either such acquisition will be completed. All of the Completed
Acquisitions have been, and the Pending Acquisitions, if consummated, will
be, accounted for as purchases.
The accompanying unaudited pro forma condensed consolidated financial
statements reflect the following as though each had occurred on January 1, 1995:
(i) the Initial Public Offering and the application of the net proceeds
therefrom; (ii) the Offering and the application of the net proceeds therefrom;
(iii) the closing of the New Credit Facility; and (iv) the Acquisitions. The
Company will record, in the quarter in which the Offering is consummated, an
extraordinary loss on retirement of debt, net of related tax benefit. As of June
30, 1996, the amount of such loss would have been approximately $2.2 million.
While the extraordinary charge has been reflected in the accompanying pro forma
balance sheet, the pro forma statements of operations do not give effect to such
loss. Such loss consists of the write-off of deferred financing costs, original
issue discount, prepayment penalty and loss on termination of interest rate
protection agreements.
Balance Sheet
The aggregate consideration paid or to be paid for the Acquisitions is
approximately $100.3 million in cash (not including up to $4.6 million of
contingent payments based upon the achievement of certain revenue targets
from 1996 through 1998). The excess of the purchase price over the book value
of the net assets acquired for each of the Acquisitions has been allocated to
tangible and intangible assets, based on the Company's estimate of the fair
value of the net assets acquired. The allocations of the purchase price as
illustrated below may change upon final appraisal of the fair value of the
net assets acquired.
26
<PAGE>
<TABLE>
<CAPTION>
(In millions)
<S> <C> <C>
Acquisitions Completed Prior to June 30, 1996:
Book value of net assets acquired $ 11.6
Allocation of purchase price in excess of acquired assets:
Property, Plant and Equipment (Fair Value Adjustment) 5.4
Other Long-term Assets (Covenants not to Compete) 2.8
Current Liabilities (Relocation and Other Reserves) (1.8)
Deferred Rent (Unfavorable Lease Liability) (5.3)
Goodwill 40.1
-----
Purchase Price of Acquisitions Completed Prior to June 30, 1996 $ 52.8
Acquisitions Completed after June 30, 1996 and the Pending
Acquisitions:
Book value of net assets acquired $ 9.2
Allocation of purchase price in excess of acquired assets:
Property, Plant and Equipment (Fair Value Adjustment) 4.8
Other Long-term Assets (Covenants not to Compete) 0.2
Current Liabilities (Relocation and Other Reserves) (2.3)
Deferred Rent (Unfavorable Lease Liability) (0.4)
Goodwill 36.0
-----
Purchase Price of Acquisitions Pending as of June 30, 1996 47.5
------
Total Purchase Price of Acquisitions $100.3
======
</TABLE>
The Acquisitions completed prior to June 30, 1996 were financed with
long-term debt and proceeds from the Initial Public Offering. The
Acquisitions completed after June 30, 1996 and the Pending Acquisitions are
assumed to be financed with long-term debt. The Company will fund the
purchase price of each Pending Acquisition with a portion of the net proceeds
from the Offering and the New Credit Facility. See "Recent and Pending
Acquisitions," "The Transactions" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
The accompanying pro forma condensed consolidated balance sheet as of June
30, 1996 has been prepared as if the Transactions had all been completed as
of June 30, 1996 and reflects the following adjustments:
(A) The pro forma adjustments to Assets consist of the following:
<TABLE>
<CAPTION>
Property, Other
Current Plant and Long-term
Assets Equipment Goodwill Assets
------- --------- -------- ---------
(In millions)
<S> <C> <C> <C> <C>
Acquisition Entries:
Reverse assets of acquired companies not purchased $(0.6) $(0.2) $ -- $(0.5)
Record estimated fair value of assets of acquired
companies -- 4.5 -- --
Record increase in intangible assets equal to the excess
of purchase price over fair value of net assets
acquired -- -- 36.0 0.2
----- ----- ----- -----
Total Acquisition Entries (0.6) 4.3 36.0 (0.3)
----- ----- ----- -----
Use of Proceeds Entries:
Record deferred financing fees associated with the Notes
and the New Credit Facility -- -- -- 6.3
Write-off of pre-existing deferred financing costs -- -- -- (2.0)
Tax benefit associated with extraordinary charge related
to early retirement of pre-existing debt 1.5 -- -- --
----- ----- ----- -----
Total Use of Proceeds Entries 1.5 -- -- 4.3
----- ----- ----- -----
Total Adjustments $ 0.9 $ 4.3 $36.0 $ 4.0
===== ===== ===== =====
</TABLE>
27
<PAGE>
(B) The pro forma adjustments to Liabilities and Stockholders' Equity
consist of the following:
<TABLE>
<CAPTION>
Other
Current Long-term Long-term Deferred Stockholders'
Liabilities Debt Liabilities Rent Equity
---------- ------- ---------- ------ -------------
(In millions)
<S> <C> <C> <C> <C> <C>
Acquisition Entries:
Reverse liabilities and equity not assumed in
connection with Acquisitions closing after
June 30, 1996 $(4.4) $ (1.2) $(1.2) $(0.2) $(1.5)
Record unfavorable lease obligation -- -- -- 0.4 --
Record additional debt to finance
Acquisitions closing after June 30, 1996 47.5
----- ------ ----- ----- -----
Total Acquisition Entries (4.4) 46.3 (1.2) 0.2 (1.5)
----- ------ ----- ----- -----
Use of Proceeds Entries:
Issuance of the Notes -- 150.0 -- -- --
Borrowings under New Credit Facility -- 13.7 -- -- --
Prepayment of Credit Agreement, Chrysler
Notes and FDS Notes (3.0) (105.1) -- -- --
Use of proceeds to repay debt issued to
finance Acquisitions closing after June 30,
1996 -- (47.5) -- -- --
Extraordinary charge, net of tax benefit,
related to early retirement of pre-existing
debt -- -- -- -- (2.2)
----- ------ ----- ----- -----
Total Use of Proceeds Entries (3.0) 11.1 -- -- (2.2)
----- ------ ----- ----- -----
Total Adjustments $(7.4) $ 57.4 $(1.2) $0.2 $(3.7)
===== ====== ===== ===== =====
</TABLE>
Statements of Operations
All of the Acquisitions, except Data Management, FDB, CRC and DAS, have a
December 31 fiscal year end. Data Management's and CRC's fiscal year end is
June 30, DAS's fiscal year end is May 31 and FDB's fiscal year end is August
31. Accordingly, Data Management's, CRC's, DAS's and FDB's results of
operations were calendarized to the twelve months ended December 31, 1995 and
the six months ended June 30, 1996.
The accompanying pro forma condensed consolidated statements of operations
for the year ended December 31, 1995 and for the six months ended June 30,
1996 have been prepared as if the Transactions and the Initial Public
Offering had occurred on January 1, 1995 and reflect the following
adjustments:
(C) A pro forma adjustment has been made to eliminate a $0.7 million
non-recurring gain on the sale of property and equipment by Data Management
in the year ended December 31, 1995.
(D) Pro forma adjustments for the six months ended June 30, 1996 and for
the year ended December 31, 1995 have been made to reduce cost of sales by
$0.3 million and $1.0 million, respectively, to eliminate specific expenses
that would not have been incurred had the Acquisitions occurred at the
beginning of 1995. Such cost savings relate to (i) the termination of certain
employees due to the integration and consolidation of certain Acquisitions
and (ii) a reduction in warehouse rent expense related to facilities the
Company will vacate upon completion of certain Acquisitions.
(E) Pro forma adjustments for the six months ended June 30, 1996 and for
the year ended December 31, 1995 have been made to reduce selling, general
and administrative expenses by $1.2 million and $2.6 million, respectively,
to eliminate specific expenses that would not have been incurred had the
Acquisitions occurred as of January 1, 1995. Such cost savings relate to (i)
the termination of certain employees due to the integration and consolidation
of certain Acquisitions and (ii) the elimination of related party expenses
and management fees in excess of amounts that would have been incurred by the
Company for the services rendered. Additional cost savings
28
<PAGE>
that the Company expects to realize through integration of the Acquisitions
into the Company's operations have not been reflected herein.
(F) A pro forma adjustment has been made to reflect additional
depreciation and amortization expense on the fair value of the assets
acquired and goodwill. Property and equipment are depreciated over three to
50 years, goodwill is amortized over 25 years and covenants not-to-compete
are amortized over two to five years on a straight- line basis. Such
depreciation and amortization may change upon final appraisal of the fair
market value of the net assets acquired.
(G) The pro forma adjustments to interest expense consist of the
following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- -----------
(In millions)
<S> <C> <C>
Acquisition Entries:
Reverse interest expense on debt not assumed in connection with Acquisitions $(0.3) $ (1.8)
Record interest expense due to assumption of unfavorable lease liabilities in
connection with the NBA and Mohawk acquisitions 0.1 0.1
Use of Proceeds Entries:
Reverse interest expense on pre-existing debt of the Company retired with
proceeds of the Offering (5.7) (10.3)
Record interest expense from issuance of the Notes at an assumed interest rate
of 10-1/2%, plus amortization of deferred financing costs 8.1 16.2
Record interest expense at an assumed interest rate of 7.85%, plus amortization
of deferred financing fees associated with the New Credit Facility 0.8 1.6
----- ------
Total Adjustments $ 3.0 $ 5.8
===== ======
</TABLE>
A 1/4% increase (or decrease) in the assumed 10-1/2% interest rate with
respect to the Notes would increase (or decrease) annual interest expense
with respect to the Notes by $375,000. A 1/8% increase (decrease) in the
interest rate with respect to the New Credit Facility would increase
(decrease) annual interest expense with respect to the assumed borrowings
under the New Credit Facility by approximately $17,000.
(H) A pro forma adjustment has been made to adjust the provision for
income taxes to a 40% rate on pro forma income before nondeductible goodwill
amortization and other nondeductible expenses.
(I) Pro forma adjustments of $0.3 million and $2.1 million for the periods
ended June 30, 1996 and December 31, 1995, respectively, have been made to
eliminate the accretion of a redeemable put warrant.
(J) A pro forma adjustment has been made to adjust the pro forma weighted
average common and common equivalent shares outstanding as if the Initial
Public Offering had occurred on January 1, 1995.
29
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
(In thousands, except per share amounts and Carton data)
The following selected consolidated statements of operations and balance
sheet data of the Company as of and for each of the years ended December 31,
1991, 1992, 1993, 1994 and 1995 have been derived from the Company's audited
consolidated financial statements. The selected consolidated statements of
operations and balance sheet data of the Company for the six months ended
June 30, 1995 and 1996 have been derived from the Company's unaudited
condensed consolidated financial statements. The Company's unaudited
condensed consolidated financial statements include all adjustments,
consisting of normal recurring accruals, that the Company considers necessary
for a fair presentation of the financial position and the results of
operations for those periods. Operating results for the six months ended June
30, 1996 are not necessarily indicative of the results for the entire year
ending December 31, 1996. The selected consolidated financial and operating
information set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
with Iron Mountain's Consolidated Financial Statements and the Notes thereto
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
Six Months Ended
Year Ended December 31, June 30,
----------------------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
------- ------ ------ ----------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Statements of Operations Data:
Revenues:
Storage $39,510 $44,077 $48,892 $54,098 $ 64,165 $30,748 $39,363
Service and Storage Material Sales 23,330 26,596 32,781 33,520 40,271 19,476 24,587
------- ------- ------- ------- -------- ------- -------
Total Revenues 62,840 70,673 81,673 87,618 104,436 50,224 63,950
Operating Expenses:
Cost of Sales (Excluding Depreciation) 31,375 35,169 43,054 45,880 52,277 25,112 32,383
Selling, General and Administrative 16,471 17,630 19,971 20,853 26,035 12,697 16,067
Depreciation and Amortization 7,674 5,780 6,789 8,690 12,341 5,428 7,530
------- ------- ------- ------- -------- ------- -------
Total Operating Expenses 55,520 58,579 69,814 75,423 90,653 43,237 55,980
------- ------- ------- ------- -------- ------- -------
Operating Income 7,320 12,094 11,859 12,195 13,783 6,987 7,970
Interest Expense 8,612 8,412 8,203 8,954 11,838 5,936 6,385
Income (Loss) before Provision for Income
Taxes (1,292) 3,682 3,656 3,241 1,945 1,051 1,585
Provision for Income Taxes 105 2,095 2,088 1,957 1,697 631 888
------- ------- ------- ------- -------- ------- -------
Net Income (Loss) (1,397) 1,587 1,568 1,284 248 420 697
Accretion of Redeemable Put Warrant 417 626 940 1,412 2,107 953 280
------- ------- ------- ------- -------- ------- -------
Net Income (Loss) Applicable to Common
Stockholders $(1,814) $ 961 $ 628 $ (128) $ (1,859) $ (533) $ 417
======= ======= ======= ======= ======== ======= =======
Net Income (Loss) per Common and Common
Equivalent Share $ (0.23) $ 0.12 $ 0.08 $ (0.02) $ (0.24) $ (0.07) $ 0.04
Weighted Average Common and Common
Equivalent Shares Outstanding 8,038 8,052 8,067 7,984 7,784 7,790 9,899
Other Data:
EBITDA (1) $14,994 $17,874 $18,648 $20,885 $ 26,124 $12,415 $15,500
EBITDA as a Percentage of Total Revenues 23.9% 25.3% 22.8% 23.8% 25.0% 24.7% 24.2%
Capital Expenditures:
Growth (2) -- $11,226 $13,605 $15,829 (3) $ 14,395 $ 6,730 $10,702
Maintenance -- 818 1,846 1,151 858 592 460
------- ------- ------- ------- -------- ------- -------
Total Capital Expenditures $ 8,163 $12,044 $15,451 $16,980 (3) $ 15,253 $ 7,322 $11,162
Additions to Customer Acquisition Costs $ -- $ 1,268 $ 922 $ 1,366 $ 1,379 $ 418 $ 717
Approximate Cartons in Storage at End of
Period (in millions) (4) 10.8 12.6 15.5 17.7 23.3 20.3 26.4
Ratio of Earnings to Fixed Charges (5) 0.9x 1.3x 1.3x 1.2x 1.1x 1.1x 1.2x
</TABLE>
(Footnotes on the following page)
30
<PAGE>
<TABLE>
<CAPTION>
As of December 31, As of
---------------------------------------------- June 30,
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and Cash Equivalents $ 407 $ 498 $ 591 $ 1,303 $ 1,585 $ 2,232
Total Assets 107,874 115,429 125,288 136,859 186,881 212,630
Total Debt 68,229 73,304 78,460 86,258 121,874 118,894
Stockholders' Equity 22,291 23,419 24,047 22,869 21,011 54,729
</TABLE>
- -------------
(Footnotes from the preceding page)
(1) Earnings before interest, taxes, depreciation, amortization and
extraordinary charges ("EBITDA"). Based on its experience in the records
management industry, the Company believes that EBITDA is an important
tool for measuring the performance of records management companies
(including potential acquisition targets) in several areas, such as
liquidity, operating performance and leverage. In addition, lenders use
EBITDA as a criterion in evaluating records management companies, and
substantially all of the Company's financing agreements contain covenants
in which EBITDA is used as a measure of financial performance. However,
EBITDA should not be considered an alternative to operating or net income
(as determined in accordance with GAAP) as an indicator of the Company's
performance or to cash flow from operations (as determined in accordance
with GAAP) as a measure of liquidity. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Overview" and
"--Liquidity and Capital Resources" for discussions of other measures of
performance determined in accordance with GAAP and the Company's sources
and applications of cash flow.
(2) Growth capital expenditures include investment in racking systems, new
buildings and leasehold improvements, equipment for new facilities,
management information systems and facilities restructuring. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations--Liquidity and Capital Resources--Capital Investments."
(3) Includes $2,901 related to the cost of constructing a records management
facility which was sold in a sale and leaseback transaction in the fourth
quarter of 1994.
(4) The term "Carton" is defined as a measurement of the volume equal to a
single standard storage carton, approximately 1.2 cubic feet. The number
of Cartons stored does not include storage volumes in the Company's vital
records services and data protection services which are described under
"Business."
(5) The pro forma ratio of earnings to fixed charges, giving effect to the
Transactions as if each had occurred as of January 1, 1995, would have
been 0.9x for the year ended December 31, 1995 and 0.9x for the six
months ended June 30, 1996. For the year ended December 31, 1995 and the
six months ended June 30, 1996, the Company would have needed to generate
additional income from continuing operations, before provision for income
taxes, of $1,576 and $358 to cover its pro forma fixed charges of $26,162
and $13,272, respectively. The ratio of earnings to fixed charges was
0.9x for the fiscal year ended December 31, 1991. For such period, the
Company would have needed to generate additional income from continuing
operations, before provision for income taxes, of $1,292 to cover its
fixed charges of $11,689.
31
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Selected
Consolidated Financial and Operating Information and Iron Mountain's
Consolidated Financial Statements and the Notes thereto and the other
financial and operating information included elsewhere in this Prospectus.
This Prospectus contains, in addition to historical information,
forward-looking statements that include risks and uncertainties. The
Company's actual results may differ materially from the results discussed in
the forward-looking statements. Factors that might cause such a difference
include those discussed below, as well as those discussed elsewhere in this
Prospectus. The Company undertakes no obligation to release publicly the
result of any revisions to these forward-looking statements that may be made
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Overview
The Company's primary financial objective is to increase its EBITDA, which
is a source of funds to service indebtedness and for investment in continued
internal growth and growth through acquisitions. The Company has benefited
from growth in EBITDA, which has increased from $17.9 million in 1992 to
$26.1 million in 1995 (a CAGR of 13.5%), but other measures of the Company's
financial performance, such as net income and net income applicable to common
stockholders, have been negatively affected by this objective. In 1994 and
1995, the Company experienced net losses applicable to common stockholders.
Such net losses are attributable in part to significant increases in non-cash
charges associated with the Company's pursuit of its growth strategy, namely,
(i) increases in depreciation and amortization expenses associated with
expansion of the Company's storage capacity and the acquisition of certain
large volume accounts and (ii) increases in goodwill amortization associated
with acquisitions accounted for under the purchase method. In addition, net
income available to common stockholders has been negatively affected by a
non-cash charge for accretion of a redeemable put warrant, which was redeemed
upon completion of the Company's Initial Public Offering. See Note 5 of Notes
to the Company's Audited Consolidated Financial Statements.
Iron Mountain's revenues consist of storage revenues and service and
storage material sales revenues. Storage revenues are derived from charges
for storing records (either on a per unit or a per cubic foot of records
basis), and have accounted for approximately 60% of total revenues in each of
the last three years and for the six months ended June 30, 1996. Service and
storage material sales revenues are derived primarily from the Company's
courier operations (consisting primarily of the pickup and delivery of
records upon customer request), additions of new Cartons, temporary removal
of records from storage, refiling of removed records, destructions of
records, permanent withdrawals from storage and sales of specially designed
storage containers and related supplies. Customers are generally billed on a
monthly basis on contractually agreed-upon terms.
While the Company's total revenues have increased from $70.7 million in
1992 to $104.4 million in 1995, average revenue on a per Carton basis has
declined over this period. The year-over-year declines in average revenue per
Carton for 1993, 1994 and 1995 were approximately 8%, 7% and 2%,
respectively. Such declines were attributable to: (i) increases in sales to
large volume accounts, which typically generate lower revenue per Carton (in
particular the Resolution Trust Corporation (the "RTC") account, which
incorporated substantial volume discounts, although such discounts were
offset by revenues from special service projects during 1993 and 1994); (ii)
a facilities management arrangement with a large volume account under which,
prior to July 1996, the Company managed the customer's records management
facility and, therefore, the charges to the customer prior to July 1996 did
not include a rent component; and (iii) industry-wide pricing pressures.
Despite this decline, the Company has been able to maintain its EBITDA
margins through increased overall operating efficiencies and economies of
scale as well as specific efficiencies realized in the servicing of large
volume accounts. For 1992, 1993, 1994, 1995 and the six months ended June 30,
1996, EBITDA margins were 25.3%, 22.8%, 23.8%, 25.0% and 24.2%, respectively.
Pursuant to its 1992 contract with the RTC, the Company participated in
the consolidation and centralization of a large number of records on behalf
of the RTC. This activity, which entailed extensive services and the
Company's start-up of operations in two new markets, resulted in a
significant increase in service and storage material sales revenues in 1993.
After the labor-intensive process of assembling and inventorying the records
was substantially completed in 1994, the revenue from RTC service and storage
material sales began to decrease, which decrease was partially offset by
increases in storage revenues due to an increase in Cartons stored. The
contract
32
<PAGE>
has been renewed effective July 27, 1996 for a one-year term by the Federal
Deposit Insurance Corporation (the "FDIC"), as successor in interest to the
RTC, and may be renewed at the option of the FDIC for three further terms of
one year each. Although the substantial costs of removing its records from
the Company's facilities may act as a disincentive to the FDIC to select
another vendor, there can be no assurance that this contract will be further
renewed or that the terms of any such renewal will be as favorable to Iron
Mountain as the terms of the current contract.
Cost of sales consists primarily of wages and benefits, facility occupancy
costs, vehicle and other equipment costs and supplies. Of these, the most
significant are wages and benefits and facility occupancy costs. Over the
past several years, Iron Mountain has been able to reduce per Carton storage
costs by: (i) designing racking systems and operating space to maximize
facility storage efficiency; (ii) negotiating favorable facility leases and
having facilities built to its custom specifications; and (iii) leasing
larger facilities, which, when filled, are less expensive per Carton to
operate.
Selling, general and administrative expenses consist primarily of
management, administrative, sales and marketing wages and benefits, and also
include travel, communications, professional fees, bad debts, training,
office equipment and supplies expenses.
The Company's depreciation and amortization charges result primarily from
the capital-intensive nature of the records management industry and the
acquisitions the Company has completed. The principal components of
depreciation relate to racking systems and related equipment, new buildings
and leasehold improvements, equipment for new facilities and computer system
software and hardware. Amortization primarily relates to goodwill and
noncompetition agreements arising from acquisitions and customer acquisition
costs. The Company has accounted for all of its acquisitions under the
purchase method. Since the purchase price for records management companies is
usually substantially in excess of the book values of their assets, these
purchases have given rise to significant goodwill and, accordingly,
significant levels of amortization. Although amortization is a non-cash
charge, it does decrease reported net income. Accordingly, the faster the
Company expands by making such acquisitions, the more likely it will be to
incur amortization charges, reducing net income.
In February 1996, the Company received net proceeds of $33.3 million from
its Initial Public Offering. The Company used $6.6 million of such net
proceeds to repurchase a warrant to acquire 444,385 shares of Common Stock
(the "Warrant"). For financial reporting purposes, the Company was required
to record a non-cash charge (based on the estimated redemption value
calculated using the effective interest rate method), resulting in
substantial charges to net income applicable to common stockholders over the
period the Warrant was outstanding. See Note 5 of Notes to the Company's
Audited Consolidated Financial Statements. The remaining net proceeds were
used by the Company to fund acquisitions (including Completed Acquisitions
consummated after the closing of the Initial Public Offering), to repay
indebtedness used to fund acquisitions and for working capital.
In December 1995, the Company decided to consolidate its corporate
accounting activities by transferring to Boston, Massachusetts those
accounting activities previously performed in Los Angeles, California. As a
result of such transfer, the Company recorded charges of $0.5 million and
$0.3 million in the fourth quarter of 1995 and the first six months of 1996,
respectively.
Forward-Looking Statements Regarding Revenues
One of the Company's goals is to achieve revenue growth of five to 10
percent per year from its existing business through the end of 1997. In
addition, over the same period, the Company's goal is to achieve revenue
growth of between 10 to 15 percent per year as a result of acquisitions.
There can be no assurance that the Company will be able to meet these goals.
See "Risk Factors."
33
<PAGE>
Results of Operations
The following table sets forth, for the periods indicated, information
derived from the Company's consolidated statements of operations, expressed
as a percentage of revenue. There can be no assurance that the trends in
revenue growth or operating results shown below will continue in the future.
<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended June 30,
------------------------------- ---------------------
1993 1994 1995 1995 1996
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Storage 59.9% 61.7% 61.4% 61.2% 61.6%
Service and Storage Material Sales 40.1 38.3 38.6 38.8 38.4
----- ----- ----- ----- -----
Total Revenues 100.0 100.0 100.0 100.0 100.0
----- ----- ----- ----- -----
Operating Expenses:
Cost of Sales (Excluding Depreciation) 52.7 52.4 50.1 50.0 50.6
Selling, General and Administrative 24.5 23.8 24.9 25.3 25.1
Depreciation and Amortization 8.3 9.9 11.8 10.8 11.8
----- ----- ----- ----- -----
Total Operating Expenses 85.5 86.1 86.8 86.1 87.5
----- ----- ----- ----- -----
Operating Income 14.5 13.9 13.2 13.9 12.5
Interest Expense 10.0 10.2 11.3 11.8 10.0
----- ----- ----- ----- -----
Income before Provision for Income Taxes 4.5 3.7 1.9 2.1 2.5
Provision for Income Taxes 2.6 2.2 1.7 1.3 1.4
----- ----- ----- ----- -----
Net Income 1.9% 1.5% 0.2% 0.8% 1.1%
===== ===== ===== ===== =====
EBITDA 22.8% 23.8% 25.0% 24.7% 24.2%
</TABLE>
Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995
Storage revenues increased from $30.7 million for the first six months of
1995 to $39.4 million for the first six months of 1996, an increase of $8.7
million or 28.0%. Ten acquisitions completed by the Company in 1995 and the
first six months of 1996 accounted for $5.5 million or 63.7% of such
increase. The balance of the storage revenues growth resulted primarily from
net increases in Cartons stored by existing customers and from sales to new
customers.
Service and storage material sales revenues increased from $19.5 million
for the first six months of 1995 to $24.6 million for the first six months of
1996, an increase of $5.1 million or 26.2%. Acquisitions accounted for $3.4
million or 66.2% of such increase. The balance of such increase resulted from
increases in service and storage material sales to existing customers and the
addition of new customer accounts.
For the reasons discussed above, total revenues increased from $50.2
million for the first six months of 1995 to $64.0 million for the first six
months of 1996, an increase of $13.8 million or 27.3%. Of such increase, $8.9
million or 64.6% was attributable to acquisitions completed by the Company in
1995 and the first six months of 1996.
Cost of sales (excluding depreciation) increased from $25.1 million for
the first six months of 1995 to $32.4 million for the first six months of
1996, an increase of $7.3 million or 29.0%, and increased as a percentage of
revenues from 50.0% for the first six months of 1995 to 50.6% for the first
six months of 1996. The increase was primarily attributable to the increase
in Cartons stored, increased expenses related to the severe winter weather on
the Atlantic coast during the first quarter of 1996 and expenses related to
certain facility relocations.
Selling, general and administrative expenses increased from $12.7 million
for the first six months of 1995 to $16.1 million for the first six months of
1996, an increase of $3.4 million or 26.5%, and decreased as a percentage of
revenues from 25.3% for the first six months of 1995 to 25.1% for the first
six months of 1996. The $3.4 million increase was primarily attributable to
the costs associated with becoming a public company, with accelerated
acquisition activity, including certain redundant transitional expenses as
new acquisitions were integrated into the Company, and the addition of
personnel needed to support the Company's growth. Additionally, the selling,
general
34
<PAGE>
and administrative expenses of acquired companies tend to be higher than Iron
Mountain's, and cost reductions and other possible synergies are not realized
immediately.
Depreciation and amortization expense increased from $5.4 million for the
first six months of 1995 to $7.5 million for the first six months of 1996, an
increase of $2.1 million or 38.7%, and increased as a percentage of revenues
from 10.8% for the first six months of 1995 to 11.8% for the first six months
of 1996. The increase was primarily attributable to the additional
depreciation and amortization expense related to the aforementioned
acquisitions, capital expenditures, including racking systems, information
systems and improvements to existing facilities, and additions to customer
acquisition costs.
As a result of the foregoing factors, operating income increased from $7.0
million for the first six months of 1995 to $8.0 million for the first six
months of 1996, an increase of $1.0 million or 14.1%. As a percentage of
revenues, operating income decreased from 13.9% for the first six months of
1995 to 12.5% for the first six months of 1996.
Interest expense increased from $5.9 million for the first six months of
1995 to $6.4 million for the first six months of 1996, an increase of $0.5
million or 7.6%. The increase was primarily attributable to increased
indebtedness to finance acquisitions and capital expenditures. The decrease
in interest expense as a percentage of revenues was primarily attributable to
a net decrease in interest rates.
As a result of the foregoing factors, income before provision for income
taxes increased from $1.1 million (2.1% of revenues) for the first six months
of 1995 to $1.6 million (2.5% of revenues) in the first six months of 1996,
an increase of $0.5 million or 50.8%. Provision for income taxes increased
from $0.6 million (1.3% of revenues) for the first six months of 1995 to $0.9
million (1.4% of revenues) for the first six months of 1996. The Company's
effective tax rate is higher than statutory rates primarily due to the
amortization of the nondeductible portion of goodwill associated with
acquisitions made prior to the change in tax laws which now generally permit
deduction of such expenses.
Net income increased from $0.4 million (0.8% of revenues) for the first
six months of 1995 to $0.7 million (1.1% of revenues) for the first six
months of 1996, an increase of $0.3 million, or 66.0%. Net income (loss)
applicable to common stockholders was a $0.5 million net loss (1.1% of
revenues), after accretion of $0.9 million related to the Warrant, for the
first six months of 1995 compared to net income of $0.4 million (0.7% of
revenues), after accretion of $0.3 million related to the Warrant, for the
first six months of 1996. The Warrant was redeemed in full in February 1996,
with a portion of the proceeds from the Initial Public Offering. As a result
of such redemption, there will be no future charges for such accretion.
As a result of the foregoing factors, EBITDA increased from $12.4 million
for the first six months of 1995 to $15.5 million for the first six months of
1996, an increase of $3.1 million, or 24.8%. As a percentage of revenues,
EBITDA decreased from 24.7% for the first six months of 1995 to 24.2% for the
first six months of 1996.
Year Ended December 31, 1995 Compared to Year Ended December 31, 1994
Storage revenues increased from $54.1 million in 1994 to $64.2 million in
1995, an increase of $10.1 million or 18.6%. Seven acquisitions completed
between June 1994 and December 1995 accounted for $5.7 million or 56.7% of
such increase. The balance of the storage revenues growth resulted primarily
from net increases in Cartons stored by existing customers and from sales to
new customers.
Service and storage material sales revenues increased from $33.5 million
in 1994 to $40.3 million in 1995, an increase of $6.8 million or 20.1%. This
increase was accomplished despite a decrease of approximately $0.8 million in
such revenues received from the RTC, which decrease was primarily due to a
reduction in revenues from special service projects. Acquisitions accounted
for $4.3 million or approximately 63.5% of such increase. The balance of such
increase resulted from increases in service and storage material sales to
existing customers and the addition of new customer accounts.
For the reasons discussed above, total revenues increased from $87.6
million in 1994 to $104.4 million in 1995, an increase of $16.8 million or
19.2%. Of such increase, $10.0 million or 59.4% was attributable to
acquisitions made by the Company between June 1994 and December 1995. The
monthly average Cartons stored increased approximately 22% in 1995 as
compared to 1994, from approximately 16.7 million Cartons to approximately
20.4 million Cartons. The percentage increase was greater than that of total
revenues primarily for the reason described in the third paragraph under
"Overview" above.
35
<PAGE>
Cost of sales (excluding depreciation) increased from $45.9 million in
1994 to $52.3 million in 1995, an increase of $6.4 million or 13.9%, and
decreased as a percentage of revenues from 52.4% in 1994 to 50.1% in 1995.
The $6.4 million increase resulted primarily from an increase in Cartons
stored. The decrease as a percentage of revenues was due primarily to
increased storage efficiencies resulting from relocations to, or additions
of, newer, higher density facilities as well as increased utilization of
storage capacity.
Selling, general and administrative expenses increased from $20.9 million
in 1994 to $26.0 million in 1995, an increase of $5.1 million or 24.9%, and
increased as a percentage of revenues from 23.8% in 1994 to 24.9% in 1995.
The $5.1 million increase was due primarily to increases in field management
and administrative staffing, including increases due to acquisitions. Of the
1.1% increase as a percentage of revenues, $0.6 million (0.6% of revenues)
resulted from a provision for a judgment in a lawsuit relating to a 1992
incident and a $0.5 million (0.5% of revenues) charge for the relocation of
the corporate accounting function from Los Angeles to Boston.
Depreciation and amortization expenses increased from $8.7 million in 1994
to $12.3 million in 1995, an increase of $3.6 million or 42.0%, and increased
as a percentage of revenues from 9.9% in 1994 to 11.8% in 1995. Depreciation
and amortization expenses, both in absolute dollars and as a percentage of
revenues, continued to increase, primarily as a result of the Company's
acquisitions and growth-related capital investments for racking systems,
improvements to records management facilities, information systems and
customer acquisition costs. Amortization during 1995 included a one-time
charge of $0.9 million (0.9% of revenues) in connection with the write-down
of the goodwill of a subsidiary due to the Company's decision to sell such
subsidiary at an estimated price which is $0.9 million less than such
subsidiary's book value and related goodwill. The Company subsequently
decided not to sell such subsidiary.
As a result of the foregoing factors, operating income increased from
$12.2 million in 1994 to $13.8 million in 1995, an increase of $1.6 million
or 13.0%, and decreased as a percentage of revenues from 13.9% to 13.2%.
Interest expense increased from $9.0 million in 1994 to $11.8 million in
1995. This increase was due primarily to increased levels of indebtedness
primarily to finance acquisitions, as well as higher interest rates and
higher deferred financing charges.
As a result of the foregoing factors, income before provision for income
taxes decreased from $3.2 million (3.7% of revenues) in 1994 to $1.9 million
(1.9% of revenues) in 1995, a decrease of $1.3 million or 40.0%. Provision
for income taxes decreased from $2.0 million (2.2% of revenues) to $1.7
million (1.7% of revenues). The Company's effective tax rates for 1994 and
1995 were higher than statutory rates primarily due to $1.5 million and $2.5
million, respectively, of amortization of nondeductible goodwill.
Net income decreased $1.1 million from $1.3 million (1.5% of revenues) in
1994 to $0.2 million (0.2% of revenues) in 1995 as a result of the factors
outlined above.
As a result of the foregoing factors, EBITDA increased from $20.9 million
in 1994 to $26.1 million in 1995, an increase of $5.2 million or 25.1%, and
increased as a percentage of revenues from 23.8% to 25.0%. These increases
reflect continuing economies of scale and increased operating efficiencies,
which were partially offset by the $0.6 million (0.6% of revenues) reserve
relating to the judgment in the lawsuit referred to above and by the $0.5
million (0.5% of revenues) charge for the relocation of the corporate
accounting function from Los Angeles to Boston.
Year Ended December 31, 1994 Compared to Year Ended December 31, 1993
Storage revenues increased from $48.9 million in 1993 to $54.1 million in
1994, an increase of $5.2 million or 10.6%. The substantial majority of the
storage revenues growth resulted from sales to new customers and increases in
Cartons stored from existing customers. Three acquisitions completed between
June and October 1994 accounted for only $0.8 million of the increase.
Service and storage material sales revenues increased from $32.8 million
in 1993 to $33.5 million in 1994, an increase of $0.7 million or 2.3%. This
increase was due primarily to an increase in services provided to existing
and new customers, which was partially offset by a $0.9 million decrease in
such revenues received from the RTC primarily due to a reduction in revenues
from special service projects.
For the reasons discussed above, total revenues increased from $81.7
million in 1993 to $87.6 million in 1994, an increase of $5.9 million or
7.3%. The monthly average Cartons stored increased from approximately 14.5
million
36
<PAGE>
in 1993 to approximately 16.7 million in 1994, an increase of approximately
15%. The percentage increase in Cartons stored was greater than that of total
revenues for the reasons discussed in the third paragraph under "Overview"
above.
Cost of sales (excluding depreciation) increased from $43.1 million in
1993 to $45.9 million in 1994, an increase of $2.8 million or 6.6%, and
decreased as a percentage of revenues from 52.7% in 1993 to 52.4% in 1994.
The $2.8 million increase was due primarily to increases in storage capacity.
The decrease as a percentage of revenues was due primarily to increased
storage efficiencies.
Selling, general and administrative expenses increased from $20.0 million
in 1993 to $20.9 million in 1994, an increase of $0.9 million or 4.4%, and
decreased as a percentage of revenues from 24.5% in 1993 to 23.8% in 1994.
The increase in such expenses was due primarily to inflationary increases in
wages and benefits, partially offset by a $0.2 million decrease in bad debt
expense. The decrease as a percentage of revenues was due to operating
efficiencies and the decrease of 0.3% in bad debt expense.
Depreciation and amortization expenses increased from $6.8 million in 1993
to $8.7 million in 1994, an increase of $1.9 million or 28.0%, and increased
as a percentage of revenues from 8.3% in 1993 to 9.9% in 1994. This increase,
both in dollars and as a percentage of revenues, was due primarily to an
increase in depreciation charges resulting from capital expenditures for
racking systems and improvements to records management facilities and
information systems.
As a result of the foregoing factors, operating income increased from
$11.9 million in 1993 to $12.2 million in 1994, an increase of $0.3 million
or 2.8%, and decreased from 14.5% of revenues to 13.9% of revenues.
Interest expense increased from $8.2 million in 1993 to $9.0 million in
1994, an increase of $0.8 million or 9.2%, due primarily to increased levels
of indebtedness.
As a result of the foregoing factors, income before provision for income
taxes decreased from $3.7 million in 1993 (4.5% of revenues) to $3.2 million
in 1994 (3.7% of revenues), a decrease of $0.5 million or 11.4%. Provision
for income taxes decreased from $2.1 million in 1993 (2.6% of revenues) to
$2.0 million in 1994 (2.2% of revenues). The Company's effective tax rates
for financial reporting purposes for 1994 and 1993 exceeded statutory tax
rates primarily because of $1.5 million of amortization of nondeductible
goodwill in each year.
Net income decreased from $1.6 million (1.9% of revenues) to $1.3 million
(1.5% of revenues) as a result of the factors outlined above.
As a result of the foregoing factors, EBITDA increased from $18.6 million
in 1993 to $20.9 million in 1994, an increase of $2.3 million or 12.0%, and
increased as a percentage of revenues from 22.8% to 23.8%. The increase as a
percentage of revenues reflected economies of scale and increased operating
efficiencies.
37
<PAGE>
Recent Quarterly Financial Data
The following table sets forth certain consolidated statements of
operations data of the Company for the quarterly periods shown. The unaudited
quarterly information has been prepared on the same basis as the annual
financial information and, in management's opinion, includes all adjustments
(consisting of normal recurring accruals) necessary to present fairly the
information for the quarters presented. The operating results for any quarter
are not necessarily indicative of results for the year or for any future
period.
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------------------------------------------------------------------------
1994 1995 1996
------------------------------------------ ------------------------------------------- -------------------
Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30
------- ------- -------- -------- ------- ------- -------- -------- ------- -------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Storage $12,863 $13,220 $13,855 $14,160 $14,882 $15,866 $16,246 $17,171 $19,154 $20,209
Service and
Storage
Material
Sales 8,452 8,489 8,171 8,408 9,456 10,020 10,324 10,471 11,874 12,713
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
otal Revenues 21,315 21,709 22,026 22,568 24,338 25,886 26,570 27,642 31,028 32,922
Operating
Expenses:
Cost of Sales
(Excluding
Depreciation) 11,429 11,325 11,509 11,617 12,224 12,888 12,888 14,277 15,668 16,715
Selling,
General and
Administrative 5,146 5,113 5,329 5,265 5,849 6,848(2) 6,358 6,980(4) 7,807 8,260(5)
Depreciation
and
Amortization 1,845 1,936 2,526(1) 2,383 2,752 2,676 3,775(3) 3,138 3,608 3,922
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating
Expenses 18,420 18,374 19,364 19,265 20,825 22,412 23,021 24,395 27,083 28,897
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
perating
Income $ 2,895 $ 3,335 $ 2,662 $ 3,303 $ 3,513 $ 3,474 $ 3,549 $ 3,247 $ 3,945 $ 4,025
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
BITDA $ 4,740 $ 5,271 $ 5,188 $ 5,686 $ 6,265 $ 6,150(2) $ 7,324 $ 6,385(4) $ 7,553 $7,947(5)
</TABLE>
- -------------
(1) Includes a $277 write-down relating to the closing of two facilities.
(2) Includes a $600 reserve for litigation.
(3) Includes a $900 write-down of the goodwill of a subsidiary as described
in "Results of Operations."
(4) Includes a charge of $500 relating to the relocation of the Company's
corporate accounting function.
(5) Includes a charge of $321 relating to the relocation of the Company's
corporate accounting function.
Liquidity and Capital Resources
In February 1996, the Company raised $33.3 million, net of underwriters'
discounts and commissions and associated costs, in the Initial Public
Offering. The net proceeds from the Initial Public Offering were used to
retire the Warrant, to fund acquisitions, to repay debt that had been
incurred to make acquisitions and for working capital.
As the Company has sought to increase its EBITDA, it has made significant
capital investments, consisting primarily of acquisitions; growth-related
capital expenditures, including racking systems, information systems and
improvements to existing facilities; and customer acquisition costs. Cash
paid for these investments during the first six months of 1996 amounted to
$19.2 million, $11.2 million and $0.7 million, respectively. These
investments have been primarily funded through a portion of the net proceeds
of the Initial Public Offering, cash flows from operations and borrowings
under the Credit Agreement.
Stockholders' equity has been negatively affected primarily by the
accretion of the Warrant, interest expense, depreciation and amortization
expenses associated with expansion of the Company's storage capacity and the
acquisition of certain large volume accounts, and amortization of goodwill.
In part as a result of the Initial Public Offering, the Company's ratio of
total debt to stockholders' equity decreased from 3.1-to-1 at December 31,
1992 to 2.2-to-1 at June 30, 1996. On a pro forma basis (after giving effect
to the Transactions), the ratio of total debt to stockholders' equity at June
30, 1996 would have been 3.3-to-1.
The Company currently intends to apply a portion of the net proceeds from
the Offering to the prepayment of the Credit Agreement, the Chrysler Notes
and the FDS Notes. The Company will record, in the quarter in which
38
<PAGE>
the Offering is consummated, an extraordinary loss on retirement of debt, net
of related tax benefit. Assuming the Transactions were to be consummated on
September 30, 1996, the amount of such loss would be approximately $2.0 million.
Such loss will consist of the write-down of deferred financing costs, original
issue discount, prepayment penalty and loss on possible termination of certain
interest rate protection agreements.
Capital Investments
For 1994, 1995 and the six months ended June 30, 1996, the Company's
growth-related capital expenditures were $15.8 million, $14.4 million and
$10.7 million, respectively. Included in capital expenditures for 1994 is
$2.9 million for the construction of a records management facility which was
sold in a sale and leaseback transaction. Growth-related capital expenditures
consist primarily of investment in racking systems, new building and
leasehold improvements, equipment for new facilities, management information
systems and facilities restructuring. For 1994, 1995 and the six months ended
June 30, 1996, the Company's maintenance capital expenditures were $1.2
million, $0.9 million and $0.5 million, respectively.
In addition, the Company incurs costs (net of revenues received for the
initial transfer of records) related to the acquisition of large volume
accounts (typically over 10,000 Cartons). For 1994, 1995 and the six months
ended June 30, 1996, the Company's additions to customer acquisition costs
were $1.4 million, $1.4 million and $0.7 million, respectively.
The Company currently expects that its capital expenditures (other than
capital expenditures related to future acquisitions, which cannot be
presently estimated) for the second half of 1996 will be between $9 million
and $10 million, and for 1997 will be between $18 million and $21 million.
The Company expects to fund these expenditures and costs from cash flows from
operations and by borrowings under the New Credit Facility.
Recent and Pending Acquisitions
The Company's liquidity and capital resources have been significantly
impacted by acquisitions and, given the Company's acquisition strategy, may
be significantly impacted for the foreseeable future. In order to capitalize
on industry consolidation, the Company in mid-1994 adopted a more active
acquisition strategy. Since mid-1994, the Company has acquired or entered
into agreements to acquire 19 records management businesses, 17 of which have
been completed and two of which are pending, for a total purchase price of
$103.2 million (not including contingent payments of up to $4.6 million based
upon the achievement of certain revenue targets during 1996 through 1998).
The Company has historically financed its acquisitions with borrowings under
the Credit Agreement in conjunction with cash flows provided by operations
and, more recently, from a portion of the proceeds of the Initial Public
Offering. Net borrowings for acquisitions during 1994, 1995 and the first six
months of 1996 totaled $2.1 million, $32.3 million and $19.0 million,
respectively. In addition, subsequent to June 30, 1996, the Company has
incurred an additional $24.5 million under the Credit Agreement to fund the
Completed Acquisitions consummated after such date. The Company intends to
use a portion of the net proceeds from the Offering, together with borrowings
under the New Credit Facility, to fund the Pending Acquisitions. The
Company's future interest expense may increase significantly as a result of
the additional indebtedness the Company may incur to finance possible future
acquisitions. To the extent that future acquisitions are financed by
additional borrowings under the New Credit Facility or other credit
facilities, the resulting increase in debt and interest expense could have a
negative effect on such measures of liquidity as debt to equity, EBITDA to
debt and EBITDA to interest expense.
Sources of Funds
During the six months ended June 30, 1996, the Company generated $8.1
million in cash flows from operations as compared to $8.2 million for the
same period of the prior year. Such change in cash flows from operations
resulted from a $3.1 million increase in EBITDA and an increase in accounts
payable, which were partially offset by an increase in accounts receivable
and other changes in working capital accounts. During the years ended
December 31, 1994 and 1995, the Company generated cash flows from operations
of $11.6 million and $15.7 million, respectively.
At December 31, 1995, the Company had estimated net operating loss
carryforwards of approximately $7.3 million for federal income tax purposes.
As a result of such loss carryforwards, cash paid for income taxes has
historically been substantially lower than the provision for income taxes.
39
<PAGE>
Net cash flows provided by financing activities were $6.7 million and
$34.1 million in 1994 and 1995, respectively, substantially all of which was
provided under the Credit Agreement, and $23.7 million for the six months
ended June 30, 1996, substantially all of which was provided by the net
proceeds of the Initial Public Offering and under the Credit Agreement.
Credit Arrangements of the Company
The Credit Agreement provides for total borrowings not to exceed $130
million and consists of the following facilities: (i) a $15 million revolving
working capital facility; (ii) a $10 million term loan; (iii) a $55 million
revolving acquisition credit facility; and (iv) a $50 million term loan. At
June 30, 1996, all borrowings under the Credit Agreement bore interest at a
weighted average annual rate of 8.5%. The obligations under the Credit
Agreement are secured by substantially all of the Company's assets, including
the stock of its operating subsidiaries. The Company also has the Chrysler
Notes outstanding. These facilities require the Company to meet certain
financial covenants and ratios. See Note 3 of Notes to the Company's Audited
Consolidated Financial Statements.
The Company intends to apply a portion of the net proceeds from the
Offering to prepay in its entirety all indebtedness outstanding under the
Credit Agreement and the Chrysler Notes. See "The Transactions" and "Use of
Proceeds." In addition, the Company intends to terminate the Credit Agreement
and to enter into the New Credit Facility as a replacement bank credit
facility. The New Credit Facility is expected to provide the Company with
revolving credit availability of $100 million for acquisitions, working
capital and other corporate purposes. See "Description of the New Credit
Facility" for a more detailed description of the currently expected terms of
the New Credit Facility. No assurance can be given that the Company will
enter into the New Credit Facility on these or any other terms. The Offering
is not conditioned on the closing of the New Credit Facility.
The annual maturities of Iron Mountain's indebtedness for the second half
of 1996 and for 1997, 1998, 1999 and 2000 are $1.6 million, $3.4 million,
$8.3 million, $8.4 million and $32.5 million, respectively. Giving pro forma
effect to the Transactions, the annual maturities of Iron Mountain's
indebtedness for the second half of 1996 and for 1997, 1998, 1999 and 2000
would be $0.1 million, $0.4 million, $0.4 million, $0.4 million and $7.8
million, respectively.
As of June 30, 1996, the Company had available under the Credit Agreement
$6.2 million under the working capital facility and $24.7 million under the
acquisition credit facility. Subsequent to June 30, 1996, the Company
borrowed $24.5 million under the acquisition credit facility to finance
acquisitions, and amended the Credit Agreement to increase the acquisition
credit facility by $5.0 million. As of June 30, 1996, on a pro forma basis,
after giving effect to the Transactions (see "The Transactions" and "Use of
Proceeds"), the Company would have had $174.5 million in total indebtedness
and an aggregate of approximately $86.3 million available under the New
Credit Facility.
Under the Credit Agreement, Iron Mountain is required to use, and may in
the future use, interest rate protection products to reduce its exposure to
increases in interest rates. Under the New Credit Facility, Iron Mountain
will also be required to use such interest rate protection products. As of
June 30, 1996, the Company had $118.9 million of total debt, of which $26.0
million had fixed interest rates and $92.9 million had variable interest
rates, $30.0 million of which was covered by interest rate protection
products, certain of which may be terminated in connection with the repayment
of the Credit Agreement. See Note 3 of Notes to the Company's Audited
Consolidated Financial Statements.
Future Capital Needs
Iron Mountain's ability to generate cash adequate to fund its needs
depends generally on the results of its operations and the availability of
financing. Management believes that cash flow from operations in conjunction
with borrowings from existing and possible future credit facilities will be
sufficient for the foreseeable future to meet debt service requirements and
to make possible future acquisitions and capital expenditures. Depending on
the pace of the Company's acquisitions, the Company may elect to seek
additional financing during the next two years. The Company anticipates that
any such financing will be debt financing, including the issuance of debt
securities. However, depending on market conditions and the preferences of
acquisition candidates, the Company would consider issuing equity securities.
However, there can be no assurance in this regard or that the terms available
for any future financing, if required, would be favorable to Iron Mountain.
40
<PAGE>
Seasonality
Historically, the Company's business has not been subject to seasonality
in any material respect.
Inflation
Certain of the Company's expenses, such as wages and benefits, occupancy
costs and equipment repair and replacement, are subject to normal
inflationary pressures. Although the Company to date has been able to offset
inflationary cost increases through increased operating efficiencies, there
can be no assurance that the Company will be able to offset any future
inflationary cost increases through similar efficiencies or increased storage
or service charges.
41
<PAGE>
BUSINESS
Introduction
Iron Mountain is the largest records management company in the United
States, as measured by revenues. The Company is a full-service provider of
records management and related services, enabling customers to outsource data
and records management functions. Pro forma for the Transactions, as of June
30, 1996, the Company managed approximately 29.6 million Cartons in 103
records centers in 33 markets nationwide. The Company has a diversified base
of over 19,000 customer accounts, which includes more than half of the
Fortune 500 and numerous legal, banking, healthcare, accounting, insurance,
entertainment and government organizations. The Company provides storage and
related services for all major media, including paper (which is the dominant
form of records retention and which has accounted for approximately 85% of
the Company's revenues since 1992), computer disks and tapes, microfilm and
microfiche, master audio and video tapes, film and optical disks, X-rays and
blueprints. The Company's principal services include filing, retrieval and
destruction of records, courier pick-up and delivery, database management and
customized reporting. The Company also sells storage materials and provides
consulting and other records-related services.
The Records Management Industry
Overview
Based on publicly available information, organizations in the United
States generate an estimated four trillion documents each year. Many of these
documents must be retained and available for reference for many years. These
records may be generally divided into two categories: active and inactive.
Active records relate to ongoing and recently completed activities or contain
information that is frequently referenced. Active records are usually stored
and managed on-site by the organization which originated them to ensure ready
availability.
Inactive records are the principal focus of the records management
industry. Inactive records consist of those records which are not needed for
immediate access but which must be retained for legal reasons or regulatory
compliance or for occasional reference in support of ongoing business
operations. Based on industry studies, the Company believes that inactive
records make up approximately 80% of all records.
[Pyramid chart showing relative size of estimated active
and inactive records market segments]
Growth of Market; Outsourcing
The Company believes that the volume of inactive records is increasing for
a number of reasons, including: (i) the rapid growth of inexpensive
document-producing technologies such as facsimile, desktop printing and
computer networking; (ii) increased regulatory requirements; (iii) concerns
over possible future litigation and the resulting increases in volume and
holding periods of documentation; (iv) the high cost of reviewing records and
deciding whether to retain or destroy them; and (v) the failure of many
entities to adopt or follow policies on records destruction. Despite the
growth of new "paperless" technologies, such as the Internet and e-mail,
management believes that stored information remains predominantly paper-based
and that such technologies have promoted the creation of hard copies of such
electronic information.
The Company believes that the records management industry will gain a
growing share of this increased volume as more large organizations make the
strategic decision to outsource their records management as part of
42
<PAGE>
a growing trend to outsource a wide variety of functions that can be
performed more cost-effectively by third parties, though there can be no
assurance in this regard. Records management companies can offer occupancy
and labor cost reductions while at the same time providing greater levels of
service than are typically available in-house.
Highly Fragmented Industry
Most records management companies serve a single local market, and are
often either owner-operated or ancillary to another business, such as a
moving company. According to the ACRC, as of January 1994 (the latest date
for which such information is available), approximately 2,600 firms offered
records storage and management services in the United States. The Company
believes that there are only four national providers in the industry
(including the Company) and that the rest are regional or, in most instances,
single-city operators.
Increasing Industry Consolidation
The Company believes that there is a trend towards consolidation in the
records management industry and that it will continue and accelerate because
of the industry's capital requirements for growth, customer demands for more
sophisticated technology solutions, a trend for certain large customers to
contract with one vendor in multiple cities and opportunities to achieve
economies of scale.
The records management business requires significant up-front capital
investment for real estate, racking systems and management information
technology. Economies of scale available in these areas can reward larger
initial capital investments by reducing per unit storage costs. However, such
economies of scale are only realized once a facility begins storage
operations and fills available capacity. Thus, larger companies with both
access to capital and the ability to quickly fill a new facility enjoy a
competitive cost advantage, thereby putting pressures on smaller competitors.
Financial Characteristics of Iron Mountain's Business
Iron Mountain's records management business has the following financial
characteristics:
(bullet)Recurring Revenues. Iron Mountain derives a majority of its
revenues from fixed periodic (usually monthly) fees charged to
customers for storage of records. Storage revenues have grown for
30 consecutive quarters and have represented approximately 60% of
the Company's total revenues in each of the last five years. Once
a customer places a record in storage with the Company and until
that record is destroyed or permanently removed (for which the
Company typically receives a service fee), the Company receives
recurring payments of fixed periodic fees without incurring
additional labor or marketing expenses or significant capital
costs. The stable and growing storage base also provides the
foundation for increases in revenues and EBITDA from service
activities and sales of storage materials.
(bullet)Historically Non-Cyclical Business. Iron Mountain has not
experienced a reduction of its business as a result of past
general economic downturns, although there can be no assurances
that this would be the case in the future. Management believes
that the outsourcing of records management may accelerate during
economic downturns as companies focus on reducing costs through
outsourcing non-core operating functions. In addition, management
believes that companies that have outsourced records management
are less likely during economic downturns to incur the move-out
costs and other expenses associated with switching vendors or
moving records management in-house.
(bullet)Inherent Growth from Existing Customers. The Company's customers
have on average generated additional Cartons at a faster rate than
stored Cartons have been destroyed or permanently removed. From
1992 to 1995, net Cartons from existing customers grew at an
average annual rate of 6.7%. The Company believes the consistent
growth of its storage revenues is the result of a number of
additional factors, including: (i) the trend toward increased
records retention; (ii) customer satisfaction with the Company's
services; and (iii) the costs and inconvenience of moving storage
operations in-house or to another provider of records management
services.
(bullet)Diversified and Stable Customer Base. The Company has over 19,000
customer accounts in a variety of industries. The Company
currently provides services to more than half of the Fortune 500
and numerous legal, banking, healthcare, accounting, insurance,
entertainment and government organizations. Only one
43
<PAGE>
of the Company's customers accounted for more than 3% of revenues
in 1993, 1994 or 1995. From 1992 to 1995, average annual permanent
removals of Cartons represented only approximately 4% of total
Cartons stored.
(bullet)Capital Expenditures Related Primarily to Growth. The Company's
business requires limited annual maintenance capital expenditures.
Maintenance capital expenditures were $1.8 million, $1.2 million
and $0.9 million in 1993, 1994 and 1995, respectively. From 1992
to 1995, over 90% of the Company's aggregate capital expenditures
were growth-related investments, primarily in racking systems, new
buildings and leasehold improvements, equipment for new
facilities, management information systems and facilities
restructuring. These growth-related capital expenditures are
primarily discretionary and create additional capacity for
increases in revenues and EBITDA.
Growth Strategy
Iron Mountain's growth strategy is to expand aggressively in existing and
new markets through increased business from existing customers, additions of
new customers and acquisitions. The Company's goal is to be one of the
largest records management companies in each of its markets. In addition,
through its growth strategy, the Company seeks to attain increasing economies
of scale in order to provide high-quality service at competitive prices.
The following table sets forth the Company's approximate growth in Cartons
stored by existing customers, new customers and as a result of acquisitions
for the three years ended December 31, 1993, 1994 and 1995 and the twelve
months ended June 30, 1996. The figures for the twelve months ended June 30,
1996 are not necessarily indicative of the results that will be achieved for
the twelve months ended December 31, 1996.
Cartons Added to Storage(1)
(In millions)
<TABLE>
<CAPTION>
Year Ended December 31, Twelve Months
------------------------------- Ended June 30,
1993 1994 1995 1996
-------- -------- -------- --------------
<S> <C> <C> <C> <C>
Cartons at Beginning of Period 12.6 15.5 17.7 20.3
Additions from Existing Customers
Gross Cartons Added (2) 1.9 2.6 2.5 3.1
Cartons Deleted:
Destructions (0.6) (0.9) (1.0) (1.1)
Permanent Removals (0.6) (0.6) (0.6) (0.8)
----- ----- ----- -----
Net Carton Growth from Existing Customers 0.7 1.1 0.9 1.2
Additions from New Customers (2) 2.2 1.0 1.4 1.8
Additions from Acquisitions 0.0 0.1 3.3 3.1
----- ----- ----- -----
Total Carton Additions 2.9 2.2 5.6 6.1
===== ===== ===== =====
Percentage Increase 23% 14% 32% 30%
</TABLE>
- -------------
(1) Excludes storage volumes attributable to the Company's vital records
services and data protection services.
(2) Gross Cartons added by the RTC or its successor the FDIC were
approximately 0.9 million, 0.3 million, 0.3 million and 0.3 million for
1993, 1994, 1995 and the twelve months ended June 30, 1996, respectively.
RTC additions in 1993 are included in Additions from New Customers
because the initial transfer of Cartons from the RTC commenced in the
fourth quarter of 1992 and continued into 1993. Additions in 1994, 1995
and the twelve months ended June 30, 1996 are included in Additions from
Existing Customers.
Growth from Existing Customers
Existing Iron Mountain customers have contributed to storage and services
revenue growth because they have on average generated additional Cartons at a
faster rate than old Cartons are destroyed or permanently removed. In order
to maximize growth opportunities from existing customers, the Company seeks
to maintain high levels of customer retention by providing premium customer
service through its decentralized customer support staff.
44
<PAGE>
The local customer support staff, working in conjunction with the
corporate staff, is also responsible for marketing additional services to
existing customers, including records tracking, indexing, customized
reporting, vital records management and records management consulting
services.
Additions of New Customers
The Company's direct sales force is dedicated solely to establishing new
account relationships and draws on the Company's national marketing
organization and senior management. New customer sales efforts have resulted
in the addition of more than 900 new customer accounts in each of the last
three years.
Iron Mountain segments its market into large volume accounts (typically
over 10,000 Cartons) and standard accounts. As of June 30, 1996, large volume
accounts represented more than half of the total Cartons stored. The two
segments differ in complexity of service and technology needs, purchasing
behavior and purchasing leverage. The Company employs different database
marketing techniques, program design features and pricing structures to meet
the needs of each segment. In recent years the Company's large volume account
segment has grown rapidly, driven by strategic outsourcing initiatives and
the Company's marketing efforts. In 1993, 1994, 1995 and the six months ended
June 30, 1996, large volume accounts represented 88%, 70%, 76% and 63%
respectively, of the additions of Cartons from new customers.
Growth through Acquisitions
Iron Mountain has had a successful record of acquiring and integrating
smaller records management companies. From 1990 through 1994, Iron Mountain
completed five acquisitions. In order to capitalize on industry
consolidation, the Company in mid-1994 adopted a more active acquisition
strategy and implemented changes in its management, systems and financial
infrastructure, including the consummation of the Initial Public Offering, to
execute such strategy. Since June 1994, the Company has acquired or entered
into agreements to acquire 19 companies, 17 of which have been completed and
two of which are pending. The Company operates in 32 markets nationwide and
intends to continue to make fold-in acquisitions in existing markets and to
make strategic acquisitions in new geographic markets, with an emphasis on
the 50 largest markets in the United States. The Company's corporate
development staff is engaged in an ongoing review of acquisition candidates.
As of the date hereof, the Company is in contact with approximately 40
companies, and expects that it will continue to meet several new candidates
each month, although the actual number may vary from month to month and there
can be no assurance that any such review will result in an acquisition.
Management believes that Iron Mountain is well positioned to participate in
the further consolidation of the records management industry. See "Risk
Factors--Risks Associated with Acquisition Strategy" and "Recent and Pending
Acquisitions."
The Company seeks to expand its national presence, size and customer base
through new-market acquisitions. Management believes that the high start-up
costs of commencing operations make acquisitions an attractive means of
entering new markets. The Company seeks to acquire records management
companies in markets where management believes there is the potential for
growth. Within such markets, the Company uses a variety of criteria to
evaluate acquisition candidates, including the capacity and condition of
existing storage facilities, past and current operating performance and
revenues and the experience and depth of existing management. The Company is
also considering investments in records management businesses outside of the
United States. See "Potential International Investments."
The Company believes that it can use its expertise and central
administrative organization to leverage the acquisition candidate's local
market presence, promoting the development of underperforming facilities and
enhancing the value of the local assets. The Company believes that its
new-market acquisition strategy could have a number of benefits, including:
(i) continued growth in revenues and EBITDA and diversification across a
greater number of markets; (ii) introduction of the Company's efficient
storage, labor, transportation and other operating efficiencies into new
markets; (iii) the increased utilization of efficiencies available through
the Company's central administrative and management information functions;
(iv) increased market awareness of Iron Mountain's national scope and
presence; and (v) increased overall scale, which should broaden the range of
and facilitate the Company's capital-raising activities. See "Risk
Factors--Risks Associated with Acquisition Strategy."
The Company also intends to continue to make fold-in acquisitions to
augment its operations in existing markets. The Company's goal in its
existing markets is to exploit economies of scale while maintaining high
quality
45
<PAGE>
service. Following a new-market acquisition, the Company seeks to increase
its business with the acquired customer base and to supplement that growth
with new customers and, potentially, with appropriate fold-in acquisitions so
that the Company may benefit from economies of scale.
Premium Service Strategy
Organizations selecting a provider of records management services consider
a number of factors in addition to price. Management believes that Iron
Mountain is a "premium" brand in the marketplace based upon its reputation
for reliability, customer-oriented organization, investment in technology and
national operating presence. The Company seeks to exploit its strengths in
each of these areas to maintain customer relationships and to attract new
customers.
Reputation for Reliability. The Company believes it has a reputation for
reliability based on its more than 40 years of operations, the continuity and
depth of its management, its successful historical growth, the quality and
diversity of its customer base which includes more than half the Fortune 500,
its technological capabilities and its size and financial resources.
Customer-Oriented Organization and Locally Responsive Management. Iron
Mountain has developed a decentralized, local management structure that
brings significant management experience and stability to local markets and
allows the Company to respond directly, effectively and flexibly to
customers. Broad operating authority is delegated to regional Vice Presidents
and to local managers. In pursuing its acquisition strategy, Iron Mountain
seeks to capitalize upon the experience and strengths of existing management.
In addition, all full-time union and non-union employees participate in
incentive-based compensation programs that provide payments based on profits
or attainment of specified objectives for the unit in which they work. Iron
Mountain believes that the experience, stability and commitment of its
regional and local management is integral to its ability to provide superior
customer service and maximize growth potential.
Investment in Technology. The Company has invested $12.5 million in
technology since 1992 in order to provide faster and more flexible solutions
for its customers and to enhance the quality and lower the costs of its own
operations. The Company believes that its technological capabilities,
especially its Safekeeper system, are a significant tool in attracting new
customers. The Company plans to continue to invest in its proprietary
technologies in the future. See "Technology and Development; Management
Information Systems."
National Operating Presence. The Company believes it is one of only four
records management companies with a national operating presence.
Traditionally, the purchase decision for large multi-site customers has been
made at the local level. Recently, however, the Company has found that
certain large organizations have sought to obtain operating and economic
efficiencies by outsourcing a significant portion of their records management
functions with a single records management company. The Company seeks to use
its national operating presence to compete for such large multi-site customer
accounts.
Low-Cost Operating Strategy
Iron Mountain pursues a low-cost operating strategy based primarily on
achieving economies of scale in the areas of storage, labor and
transportation, general and administrative functions and management
information systems. The Company believes that it is one of the few records
management companies with the size and resources to realize significant
economies of scale in these areas.
Storage Costs
Because occupancy costs are a major component of the Company's cost of
sales, reducing per Carton storage costs is a primary strategic goal of the
Company and its real estate management staff. The Company seeks to minimize
per Carton storage costs by: (i) designing racking systems and operating
space to maximize facility storage efficiency; (ii) negotiating favorable
facility leases and having facilities built to its custom specifications; and
(iii) leasing larger facilities, which, when filled, are less expensive per
Carton to operate. Since 1991, the Company has acquired or leased 11
custom-designed records management facilities. The average Carton density
(the ratio of standard Carton storage capacity to total square feet of floor
space) of these facilities is approximately twice
46
<PAGE>
that of the Company's overall average Carton density. As a result of these
practices and after giving effect to the consummation of the Acquisitions,
average Carton density in the Company's facilities increased 32% from
December 31, 1992 to June 30, 1996.
Labor and Transportation Efficiency
The Company has made significant investments in computer technologies for
its service operations, resulting in greater efficiencies. In addition, by
increasing its operations and customer base in a local market area, the
Company seeks to maximize its courier delivery fleet usage and to increase
delivery and routing efficiencies.
The Company's incentive structure has also contributed to labor
efficiency. Each of the Company's full-time employees participates in
incentive compensation programs based upon achievement of specific operating
targets designed to integrate the objectives and performance of records
management facility employees and managers. For the six months ended June 30,
1996, the Company's employees earned incentive compensation in an amount
equal to approximately 10.8% of the base wages paid by the Company.
In part as a result of the foregoing factors, while the number of Cartons
stored at the Company's facilities between January 1, 1992 and June 30, 1996
increased by approximately 15.6 million (or approximately 144%), the
Company's staff increased during the same period by approximately 520
employees (or approximately 65%).
G&A and MIS Efficiencies
The Company's corporate staff provides support to local management in the
areas of acquisitions, marketing, facility acquisition and leasing, racking
system purchasing, finance and accounting and human resource management. In
addition, the Company's corporate staff is responsible for the design and
support of all records management technology. The Company believes that
central support in these areas provides local managers with competitive
advantages over smaller, local competitors and results in significant
economies of scale.
Technology and Development; Management Information Systems
The Company pioneered the application of advanced information technology
to the records management industry. Iron Mountain's proprietary Safekeeper
system provides advanced inventory control and information access, enabling
the Company to provide faster, higher quality and more flexible solutions to
its customers and to lower the costs of its operations. Iron Mountain's
Safekeeper system exploits bar-code technology to provide inventory integrity
and a comprehensive, standardized approach to tracking, accessing and
retrieving records. Safekeeper offers state-of-the-art records management
capabilities and ease of access to customers while featuring security
functions to protect customer information from unauthorized access. The
system coordinates inventory control, order entry, billing, material sales,
service activity, accounts receivable and management reporting, and features
system-driven quality assurance and error-prevention. Since 1992, the Company
has invested $12.5 million to develop and refine its management information
systems, including Safekeeper.
Safekeeper is built on an open systems architecture which is fully
portable and can be implemented in small processing environments with several
users and in large processing environments with hundreds of users. This
allows the Company a substantial measure of flexibility and vendor
independence, and reduces the risk of technological obsolescence.
Safekeeper has improved the Company's customer support and operating
efficiency in the following ways:
(bullet)Acquisition System Integration. Safekeeper has been designed to
easily and effectively integrate newly acquired records management
companies and offer improved levels of customer service and
records management capabilities to customers acquired through
acquisitions. The critical components of integrating acquisition
systems are the abilities to match the acquired company's carton
identifiers, location identifiers, records descriptive data, and
billing data. Safekeeper is designed with flexible, comprehensive
capabilities in each of these areas. Consequently, an acquired
company's inventory can be converted to Safekeeper without having
to relabel cartons or reset and relabel inventory locations. The
customers of the acquired company retain their records data and
receive similar billing rate structures. In addition, acquisition
customers experience minimal disruption during integration and,
after conversion, gain access to advanced records management and
information access capabilities. Safekeeper utilizes a suite of
47
<PAGE>
conversion routines to automate the conversion process and
effectively translate customer and inventory information.
(bullet)Storage Efficiency. Safekeeper enables the Company to maximize the
efficient use of storage space at its facilities. When cartons are
added or returned to storage, Safekeeper identifies available
space and the location of the customer's other records at the
facility. Because there is a continual flow of cartons into and
out of the Company's facilities, Safekeeper also permits facility
operators to utilize space that becomes available as soon as
cartons are removed. Safekeeper can pinpoint the location of any
carton, enabling facility operators to quickly determine the
optimal location for new or returning cartons.
(bullet)Inventory Integrity. Bar-coding and scanning are used to track a
carton or a record throughout its life cycle at Iron Mountain.
Safekeeper identifies inventory discrepancies during the order
processing cycle and forces their resolution before they affect
the customer. This forced discrepancy resolution means that errors
must be resolved before an order can be closed; until the order is
closed, billing cannot be processed. Management believes that this
system-driven quality assurance is a significant advantage over
the "best efforts" approach used by most of its competitors.
(bullet)Customer Information Access. Customers can access their records
management data through a variety of formats, including direct
access via Safekeeper Online, access on their own PCs via
Safekeeper Desktop, integration of their internal system with
Safekeeper via automated file transfers and paper reports.
Safekeeper Online enables a customer to place orders directly via
online access, resulting in efficiencies for Iron Mountain order
processing. It features robust querying and searching tools to
enable customers to identify records with only partial
information. Safekeeper Desktop is a PC application, run from
customers' desktop or network PCs; it provides customers with an
entire set of records management data along with user-friendly
tools for querying, reporting, and editing. Safekeeper's suite of
file transfers enable customers to automatically transfer records
data and service requests from their internal system to
Safekeeper. The paper reports include inventory detail and
summary, service activity analysis, quality assurance, and
management review.
(bullet)Records Management Flexibility. Safekeeper offers full life-cycle
records management, from file creation to destruction, enabling
each customer to establish schedules for records retention and
destruction as dictated by the customer's specific needs.
Safekeeper can flexibly accommodate large or small amounts of
records management data in accordance with customer requirements.
A series of customer-specific features and options allows Iron
Mountain to tailor the records management functionality and
reporting to the customer's needs.
(bullet)Security. Safekeeper incorporates strict security protocols and
procedures for all customers to prevent unauthorized access to a
client's records information. Advanced security features that can
automatically restrict access by departmental identification
and/or type of service request are available to customers that are
internally set up to provide this information.
In addition to Safekeeper, the Company's data protection services
facilities utilize the Company's Media Link(tm) software, a state-of-the-art
media management system which provides integrated bar-code tracking and
electronic data interface between customer and Iron Mountain facilities, as
well as audit trail and remote inventory query functionality. The Company
plans to continue to invest in its proprietary technologies in the future in
order to enhance its customer service as well as to increase its own
operating efficiency.
Description of Iron Mountain Records Management Services
Iron Mountain's records management services consist primarily of the
storage operations for the management of hard copy documents. These and
related services and products sold have, since 1992, accounted for
approximately 85% of the Company's revenues. The balance of the Company's
revenues come from the storage and service of vital records and data
protection, consulting and other services.
48
<PAGE>
Storage Operations
Storage revenues accounted for approximately 60% of revenues in each of
the Company's last five fiscal years. Storage charges are generally billed
monthly on a per storage unit basis (usually either per unit or per cubic
foot of records) and include the provision of space, racking, computerized
inventory and activity tracking, physical security, environmental and climate
control and fire protection.
The storage of a carton begins by issuing Safekeeper bar-coded labels to
the customer. The customer packs records in cartons and affixes the bar-coded
label to each carton. Customer personnel and the Iron Mountain driver conduct
a physical count of the cartons and the driver signs for the cartons, which
are then transported to the records management facility. Upon delivery to the
facility, the cartons are subjected to a second physical count. The cartons
are delivered to available space identified by Safekeeper and the bar-coded
information is scanned into the computer together with a bar-coded location
identifier. At the same time, a computer operator enters the customer's data
describing the stored material into the computer and the system confirms that
the cartons sent match the data entered in the computer. Under the Company's
computer control system, the order can only be closed out when all requisite
steps and checks have been completed and counts and locations have been
reconciled.
Service and Courier Operations
Principal services include adding cartons to storage, temporary removal of
files or cartons from storage, refiling of removed records, permanent
withdrawals from storage and destruction of records. Service charges are
generally assessed for each procedure on a per unit basis. The Safekeeper
system controls the service processes from order entry through transportation
and invoicing.
Courier operations consist primarily of the pickup and delivery of records
upon customer request. Courier delivery schedules can be tailored to fit
customers' needs, but generally customer orders received by 4:00 p.m. on a
business day are delivered the following business day. The Company also
provides same-day and immediate delivery during business hours and emergency
delivery at night and on weekends and holidays. Charges for courier services
are based on urgency of delivery, volume and location and are billed monthly
as incurred. The Company currently utilizes a fleet of approximately 250
owned or leased delivery vehicles.
Vital Records Services
Vital records contain critical or irreplaceable data such as master audio
and video recordings, film, software source code and other highly proprietary
information. Vital records may require special facilities or services, either
because of the data they contain or the media on which they are recorded. The
Company's charges for providing enhanced security and special
climate-controlled environments for vital records are higher than for typical
storage functions. The Company provides the same ancillary services for vital
records as it provides for its other storage operations.
Data Protection Services
Data protection services consist of the storage, backup and archiving of
computer media as part of corporate disaster and business recovery plans.
Computer tapes, cartridges and disk packs are transported off-site by the
Company's courier operations on a scheduled basis to secure,
climate-controlled facilities, where they are available to customers 24 hours
a day, 365 days a year, to facilitate data recovery in the event of a
disaster. This process is managed by Iron Mountain's Media Link software, a
state-of-the-art media management system which provides integrated bar-code
tracking, electronic data interface between customer and Iron Mountain's
facilities as well as audit trail and remote inventory query functionality.
Iron Mountain also manages tape library relocation and supports disaster
recovery testing and execution.
Additional Services and Products
Iron Mountain offers a variety of additional services, which customers may
request or contract for on an individual basis. These services include
performing records inventories, packing records into cartons or other
containers, computerized indexing of files and individual documents,
developing schedules for the retention and destruction of records and records
management consulting services. The Company also sells a full line of
specially designed corrugated cardboard, metal and plastic storage
containers.
49
<PAGE>
The Company's subsidiary, Iron Mountain Information Partners, Inc.,
provides professional consulting services to large customers, enabling them
to develop and implement comprehensive records management programs. The
Company's consulting business draws on the Company's 45 years of experience
to analyze the practices of such companies and assist them in creating more
effective programs of records management. The Company's consultants work with
such customers to develop policies for document review, analysis and
evaluation and for scheduling of document retention and destruction.
In addition to its historical focus on the management of inactive records,
the Company has recently begun to provide services for the management of
active records. The Company can provide these services, which generally
include document and file processing and storage, both off-site at its own
facilities and by supplying its own personnel to perform management functions
on-site at the customer's premises. The Company sees active records
management as a potential source of future revenue growth for the Company,
although there can be no assurance in this regard.
Potential International Investments
Iron Mountain is considering capitalizing upon its expertise in the
records management industry by making investments in records management
businesses outside the United States. From time to time, the Company has had
discussions concerning such investments. Such investments, if consummated,
would be subject to risks and uncertainties relating to the indigenous
political, social, regulatory, tax and economic structures of countries in
those areas, as well as fluctuations in currency valuation, exchange
controls, expropriation and governmental policies limiting returns to foreign
investors. At this time, there can be no assurance as to whether any such
investment will be made or, if made, will be successful in achieving its
objectives.
Customers
The Company's customer base is diversified in terms of revenue and
industry concentration. The Company has over 19,000 customer accounts. Iron
Mountain considers each invoice it delivers to its customers a separate
customer account and, accordingly, an organization which receives more than
one invoice represents multiple customer accounts. The chart below shows, as
of June 1994, the relative amounts of revenue attributable to certain
business sectors.
[Pie chart showing relative amounts of
revenue attributable to certain business sectors]
[TABULAR REPRESENTATION OF PIE CHART]
Other Financial Institutions 10%
Health Care 10%
Professional Services 7%
Government 6%
Manufacturing 4%
Retail 4%
Entertainment 2%
Other 19%
Legal Services 16%
Depository Institutions 14%
Insurance Companies 5%
The Company services accounts of all sizes, from small businesses and
professional groups to over half of the Fortune 500. Other than the RTC or
its successor, the FDIC, which accounted for 7.4%, 6.3%, 4.8% and 3.6% of
Iron Mountain's revenues for the years ended December 31, 1993, 1994 and 1995
and the six months ended June 30, 1996, respectively, no account or related
set of accounts generated more than 3% of Iron Mountain's revenues during any
such period.
The Company's contract with the FDIC, as successor under the contract to
the RTC, was renewed effective July 27, 1996 for a one-year term, with three
further annual renewal options at the election of the FDIC. Although the
substantial costs of removing its records from the Company's facilities may
act as a disincentive to the FDIC
50
<PAGE>
to select another vendor, there can be no assurance that the contract will be
further renewed or that the terms of such renewal will be as favorable to
Iron Mountain as the terms of the current contract. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Overview."
Marketing and Sales
The Company uses database marketing and a dedicated sales force to focus
exclusively on new business development. A corporate marketing organization
provides sales support, training, marketing communications and product
management as support functions. The program has successfully produced over
900 new customer accounts per year since 1991. The selling effort is
bolstered by regional and senior managers focused on key account selling.
Properties
As of June 30, 1996, Iron Mountain conducted operations through 77 leased
and 12 owned facilities containing a total of approximately 6.3 million
square feet of space. The leased facilities typically have initial lease
terms of 10 years with options to renew for an additional 10 years. The
weighted average remaining term of the leases on these facilities is
approximately 7.0 years. In addition, many of the leases contain either a
purchase option or a right of first refusal upon the sale of the property.
The leases include one property leased from affiliates of the Company. See
"Management--Executive Compensation--Compensation Committee Interlocks and
Insider Participation" and Note 8 of Notes to the Company's Audited
Consolidated Financial Statements.
As of June 30, 1996, the Company owned or leased (directly or through its
subsidiaries) the following records management facilities in the geographic
locations indicated below.
<TABLE>
<CAPTION>
Records
Management
State Facilities
- ----- -------------
<S> <C>
Arizona 2
California 24
Colorado 3
Connecticut 2
Delaware 1
Florida 4
Georgia 8
Illinois 3
Kansas 1
Kentucky 1
Massachusetts 7
Maryland 3
Missouri 2
New Hampshire 1
New Jersey 4
New York 4
Ohio 4
Pennsylvania 2
Rhode Island 1
Tennessee 1
Texas 8
Virginia 3
--
Total 89
==
</TABLE>
The Company or its principal subsidiary is a guarantor of a substantial
portion of the leases to which other subsidiaries are party. Substantially
all of the property and assets currently owned and leased by the Company or
its subsidiaries are pledged as security for the lenders under the Credit
Agreement. It is expected that, in connection with the New Credit Facility,
such liens (other than the pledge of the stock of the Company's subsidiaries)
will be released. See Notes 3 and 7 of Notes to the Company's Audited
Consolidated Financial Statements for additional information regarding the
Credit Agreement and the minimum annual rental commitments of the Company,
respectively.
51
<PAGE>
Employees
A key feature of Iron Mountain's operating strategy is its decentralized
management structure and reliance on local management operating in local
business environments. The Company's operations are divided into three areas
comprising seven local management regions to maximize marketing and operating
effectiveness and to minimize supervisory costs. The management regions, each
of which is managed by a Vice President, are further divided into a total of
27 districts, each managed by a General Manager. The management regions are
overseen by offices in Boston and Los Angeles, but regional Vice Presidents
and General Managers have broad operating authority. The Company's
headquarters staff performs a variety of central administrative and support
functions in order to maximize the time and resources that local personnel
can devote to customer service and client development.
Iron Mountain had approximately 1,200 full-time employees as of June 30,
1996, of whom approximately 89% are employed at the district level, 8% at the
corporate level and the balance at the area and regional levels.
Approximately 11% of the Company's employees are represented by various
Teamsters Union locals under five different agreements. Two of these
agreements, representing 42 employees, have expired and are currently under
negotiation. Based on its prior experience with the two union locals involved
in these negotiations, the Company expects that it will enter into new
agreements on satisfactory terms. The remaining three contracts expire in
December 1996, March 1997 and March 1999. In addition, at two of Iron
Mountain's facilities an election, subject to National Labor Relations Board
regulations, was held on June 20, 1996. A majority of the approximately 40
employees voted for representation by a Teamsters Union local. The election
results have not been certified as of the date hereof.
All non-union employees are eligible to participate in the Company's
benefit programs, which include medical, dental, life, short and long-term
disability and accidental death and dismemberment plans. Unionized employees
receive these types of benefits through their unions. In addition to base
compensation and other usual benefits, all full-time union and non-union
employees participate in some form of incentive-based compensation program
that provides payments based on profits, collections, or attainment of
specified objectives for the unit in which they work. Management believes
that the Company has good relationships with its employees and unions.
Competition
Iron Mountain competes with three other national companies as well as a
large number of local and regional concerns. The Company believes that
competition for customers is based on price, reputation for reliability,
quality of service and scope and scale of technology, and believes that it
generally competes effectively based on these factors. Management believes
that, except for Pierce Leahy Corp., all of these competitors have records
management revenues significantly lower than those of the Company. To
accommodate growth, a records management vendor must invest in incremental
storage capacity, which requires added warehouses, racking systems, and
related equipment including computer systems capable of tracking increasingly
large inventories. The amount of such investment is significant relative to
the immediate return that can be realized, and the faster a vendor grows, the
more capital is required. As a result, the industry trend toward
consolidation will, in management's opinion, continue and accelerate. In
addition, the Company faces competition from the internal document handling
capability of its current and potential customers. There can be no assurance
that these organizations will outsource more of their document management
needs or that they will not bring in-house some or all of the functions they
currently outsource. The Company also faces competition for acquisition
candidates.
The substantial majority of the Company's revenues have been derived from
the storage of paper documents and from related services. Such storage
requires significant physical space. Alternative technologies for generating,
capturing, managing, transmitting and storing information have been
developed, many of which require significantly less space than paper. Such
technologies include computer media, microforms, audio/video tape, film,
CD-ROM and optical disk. None of these technologies has replaced paper as the
principal means for storing information. However, there can be no assurance
that one or more non-paper-based technologies (whether now existing or
developed in the future) may not in the future significantly reduce or
supplant the use of paper as a preferred medium, which could in turn
adversely affect the Company's business.
52
<PAGE>
Insurance
Iron Mountain carries a comprehensive property insurance policy with
insurers that it believes to be reputable and in amounts that it believes to
be appropriate, covering replacement cost of real and personal property,
including improvements. Subject to sub-limits, the policy also covers
extraordinary expenses associated with business interruption and damage or
loss from flood or earthquake, subject to certain deductibles. Separate
policies for California earthquake insurance carry other deductibles that may
be significant. Iron Mountain also maintains general liability and excess
liability insurance covering bodily injury, property damage and personal
injury. See "Risk Factors--Casualty."
The Company's standard form of contract sets forth an agreed maximum value
for each carton or other storage unit held by the Company as a limitation on
liability for loss or damage, as permitted under the Uniform Commercial Code.
In contracts containing such limits, such values are nominal, and the Company
believes that in typical circumstances its liability would be so limited in
the event of loss or damage relating to the value of information stored on
media held by the Company. However, certain of the Company's agreements with
certain large volume accounts contain no such limits or contain higher limits
or supplemental insurance arrangements.
Environmental Matters
Under various environmental laws, an owner of real estate or a lessee
conducting operations thereon may become liable for the costs of
investigation, removal or remediation of soil and groundwater contaminated by
certain hazardous substances or wastes or petroleum products. Certain such
laws impose cleanup responsibility and liability without regard to whether
the owner or operator of the real estate or operations thereon knew of or was
responsible for the contamination, and whether or not operations at the
property have been discontinued or title to the property has been
transferred. In addition, the presence of such substances, or the failure to
properly remediate such property may adversely affect the current property
owner's or operator's ability to sell or rent such property or to borrow
using such property as collateral. The owner or operator of contaminated real
estate also may be subject to common law claims by third parties based on
damages and costs resulting from off-site migration of the contamination.
Certain environmental laws govern the removal, encapsulation or
disturbance of ACMs. Such laws may impose liability for the release of ACMs
and may enable third parties to seek recovery from owners or operators of
real estate for personal injury associated with exposure to such substances.
The Company is aware of the presence of ACMs at some of the Company's
facilities, but believes that such materials are in acceptable condition at
this time. The Company believes that future costs related to any remediation
of ACMs at these facilities will not be material, either on an annual basis
or in the aggregate, although there can be no assurance with respect thereto.
In addition, certain of the properties formerly or currently owned or
operated by the Company were previously used for industrial or other purposes
that involved the use or storage of hazardous substances or petroleum
products or the generation and disposal of hazardous wastes and, in some
instances, included the operation of USTs. In connection with its former and
current ownership or operation of certain properties, the Company may be
potentially liable for environmental costs such as those discussed above, and
as more specifically described below.
At the Company's Hollywood, California facilities, certain USTs and
contaminated soils have been removed. Some additional contamination of soils
and groundwater remains and may be migrating. In 1990 and 1991, the Company
filed certain reports documenting its efforts and site conditions with the
appropriate environmental agencies pursuant to various environmental laws.
Investigations conducted on behalf of the Company in connection with its
on-site remedial activities disclosed that regional groundwater
contamination, unrelated to the Company's property, exists. At this time, the
Company has not received any notice from any regulatory agency or third party
seeking further remediation of soil or groundwater by the Company; however,
there can be no assurance that such further action will not be sought in the
future. The Company has accrued estimated costs of $0.8 million that it
believes it may reasonably be expected to incur in connection with this site
if such additional remediation were to become necessary; however, there can
be no assurance as to the adequacy of such accrual. The Company believes the
ultimate outcome of the foregoing will not have a material adverse effect on
the Company's financial condition or results of operations. See Note 7 of
Notes to the Company's Audited Consolidated Financial Statements.
The Company has also from time to time conducted certain environmental
investigations and remedial activities at certain of its other former and
current facilities, but an in-depth environmental review of the properties
has not been conducted by or on behalf of the Company. The Company believes
that it is in substantial compliance
53
<PAGE>
with all applicable material environmental laws. The Company has not received
any written notice from any governmental authority or third party asserting,
and is not otherwise aware of, any material noncompliance, liability or claim
relating to hazardous substances or wastes, petroleum products or material
environmental laws applicable to Company operations in connection with any of
its present or former properties other than as described above. However, no
assurance can be given that there are no environmental conditions for which
the Company might be liable in the future or that future regulatory action,
as well as compliance with future environmental laws, will not require the
Company to incur costs for or at its properties that could have a material
adverse effect on the Company's financial condition and results of
operations.
Legal Proceedings
The Company is involved in litigation from time to time in the ordinary
course of business. In the opinion of management, no material legal
proceedings are pending to which the Company, or any of its properties, is
subject.
54
<PAGE>
MANAGEMENT
Directors, Executive Officers and Certain Other Officers
The Directors, executive officers and certain other officers of the
Company are as follows:
<TABLE>
<CAPTION>
Names of Directors and Executive Officers Age Position
- ------------------------------------------- --- --------
<S> <C> <C>
C. Richard Reese (1) 50 Chairman of the Board of Directors and Chief
Executive Officer
David S. Wendell 42 President and Chief Operating Officer, Director
Eugene B. Doggett (1) 60 Executive Vice President and Chief Financial
Officer, Director
Robert P. Swift 54 Executive Vice President
Kenneth F. Radtke, Jr. 51 Executive Vice President
Constantin R. Boden (2) (3) 60 Director
Arthur D. Little (2) (3) 52 Director
Vincent J. Ryan (1) (3) 60 Director
Names of Certain Other Officers Age Position
- ------------------------------------------- --- --------
Jean A. Bua 38 Vice President and Corporate Controller
James R. Jandl 42 Vice President of Human Resources
John F. Kenny 39 Vice President of Corporate Development
Joseph J. Larizza 54 Vice President and Chief Information Officer
John P. Lawrence 45 Vice President and Treasurer
Kenneth A. Rubin 34 Vice President of Marketing
T. Anthony Ryan 55 Vice President of Real Estate
</TABLE>
- -------------
(1) Member of the Executive Committee; Mr. Ryan is the Chairman of the
Executive Committee.
(2) Member of the Audit Committee; Mr. Boden is the Chairman of the Audit
Committee.
(3) Member of the Compensation Committee; Mr. Little is the Chairman of the
Compensation Committee.
The Board of Directors currently consists of six directors. There are
three classes of directors who serve for three-year terms and are elected on
a staggered basis, one class of two directors standing for election each
year. The term of the Class B Directors, C. Richard Reese and Arthur D.
Little, will expire at the 1997 Annual Meeting of Stockholders, the term of
the Class C Directors, Eugene B. Doggett and Constantin R. Boden, will expire
at the 1998 Annual Meeting of Stockholders and the term of the Class A
Directors, David S. Wendell and Vincent J. Ryan, will expire at the 1999
Annual Meeting. Directors of each class will thereafter hold office until the
third annual meeting of the stockholders of the Company following their
election or until their successors are elected and qualified.
The executive officers and other officers were elected by the Board of
Directors on June 14, 1996. All executive officers and other officers hold
office at the discretion of the Board until the first meeting of the Iron
Mountain Board following the next annual meeting of stockholders and until
their successors are chosen and qualified.
Directors and Executive Officers
C. Richard Reese is the Chairman of the Board of Directors of Iron
Mountain, a position he has held since November 1995, and the Chief Executive
Officer, a position he has held since December 1981. Prior to November 1995,
Mr. Reese was the President of Iron Mountain, a position he had held since
1981. Mr. Reese is also a Director of Schooner. Prior to joining Iron
Mountain, he lectured at Harvard Business School in "Entrepreneurship" and
provided consulting services to small and medium-sized emerging enterprises.
Mr. Reese has also served as president and a Director of the ACRC. He holds a
Master of Business Administration degree from Harvard Business School.
David S. Wendell is the President and Chief Operating Officer of Iron
Mountain, a position he has held since November 1995. After practicing law
with Brown & Wood, Mr. Wendell joined Iron Mountain in 1984, where he has
served in a variety of positions. Prior to November 1995, he was Executive
Vice President, Atlantic Area and
55
<PAGE>
prior to 1991, he was Vice President, New England Region. He holds a Master
of Business Administration degree from Harvard Business School and a Juris
Doctor degree from the University of Virginia.
Eugene B. Doggett is the Executive Vice President and Chief Financial
Officer of Iron Mountain, a position he has held since 1987. Mr. Doggett is
also a Director of Schooner. Prior to joining the Company, he had extensive
experience in commercial and investment banking, as well as financial and
general management experience at senior levels. He holds a Master of Business
Administration degree from Harvard Business School.
Robert P. Swift is an Executive Vice President of Iron Mountain, a
position he has held since November 1995. Prior to November 1995, Mr. Swift
was the Executive Vice President, Western Area of Iron Mountain and prior to
1988, Mr. Swift was employed in various positions at Bell & Howell Records
Management Company.
Kenneth F. Radtke, Jr. is an Executive Vice President of Iron Mountain, a
position that he has held since June 1996. Prior to June 1996, Mr. Radtke was
Northeast Regional Vice President and prior to 1995 was Sales Manager, New
York Region. Mr. Radtke has worked in the records and information industry
since 1988 as President and Chief Executive Officer, Dataport Company, Inc.
and Senior Vice President, Arcus, Inc. He holds a graduate degree from the
University of Wisconsin, Graduate School of Banking.
Constantin R. Boden is a Director of Iron Mountain, a position he has held
since December 1990. Mr. Boden is on the advisory board of Boston Capital
Ventures, a risk capital concern. For 33 years, until January 1995, Mr. Boden
was employed by Bank of Boston, most recently as Executive Vice President,
International Banking. He holds a Master of Business Administration degree
from Harvard Business School.
Arthur D. Little is a Director of Iron Mountain, a position he has held
since November 1995. Mr. Little is a principal of The Little Investment
Company, which he founded in 1992. Prior to that, he was Managing Director of
and also a partner in Narragansett Capital, Inc., a private investment firm.
He holds a Bachelor of Arts degree in history from Stanford University.
Vincent J. Ryan is a Director of Iron Mountain. Mr. Ryan is the founder of
Schooner and has served as Chairman and Chief Executive Officer of Schooner
since 1971. Prior to November 1995, Mr. Ryan served as Chairman of the Board
of Directors of Iron Mountain. Mr. Ryan also serves as a Director and member
of the Executive Committee of Continental Cablevision, Inc. He holds a
Bachelors of Arts degree in English from Boston University.
Certain Other Officers
Jean A. Bua is Vice President and Corporate Controller. Ms. Bua joined
Iron Mountain in such capacity in March 1996. From 1993 to 1996, Ms. Bua was
the Corporate Controller for Duracraft Corp., a consumer products
manufacturer. Prior to that, Ms. Bua was the accounting manager for a
high-tech manufacturer and was a management consultant for Ernst & Young. She
holds a Master of Business Administration degree from the University of Rhode
Island. Ms. Bua is a certified public accountant.
James R. Jandl is Vice President of Human Resources. Mr. Jandl joined Iron
Mountain in 1989. For the preceding nine years he was involved in human
resources management in the hospitality industry with focus on operational
start-up and turn-around situations. He holds a masters degree in psychology
from West Georgia College.
John F. Kenny is Vice President of Corporate Development, with primary
responsibility for implementing the Company's acquisition strategy. Mr. Kenny
joined Iron Mountain in 1991. Prior to 1991, he was a Vice President of CS
First Boston Merchant Bank, New York, with responsibility for risk capital,
portfolio and transaction management. He holds a Master of Business
Administration degree from Harvard Business School.
Joseph J. Larizza is Vice President and Chief Information Officer, with
responsibility for management information systems, including oversight of the
development of Iron Mountain's Safekeeper system. Prior to joining Iron
Mountain in 1996, Mr. Larizza was the chief information officer at Service
America, a large food service corporation and, prior to that, chief
information officer at the Advertising Checking Bureau, with responsibility
for information systems and development of client-server products. He holds a
Bachelors degree in management from Post College.
John P. Lawrence is Vice President and Treasurer, with responsibility for
acquisition integration, internal audit, risk management and purchasing and
contracting. Mr. Lawrence has been associated with Iron Mountain since 1988.
56
<PAGE>
Prior to 1988, he worked for Hewlett Packard for nine years in various
management positions in finance, control, marketing and manufacturing. He
holds a Master of Business Administration degree from Harvard Business
School.
Kenneth A. Rubin is Vice President of Marketing. Mr. Rubin joined Iron
Mountain in 1989. Prior to 1989, he was Director of both Sales and Marketing
for Leahy/Instar, a records management company. He was also a founding
director of Software Escrow Security. He holds a Bachelors degree in
political science from Drew University.
T. Anthony Ryan is Vice President of Real Estate. Mr. Ryan manages the
real estate department of Iron Mountain and is responsible for identifying
and evaluating new facility opportunities and negotiating long-term leases.
He has been involved in real estate development for 22 years. His work
experience includes positions as Director of Development for Gilbane
Property, Vice President of CRJ Investments and, more recently, Vice
President and Partner at the Linpro Company. He holds a Bachelors degree in
history from The George Washington University.
Biographical information of the Directors, executive officers and other
officers is as of September 3, 1996.
Executive Compensation
The following table provides certain information concerning compensation
earned by the Chief Executive Officer and each other executive officer
serving in such capacity at December 31, 1995 who received compensation in
excess of $100,000 (the "Named Executive Officers") for the years ended
December 31, 1994 and December 31, 1995.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------- ----------------------------------
Number of
Shares
Underlying All Other
Name and Principal Position Year (1) Salary Bonus Options Compensation (2)
- ----------------------------- ---------- --------- --------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
C. Richard Reese 1995 $261,765 $200,000 0 $1,790
Chairman of the Board and
Chief Executive Officer 1994 $255,400 $125,000 0 $1,623
David S. Wendell 1995 $136,627 $ 62,731 35,469 $1,573
President and Chief
Operating Officer 1994 $129,800 $ 50,000 0 $1,352
Eugene B. Doggett 1995 $192,274 $165,000 0 $1,790
Executive Vice President
and Chief Financial
Officer 1994 $187,500 $ 93,750 0 $1,623
Robert P. Swift 1995 $131,119 $ 24,397 8,096 $1,243
Executive Vice President 1994 $126,600 $ 16,740 0 $ 865
</TABLE>
- -------------
(1) In accordance with the requirements of Item 402(b) of Regulation S-K,
information is presented for the Company's two most recent years.
(2) Reflects the Company's matching contribution to the Iron Mountain Profit
Sharing Retirement Plan for each individual.
57
<PAGE>
Compensation Committee Interlocks and Insider Participation
Prior to November 1995, Iron Mountain's Compensation Committee of the
Board of Directors consisted of Constantin R. Boden and Vincent J. Ryan, who
was until November 17, 1995 the Chairman of the Board. The present
Compensation Committee consists of Mr. Little, who is the Chairman of the
Committee, and Messrs. Boden and Ryan.
Messrs. Reese and Doggett are executive officers of Iron Mountain and are
directors of Schooner. Prior to November 1995, they were also executive
officers of Schooner. Mr. Ryan is the Chairman of the Board and principal
stockholder of Schooner.
In 1993, the Company paid fees of $95,927 to Vincent J. Ryan for
consulting services. In each of 1994 and 1995, the Company paid fees of
$111,048 to Schooner for consulting services rendered by Mr. Ryan. These
services and fees terminated as of December 31, 1995.
Iron Mountain Records Management, Inc. ("IMRM"), a subsidiary of the
Company, is the tenant under a lease dated January 1, 1991 for a 31,500
square-foot building in Houston, Texas. The owner of the building is IM
Houston (CR) Limited Partnership, a Texas limited partnership, of which
Mountain Realty, Inc., a Massachusetts corporation whose sole stockholder is
Vincent J. Ryan, is the sole general partner, and the limited partners of
which are Vincent J. Ryan, C. Richard Reese and Eugene B. Doggett. The term
of the lease expires December 31, 2000, with two five-year extension options
exercisable by IMRM. IMRM currently pays annual rent in the amount of
approximately $94,000, subject to adjustment in 1997 and 1999 (and in the
option periods if the term is extended) based upon percentage changes in the
consumer price index, with a floor of 3% and a ceiling of 5%, compounded
annually. As tenant, IMRM is responsible for taxes, insurance and
maintenance. The space is used by IMRM as a records management facility.
During 1993, 1994, 1995 and the six months ended June 30, 1996, IMRM paid
rent in the annual amount of $88,000, $88,000, $94,000 and $47,000,
respectively, under the lease. The lease is, in the opinion of management, on
commercially reasonable terms, no less favorable to IMRM than could have been
obtained from an unaffiliated party at the time of the transaction.
The Company paid compensation of $120,000, $144,000, $154,000 and $62,000
for 1993, 1994, 1995 and the six months ended June 30, 1996, respectively, to
Mr. T. Anthony Ryan. Mr. Ryan is Vice President, Real Estate, of the Company
and is the brother of Mr. Vincent J. Ryan, a Director and the former Chairman
of the Board of the Company. The Company believes that the terms of Mr.
Ryan's employment are no less favorable to it than would be negotiable with
an unrelated third party.
Iron Mountain is indebted to Schooner in the principal amount of $382,500
under a junior subordinated note, which was incurred by Iron Mountain in 1990
in connection with an acquisition. Schooner subsequently acquired the note
from the holder as an investment. The Company intends to use a portion of the
net proceeds from the Offering to prepay such indebtedness in its entirety.
See "The Transactions--Repayment of FDS Notes."
Schooner leases space from Iron Mountain at Iron Mountain's corporate
headquarters. Such lease is a tenancy- at-will and may be terminated by
either Iron Mountain or Schooner at any time. As consideration for such
lease, Schooner pays rent to Iron Mountain based on its pro rata share of all
expenses related to the use and occupancy of the premises. The rent paid by
Schooner to Iron Mountain under such lease was approximately $48,000,
$58,000, $59,000 and $33,000 in 1993, 1994, 1995 and the six months ended
June 30, 1996, respectively.
Employees of Schooner were eligible to participate in the Iron Mountain
Profit Sharing Retirement Plan, a Section 401(k) plan, as well as the
Company's group medical, dental, life, disability and accidental death and
dismemberment arrangements (the "Company Benefit Plans"). Schooner reimbursed
the Company for costs incurred as a result of the participation of Schooner
employees in Company Benefit Plans. Participation by Schooner employees in
the Company Benefit Plans terminated shortly after the consummation of the
Initial Public Offering.
Director Compensation
Directors who are employees of the Company do not receive additional
compensation for serving as directors. Each director who is not an employee
of the Company (each an "Eligible Director") receives an annual retainer fee
of $10,000 as compensation for his or her services as a member of the Board
of Directors and is also paid $2,500 per quarter (to a maximum of $10,000 per
year) for attendance at meetings (the "Director's Compensation"). All
directors of the Company are reimbursed for out-of-pocket expenses incurred
in attending meetings of the Board of Directors or committees thereof, and
for other expenses incurred in their capacities as directors of the Company.
58
<PAGE>
Pursuant to the Iron Mountain Incorporated 1995 Stock Plan for Non-Employee
Directors (the "Directors Plan"), Eligible Directors may elect to receive all
or a portion of their Director Compensation in the form of Common Stock. An
Eligible Director electing to receive Common Stock under the Directors Plan
will, as an incentive, receive in lieu of cash an amount of Common Stock
equivalent to 110% of the Director Compensation otherwise due to be paid in
cash. The Company has reserved 15,000 shares of Common Stock for issuance
under the Directors Plan.
Stock Option Information
Effective November 30, 1995, Iron Mountain instituted the Iron Mountain
Incorporated 1995 Stock Incentive Plan (the "Stock Option Plan"), which is
administered by the Compensation Committee, as a restatement of Iron
Mountain's then-existing stock option plan. The purpose of the Stock Option
Plan is to encourage key employees, directors, and consultants of the Company
and its subsidiaries who render services of special importance to, and who
have contributed or may be expected to contribute materially to the success
of, the Company or a subsidiary to continue their association with the
Company and its subsidiaries by providing favorable opportunities for them to
participate in the ownership of the Company and in its future growth through
the granting of restricted shares ("Restricted Stock"), options to acquire
Common Stock ("Options"), stock appreciation rights ("SARs") and other rights
to compensation in amounts determined by the value of the Common Stock.
Restricted Stock, SARs and other rights are referred to collectively as
"Other Rights."
The total number of shares of Common Stock that may be subject to Options
and Other Rights under the Stock Option Plan may not exceed 1,000,000. As of
June 30, 1996, options for 757,827 shares of Common Stock were outstanding
under the Stock Option Plan and 213,258 shares of Common Stock were available
for grants of Options and/or Other Rights under the Stock Option Plan. The
duration of the Options granted under the Stock Option Plan may be specified
pursuant to each respective stock option agreement, but in no event can any
Option intended to qualify as an incentive stock option (an "ISO") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), be exercisable after the expiration of 10 years after the date of
grant. In the case of any employee who owns (or is considered under Section
424(d) of the Code as owning) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any of its
Subsidiaries, no ISO shall be exercisable after the expiration of five years
from its date of grant.
The following table sets forth certain information concerning the grant of
Options to Messrs. Wendell and Swift. Neither of the other Named Executive
Officers was granted Options in 1995.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value At
Assumed Annual Rates
of
Stock Appreciation
Number of % of Total for
Securities Options Option Terms (2)
Underlying Granted to Exercise --------------------
Options Employees in Price Per Expiration
Name Granted Fiscal Year Share Date 5%($) 10%($)
- ------------------------------------- ------------ -------------- ----------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
David S. Wendell 35,469 21.9% $16.125 (1) $359,688 $911,521
President and Chief Operating
Officer
Robert P. Swift 8,096 5.0% $16.125 2/5/2006 $ 82,101 $208,066
Executive Vice President
</TABLE>
- -------------
(1) Options granted to Mr. Wendell with respect to 29,410 shares of Common
Stock expire February 5, 2006, and options with respect to the remaining
6,059 shares expire 60 days after termination of Mr. Wendell's employment
with the Company.
(2) Potential Realizable Value is based on the assumed growth rates for an
assumed ten-year option term. 5% annual growth results in a Common Stock
price per share of $26.27, and 10% results in a Common Stock price per
share of $41.82, respectively, for such term. The actual value, if any,
an executive may realize will depend on the excess of the market price of
the Common Stock over the exercise price on the date the option is
exercised, so that there is no assurance the value realized by an
executive will be at or near the amounts reflected in this table.
59
<PAGE>
The following table sets forth certain information with respect to the
unexercised Options granted to Messrs. Wendell and Swift. Neither of such
individuals exercised any stock options during the year ended December 31,
1995. Neither of the other Named Executive Officers has any unexercised
Options.
Fiscal Year End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money-Options at
Options at December 31, 1995 December 31, 1995 (1)
-------------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
David S. Wendell 71,077 53,266 $676,653 $169,427
President and Chief Operating
Officer
Robert P. Swift 11,566 15,806 $110,108 $ 73,399
Executive Vice President
</TABLE>
- -------------
(1) Based on the initial public offering price of $16.00 per share, less the
exercise price.
CERTAIN TRANSACTIONS
In 1993, in connection with the employment of David S. Wendell, the Company
made demand loans to Mr. Wendell in an aggregate principal amount of $70,000 in
connection with Mr. Wendell's purchase of a home. The loans bear interest at a
rate equal to the Company's cost to borrow such funds and are secured by a
second mortgage on the home. As of September 3, 1996, the principal balance of
the loans was $25,000.
See "Management--Executive Compensation--Compensation Committee Interlocks
and Insider Participation" for a discussion of: (i) certain payments to
Vincent J. Ryan and Schooner for consulting services; (ii) a lease between a
partnership affiliated with Messrs. Doggett, Reese and Ryan and a subsidiary
of the Company; (iii) the familial relationship between Vincent J. Ryan, an
Iron Mountain Director, and T. Anthony Ryan, an Iron Mountain officer; (iv) a
lease between Schooner and the Company; (v) certain indebtedness of Iron
Mountain to Schooner to be repaid with a portion of the net proceeds of the
Offering; and (vi) Schooner's prior participation in Iron Mountain's 401(k)
plan and certain other employee benefit plans.
60
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to the Company
with respect to beneficial ownership of Common Stock by: (i) each stockholder
known by the Company to be the beneficial owner of more than five percent of
the Common Stock; (ii) each director; (iii) each Named Executive Officer; and
(iv) all executive officers and directors of the Company as a group. Such
information is presented as of September 3, 1996.
<TABLE>
<CAPTION>
Amount of Beneficial
Ownership (1)
------------------------------
Percent
Name Shares Owned
- ---------------------------------- -------------- ------------
<S> <C> <C>
Directors and Executive Officers:
C. Richard Reese (2) 1,127,503 11.7%
David S. Wendell (3) 83,815 *
Eugene B. Doggett (4) 219,745 2.3%
Robert P. Swift (5) 15,421 *
Constantin R. Boden (6) 19,746 *
Arthur D. Little (7) 98,730 1.0%
Vincent J. Ryan (8) 3,503,250 36.4%
All Directors and executive
officers as a group (8 persons)(9) 4,371,289 45.0%
Five Percent Stockholder:
Schooner Capital Corporation (10) 1,909,384 19.8%
</TABLE>
- -------------
* Less than 1%
(1) Except as otherwise indicated, the persons named in the table above have
sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by them.
(2) Mr. Reese is a director and Chairman of the Board and Chief Executive
Officer of the Company. Includes 12,160 shares of Common Stock held by
trusts for the benefit of Mr. Reese's children, as to which Mr. Reese
disclaims beneficial ownership. Also includes 668,166 shares of Common
Stock as to which Mr. Reese shares beneficial ownership with Schooner as
a result of a 1988 deferred compensation arrangement, as amended,
between Schooner and Mr. Reese relating to Mr. Reese's former services
as President of Schooner. Pursuant to such arrangement, upon the earlier
to occur of (i) Schooner's sale or exchange of substantially all of the
shares of Common Stock held by Schooner or (ii) the cessation of Mr.
Reese's employment with Iron Mountain, Schooner is required to transfer
such shares of Common Stock to Mr. Reese or remit to Mr. Reese cash in
an amount equal to the then current fair market value of such shares of
Common Stock. Schooner has agreed to vote the shares of Common Stock
subject to such arrangement at the direction of Mr. Reese. Mr. Reese's
address is c/o Iron Mountain Incorporated, 745 Atlantic Avenue, Boston,
Massachusetts 02111.
(3) Mr. Wendell is a director and President and Chief Operating Officer of
the Company. Includes 79,960 shares that Mr. Wendell has the right to
acquire pursuant to currently exercisable options. See "Executive
Compensation." Mr. Wendell's address is c/o Iron Mountain Incorporated,
745 Atlantic Avenue, Boston, Massachusetts 02111.
(4) Mr. Doggett is a director and Executive Vice President and Chief
Financial Officer of the Company. Includes 29,550 shares of Common Stock
as to which Mr. Doggett shares beneficial ownership with Schooner as a
result of a 1988 deferred compensation arrangement, as amended, between
Schooner and Mr. Doggett relating to Mr. Doggett's former services as
Chief Financial Officer of Schooner. Pursuant to such arrangement, upon
the earlier to occur of (i) Schooner's sale or exchange of substantially
all of the shares of Common Stock held by Schooner or (ii) the cessation
of Mr. Doggett's employment with Iron Mountain, Schooner is required to
transfer such shares of Common Stock to Mr. Doggett or remit to Mr.
Doggett cash in an amount equal to the then current fair market value of
such shares of Common Stock. Schooner has agreed to vote the shares of
Common Stock subject to such arrangement at the direction of Mr.
Doggett. Mr. Doggett's address is c/o Iron Mountain Incorporated, 745
Atlantic Avenue, Boston, Massachusetts 02111.
61
<PAGE>
(5) Mr. Swift is a director and Executive Vice President of the Company.
Consists of shares that Mr. Swift has the right to acquire pursuant to
currently exercisable options. See "Executive Compensation." Mr. Swift's
address is c/o Iron Mountain Incorporated, 1340 East 6th Street, Los
Angeles, California 90021.
(6) Mr. Boden is a director of the Company. Mr. Boden's address is c/o
Boston Capital Ventures, 45 School Street, Boston, Massachusetts 02110.
(7) Mr. Little is a director of the Company. Consists of 49,365 shares held
by The Little Family Trust and 49,365 shares held by The Little Family
Foundation, as to which Mr. Little disclaims beneficial ownership. Mr.
Little's address is c/o The Little Investment Company, 33 Broad Street,
Boston, Massachusetts 02109.
(8) Mr. Ryan is a director of the Company. Mr. Ryan holds 1,593,866 shares
of Common Stock. The remaining shares of Common Stock listed as being
beneficially owned by Mr. Ryan are held by Schooner, as to which Mr.
Ryan has sole voting power and investment power as the Chairman of the
Board and principal stockholder of Schooner. Mr. Ryan's address is c/o
Schooner Capital Corporation, 745 Atlantic Avenue, Boston, Massachusetts
02111. See footnote (10) regarding shares held by Schooner.
(9) Includes 96,156 shares that directors and executive officers have the
right to acquire pursuant to currently exercisable options.
(10) Mr. Ryan is the Chairman of the Board and the principal stockholder of
Schooner and, accordingly has sole voting and investment power with
respect to the shares of Common Stock held by Schooner. Includes 668,166
shares of Common Stock as to which Schooner shares beneficial ownership
with Mr. Reese as described in footnote (2). Also includes 29,550 shares
of Common Stock as to which Schooner shares beneficial ownership with
Mr. Doggett as described in footnote (4). Schooner has agreed to vote
the shares of Common Stock subject to such arrangements at the direction
of Mr. Reese or Mr. Doggett, as the case may be.
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DESCRIPTION OF THE NOTES
General
The Notes will be issued pursuant to an Indenture (the "Indenture")
between the Company and First Bank National Association, as trustee (the
"Trustee"). The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939 (the "Trust Indenture Act"). The Notes are subject to all such terms,
and Holders of Notes are referred to the Indenture and the Trust Indenture
Act for a statement thereof. The following summary of certain provisions of
the Indenture does not purport to be complete and is qualified in its
entirety by reference to the Indenture, including the definitions therein of
certain terms used below. A copy of the proposed form of Indenture has been
filed as an exhibit to the Registration Statement of which this Prospectus is
a part. The definitions of certain terms used in the following summary are
set forth below under "Certain Definitions."
Principal, Maturity and Interest
The Notes will be general unsecured obligations of the Company, will be
limited in aggregate principal amount to $150 million and will mature on
, 2006. Interest on the Notes will accrue at the rate of % per
annum and will be payable semi-annually in arrears on and ,
commencing on , 1997, to Holders of record on the immediately
preceding and . Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months. The Notes will be
payable both as to principal and interest at the office or agency of the
Company maintained for such purpose within the City and State of New York or,
at the option of the Company, payment of interest may be made by check mailed
to the Holders of Notes at their addresses set forth in the register of
Holders of Notes. Until otherwise designated by the Company, the Company's
office or agency in New York will be the office of the Trustee maintained for
such purpose. The Notes will be issued in registered form, without coupons,
and in denominations of $1,000 and integral multiples thereof.
Subsidiary Guarantees
The Company's payment obligations under the Notes will be jointly and
severally guaranteed (the "Subsidiary Guarantees") on an unsecured senior
subordinated basis by all of the Company's existing and future Restricted
Subsidiaries other than the Excluded Restricted Subsidiaries (each, a
"Subsidiary Guarantor") (see "Certain Covenants--Additional Subsidiary
Guarantees"). Each Subsidiary Guarantee will be subordinated to the prior
payment in full of all Senior Debt of each such Subsidiary Guarantor, which on a
pro forma basis would have been $24.5 million at June 30, 1996 for all
Subsidiary Guarantors. Notwithstanding the subordination provisions contained in
the Indenture, the obligations of a Subsidiary Guarantor under its Subsidiary
Guarantee will be unconditional. See "Risk Factors-- Unenforceability and
Release of Guarantees."
Subordination
The payment of principal of, premium, if any, and interest on the Notes
will be subordinated in right of payment, as set forth in the Indenture, to
the prior payment in full in cash of all Obligations with respect to Senior
Debt, whether outstanding on the date of the Indenture or thereafter
incurred.
Upon any payment or distribution to creditors of the Company or any
Subsidiary Guarantor in a liquidation or dissolution of the Company or such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or any Subsidiary
Guarantor or its property, an assignment for the benefit of creditors or any
marshaling of the assets and liabilities of the Company or any Subsidiary
Guarantor, (a) the holders of Senior Debt will be entitled to receive payment in
full in cash of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the applicable Senior Debt, whether or not allowed as a claim in such
proceeding) before the Holders of Notes will be entitled to receive any payment
or distribution with respect to the Notes, and (b) until all Obligations with
respect to Senior Debt are paid in full in cash, any payment or distribution to
which the Holders of Notes would be entitled shall be made to the holders of
Senior Debt.
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Neither the Company nor any Subsidiary Guarantor may make any payment or
distribution upon or in respect of the Notes, including, without limitation, by
way of set-off or otherwise, or redeem (or make a deposit in redemption of),
defease or acquire any of the Notes for cash, properties or securities if (a) a
default in the payment of any Obligation in respect of any Senior Debt occurs
and is continuing or (b) any other default (or any event that, after notice or
passage of time would become a default) (a "Non-Monetary Default") occurs and is
continuing with respect to Senior Debt and, in the case of clause (b), the
Trustee receives a notice of such default (a "Payment Blockage Notice") from the
holders (or the agent or representative of such holders) of any Designated
Senior Debt. Payments on the Notes may and shall be resumed (i) in the case of a
payment default, on the date on which such default is cured or waived and (ii)
in the case of a Non-Monetary Default, on the earlier of the date on which such
Non- Monetary Default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of any
Senior Debt has been accelerated. Any number of Payment Blockage Notices may be
given, provided, however, that (A) not more than one Payment Blockage Notice
may be commenced during any period of 360 consecutive days and (B) any
Non-Monetary Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee (to the extent the holder of
Designated Senior Debt, or such trustee or agent, giving such Payment Blockage
Notice had knowledge of the same) shall not be the basis for a subsequent
Payment Blockage Notice, unless such default has been cured or waived for a
period of not less than 90 consecutive days.
The Indenture will further require that the Company promptly notify
holders of Senior Debt if payment of the Notes is accelerated because of an
Event of Default.
As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, Holders of Notes may recover less ratably
than creditors of the Company who are holders of Senior Debt. On a pro forma
basis, after giving effect to the Transactions, the principal amount of
Senior Debt of the Company and the Restricted Subsidiaries outstanding at
June 30, 1996 would have been $24.5 million. The Indenture will not limit the
amount of additional Indebtedness, including Senior Debt, that the Company
and its Subsidiaries can incur if certain financial tests are met. See
"Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock."
Optional Redemption
The Notes will not be redeemable at the Company's option prior to
, 2001. Thereafter, the Notes will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest thereon to
but excluding the applicable redemption date, if redeemed during the twelve-
month period beginning on of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
- ---- ----------
<S> <C>
2001 %
2002 %
2003 %
2004 and thereafter 100%
</TABLE>
Notwithstanding the foregoing, at any time during the first 36 months
after the date of issuance of the Notes, the Company may redeem up to 35% of
the initial principal amount of the Notes originally issued with the net
proceeds of one or more Qualified Equity Offerings at a redemption price
equal to % of the principal amount of such Notes, plus accrued and unpaid
interest, if any, to but excluding the date of redemption; provided, that at
least 65% of the principal amount of Notes originally issued remains
outstanding immediately after the occurrence of any such redemption and that
such redemption occurs within 60 days following the closing of any such
Qualified Equity Offering.
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Mandatory Redemption
Except with respect to required repurchases upon the occurrence of a
Change of Control or in the event of certain Asset Sales, each as described
below under "Repurchase at the Option of Holders," the Company is not
required to make sinking fund or redemption payments with respect to the
Notes.
Repurchase at the Option of Holders
Change of Control
Upon the occurrence of a Change of Control, each Holder of Notes will have
the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price
in cash equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest, if any, to but excluding the date of purchase (the
"Change of Control Payment"). Within 30 calendar days following any Change of
Control, the Company will mail a notice to each Holder stating: (a) that the
Change of Control Offer is being made pursuant to the covenant entitled
"Change of Control" and that all Notes tendered will be accepted for payment;
(b) the purchase price and the purchase date, which will be no earlier than
30 calendar days nor later than 60 calendar days from the date such notice is
mailed (the "Change of Control Payment Date"); (c) that any Note not tendered
will continue to accrue interest; (d) that, unless the Company defaults in
the payment of the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer will cease to accrue interest on and
after the Change of Control Payment Date; (e) that Holders electing to have
any Notes purchased pursuant to a Change of Control Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes completed, to the Paying Agent at the
address specified in such notice prior to the close of business on the fifth
Business Day preceding the Change of Control Payment Date; (f) that Holders
will be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the second Business Day preceding the
Change of Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing his
election to have such Notes purchased; and (g) that Holders whose Notes are
being purchased only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral multiple
thereof. The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable to the repurchase of the
Notes in connection with a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (a) accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (b) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Notes or portions
thereof so tendered and (c) deliver or cause to be delivered to the Trustee
the Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof tendered to the Company. The Paying Agent will
promptly mail to each Holder of Notes so accepted the Change of Control
Payment for such Notes, and the Trustee will promptly authenticate and mail
to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that each such new Note
will be in a principal amount of $1,000 or an integral multiple thereof.
Except as described above with respect to a Change of Control, the
Indenture does not contain provisions that permit the Holders of the Notes to
require that the Company repurchase or redeem the Notes in the event of a
takeover, recapitalization or similar restructuring, nor does it contain any
other "event risk" protections for Holders of the Notes.
Although the Change of Control provision may not be waived by the Company,
and may be waived by the Trustee only in accordance with the provisions of
the Indenture, there can be no assurance that any particular transaction
(including a highly leveraged transaction) cannot be structured or effected
in a manner not constituting a Change of Control.
The Credit Agreement currently prohibits the Company from purchasing any
Notes prior to the expiration of the Credit Agreement and also provides that
certain change of control events with respect to the Company would constitute
a default thereunder. The New Credit Facility is expected to contain, and any
future credit agreements
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or other agreements relating to Senior Debt to which the Company becomes a
party may contain, similar restrictions and provisions. In the event a Change
of Control occurs at a time when the Company is prohibited from purchasing
Notes, the Company could seek the consent of its lenders to the purchase of
Notes or could attempt to refinance the borrowings that contain such
prohibition. If the Company does not obtain such a consent or repay such
borrowings, the Company will remain prohibited from purchasing Notes. In such
case, the Company's failure to purchase tendered Notes would constitute an
Event of Default under the Indenture which would, in turn, constitute a
default under the Credit Agreement and is expected to constitute an event of
default under the New Credit Facility. In such circumstances, the
subordination provisions in the Indenture would likely restrict payments to
the Holders of Notes.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Principal Stockholders (or
any of them), is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more
than a majority of the voting power of all classes of Voting Stock of the
Company;
(b) the Company consolidates with, or merges with or into, another
Person or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates
with, or merges with or into, the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is
converted into or exchanged for cash, securities or other property, other
than any such transaction where (i) the outstanding Voting Stock of the
Company is not converted or exchanged at all (except to the extent
necessary to reflect a change in the jurisdiction of incorporation) or is
converted into or exchanged for (A) Voting Stock (other than Disqualified
Stock) of the surviving or transferee Person or (B) cash, securities and
other property (other than Capital Stock described in the foregoing clause
(A)) of the surviving or transferee Person in an amount that could be paid
as a Restricted Payment as described under the "Restricted Payments"
covenant and (ii) immediately after such transaction, no "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Principal Stockholders (or any of them), is
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of more than a majority of the
total outstanding Voting Stock of the surviving or transferee Person;
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election to such Board of Directors, or whose
nomination for election by the stockholders of the Company, was approved
by a vote of 66-2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office; or
(d) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with
the provisions described under "Consolidation, Merger and Sale of Assets."
Asset Sales
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, (a) sell, lease, convey or otherwise
dispose of any assets (including by way of a Sale and Leaseback Transaction,
but excluding a Qualifying Sale and Leaseback Transaction) other than sales
of inventory in the ordinary course of business (provided that the sale,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company will be governed by the provisions of the Indenture
described above under the caption "Change of Control" and/or the provisions
described below under the caption "Merger, Consolidation or Sale of Assets"
and not by the provisions of this covenant), or (b) issue or sell Equity
Interests of any of its Restricted Subsidiaries, that, in the case of either
clause (a) or (b) above, whether in a single transaction or a series of
related transactions, (i) have a fair market value in excess of $1.0 million,
or (ii) result in Net Proceeds in excess of $1.0 million (each of the
foregoing, an "Asset Sale"), unless (x) the Company (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such
Asset Sale at least equal to the fair market value (evidenced by an Officers'
Certificate delivered to the Trustee, and for Asset Sales having a fair
market value or resulting in net proceeds in excess of $5.0 million,
evidenced by a resolution of the Board of Directors set forth in an Officers'
Certificate
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delivered to the Trustee) of the assets sold or otherwise disposed of and (y)
at least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash or like-kind assets (in each
case as determined in good faith by the Company, evidenced by a resolution of
the Board of Directors and certified by an Officers' Certificate filed with
the Trustee); provided, however, that the amount of (A) any liabilities (as
shown on the Company's or such Restricted Subsidiary's most recent balance
sheet or in the notes thereto) of the Company or such Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Notes or
any Subsidiary Guarantee) that are assumed by the transferee of any such
assets and (B) any notes or other obligations received by the Company or such
Restricted Subsidiary from such transferee that are immediately converted by
the Company or such Restricted Subsidiary into cash (to the extent of the
cash received) or Cash Equivalents, shall be deemed to be cash for purposes
of this provision; and provided, further, that the 75% limitation referred to
in the foregoing clause (y) shall not apply to any Asset Sale in which the
cash portion of the consideration received therefrom is equal to or greater
than what the after-tax proceeds would have been had such Asset Sale complied
with the aforementioned 75% limitation. A transfer of assets or issuance of
Equity Interests by the Company to a Wholly Owned Restricted Subsidiary or by
a Wholly Owned Restricted Subsidiary to the Company or to another Wholly
Owned Restricted Subsidiary will not be deemed to be an Asset Sale.
Within 360 days of any Asset Sale, the Company may, at its option, apply
an amount equal to the Net Proceeds from such Asset Sale either (a) to
permanently reduce Senior Debt, or (b) to an investment in a Restricted
Subsidiary or in another business or capital expenditure or other
long-term/tangible assets, in each case, in the same line of business as the
Company or any of its Restricted Subsidiaries was engaged in on the date of
the Indenture or in businesses similar or reasonably related thereto. Pending
the final application of any such Net Proceeds, the Company may temporarily
reduce Senior Bank Debt or otherwise invest such Net Proceeds in any manner
that is not prohibited by the Indenture. Any Net Proceeds from such Asset
Sale that are not applied or invested as provided in the first sentence of
this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $5.0 million, the Company shall
make an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company may use
any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.
Selection and Notice
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
the Notes are listed, or, if the Notes are not so listed, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and
appropriate, provided that no Notes of $1,000 or less shall be redeemed in
part. Notices of redemption shall be mailed by first class mail at least 30
but not more than 60 days before the redemption date to each Holder of Notes
to be redeemed at its registered address. If any Note is to be redeemed in
part only, the notice of redemption that relates to such Note shall state the
portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof will be issued in
the name of the Holder thereof upon cancellation of the original Note. On and
after the redemption date, interest will cease to accrue on Notes or portions
of them called for redemption.
Certain Covenants
Restricted Payments
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly: (a) declare or
pay any dividend or make any distribution on account of the Company's or any
of its Restricted Subsidiaries' Equity Interests (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of
the Company or such Restricted Subsidiary or dividends or distributions
payable to the Company or any Restricted Subsidiary of the Company); (b)
purchase, redeem or otherwise acquire
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or retire for value any Equity Interests of the Company or any Restricted
Subsidiary or other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Restricted Subsidiary); (c) purchase,
redeem or otherwise acquire or retire prior to scheduled maturity for value any
Indebtedness that is subordinated in right of payment to the Notes or (d)
make any Investment other than a Permitted Investment (all such payments and
other actions set forth in clauses (a) through (d) above being collectively
referred to as "Restricted Payments"), unless, at the time of such Restricted
Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the test set forth in
the first paragraph of the covenant entitled "Incurrence of Indebtedness
and Issuance of Preferred Stock;" and
(iii) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries
after the date of the Indenture is less than (x) the cumulative EBITDA of
the Company, minus 1.75 times the cumulative Consolidated Interest Expense
of the Company, in each case for the period (taken as one accounting
period) from June 30, 1996, to the end of the Company's most recently
ended fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment, plus (y) the aggregate net Equity
Proceeds received by the Company from the issuance or sale since the date
of the Indenture of Equity Interests of the Company or of debt securities
of the Company that have been converted into such Equity Interests (other
than Equity Interests or convertible debt securities sold to a Restricted
Subsidiary of the Company and other than Disqualified Stock or debt
securities that have been converted into Disqualified Stock), plus (z)
$2.0 million.
The foregoing provisions will not prohibit (A) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of the
Indenture; (B) the redemption, repurchase, retirement or other acquisition or
retirement for value of any Equity Interests of the Company in exchange for,
or with the net cash proceeds of, the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of other Equity Interests of
the Company (other than any Disqualified Stock); (C) the defeasance,
redemption, repurchase, retirement or other acquisition or retirement for
value of Indebtedness that is subordinated or pari passu in right of payment
to the Notes in exchange for, or with the net cash proceeds of, a
substantially concurrent issuance and sale (other than to a Restricted
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); (D) the defeasance, redemption, repurchase, retirement
or other acquisition or retirement for value of Indebtedness that is
subordinated or pari passu in right of payment to the Notes in exchange for,
or with the net cash proceeds of, a substantially concurrent issue and sale
(other than to the Company or any of its Restricted Subsidiaries) of
Refinancing Indebtedness; (E) the repurchase of any Indebtedness subordinated
or pari passu in right of payment to the Notes at a purchase price not
greater than 101% of the principal amount of such Indebtedness in the event
of a Change of Control in accordance with provisions similar to the "Change
of Control" covenant, provided that prior to or contemporaneously with such
repurchase the Company has made the Change of Control Offer as provided in
such covenant with respect to the Notes and has repurchased all Notes validly
tendered for payment in connection with such Change of Control Offer; (F) the
prepayment of the Chrysler Notes, together with premium and interest thereon;
(G) the prepayment of $450,000 of junior subordinated notes issued by the
Company in connection with a 1990 acquisition, together with interest
thereon; and (H) additional payments to current or former employees of the
Company for repurchases of stock, stock options or other equity interests,
provided that the aggregate amount of all such payments under this clause (H)
does not exceed $500,000 in any year and $2.0 million in the aggregate.
The Restricted Payments described in clauses (B), (C), (E) and (H) of the
immediately preceding paragraph will be Restricted Payments that will be
permitted to be taken in accordance with such paragraph but will reduce the
amount that would otherwise be available for Restricted Payments under clause
(iii) of the first paragraph of this section, and the Restricted Payments
described in clauses (A), (D), (F) and (G) of the immediately preceding
paragraph will be Restricted Payments that will be permitted to be taken in
accordance with such paragraph and will not reduce the amount that would
otherwise be available for Restricted Payments under clause (iii) of the
first paragraph of this section.
If an Investment results in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments deemed to have been made as
calculated under the foregoing provision will be reduced by the amount of any
net
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reduction in such Investment (resulting from the payment of interest or
dividends, loan repayment, transfer of assets or otherwise) to the extent
such net reduction is not included in the Company's EBITDA; provided,
however, that the total amount by which the aggregate amount of all
Restricted Payments may be reduced may not exceed the lesser of (a) the cash
proceeds received by the Company and its Restricted Subsidiaries in
connection with such net reduction and (b) the initial amount of such
Investment.
If the aggregate amount of all Restricted Payments calculated under the
foregoing provision includes an Investment in an Unrestricted Subsidiary or
other Person that thereafter becomes a Restricted Subsidiary, such Investment
will no longer be counted as a Restricted Payment for purposes of calculating
the aggregate amount of Restricted Payments. For the purpose of making any
calculations under the Indenture, (a) an Investment will include the fair
market value of the net assets of any Restricted Subsidiary at the time that
such Restricted Subsidiary is designated an Unrestricted Subsidiary and will
exclude the fair market value of the net assets of any Unrestricted
Subsidiary that is designated as a Restricted Subsidiary, (b) any property
transferred to or from an Unrestricted Subsidiary will be valued at fair
market value at the time of such transfer, provided that, in each case, the
fair market value of an asset or property is as determined by the Board of
Directors in good faith, and (c) subject to the foregoing, the amount of any
Restricted Payment, if other than cash, will be determined by the Board of
Directors, whose good faith determination will be conclusive.
The Board of Directors may designate a Restricted Subsidiary to be an
Unrestricted Subsidiary in compliance with the covenant entitled
"Unrestricted Subsidiaries." Upon such designation, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the
extent repaid in cash) in the Subsidiary so designated will be deemed to be
Restricted Payments made at the time of such designation and will reduce the
amount available for Restricted Payments under the first paragraph of this
covenant. Such designation will only be permitted if such Restricted Payment
would be permitted at such time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guaranty or otherwise become directly or indirectly liable
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company will not permit any of its Restricted Subsidiaries
to issue any shares of preferred stock; provided, however, that the Company
may incur Indebtedness and may permit a Restricted Subsidiary to incur
Indebtedness if at the time of such incurrence and after giving effect
thereto the Leverage Ratio would be less than 6.0 to 1.0.
The foregoing limitations will not apply to (a) the incurrence by the
Company or any Restricted Subsidiary of Senior Bank Debt in an aggregate
amount not to exceed $25.0 million at any one time outstanding, (b) the
issuance by the Restricted Subsidiaries of Subsidiary Guarantees, (c) the
incurrence by the Company and its Restricted Subsidiaries of the Existing
Indebtedness, (d) the issuance by the Company of the Notes, (e) the
incurrence by the Company and its Restricted Subsidiaries of Capital Lease
Obligations and/or additional Indebtedness constituting purchase money
obligations up to an aggregate of $2.5 million at any one time outstanding,
provided that the Liens securing such Indebtedness constitute Permitted
Liens, (f) the incurrence of Indebtedness between (i) the Company and its
Restricted Subsidiaries and (ii) the Restricted Subsidiaries, (g) Hedging
Obligations that are incurred for the purpose of fixing or hedging interest
rate risk with respect to any floating rate Indebtedness that is permitted by
the terms of the Indenture to be outstanding, (h) the incurrence by the
Company and its Restricted Subsidiaries of Indebtedness arising out of
letters of credit, performance bonds, surety bonds and bankers' acceptances
incurred in the ordinary course of business up to an aggregate of $2.0
million at any one time outstanding, (i) the incurrence by the Company and
its Restricted Subsidiaries of Indebtedness consisting of guarantees,
indemnities or obligations in respect of purchase price adjustments in
connection with the acquisition or disposition of assets, including, without
limitation, shares of Capital Stock, and (j) the incurrence by the Company
and its Restricted Subsidiaries of Refinancing Indebtedness issued in
exchange for, or the proceeds of which are used to repay, redeem, defease,
extend, refinance, renew, replace or refund, Indebtedness referred to in
clauses (b) through (e) above, and this clause (j).
Liens
The Indenture will provide that neither the Company nor any of its
Restricted Subsidiaries may directly or indirectly create, incur, assume or
suffer to exist any Lien (other than a Permitted Lien) upon any property or
assets
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now owned or hereafter acquired, or any income, profits or proceeds
therefrom, or assign or otherwise convey any right to receive income
therefrom, unless (a) in the case of any Lien securing any Indebtedness that
is subordinate to the Notes, the Notes are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Lien and (b)
in the case of any other Lien, the Notes are equally and ratably secured with
the obligation or liability secured by such Lien.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) (i) pay
dividends or make any other distributions to the Company or any of its
Restricted Subsidiaries (A) on its Capital Stock or (B) with respect to any
other interest or participation in, or measured by, its profits, or (ii) pay
any Indebtedness owed to the Company or any of its Restricted Subsidiaries,
(b) make loans or advances to the Company or any of its Restricted
Subsidiaries or (c) transfer any of its properties or assets to the Company
or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (1) Existing Indebtedness, (2)
the Credit Agreement as in effect as of the date of the Indenture, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancing thereof, provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive in the
aggregate with respect to such dividend and other payment restrictions than
those contained in the Credit Agreement as in effect on the date of the
Indenture, (3) the Indenture and the Notes, (4) applicable law, (5) any
instrument governing Indebtedness or Capital Stock of a Person acquired by
the Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness was incurred in
connection with or in contemplation of such acquisition), which encumbrance
or restriction is not applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property or assets of the
Person, so acquired, provided that the EBITDA of such Person is not taken
into account in determining whether such acquisition was permitted by the
terms of the Indenture, (6) customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (7) restrictions on the transfer of property subject to purchase
money or Capital Lease Obligations otherwise permitted by clause (e) of the
covenant entitled "Incurrence of Indebtedness and Issuance of Preferred
Stock," or (8) permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Refinancing
Indebtedness are no more restrictive in the aggregate than those contained in
the agreements governing the Indebtedness being refinanced.
Merger, Consolidation, or Sale of Assets
The Indenture will provide that the Company may not consolidate or merge with
or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
Person unless (a) the Company is the surviving corporation or the Person formed
by or surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (b) the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the obligations
of the Company under the Notes and the Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (c) immediately
after such transaction no Default or Event of Default exists; and (d) the
Company or Person formed by or surviving any such consolidation or merger, or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made, will, at the time of such transaction and after giving pro
forma effect thereto, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the test set forth in the first paragraph of the
covenant entitled "Incurrence of Indebtedness and Issuance of Preferred Stock."
Transactions with Affiliates
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of,
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any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (a)
such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with a non-Affiliated Person and (b) the Company delivers to the
Trustee (i) with respect to any Affiliate Transaction involving aggregate
payments in excess of $1.0 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above and such Affiliate Transaction is
approved by a majority of the disinterested members of the Board of Directors
and (ii) with respect to any Affiliate Transaction involving aggregate
payments in excess of $5.0 million, an opinion as to the fairness to the
Company or such Restricted Subsidiary from a financial point of view issued
by an investment banking firm of national standing; provided, however, that
(A) any employment agreement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary, (B)
transactions between or among the Company and/or its Restricted Subsidiaries,
(C) transactions permitted by the provisions of the Indenture described above
under the covenant "Restricted Payments" and (D) the grant of stock, stock
options or other equity interests to employees and directors of the Company
in accordance with duly adopted Company stock grant, stock option and similar
plans, in each case, shall not be deemed Affiliate Transactions; and further
provided that (1) the provisions of clause (b) shall not apply to sales of
inventory by the Company or any Restricted Subsidiary to any Affiliate in the
ordinary course of business and (2) the provisions of clause (b) (ii) shall
not apply to loans or advances to the Company or any Restricted Subsidiary
from, or equity investments in the Company or any Restricted Subsidiary by,
any Affiliate to the extent permitted by the provisions of the Indenture
described above under the covenant entitled "Incurrence of Indebtedness and
Issuance of Preferred Stock."
Certain Senior Subordinated Debt
The Indenture will provide that (a) the Company will not incur any
Indebtedness that is subordinated or junior in right of payment to any Senior
Debt of the Company and senior in any respect in right of payment to the
Notes, and (b) the Company will not permit any Restricted Subsidiary to incur
any Indebtedness that is subordinated or junior in right of payment to its
Senior Debt and senior in any respect in right of payment to its Subsidiary
Guarantee.
Additional Subsidiary Guarantees
The Indenture will provide that if any entity (other than an Excluded
Restricted Subsidiary) shall become a Restricted Subsidiary after the date of
the Indenture, then such Restricted Subsidiary shall execute a Subsidiary
Guarantee and deliver an opinion of counsel with respect thereto, in
accordance with the terms of the Indenture.
The Indenture will provide that no Restricted Subsidiary may consolidate
with or merge with or into (whether or not such Restricted Subsidiary is the
surviving Person), another Person (other than the Company) whether or not
affiliated with such Restricted Subsidiary unless (a) subject to the
provisions of the following paragraph, the Person formed by or surviving any
such consolidation or merger (if other than such Restricted Subsidiary)
assumes all the obligations of such Restricted Subsidiary under its
Subsidiary Guaranty, if any, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee; (b) immediately after
giving effect to such transaction, no Default or Event of Default exists; and
(c) such Restricted Subsidiary, or any Person formed by or surviving any such
consolidation or merger, would be permitted to incur, immediately after
giving effect to such transaction, at least $1.00 of additional Indebtedness
pursuant to the test set forth in the first paragraph of the covenant
entitled "Incurrence of Indebtedness and Issuance of Preferred Stock."
The Indenture will provide that in the event of (a) a sale or other
disposition of all of the assets of any Restricted Subsidiary, by way of merger,
consolidation or otherwise, (b) a sale or other disposition of all of the
capital stock of any Restricted Subsidiary, or (c) the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the terms
of the covenant entitled "Unrestricted Subsidiaries," then such Subsidiary (in
the event of a sale or other disposition, by way of such a merger, consolidation
or otherwise, of all of the capital stock of such Restricted Subsidiary or in
the event of the designation of such Restricted Subsidiary as an Unrestricted
Subsidiary) or the corporation acquiring the property (in the event of a sale or
other disposition of all of the assets of such Restricted Subsidiary) will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture. See "Redemption or
Repurchase at Option of Holders--Asset Sales."
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Unrestricted Subsidiaries
The Board of Directors may designate any Subsidiary (including any Restricted
Subsidiary or any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary so long as: (i) neither the Company nor any Restricted
Subsidiary is directly or indirectly liable for any Indebtedness of such
Subsidiary; (ii) no default with respect to any Indebtedness of such Subsidiary
would permit (upon notice, lapse of time or otherwise) any holder of any other
Indebtedness of the Company or any Restricted Subsidiary to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; (iii) any Investment in such Subsidiary
deemed to be made as a result of designating such Subsidiary an Unrestricted
Subsidiary will not violate the provisions of the covenant entitled "Restricted
Payments;" (iv) neither the Company nor any Restricted Subsidiary has a
contract, agreement, arrangement, understanding or obligation of any kind,
whether written or oral, with such Subsidiary other than (A) those that might be
obtained at the time from Persons who are not Affiliates of the Company or (B)
administrative, tax sharing and other ordinary course contracts, agreements,
arrangements and understandings or obligations entered into in the ordinary
course of business; and (v) neither the Company nor any Restricted Subsidiary
has any obligation to subscribe for additional shares of Capital Stock or other
Equity Interests in such Subsidiary, or to maintain or preserve such
Subsidiary's financial condition or to cause such Subsidiary to achieve certain
levels of operating results other than as permitted under the covenant entitled
"Restricted Payments." Notwithstanding the foregoing, the Company may not
designate as an Unrestricted Subsidiary any Subsidiary which, on the date of the
Indenture, is a Significant Subsidiary, and may not sell, transfer or otherwise
dispose of any properties or assets of any such Significant Subsidiary to an
Unrestricted Subsidiary, other than in the ordinary course of business.
The Board of Directors may designate any Unrestricted Subsidiary as a
Restricted Subsidiary; provided that such designation will be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only
be permitted if (i) such Indebtedness is permitted under the "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant and (ii) no Default or
Event of Default would occur as a result of such designation.
Reports
Whether or not required by the rules and regulations of the Securities and
Exchange Commission (the "Commission"), so long as any Notes are outstanding,
the Company will furnish to the Holders of Notes (a) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file
such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (b) all financial information that would be required to be
included in a Form 8-K filed with the Commission if the Company were required
to file such reports. In addition, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability (unless
the Commission will not accept such a filing) and make such information
available to investors who request it in writing.
Events of Default and Remedies
The Indenture will provide that each of the following constitutes an Event
of Default: (a) default for 30 days in the payment when due of interest on
the Notes (whether or not prohibited by the subordination provisions of the
Indenture); (b) default in payment when due of the principal of or premium,
if any, on the Notes (whether or not prohibited by the subordination
provisions of the Indenture); (c) failure by the Company to comply with the
provisions described under "Change of Control;" (d) failure by the Company or
any Subsidiary Guarantor for 60 days after written notice from the Trustee
or Holders of not less than 25% of the aggregate principal amount of the
Notes outstanding to comply with any of its other agreements in the
Indenture, Notes or the Subsidiary Guarantees; (e) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee exists on the date of the Indenture or is created
thereafter, if (i) such default results in the acceleration of such
Indebtedness prior to its express maturity or shall constitute a default in
the payment of such Indebtedness at final maturity of such Indebtedness, and
(ii) the principal amount of any such Indebtedness
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that has been accelerated or not paid at maturity, when added to the
aggregate principal amount of all other such Indebtedness that has been
accelerated or not paid at maturity, exceeds $5.0 million; (f) failure by the
Company or any of its Restricted Subsidiaries to pay final judgments aggregating
in excess of $5.0 million, which judgments remain unpaid, undischarged or
unstayed for a period of 60 days; (g) certain events of bankruptcy or insolvency
with respect to the Company or any of its Restricted Subsidiaries that are
Significant Subsidiaries; and (h) except as permitted by the Indenture or the
Subsidiary Guarantees, any Subsidiary Guarantee issued by a Restricted
Subsidiary shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect, or any
Restricted Subsidiary or any Person acting on behalf of any Restricted
Subsidiary shall deny or disaffirm in writing its obligations under its
Subsidiary Guarantee.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately; provided, however,
that if any Obligation with respect to Senior Bank Debt is outstanding
pursuant to the Credit Agreement upon a declaration of acceleration of the
Notes, the principal, premium, if any, and interest on the Notes will not be
payable until the earlier of (i) the day which is five business days after
written notice of acceleration is received by the Company and the Credit
Agent, or (ii) the date of acceleration of the Indebtedness under the Credit
Agreement. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to the
Company or any Restricted Subsidiary that is a Significant Subsidiary, the
principal of, and premium, if any, and any accrued and unpaid interest on all
outstanding Notes will become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. In the event of a declaration of
acceleration of the Notes because an Event of Default has occurred and is
continuing as a result of the acceleration of any Indebtedness described in
clause (e) of the preceding paragraph, the declaration of acceleration of the
Notes shall be automatically annulled if the holders of any Indebtedness
described in clause (e) have rescinded the declaration of acceleration in
respect of such Indebtedness within 30 days of the date of such declaration
and if (i) the annulment of the acceleration of the Notes would not conflict
with any judgment or decree of a competent jurisdiction, and (ii) all
existing Events of Default, except non- payment of principal or interest on
the Notes that became due solely because of the acceleration of the Notes,
have been cured or waived.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to
the optional redemption provisions of the Indenture, an equivalent premium
shall also become and be immediately due and payable to the extent permitted
by law upon the acceleration of the Notes. If an Event of Default occurs
prior to , 2004 by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding
the prohibition on redemption of the Notes prior to , 2004, then the
premium specified in the Indenture shall also become immediately due and
payable to the extent permitted by law upon the acceleration of the Notes.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. Subject to certain
limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee
a statement specifying such Default or Event of Default.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the Company
or any Restricted Subsidiary, as such, shall have any liability for any
obligations of the Company or any Restricted Subsidiary under the Notes, the
Subsidiary Guarantees or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes
by accepting a Note and the Subsidiary Guarantees waives and releases
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all such liability. The waiver and release are part of the consideration for
issuance of the Notes and the Subsidiary Guarantees. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is
the view of the Commission that such a waiver is against public policy.
Legal Defeasance and Covenant Defeasance
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance") except for (a) the rights of Holders of outstanding Notes to
receive payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, (b) the Company's
obligations with respect to the Notes concerning issuing temporary Notes,
registration of Notes, mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payment and money for security
payments held in trust, (c) the rights, powers, trusts, duties and immunities
of the Trustee, and the Company's obligations in connection therewith and (d)
the Legal Defeasance provisions of the Indenture. In addition, the Company
may, at its option and at any time, elect to have the obligations of the
Company released with respect to certain covenants that are described in the
Indenture ("Covenant Defeasance"), and thereafter any omission to comply with
such obligations shall not constitute a Default or Event of Default with
respect to the Notes. In the event Covenant Defeasance occurs, certain events
(not including non-payment, bankruptcy, receivership and insolvency events)
described under "Events of Default" will no longer constitute an Event of
Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (a)
the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, cash in Dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
outstanding Notes on the stated maturity or on the applicable redemption
date, as the case may be, of such principal or installment of principal of,
premium, if any, or interest on the outstanding Notes; (b) in the case of
Legal Defeasance, the Company shall have delivered to the Trustee an opinion
of counsel in the United States reasonably acceptable to the Trustee
confirming that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (ii) since the date of
the Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred; (c) in the case of Covenant
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred; (d) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or insofar as Events
of Default from bankruptcy or insolvency events are concerned, at any time in
the period ending on the 91st day after the date of deposit; (e) such Legal
Defeasance or Covenant Defeasance shall not result in a breach or violation
of, or constitute a default under, any material agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound; (f) the Company shall have
delivered to the Trustee an opinion of counsel to the effect that after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally; (g) the Company shall have
delivered to the Trustee an Officers' Certificate stating that the deposit
was not made by the Company with the intent of preferring the Holders of
Notes over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and (h)
the Company shall have delivered to the Trustee an Officers' Certificate and
an opinion of counsel, each stating that all conditions precedent provided
for relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
Transfer and Exchange
A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by
the Indenture. The
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Company is not required to transfer or exchange any Note selected for
redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
Book-Entry, Delivery and Form
The Notes will be represented by one or more fully registered global notes
(collectively, the "Global Note"). The Global Note will be deposited upon
issuance with, or on behalf of, The Depository Trust Company, as Depositary
(the "Depositary"), and registered in the name of the Depositary or a nominee
of the Depositary (the "Global Note Registered Owner"). Except as set forth
below, the Global Note may be transferred, in whole and not in part, only to
another nominee of the Depositary or to a successor of the Depositary or its
nominee.
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company created to hold securities for its
participating organizations (collectively, the "Participants") and to
facilitate the clearance and settlement of transactions in those securities
between the Participants through electronic book-entry changes in accounts of
its Participants. The Participants include securities brokers and dealers
(including the Underwriters), banks, trust companies, clearing corporations
and certain other organizations. Access to the Depositary's systems is also
available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own
securities held by or on behalf of the Depositary only through the
Participants or the Indirect Participants. The ownership interest and
transfer of ownership interest of each actual purchaser of each security held
by or on behalf of the Depositary are recorded on the records of the
Participants and Indirect Participants.
The Depositary has also advised the Company that, pursuant to procedures
established by it, (i) upon deposit of the Global Note, the Depositary will
credit the accounts of Participants designated by the Underwriters with
portions of the principal amount of the Global Note and (ii) ownership of
such interests in the Global Note will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by the
Depositary (with respect to the Participants) or by the Participants and the
Indirect Participants (with respect to other owners of beneficial interests
in the Global Note). The laws of some states require that certain persons
take physical delivery in definitive form of securities that they own.
Consequently, the ability to transfer the Notes will be limited to that
extent.
Except as provided below, owners of interests in the Global Note will not
have Notes registered in their names, will not receive physical delivery of
the Notes in definitive form and will not be considered the registered owners
or holders thereof under the Indenture for any purpose.
Payments in respect of the principal of and premium, if any, and interest
on any Notes registered in the name of the Global Note Registered Owner will
be payable by the Trustee to the Global Note Registered Owner in its capacity
as the registered holder under the Indenture. Under the terms of the
Indenture, the Company and the Trustee will treat the persons in whose names
the Notes, including the Global Note, are registered as the owners thereof
for the purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Company, the Trustee nor any agent of
the Company or the Trustee has or will have any responsibility or liability
for (i) any aspect of the Depositary's records or any Participant's records
relating to or payments made on account of beneficial ownership interests in
the Global Note, or for maintaining, supervising or reviewing any of the
Depositary's records or any Participant's records relating to the beneficial
ownership interests in the Global Note or (ii) any other matter relating to
the actions and practices of the Depositary or any of its Participants. The
Depositary has advised the Company that its current practice, upon receipt of
any payment in respect of securities such as the Notes (including principal
and interest), is to credit the accounts of the relevant Participants with
the payment on the payment date, in amounts proportionate to their respective
holdings in principal amount of beneficial interests in the relevant security
as shown on the records of the Depositary. Payments by the Participants and
the Indirect Participants to the beneficial owners of the Notes will be
governed by standing instructions and customary practices and will be the
responsibility of the Participants or the Indirect Participants and will not
be the responsibility of the Depositary, the Trustee or the Company. Neither
the Company nor the Trustee will be liable for any delay by the Depositary or
any of its Participants in identifying the beneficial owners of the Notes,
and
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the Company and Trustee may conclusively rely on and will be protected in
relying on instructions from the Global Note Registered Owner for all
purposes.
The Global Note is exchangeable for definitive Notes: (i) if the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary of the Global Note and the Company thereupon fails to appoint a
successor Depositary; (ii) if the Company, at its option, notifies the
Trustee in writing that it elects to cause the issuance of the Notes in
definitive registered form; or (iii) if there shall have occurred and be
continuing an Event of Default or any event which after notice or lapse of
time or both would be an Event of Default with respect to the Notes. Such
definitive Notes shall be registered in the names of the owners of the
beneficial interests in the Global Note as provided by the Participants. Upon
issuance of the Notes in definitive form, the Trustee is required to register
the Notes in the name of, and cause the Notes to be delivered to, the person
or persons (or the nominee thereof) identified as the beneficial owners as
the Depositary shall direct.
Settlement for purchases of beneficial interests in the Global Note upon
the original issuance thereof will be required to be made by wire transfer in
immediately available funds. Payments in respect of the Notes represented by
the Global Note (including principal, premium, if any, and interest) will be
made by wire transfer in immediately available funds to the accounts
specified by the Global Note Registered Owner. With respect to the definitive
Notes, the Company will make all payments of principal, premium, if any, and
interest by wire transfer in immediately available funds to the accounts
specified by the Holders thereof or, if no such account is specified, by
mailing a check to such Holder's registered address. Secondary trading in
long-term notes of corporate issuers is generally settled in clearing-house
or next-day funds. In contrast, the beneficial interests in the Global Note
are expected to trade in the Depositary's Same-Day Funds Settlement System,
in which secondary market trading activity in those beneficial interests
would be required by the Depositary to settle in immediately available funds.
There is no assurance as to the effect, if any, that settlement in
immediately available funds would have on trading activity in such beneficial
interests.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for Notes), and any existing default or compliance with any provision
of the Indenture or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes).
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder of Notes): (a)
reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver; (b) reduce the principal of or change the
fixed maturity of any Note or alter the provisions with respect to the
redemption of the Notes in a manner adverse to the Holders of the Notes; (c)
reduce the rate of or change the time for payment of interest on any Note;
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration); (e) make any Note payable in
money other than that stated in the Notes; (f) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the
rights of Holders of Notes to receive payments of principal of or premium, if
any, or interest on the Notes; (g) waive a redemption payment with respect to
any Note (other than a payment required by one of the covenants described
above under the caption "Repurchase at the Option of Holders"); (h) except
pursuant to the Indenture, release any Restricted Subsidiary from its
obligations under its Subsidiary Guarantee, or change any Subsidiary
Guarantee in any manner that would materially adversely affect the Holders;
or (i) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the
Notes to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the
Notes in the case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under
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the Indenture of any such Holder, or to comply with requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
Concerning the Trustee
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; however, if it acquires any conflicting interest it
must eliminate such conflict within 90 days, apply to the Commission for
permission to continue or resign.
The Holders of a majority in principal amount of the then outstanding
Notes will have the right to direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the
Indenture at the request of any Holder of Notes, unless such Holder shall
have offered to the Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
Additional Information
Anyone who receives this Prospectus may obtain a copy of the Indenture
without charge by writing to Iron Mountain Incorporated, 745 Atlantic Avenue,
Boston, MA 02111, Attention: Executive Vice President/Chief Financial
Officer.
Certain Definitions
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person, (a)
Indebtedness of any other Person, existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Subsidiary of such
specified Person and (b) Indebtedness encumbering any asset acquired by such
specified Person.
"Acquisition EBITDA" means, as of any date of determination, with respect
to an Acquisition EBITDA Entity, the sum of (a) EBITDA of such Acquisition
EBITDA Entity for its last fiscal quarter for which financial statements are
available at such date of determination, multiplied by four (or if such
quarterly statements are not available, EBITDA for the most recent fiscal
year for which financial statements are available), plus (b) projected
quantifiable improvements in operating results (on an annualized basis) due
to cost reductions calculated in good faith by the Company or one of its
Restricted Subsidiaries, as certified by an Officers' Certificate filed with
the Trustee, without giving effect to any operating losses of the acquired
Person.
"Acquisition EBITDA Entity" means, as of any date of determination, a
business or Person (a) which has been acquired by the Company or one of its
Restricted Subsidiaries and with respect to which financial results on a
consolidated basis with the Company have not been made available for an
entire fiscal quarter or (b) which is to be acquired in whole or in part with
Indebtedness, the incurrence of which will require the calculation on such
date of the Acquisition EBITDA of such Acquisition EBITDA Entity for purposes
of the covenant entitled "Incurrence of Indebtedness and Issuance of
Preferred Stock."
"Adjusted EBITDA" means, as of any date of determination and without
duplication, the sum of (a) EBITDA of the Company and its Restricted
Subsidiaries for the most recent fiscal quarter for which internal financial
statements are available at such date of determination, multiplied by four,
and (b) Acquisition EBITDA of each business or Person that is an Acquisition
EBITDA Entity as of such date of determination, multiplied by a fraction, the
numerator of which is three minus the number of months (and/or any portion
thereof) in such most recent fiscal quarter for which the financial results
of such Acquisition EBITDA Entity are included in the EBITDA of the Company
and its Restricted Subsidiaries under clause (a) above, and (ii) the
denominator of which is three. The
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effects of unusual or non-recurring items in respect of the Company, a
Restricted Subsidiary or an Acquisition EBITDA Entity occurring in any period
shall be excluded in the calculation of Adjusted EBITDA.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or
otherwise; provided, however, that beneficial ownership of 10% or more of the
voting securities of a Person shall be deemed to be control.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock,
including, without limitation, with respect to partnerships, partnership
interests (whether general or limited) and any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, such partnership.
"Cash Equivalents" means (a) securities with maturities of one year or
less from the date of acquisition, issued, fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit,
time deposits, overnight bank deposits, bankers acceptances and repurchase
agreements issued by a Qualified Issuer having maturities of 270 days or less
from the date of acquisition, (c) commercial paper of an issuer rated at
least A-2 by Standard & Poor's Rating Group, a division of McGraw Hill, Inc.,
or P-2 by Moody's Investors Service, or carrying an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments and having maturities of 270 days or
less from the date of acquisition, (d) money market accounts or funds with or
issued by Qualified Issuers and (e) Investments in money market funds
substantially all of the assets of which are comprised of securities and
other obligations of the types described in clauses (a) through (c) above.
"Consolidated Adjusted Net Income" means, for any period, the net income
(or net loss) of the Company and its Restricted Subsidiaries for such period
as determined on a consolidated basis in accordance with GAAP, adjusted to
the extent included in calculating such net income or loss by excluding (a)
any net after-tax extraordinary gains or losses (less all fees and expenses
relating thereto), (b) any net after-tax gains or losses (less all fees and
expenses relating thereto) attributable to Asset Sales, (c) the portion of
net income (or loss) of any Person (other than the Company or a Restricted
Subsidiary), including Unrestricted Subsidiaries, in which the Company or any
Restricted Subsidiary has an ownership interest, except to the extent of the
amount of dividends or other distributions actually paid to the Company or
any Restricted Subsidiary in cash dividends or distributions by such Person
during such period, and (d) the net income (or loss) of any Person combined
with the Company or any Restricted Subsidiary on a "pooling of interests"
basis attributable to any period prior to the date of combination.
"Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes of the Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, the sum of (a) the amount which, in conformity with GAAP, would
be set forth opposite the caption "interest expense" (or any like caption) on
a consolidated statement of operations of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (i) amortization
of debt discount, (ii) the net cost of interest rate contracts (including
amortization of discounts), (iii) the interest portion of any deferred
payment obligation, (iv) amortization of debt issuance costs, and (v) the
interest component of Capital Lease Obligations of the Company and its
Restricted Subsidiaries, plus (b) all interest on any Indebtedness of any
other Person guaranteed and paid by the Company or any of its Restricted
Subsidiaries; provided, however, that Consolidated Interest Expense will not
include any gain or loss from extinguishment of debt, including write-off of
debt issuance costs.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses of the Company and its
Restricted Subsidiaries reducing Consolidated Adjusted Net Income for
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such period, determined on a consolidated basis in accordance with GAAP
(excluding any such non-cash charge that requires an accrual of or reserve
for cash charges for any future period).
"Credit Agent" means The Chase Manhattan Bank, in its capacity as
administrative agent for the lenders party to the Credit Agreement, or any
successor or successors party thereto.
"Credit Agreement" means that certain Credit Agreement, dated as of
December 10, 1990, as amended and restated as of April 15, 1993, and as
further amended and restated as of January 31, 1995, among the Company, the
lenders party thereto and the Credit Agent, as the same may be refunded,
replaced or refinanced by the New Credit Facility, and in each case as amended,
restated, supplemented, modified, renewed, refunded, increased, extended,
replaced or refinanced from time to time.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Designated Senior Debt" means (a) Senior Bank Debt and (b) other Senior
Debt the principal amount of which is $50.0 million or more at the date of
designation by the Company in a written instrument delivered to the Trustee;
provided that Senior Debt designated as Designated Senior Debt pursuant to
clause (b) shall cease to be Designated Senior Debt at any time that the
aggregate principal amount thereof outstanding is $10.0 million or less.
"Disqualified Stock" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, for cash or other property (other than Capital Stock that is not
Disqualified Stock) pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the Holder thereof, in whole or in part, in each
case on or prior to the stated maturity of the Notes.
"Dollars" and "$" mean lawful money of the United States of America.
"EBITDA" means for any period Consolidated Adjusted Net Income for such
period increased by (a) Consolidated Interest Expense for such period, plus
(b) Consolidated Income Tax Expense for such period, plus (c) Consolidated
Non-Cash Charges for such period.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Proceeds" means (a) with respect to Equity Interests (or debt
securities converted into Equity Interests) issued or sold for cash Dollars,
the aggregate amount of such cash Dollars and (b) with respect to Equity
Interests (or debt securities converted into Equity Interests) issued or sold
for any consideration other than cash Dollars, the aggregate Market Price
thereof computed on the date of the issuance or sale thereof.
"Excluded Restricted Subsidiary" means any Wholly Owned Restricted
Subsidiary principally engaged in the records management business domiciled
outside the United States of America if the issuance of a Subsidiary
Guarantee by such Subsidiary would, as determined in a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee, create a tax disadvantage that is material in relation to the
aggregate amount of the Company's and any Restricted Subsidiary's Investment
or proposed Investment therein.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than under the Credit Agreement) in existence on the date
of the Indenture, until such amounts are repaid.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged.
"Guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all
or any part of such obligation, including, without limiting the foregoing,
the obligation to reimburse amounts drawn down under letters of credit
securing such obligations.
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"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person, and
whether or not contingent, (a) every obligation of such Person for money
borrowed, (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) every reimbursement obligation of
such Person with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of such Person, (d) every
obligation of such Person issued or assumed as the deferred purchase price of
property or services, (e) every Capital Lease Obligation and every obligation
of such Person in respect of Sale and Leaseback Transactions that would be
required to be capitalized on the balance sheet in accordance with GAAP, (f)
all Disqualified Stock of such Person valued at the greater of its voluntary
or involuntary maximum fixed repurchase price, plus accrued and unpaid
dividends (unless included in such maximum repurchase price), (g) all
obligations of such Person under or with respect to Hedging Obligations which
would be required to be reflected on the balance sheet as a liability of such
Person in accordance with GAAP and (h) every obligation of the type referred
to in clauses (a) through (g) of another Person and dividends of another
Person the payment of which, in either case, such Person has guaranteed. For
purposes of this definition, the "maximum fixed repurchase price" of any
Disqualified Stock that does not have a fixed repurchase price will be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were repurchased on any date on which Indebtedness is
required to be determined pursuant to the Indenture, and if such price is
based upon, or measured by, the fair market value of such Disqualified Stock,
such fair market value will be determined in good faith by the board of
directors of the issuer of such Disqualified Stock. Notwithstanding the
foregoing, trade accounts payable and accrued liabilities arising in the
ordinary course of business and any liability for federal, state or local
taxes or other taxes owed by such Person shall not be considered Indebtedness
for purposes of this definition. The amount outstanding at any time of any
Indebtedness issued with original issue discount is the aggregate principal
amount at maturity of such Indebtedness, less the remaining unamortized
portion of the original issue discount of such Indebtedness at such time, as
determined in accordance with GAAP.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of loans
(including Guarantees), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"Leverage Ratio" means, at any date, the ratio of (a) the aggregate
principal amount of Indebtedness of the Company and its Restricted
Subsidiaries outstanding as of the most recent available quarterly or annual
balance sheet to (b) Adjusted EBITDA, after giving pro forma effect, without
duplication, to (i) the incurrence, repayment or retirement of any
Indebtedness by the Company or its Restricted Subsidiaries since the last day
of the most recent full fiscal quarter of the Company, (ii) if the Leverage
Ratio is being determined in connection with the incurrence of Indebtedness
by the Company or a Restricted Subsidiary, such Indebtedness, and (iii) the
Indebtedness to be incurred in connection with the acquisition of any
Acquisition EBITDA Entity.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code, or equivalent statutes, of any
jurisdiction).
"Market Price" means, (a) with respect to the calculation of Equity
Proceeds from the issuance or sale of debt securities which have been
converted into Equity Interests, the value received upon the original
issuance or sale of such converted debt securities, as determined reasonably
and in good faith by the Board of Directors, and (b) with respect to the
calculation of Equity Proceeds from the issuance or sale of Equity Interests,
the average of the daily closing prices for such Equity Interests for the 20
consecutive trading days preceding the date of such computation. The closing
price for each day shall be (a) if such Equity Interests are then listed or
admitted to trading on the New York Stock Exchange, the closing price on the
NYSE Consolidated Tape (or any successor consolidated tape reporting
transactions on the New York Stock Exchange) or, if such composite tape shall
not be in use or shall not report transactions in such Equity Interests, or
if such Equity Interests shall be listed on a stock exchange other
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than the New York Stock Exchange (including for this purpose the Nasdaq
National Market), the last reported sale price regular way for such day, or
in case no such reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in each case on the
principal national securities exchange on which such Equity Interests are
listed or admitted to trading (which shall be the national securities
exchange on which the greatest number of such Equity Interests have been
traded during such 20 consecutive trading days), or (b) if such Equity
Interests are not listed or admitted to trading on any such exchange, the
average of the closing bid and asked prices thereof in the over-the-counter
market as reported by the National Association of Securities Dealers
Automated Quotation System or any successor system, or if not included
therein, the average of the closing bid and asked prices thereof furnished by
two members of the National Association of Securities Dealers selected
reasonably and in good faith by the Board of Directors for that purpose. In
the absence of one or more such quotations, the Market Price for such Equity
Interests shall be determined reasonably and in good faith by the Board of
Directors.
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale, which
amount is equal to the excess, if any, of (a) the cash received by the
Company or such Restricted Subsidiary (including any cash payments received
by way of deferred payment pursuant to, or monetization of, a note or
installment receivable or otherwise, but only as and when received) in
connection with such disposition over (b) the sum of (i) the amount of any
Indebtedness which is secured by such asset and which is required to be
repaid in connection with the disposition thereof, plus (ii) the reasonable
out- of-pocket expenses incurred by the Company or such Restricted
Subsidiary, as the case may be, in connection with such disposition or in
connection with the transfer of such amount from such Restricted Subsidiary
to the Company, plus (iii) provisions for taxes, including income taxes,
attributable to the disposition of such asset or attributable to required
prepayments or repayments of Indebtedness with the proceeds thereof, plus
(iv) if the Company does not first receive a transfer of such amount from the
relevant Restricted Subsidiary with respect to the disposition of an asset by
such Restricted Subsidiary and such Restricted Subsidiary intends to make
such transfer as soon as practicable, the out-of-pocket expenses and taxes
that the Company reasonably estimates will be incurred by the Company or such
Restricted Subsidiary in connection with such transfer at the time such
transfer is expected to be received by the Company (including, without
limitation, withholding taxes on the remittance of such amount).
"Obligations" means any principal, interest (including post-petition
interest, whether or not allowed as a claim in any proceeding), penalties, fees,
costs, expenses, indemnifications, reimbursements, damages and other liabilities
payable under or in connection with any Indebtedness.
"Officers' Certificate" means a certificate signed, unless otherwise
specified, by any two of the Chairman of the Board, a Vice Chairman of the
Board, the President, the Chief Financial Officer, the Controller, or an
Executive Vice President of the Company, and delivered to the Trustee.
"Permitted Investments" means (a) any Investments in the Company or in a
Restricted Subsidiary (other than an Excluded Restricted Subsidiary) of the
Company, including without limitation the Guarantee of Indebtedness permitted
under the covenant entitled "Incurrence of Indebtedness and Issuance of
Preferred Stock;" (b) any Investments in Cash Equivalents; (c) Investments by
the Company or any Restricted Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a Restricted Subsidiary (other
than an Excluded Restricted Subsidiary) of the Company or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary (other than an Excluded Restricted Subsidiary) of the
Company; (d) Investments in assets (including accounts and notes receivable)
owned or used in the ordinary course of business; (e) Investments for any
purpose related to the Company's records management business in an aggregate
outstanding amount not to exceed $10.0 million; and (f) Investments by the
Company or a Restricted Subsidiary (other than an Excluded Restricted
Subsidiary) in one or more Excluded Restricted Subsidiaries, the aggregate
outstanding amount of which does not exceed 10% of the consolidated assets of
the Company and its Restricted Subsidiaries.
"Permitted Liens" means:
(a) Liens existing as of the date of issuance of the Notes;
(b) Liens on property or assets of the Company or any Restricted
Subsidiary securing Senior Debt;
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(c) Liens on any property or assets of a Restricted Subsidiary granted
in favor of the Company or any Wholly Owned Restricted Subsidiary;
(d) Liens securing the Notes or the Guarantees;
(e) any interest or title of a lessor under any Capital Lease Obligation
or Sale and Leaseback Transaction so long as the Indebtedness, if any,
secured by such Lien does not exceed the principal amount of Indebtedness
permitted under the covenant entitled "Incurrence of Indebtedness and
Issuance of Preferred Stock;"
(f) Liens securing Acquired Debt created prior to (and not in connection
with or in contemplation of) the incurrence of such Indebtedness by the
Company or any Restricted Subsidiary; provided that such Lien does not
extend to any property or assets of the Company or any Restricted
Subsidiary other than the assets acquired in connection with the
incurrence of such Acquired Debt;
(g) Liens securing Hedging Obligations permitted to be incurred pursuant
to clause (g) of the covenant entitled "Incurrence of Indebtedness and
Issuance of Preferred Stock;"
(h) Liens arising from purchase money mortgages and purchase money
security interests, or in respect of the construction of property or
assets, incurred in the ordinary course of the business of the Company or
a Restricted Subsidiary; provided that (i) the related Indebtedness is not
secured by any property or assets of the Company or any Restricted
Subsidiary other than the property and assets so acquired or constructed
and (ii) the Lien securing such Indebtedness is created within 60 days of
such acquisition or construction;
(i) statutory Liens or landlords' and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made therefor;
(j) Liens for taxes, assessments, government charges or claims with
respect to amounts not yet delinquent or that are being contested in good
faith by appropriate proceedings diligently conducted, if a reserve or
other appropriate provision, if any, as is required in conformity with
GAAP has been made therefor;
(k) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance bonds and other obligations of a like
nature incurred in the ordinary course of business (other than contracts
for the payment of money);
(l) easements, rights-of-way, restrictions and other similar charges or
encumbrances not interfering in any material respect with the business of
the Company or any Restricted Subsidiary incurred in the ordinary course
of business;
(m) Liens arising by reason of any judgment, decree or order of any
court so long as such Lien is adequately bonded and any appropriate legal
proceedings that may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have
expired;
(n) Liens arising under options or agreements to sell assets;
(o) other Liens securing obligations incurred in the ordinary course of
business, which obligations do not exceed $1.0 million in the aggregate at
any one time outstanding; and
(p) any extension, renewal or replacement, in whole or in part, of any
Lien described in the foregoing clauses (a) through (o); provided that any
such extension, renewal or replacement shall not extend to any additional
property or assets.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Principal Stockholders" means each of Vincent J. Ryan, Schooner Capital
Corporation, C. Richard Reese, Eugene B. Doggett, and their respective
Affiliates.
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<PAGE>
"Qualified Equity Offering" means an offering of Capital Stock, other than
Disqualified Stock, of the Company for Dollars, whether registered or exempt
from registration under the Securities Act.
"Qualified Issuer" means (a) any lender party to the Credit Agreement or
(b) any commercial bank (i) which has capital and surplus in excess of
$500,000,000 and (ii) the outstanding short- term debt securities of which
are rated at least A-2 by Standard & Poor's Rating Group, a division of
McGraw-Hill, Inc. or at least P-2 by Moody's Investors Service, or carry an
equivalent rating by a nationally recognized rating agency if both of the two
named rating agencies cease publishing ratings of investments.
"Qualifying Sale and Leaseback Transaction" means any Sale and Leaseback
Transaction between the Company or any of its Restricted Subsidiaries and any
bank, insurance company or other lender or investor providing for the leasing
to the Company or such Restricted Subsidiary of any property (real or
personal) which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such lender or investor or to any Person to
whom funds have been or are to be advanced by such lender or investor and
where the property in question has been constructed or acquired after the
date of the Indenture.
"Refinancing Indebtedness" means new Indebtedness incurred or given in
exchange for, or the proceeds of which are used to repay, redeem, defease,
extend, refinance, renew, replace or refund, other Indebtedness; provided,
however, that (a) the principal amount of such new Indebtedness shall not
exceed the principal amount of Indebtedness so repaid, redeemed, defeased,
extended, refinanced, renewed, replaced or refunded (plus the amount of fees,
premiums, consent fees, prepayment penalties and expenses incurred in
connection therewith); (b) such Refinancing Indebtedness shall have a
Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of the Indebtedness so repaid, redeemed, defeased,
extended, refinanced, renewed, replaced or refunded or shall mature after
, 2006; (c) to the extent such Refinancing Indebtedness refinances
Indebtedness that has a final maturity date occurring after , 2006, such new
Indebtedness shall have a final scheduled maturity not earlier than the final
scheduled maturity of the Indebtedness so repaid, redeemed, defeased,
extended, refinanced, renewed, replaced or refunded and shall not permit
redemption at the option of the holder earlier than the earliest date of
redemption at the option of the holder of the Indebtedness so repaid,
redeemed, defeased, extended, refinanced, renewed, replaced or refunded; (d)
to the extent such Refinancing Indebtedness refinances Indebtedness
subordinate to the Notes, such Refinancing Indebtedness shall be subordinated
in right of payment to the Notes and to the extent such Refinancing
Indebtedness refinances Notes or Indebtedness pari passu with the Notes, such
Refinancing Indebtedness shall be pari passu with or subordinated in right of
payment to the Notes, in each case on terms at least as favorable to the
holders of Notes as those contained in the documentation governing the
Indebtedness so repaid, redeemed, defeased, extended, refinanced, renewed,
replaced or refunded; and (e) with respect to Refinancing Indebtedness
incurred by a Restricted Subsidiary, such Refinancing Indebtedness shall rank
no more senior, and shall be at least as subordinated, in right of payment to
the Subsidiary Guarantee of such Restricted Subsidiary as the Indebtedness
being extended, refinanced, renewed, replaced or refunded.
"Restricted Subsidiary" means (a) each direct or indirect Subsidiary of
the Company existing on the date of the Indenture and (b) any other direct or
indirect Subsidiary of the Company formed, acquired or existing after the
date of the Indenture, in each case which is not designated by the Board of
Directors as a "Unrestricted Subsidiary."
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which a Person sells or transfers any
property or asset in connection with the leasing, or the resale against
installment payments, of such property or asset to the seller or transferor.
"Senior Bank Debt" means all Obligations outstanding under or in
connection with the Credit Agreement (including Guarantees of such
Obligations by Subsidiaries of the Company).
"Senior Debt" means (a) the Senior Bank Debt and (b) any other Indebtedness
permitted to be incurred by the Company or any Restricted Subsidiary, as the
case may be, under the terms of the Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is (i) on a parity with
or subordinated in right of payment to the Notes or (ii) subordinated to Senior
Debt on terms substantially similar to those of the Notes. Notwithstanding
anything to the contrary in the foregoing, Senior Debt shall not include (i) any
liability for federal, state, local or other taxes owed or owing by the Company,
(ii) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates, (iii) any trade payables or (iv) any Indebtedness that is incurred
in violation of the Indenture, provided that such Indebtedness shall be deemed
not to have been incurred in violation of the
83
<PAGE>
Indenture for purposes of this clause (iv) if, in the case of any obligations
under the Credit Agreement, the holders of such obligations or their agent or
representative shall have received a representation from the Company to the
effect that the incurrence of such Indebtedness does not violate the provisions
of the Indenture.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Act, as such Regulation is in effect on the date hereof.
"Subsidiary" means, with respect to any Person, any corporation, association
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or a combination thereof.
"Unrestricted Subsidiary" means (a) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary in accordance with the
"Unrestricted Subsidiaries" covenant and (b) any Subsidiary of an
Unrestricted Subsidiary.
"Voting Stock" means any class or classes of Capital Stock pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees of
any Person (irrespective of whether or not, at the time, stock of any other
class or classes has, or might have, voting power by reason of the happening of
any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
sum of the products obtained by multiplying (x) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payment of principal, including payment at final maturity, in respect
thereof, by (y) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment, by (b) the
then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary of
the Company all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be owned
by the Company or by one or more Wholly Owned Restricted Subsidiaries of the
Company.
DESCRIPTION OF NEW CREDIT FACILITY
The Company intends to replace the Credit Agreement with the New Credit
Facility. The following description is based upon a term sheet relating to
the New Credit Facility. No assurances can be given that the Company will
enter into the New Credit Facility on these or any other terms. The Offering
is not conditioned on the closing of the New Credit Facility.
It is anticipated that the New Credit Facility will be a $100 million
revolving credit facility with up to $2 million of availability for letters
of credit. The New Credit Facility is expected to terminate on September 30,
2001, at which time all outstanding revolving credit loans and other amounts
payable thereunder will become due. Borrowings under the New Credit Facility
may be used to finance possible future acquisitions, as well as for working
capital and general corporate purposes. As with the Credit Agreement, the
Company's obligations under the New Credit Facility are expected to be
guaranteed by substantially all of the Company's subsidiaries; however,
unlike the Credit Agreement, the New Credit Facility is expected to be
secured only by the pledge of the stock of such subsidiaries. Prepayments of
outstanding borrowings under the New Credit Facility will be required in
certain circumstances out of the proceeds of certain insurance payments,
condemnations, issuances of indebtedness and asset dispositions.
The New Credit Facility is expected to permit the Company to elect from time
to time, as to all or any portion of the borrowings thereunder, an interest rate
based upon (i) a fluctuating rate equal to the highest of (x) the prime rate of
The Chase Manhattan Bank, (y) the secondary market rate for three-month
certificates of deposit (adjusted for statutory reserves and FDIC assessments),
plus 1%, or (z) the overnight federal funds rate plus 1/2 of 1% (the "Adjusted
Base Rate") or (ii) the interest rates prevailing on the date of determination
in the London interbank market (the "Eurodollar Rate") for the interest period
selected by the Company, plus, in the case of either (i) or (ii), a margin (the
"Applicable Margin") over the Adjusted Base Rate or the Eurodollar Rate. The
Applicable Margins for loans bearing interest at a rate based upon the Adjusted
Base Rate or the Eurodollar Rate ("Eurodollar Loans"), and commitment fees on
the undrawn portion of the New Credit Facility, will vary based on the Company's
84
<PAGE>
achieving and maintaining specified ratios of funded indebtedness (net of cash
and cash equivalents on hand) to EBITDA.
The New Credit Facility is expected to provide for payment by the Company
in respect of letters of credit of: (i) a per annum fee equal to the
Applicable Margin for Eurodollar Loans from time to time in effect; (ii) a
fronting fee of 1/4 of 1%; plus (iii) customary issuing fees and expenses.
The New Credit Facility is expected to contain covenants restricting the
ability of the Company and its subsidiaries to, among other things: (i) declare
dividends or redeem or repurchase capital stock; (ii) make optional payments and
modifications of subordinated and other debt instruments; (iii) incur liens and
engage in sale and leaseback transactions; (iv) make loans and investments; (v)
incur indebtedness and contingent obligations; (vi) make capital expenditures;
(vii) engage in mergers, acquisitions and asset sales; (viii) enter into
transactions with affiliates; and (ix) make changes in their lines of business.
It is also expected that the Company will be required to comply with financial
covenants with respect to: (i) a maximum leverage ratio; (ii) a minimum interest
coverage ratio; and (iii) a minimum fixed charge coverage ratio. The Company
will also be required to make certain customary affirmative covenants.
Events of default under the New Credit Facility are expected to include: (i)
the Company's failure to pay principal or interest when due; (ii) the Company's
material breach of any covenant, representation or warranty contained in the
loan documents; (iii) customary cross-default provisions; (iv) events of
bankruptcy, insolvency or dissolution of the Company or its subsidiaries; (v)
the levy of certain judgments against the Company, its subsidiaries or their
assets; (vi) certain adverse events under ERISA plans of the Company or its
subsidiaries; (vii) the actual or asserted invalidity of security documents or
guarantees of the Company or its subsidiaries; (viii) a change of control of the
Company; and (ix) the creation of certain environmental liabilities.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 13,000,000 shares of
Common Stock, 1,000,000 shares of Nonvoting Common Stock, $.01 par value per
share (the "Nonvoting Common Stock"), and 2,000,000 shares of Preferred
Stock, $.01 par value per share. On September 3, 1996, 9,627,141 shares of
Common Stock were outstanding and 500,000 shares of Nonvoting Common Stock
were outstanding.
Holders of shares of Common Stock are entitled to one vote per share for
each matter submitted to the stockholders of the Company without cumulative
voting rights in the election of Directors. Holders of Nonvoting Common Stock
have no right to vote on any matter voted on by the stockholders of the
Company, except as may otherwise be provided by law. In all other respects
(other than as to convertibility), the rights of holders of the Common Stock
and the Nonvoting Common Stock are identical. Shares of Nonvoting Common
Stock are convertible, at any time at the option of the holder, on a
share-for-share basis into shares of Common Stock without the payment of any
additional consideration; provided that the conversion of any shares of
Nonvoting Common Stock by a "bank holding company" under the Bank Holding
Company Act of 1956, as amended, or an affiliate thereof is prohibited if the
conversion of the total number of shares of Nonvoting Common Stock held by
such holder would cause it to be in violation of such Act.
The 2,000,000 authorized and unissued shares of Preferred Stock may be
issued with such designations, preferences, limitations and relative rights
as the Board of Directors may authorize including, but not limited to: (i)
the distinctive designation of each series and the number of shares that will
constitute such series; (ii) the voting rights, if any, of shares of such
series; (iii) the dividend rate on the shares of such series, any
restriction, limitation or condition upon the payment of such dividends,
whether dividends shall be cumulative, and the dates on which dividends are
payable; (iv) the prices at which, and the terms and conditions on which, the
shares of such series may be redeemed, if such shares are redeemable; (v) the
purchase or sinking fund provisions, if any, for the purchase or redemption
of shares of such series; (vi) any preferential amount payable upon shares of
such series in the event of the liquidation, dissolution or winding-up of the
Company or the distribution of its assets; and (vii) the price or rates of
conversion at which, and the terms and conditions on which the shares of such
series may be converted into other securities, if such shares are
convertible. Although the Company has no present intention to issue shares of
Preferred Stock, the issuance of Preferred Stock, or the issuance of rights
to purchase such shares, could discourage an unsolicited acquisition proposal
and the rights of holders of Common Stock will be subject to, and may be
adversely affected by, the rights of holders of any Preferred Stock that may
be issued in the future.
85
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement") between the Company and Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), Bear, Stearns & Co. Inc.
("Bear Stearns") and Prudential Securities Incorporated (together with DLJ
and Bear Stearns, the "Underwriters"), each of the several Underwriters has
severally agreed to purchase from the Company, and the Company has agreed to
sell to each of the Underwriters, the respective principal amounts of Notes
set forth opposite its name below, at the public offering price set forth on
the cover page of this Prospectus, less the underwriting discount:
<TABLE>
<CAPTION>
Principal Amount
Underwriters of Notes
------------------------------------------------------- ----------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation $
Bear, Stearns & Co. Inc.
Prudential Securities Incorporated
------------
$150,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters are subject to certain conditions precedent, including the
approval of certain legal matters by counsel. The Company and the Guarantors
have agreed to indemnify the Underwriters against certain liabilities and
expenses, including liabilities under the Securities Act or to contribute to
payments that the Underwriters may be required to make in respect thereof.
The nature of the Underwriters' obligations is such that the Underwriters are
committed to purchase all of the Notes if any of the Notes are purchased.
The Underwriters have advised the Company that they propose to offer the
Notes directly to the public initially at the public offering price set forth
on the cover page of this Prospectus and to certain dealers at such offering
price less a concession not to exceed % of the principal amount of the
Notes. The Underwriters may allow, and such dealers may reallow, discounts
not in excess of % of the principal amount of the Notes to certain other
dealers. After the initial public offering of the Notes, the offering price
and other selling terms may be changed by the Underwriters.
The Notes are a new issue of securities, have no established trading
market, will not be listed on any securities exchange or included in the
National Association of Securities Dealers Automated Quotation System and may
not be widely distributed. The Company has been advised by the Underwriters
that, following the completion of this Offering, the Underwriters presently
intend to make a market in the Notes as permitted by applicable laws and
regulations. The Underwriters, however, are under no obligation to do so and
may discontinue any market-making activities at any time at the sole
discretion of the Underwriters. No assurances can be given as to the
liquidity of any trading market for the Notes.
VALIDITY OF SECURITIES
The validity of the securities offered hereby will be passed upon for the
Company by Sullivan & Worcester LLP, Boston, Massachusetts, and for the
Underwriters by Jones, Day, Reavis & Pogue, New York, New York. Jas. Murray
Howe, Secretary of the Company, is of counsel to Sullivan & Worcester LLP and
beneficially owns 3,855 shares of Common Stock.
EXPERTS
The consolidated financial statements and schedule of Iron Mountain
Incorporated and its subsidiaries for each of the three years ended December
31, 1995 included in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said reports.
The financial statements of National Business Archives, Inc. for the two
years ended December 31, 1993 and 1994, included in this Prospectus and
elsewhere in the Registration Statement have been audited by Wolpoff &
Company, LLP, independent public accountants, as indicated in their report
with respect thereto, and are included herein in reliance upon the authority
of said firm as experts in giving said report.
86
<PAGE>
The financial statements of Data Management Business Records Storage, Inc.
for the year ended June 30, 1995, included in this Prospectus and elsewhere
in the Registration Statement have been audited by Morrison and Smith,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in giving said report.
The financial statements of Nashville Vault Company, Ltd., for the year
ended December 31, 1995, included in this Prospectus and elsewhere in the
Registration Statement have been audited by Geo. S. Olive & Co. LLC,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in giving said report.
The combined financial statements of Data Archive Services, Inc. and Data
Archive Services of Miami, Inc. for the year ended May 31, 1996, included in
this Prospectus and elsewhere in the Registration Statement have been audited
by Perless, Roth, Jonas & Hartney, CPAs, PA, independent public accountants,
as indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said report.
The financial statements of Data Storage Systems, Inc. for the year ended
December 31, 1995, included in this Prospectus and elsewhere in the
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and
are included herein in reliance upon the authority of said firm as experts in
giving said report.
The financial statements of DataVault Corporation, for the year ended
December 31, 1995, included in this Prospectus and elsewhere in the
Registration Statement have been audited by Robert F. Gayton, CPA,
independent public accountant, as indicated in his report with respect
thereto, and are included herein in reliance upon the authority of said firm
as an expert in giving said report.
The financial statements of International Record Storage and Retrieval
Service, Inc. for the year ended December 31, 1995, included in this
Prospectus and elsewhere in the Registration Statement have been audited by
Rothstein, Kass & Company, P.C., independent public accountants, as indicated
in their report with respect thereto, and are included herein in reliance
upon the authority of said firm as experts in giving said report.
The financial statements of DKA Industries, Inc., for the year ended
December 31, 1995, included in this Prospectus and elsewhere in the
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and
are included herein in reliance upon the authority of said firm as experts in
giving said report.
The financial statements of Mohawk Business Record Storage, Inc., for the
year ended December 31, 1995, included in this Prospectus and elsewhere in
the Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in giving said report.
The financial statements of Security Archives Corporation, for the year
ended December 31, 1995, included in this Prospectus and elsewhere in the
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and
are included herein in reliance upon the authority of said firm as experts in
giving said report.
ADDITIONAL INFORMATION
The Company has filed with the Commission, Washington, D.C. 20549, a
Registration Statement on Form S-1 under the Securities Act with respect to
the Notes offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and
the Notes offered hereby, reference is made to the Registration Statement and
the exhibits and schedules filed therewith. Statements contained in this
Prospectus as to the contents of any contract or any other document to which
reference is made are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement. Each such statement is qualified in
all respects by such reference. A copy of the Registration Statement may be
inspected without charge at the offices of the Commission in Washington D.C.
20549, and copies of all or any part of the Registration Statement may be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 upon the payment of the fees prescribed
by the Commission.
87
<PAGE>
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the Commission's
Regional Offices at Citicorp Center, 500 West Madison, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York 10048. Copies
of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington,
D.C. 20549, at prescribed rates. In addition, the Common Stock is listed on
the Nasdaq National Market, and such reports, proxy statements and certain
other information can also be inspected at the offices of Nasdaq Operations,
1735 K Street, N.W., Washington, D.C. 20006. The Commission maintains a Web
site that contains reports, proxy statements and other information filed with
the Commission; the address of such site is http://www.sec.gov. Certain such
reports, proxy statements and other information filed with the Commission by
the Company on or after August 14, 1996 may be found at such Web site.
88
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
-------
Financial Statements of Iron Mountain Incorporated:
Unaudited Condensed Consolidated Interim Financial Statements ......... F-2
Audited Consolidated Financial Statements ............................. F-8
Financial Statements of Completed Acquisitions:
National Business Archives, Inc. ...................................... F-24
Data Management Business Records Storage, Inc. ........................ F-33
Nashville Vault Company, Ltd. ......................................... F-44
Data Archive Services, Inc. and Data Archive Services of Miami, Inc. .. F-50
Data Storage Systems, Inc. ............................................ F-59
DataVault Corporation ................................................. F-66
International Record Storage and Retrieval Service, Inc. .............. F-72
DKA Industries, Inc. d/b/a Systems Record Storage ..................... F-80
Financial Statements of Pending Acquisitions:
Mohawk Business Record Storage, Inc. .................................. F-88
Security Archives Corporation ......................................... F-96
F-1
<PAGE>
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1995 1996
------------ ---------
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents ........................................ $ 1,585 $ 2,232
Accounts Receivable (Less allowance for doubtful accounts of $651
and of $790, respectively) .................................... 16,936 19,756
Inventories ...................................................... 682 523
Deferred Income Taxes ............................................ 1,943 2,036
Prepaid Expenses and Other ....................................... 1,862 1,318
------------ ---------
Total Current Assets ........................................... 23,008 25,865
Property, Plant and Equipment:
Property, Plant and Equipment .................................... 125,240 141,601
Less: Accumulated Depreciation ................................... (32,564) (38,597)
------------ ---------
Net Property, Plant and Equipment .............................. 92,676 103,004
Other Assets:
Goodwill ......................................................... 59,253 72,213
Customer Acquisition Costs ....................................... 5,210 5,671
Deferred Financing Costs ......................................... 2,638 2,268
Other ............................................................ 4,096 3,609
------------ ---------
Total Other Assets ............................................. 71,197 83,761
------------ ---------
Total Assets ................................................... $186,881 $212,630
============ =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt ................................ $ 2,578 $ 3,194
Accounts Payable ................................................. 4,797 6,342
Accrued Expenses ................................................. 10,917 10,638
Deferred Income .................................................. 3,108 2,454
Other Liabilities ................................................ 469 501
------------ ---------
Total Current Liabilities ...................................... 21,869 23,129
Long-term Debt, Net of Current Portion ............................ 119,296 115,700
Deferred Rent ..................................................... 7,983 7,897
Deferred Income Taxes ............................................. 3,621 4,406
Other Long-term Liabilities ....................................... 6,769 6,769
Commitments and Contingencies
Redeemable Put Warrant ............................................ 6,332 --
Stockholders' Equity:
Preferred Stock .................................................. 5 --
Common Stock--Voting ............................................. 0 96
Common Stock--Non-voting ......................................... -- 5
Additional Paid-In Capital ....................................... 28,809 62,014
Accumulated Deficit .............................................. (7,803) (7,386)
------------ ---------
Total Stockholders' Equity ..................................... 21,011 54,729
------------ ---------
Total Liabilities and Stockholders' Equity ..................... $186,881 $212,630
============ =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-2
<PAGE>
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
-----------------------------
1995 1996
------------ --------------
<S> <C> <C>
Revenues:
Storage .......................................................... $15,866 $20,209
Service and Storage Material Sales ............................... 10,020 12,713
------------ --------------
Total Revenues ................................................. 25,886 32,922
Operating Expenses:
Cost of Sales (Excluding Depreciation) ........................... 12,888 16,715
Selling, General and Administrative .............................. 6,848 8,260
Depreciation and Amortization .................................... 2,676 3,922
------------ --------------
Total Operating Expenses ....................................... 22,412 28,897
------------ --------------
Operating Income .................................................. 3,474 4,025
Interest Expense .................................................. 2,868 3,091
------------ --------------
Income Before Provision for Income Taxes .......................... 606 934
Provision for Income Taxes ........................................ 364 523
------------ --------------
Net Income ........................................................ 242 411
Accretion of Redeemable Put Warrant ............................... 501 --
------------ --------------
Net Income (Loss) Applicable to Common Stockholders ............... $ (259) $ 411
============ ==============
Net Income (Loss) Per Common and Common Equivalent Share .......... $ (0.03) $ 0.04
============ ==============
Weighted Average Common and Common Equivalent Shares Outstanding .. 7,779 10,336
============ ==============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-3
<PAGE>
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------
1995 1996
---------- ------------
<S> <C> <C>
Revenues:
Storage .......................................................... $30,748 $39,363
Service and Storage Material Sales ............................... 19,476 24,587
---------- ------------
Total Revenues ................................................. 50,224 63,950
Operating Expenses:
Cost of Sales (Excluding Depreciation) ........................... 25,112 32,383
Selling, General and Administrative .............................. 12,697 16,067
Depreciation and Amortization .................................... 5,428 7,530
---------- ------------
Total Operating Expenses ....................................... 43,237 55,980
---------- ------------
Operating Income .................................................. 6,987 7,970
Interest Expense .................................................. 5,936 6,385
---------- ------------
Income Before Provision for Income Taxes .......................... 1,051 1,585
Provision for Income Taxes ........................................ 631 888
---------- ------------
Net Income ........................................................ 420 697
Accretion of Redeemable Put Warrant ............................... 953 280
---------- ------------
Net Income (Loss) Applicable to Common Stockholders ............... $ (533) $ 417
========== ============
Net Income (Loss) Per Common and Common Equivalent Share .......... $ (0.07) $ 0.04
========== ============
Weighted Average Common and Common Equivalent Shares Outstanding .. 7,790 9,899
========== ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-4
<PAGE>
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------
1995 1996
---------- ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income ...................................................... $ 420 $ 697
Adjustments to Reconcile Net Income to Net Cash
Provided by Operations:
Depreciation and Amortization .................................. 5,428 7,530
Amortization of Financing Costs ................................ 756 429
Provision for Deferred Income Taxes ............................ 540 492
Changes in Assets and Liabilities (Exclusive of Acquisitions):
Accounts Receivable ............................................ (910) (2,194)
Inventories .................................................... (29) 174
Prepaid Expenses and Other Current Assets ...................... (195) 444
Other Assets ................................................... 180 674
Accounts Payable ............................................... 645 1,545
Accrued Expenses ............................................... 1,324 (279)
Deferred Income ................................................ 127 (865)
Other Current Liabilities ...................................... (27) (474)
Deferred Rent .................................................. (86) (86)
Other Long-term Liabilities .................................... 1 --
---------- ------------
Cash Flows Provided by Operations ............................. 8,174 8,087
Cash Flows from Investing Activities:
Capital Expenditures ............................................ (7,322) (11,162)
Additions to Customer Acquisition Costs ......................... (418) (717)
Cash Paid for Acquisitions ...................................... (15,484) (19,187)
Other ........................................................... -- (25)
---------- ------------
Cash Flows Used in Investing Activities ....................... (23,224) (31,091)
Cash Flows Provided by Financing Activities:
Repayment of Debt ............................................... (8,369) (29,515)
Net Proceeds from Borrowings .................................... 25,186 26,500
Financing Costs ................................................. (1,402) (24)
Proceeds from Exercise of Stock Options ......................... 200 --
Repurchase of Stock ............................................. (199) --
Proceeds from Initial Public Offering, Net of Costs and Expenses -- 33,302
Retirement of Put Warrant ....................................... -- (6,612)
---------- ------------
Cash Flows Provided by Financing Activities ................... 15,416 23,651
---------- ------------
Increase in Cash and Cash Equivalents ............................ 366 647
Cash and Cash Equivalents, Beginning of Period ................... 1,303 1,585
---------- ------------
Cash and Cash Equivalents, End of Period ......................... $ 1,669 $ 2,232
========== ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
F-5
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share data)
(Unaudited)
1. General
The interim condensed consolidated financial statements presented herein
have been prepared by Iron Mountain Incorporated ("Iron Mountain" or the
"Company") without audit and, in the opinion of management, reflect all
adjustments of a normal recurring nature necessary for a fair presentation.
Interim results are not necessarily indicative of results for a full year.
The condensed consolidated balance sheet presented as of December 31,
1995, has been derived from the consolidated financial statements that have
been audited by the Company's independent public accountants. The unaudited
condensed consolidated financial statements have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in the annual
financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to those rules and
regulations, but the Company believes that the disclosures are adequate to
make the information presented not misleading. The condensed consolidated
financial statements and notes included herein should be read in conjunction
with the consolidated financial statements and notes included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
2. Initial Public Offering of Common Stock
On February 6, 1996, the Company completed the sale of 2,350 shares of its
common stock in an initial public offering at a price of $16.00 per share.
The proceeds from the public offering were $34,968 after underwriting
discounts and commissions, and $33,302 after other expenses of the offering
totaling $1,666. Such net proceeds were used to retire the redeemable put
warrant for $6,612, to fund acquisitions, to repay debt that had been
incurred to make acquisitions and for working capital.
3. Acquisitions and Dispositions
During 1995, the Company purchased four records management businesses.
During the six months ended June 30, 1996, the Company purchased six
additional records management businesses. Each of these acquisitions was
accounted for using the purchase method of accounting, and accordingly, the
results of operations for each acquisition have been included in the
consolidated results of the Company from the respective acquisition dates.
The purchase price for the 1996 acquisitions exceeded the underlying fair
value of the net assets acquired by $14,554, which has been assigned to
goodwill and is being amortized over the estimated benefit period of 25
years. Funds used to make the various acquisitions were provided through the
Company's acquisition credit facility and, indirectly, a portion of the net
proceeds of the Company's initial public offering. A summary of the cash
consideration and allocation of the purchase price as of the acquisition
dates are as follows:
1996
--------
Fair Value of Assets Acquired in 1996 ............... $20,104
Liabilities Assumed ................................. (917)
--------
Cash Paid ........................................... $19,187
========
F-6
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(In thousands except per share data)
(Unaudited)
The following unaudited pro forma information shows the results of the
Company's operations for the year ended December 31, 1995 and the six months
ended June 30, 1996, as though each of the completed acquisitions had
occurred as of January 1, 1995.
1995 1996
------- ---------
Revenues ...................................... $123,438 $65,678
Net Income (Loss) ............................. (348) 728
Accretion of Redeemable Put Warrant ........... 2,107 280
------- ---------
Net Income (Loss) Applicable to Stockholders .. $ (2,455) $ 448
======= =========
Net Income (Loss) Per Share ................... $ (0.32) $ 0.05
======= =========
The pro forma results have been prepared for comparative purposes only and
are not necessarily indicative of the actual results of operations had the
acquisitions taken place as of January 1, 1995 or the results that may occur
in the future. Furthermore, the pro forma results do not give effect to all
cost savings or incremental costs which may occur as a result of the
integration and consolidation of the companies.
4. Long-term Debt
Long-term debt as of December 31, 1995 and June 30, 1996, is as follows:
1995 1996
------- --------
Term Loans A and B ......................... $ 59,625 $ 58,750
$50,000 Acquisition Credit Facility ........ 34,400 25,300
$15,000 Working Capital Facility ........... 1,700 8,800
Chrysler Notes ............................. 14,772 14,807
Real Estate Mortgages ...................... 10,797 10,761
Other ...................................... 580 476
------- --------
Total Long-term Debt .................... 121,874 118,894
Less: Current Portion ...................... (2,578) (3,194)
------- --------
Long-term Debt, Net of Current Portion .. $119,296 $115,700
======= ========
5. Commitments and Contingencies
Litigation
During the second quarter of 1996, the Company paid $600 to cover the
uninsured portion of a judgment previously entered by the California Workers
Compensation Board against the Company relating to injuries sustained by a
driver employed by a courier company used at the time by the Company. This
amount had been fully reserved in the second quarter of 1995 and therefore
had no impact on the results of operations for the three and six month
periods ended June 30, 1996.
Iron Mountain is presently involved as a defendant in various litigation
which has occurred in the normal course of business. Management believes it
has meritorious defenses in all such actions, and in any event, the amount of
damages, if such matters were decided adversely, would not have a material
adverse effect on Iron Mountain's financial condition or results of
operations.
6. Subsequent Events
Subsequent to June 30, 1996, the Company acquired four records management
businesses for $23,523 in transactions that were accounted for as purchases.
On August 29, 1996 the Company amended its Credit Agreement to increase its
Acquisition Credit Facility from $50,000 to $55,000.
F-7
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Iron Mountain Incorporated:
We have audited the accompanying consolidated balance sheets of Iron Mountain
Incorporated (a Delaware corporation) and its subsidiaries, as of December
31, 1994 and 1995 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Iron Mountain Incorporated
and its subsidiaries, as of December 31, 1994 and 1995 and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Los Angeles, California
February 26, 1996
F-8
<PAGE>
IRON MOUNTAIN INCORPORATED
CONSOLIDATED BALANCE SHEETS--DECEMBER 31, 1994 AND 1995
(In thousands)
ASSETS
<TABLE>
<CAPTION>
December 31,
--------------------
1994 1995
------- ---------
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents ........................................ $ 1,303 $ 1,585
Accounts Receivable (Less allowance for doubtful accounts of $531
and $651 as of 1994 and 1995, respectively) ..................... 13,270 16,936
Inventories ...................................................... 503 682
Deferred Income Taxes ............................................ 778 1,943
Prepaid Expenses and Other ....................................... 1,223 1,862
------- ---------
Total Current Assets ........................................... 17,077 23,008
Property, Plant and Equipment:
Property, Plant and Equipment .................................... 99,753 125,240
Less--Accumulated Depreciation ................................... (24,735) (32,564)
------- ---------
Net Property, Plant and Equipment .............................. 75,018 92,676
Other Assets:
Goodwill ......................................................... 36,720 59,253
Customer Acquisition Costs ....................................... 4,273 5,210
Deferred Financing Costs ......................................... 2,247 2,638
Other ............................................................ 1,524 4,096
------- ---------
Total Other Assets ............................................. 44,764 71,197
------- ---------
Total Assets ...................................................... $136,859 $186,881
======= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt ................................ $ 628 $ 2,578
Accounts Payable ................................................. 3,756 4,797
Accrued Expenses ................................................. 4,710 10,917
Deferred Income .................................................. 2,096 3,108
Other Liabilities ................................................ 344 469
------- ---------
Total Current Liabilities ...................................... 11,534 21,869
Long-term Debt, Net of Current Portion ............................ 85,630 119,296
Other Long Term Liabilities ....................................... 7,296 6,769
Deferred Rent ..................................................... 2,837 7,983
Deferred Income Taxes ............................................. 2,468 3,621
Commitments and Contingencies
Redeemable Put Warrant ............................................ 4,225 6,332
Stockholders' Equity:
Preferred Stock .................................................. 5 5
Common Stock ..................................................... 0 0
Additional Paid-In Capital ....................................... 28,808 28,809
Accumulated Deficit .............................................. (5,944) (7,803)
------- ---------
Total Stockholders' Equity ..................................... 22,869 21,011
------- ---------
Total Liabilities and Stockholders' Equity ........................ $136,859 $186,881
======= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-9
<PAGE>
IRON MOUNTAIN INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(In thousands except per share data)
<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- ----------
<S> <C> <C> <C>
Revenues:
Storage .................................................. $48,892 $54,098 $ 64,165
Service and Storage Material Sales ....................... 32,781 33,520 40,271
-------- -------- ----------
Total Revenues ........................................ 81,673 87,618 104,436
Operating Expenses:
Cost of Sales (Excluding Depreciation) ................... 43,054 45,880 52,277
Selling, General and Administrative ...................... 19,971 20,853 26,035
Depreciation and Amortization ............................ 6,789 8,690 12,341
-------- -------- ----------
Total Operating Expenses .............................. 69,814 75,423 90,653
-------- -------- ----------
Operating Income ......................................... 11,859 12,195 13,783
Interest Expense ......................................... 8,203 8,954 11,838
-------- -------- ----------
Income Before Provision for Income Taxes ................. 3,656 3,241 1,945
Provision for Income Taxes ............................... 2,088 1,957 1,697
-------- -------- ----------
Net Income ............................................... 1,568 1,284 248
Accretion of Redeemable Put Warrant ...................... 940 1,412 2,107
-------- -------- ----------
Net Income (Loss) Applicable to Common Stockholders ...... $ 628 $ (128) $ (1,859)
======== ======== ==========
Net Income (Loss) Per Common and Common Equivalent Share . $ 0.08 $ (0.02) $ (0.24)
Weighted Average Common and Common Equivalent Shares
Outstanding ............................................. 8,067 7,984 7,784
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-10
<PAGE>
IRON MOUNTAIN INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
AS OF DECEMBER 31, 1993, 1994 AND 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
----------------------------------
1993 1994 1995
-------- -------- ----------
<S> <C> <C> <C>
Series A1 Preferred Stock:
Balance, Beginning of Period .................................. $ 2 $ 2 $ 1
Conversion of 100,000 Shares of Series A1 Preferred Stock to
Series A2 Preferred Stock .................................... -- (1) --
Conversion of 43,500 Shares of Series A1 Preferred Stock to
Series A3 Preferred Stock .................................... -- -- (1)
-------- -------- ----------
Balance, End of Period; (150,000, 50,000 and 6,500 Shares
Outstanding as of December 31, 1993, 1994 and 1995,
Respectively) ................................................ 2 1 0
Series A2 Preferred Stock:
Balance, Beginning of Period .................................. -- -- 1
Conversion of 100,000 Shares of Series A1 Preferred Stock to
Series A2 Preferred Stock .................................... -- 1 --
Repurchase of 2,000 Shares of Series A2 Preferred Stock ....... -- -- 0
-------- -------- ----------
Balance, End of Period; (None Outstanding as of December 31,
1993; 100,000 and 98,000 Shares Outstanding as of December 31,
1994 and 1995, Respectively) ................................. -- 1 1
Series A3 Preferred Stock:
Balance, Beginning of Period .................................. -- -- --
Conversion of 43,500 Shares of Series A1 Preferred Stock to
Series A3 Preferred Stock .................................... -- -- 1
-------- -------- ----------
Balance, End of Period (None outstanding December 31, 1993 and
1994; 43,500 Shares Outstanding December 31, 1995) ........... -- -- 1
Series C Preferred Stock:
Balance, End of Period; (351,395 Shares Outstanding as of
December 31, 1993, 1994 and 1995, Respectively) .............. 3 3 3
-------- -------- ----------
Total Preferred Stock ........................................ 5 5 5
-------- -------- ----------
Class A Common Stock:
Balance, Beginning of Period .................................. 0 0 0
Stock Options Exercised for 15,976 Shares of Class A Common
Stock in 1995 ................................................ -- -- 0
-------- -------- ----------
Balance, End of Period; 28,912, 28,912 and 44,888 Shares
Outstanding as of December 31, 1993, 1994 and 1995,
Respectively) ................................................ 0 0 0
Class C Common Stock:
Balance, Beginning of Period .................................. 0 0 --
Repurchase of 17,289 Shares of Class C Common Stock ........... -- (0) --
-------- -------- ----------
Balance, End of Period; (17,289 Shares Outstanding as of
December 31, 1993; None Outstanding as of December 31, 1994
and 1995) .................................................... 0 -- --
-------- -------- ----------
Total Common Stock ........................................... 0 0 0
-------- -------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-11
<PAGE>
IRON MOUNTAIN INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY -- (Continued)
<TABLE>
<CAPTION>
December 31,
----------------------------
1993 1994 1995
------ ------ --------
<S> <C> <C> <C>
Additional Paid in Capital:
Balance, Beginning of Period ........................ $29,858 $29,858 $28,808
Class C Common Stock Repurchased, 17,289 Shares ..... -- (1,050) --
Series A2 Preferred Stock Repurchased, 2,000 Shares . -- -- (199)
Class A Common Stock, Options Exercised, 15,976
Shares ............................................. -- -- 200
------ ------ --------
Balance, End of Period .............................. 29,858 28,808 28,809
------ ------ --------
Accumulated Deficit:
Balance, Beginning of Period ........................ (6,444) (5,816) (5,944)
Net Income .......................................... 1,568 1,284 248
Accretion of Redeemable Put Warrant ................. (940) (1,412) (2,107)
------ ------ --------
Balance, End of Period .............................. (5,816) (5,944) (7,803)
------ ------ --------
Total Stockholders' Equity ........................... $24,047 $22,869 $21,011
====== ====== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-12
<PAGE>
IRON MOUNTAIN INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(In thousands)
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income .................................... $ 1,568 $ 1,284 $ 248
Adjustments to Reconcile Net Income to Cash
Flows Provided by Operations:
Depreciation and Amortization ............... 6,789 8,690 12,341
Amortization of Financing Costs ............. 954 1,046 1,135
Loss on Sale of Fixed Assets ................ 145 278 400
Provision for Deferred Income Taxes ......... 1,766 1,714 1,179
Changes in Deferred Rent .................... 605 441 (110)
Changes in Other Long-term Liabilities ...... 1,051 (394) (527)
Changes in Assets and Liabilities
(Exclusive of Acquisitions):
Accounts Receivable ......................... (1,005) (1,807) (2,541)
Inventory ................................... (33) (39) (100)
Prepaid Expenses ............................ (304) (517) (639)
Accounts Payable ............................ 304 83 265
Accrued Expenses ............................ (70) 1,191 4,252
Deferred Income ............................. 971 (26) (301)
Other Liabilities ........................... 80 (369) 125
------- ------- ---------
Cash Flows Provided by Operations ........... 12,821 11,575 15,727
------- ------- ---------
Cash Flows from Investing Activities:
Capital Expenditures ......................... (15,451) (16,980) (15,253)
Additions to Customer Acquisition Costs ...... (922) (1,366) (1,379)
Cash Paid for Acquisitions ................... -- (2,846) (33,048)
Proceeds from Sale of Assets ................. 14 2,973 73
Other, Net ................................... (209) 705 71
------- ------- ---------
Cash Flows Used in Investing Activities ..... (16,568) (17,514) (49,536)
------- ------- ---------
Cash Flows Provided by Financing Activities:
Repayment of Debt .............................. (4,659) (13,642) (812)
Net Proceeds from Borrowings ................... 9,100 21,350 36,350
Cash From Exercise of Stock Options ............ -- -- 200
Repurchase of Stock ............................ -- (1,050) (199)
Financing Costs ................................ (601) (7) (1,448)
------- ------- ---------
Cash Flows Provided by Financing Activities ... 3,840 6,651 34,091
------- ------- ---------
Increase in Cash ............................... 93 712 282
Cash and Cash Equivalents, Beginning of Year ... 498 591 1,303
------- ------- ---------
Cash and Cash Equivalents, End of Year ......... $ 591 $ 1,303 $ 1,585
======= ======= =========
Supplemental Information:
Cash Paid for Interest ......................... $ 7,239 $ 7,741 $ 9,111
======= ======= =========
Cash Paid for Income Taxes ..................... $ 859 $ 339 $ 1,177
======= ======= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-13
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(Amounts in thousands except share data)
1. Nature of Business
The accompanying financial statements represent the consolidated accounts
of Iron Mountain Incorporated (formerly Iron Mountain Information Services,
Inc.) and its subsidiaries (collectively Iron Mountain or the Company). Iron
Mountain is a full service records management company providing storage and
related services for all media in various locations throughout the United
States to Fortune 500 Companies and numerous legal, banking, health care,
accounting, insurance, entertainment, and government organizations.
2. Summary of Significant Accounting Policies
a. Principles of Consolidation
The financial statements reflect the financial position and results of
operations of Iron Mountain on a consolidated basis. All significant
intercompany account balances and transactions with affiliates have been
eliminated.
b. Property, Plant and Equipment
Property, plant and equipment are stated at cost and depreciated using the
straight-line method with the following useful lives:
Buildings ........................ 40 to 50 years
Leasehold improvements ........... 8 to 10 years or the
life of the lease,
whichever is shorter
Racking .......................... 10 to 20 years
Warehouse equipment/vehicles ..... 5 to 10 years
Office equipment ................. 3 to 5 years
Computer hardware and software ... 3 to 5 years
Property, plant and equipment consist of the following:
December 31,
------------------
1994 1995
------ --------
Real property ..................... $33,118 $ 34,162
Leasehold improvements ............ 8,958 11,206
Racking ........................... 35,977 53,348
Warehouse equipment/vehicles ...... 5,238 5,810
Furniture and fixtures ............ 2,411 2,754
Computer hardware and software .... 9,771 13,729
Construction in progress .......... 4,280 4,231
------ --------
$99,753 $125,240
====== ========
Minor maintenance costs are expensed as incurred. Major improvements to
the leased buildings are capitalized as leasehold improvements and
depreciated as described above.
c. Revenue Recognition
Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to
the customer. Amounts related to future storage for customers where storage
fees are billed in advance are accounted for as deferred income and amortized
over the applicable period. These amounts are included in deferred income in
the accompanying financial statements.
F-14
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
d. Goodwill
Goodwill reflects the cost in excess of fair value of the net assets of
companies acquired in purchase transactions. Goodwill is amortized using the
straight-line method from the date of acquisition over the expected period to
be benefited, currently estimated at 25 years. The Company assesses the
recoverability of goodwill, as well as other long lived assets based upon
expectations of future undiscounted cash flows in accordance with Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long Lived Assets and for Long Lived Assets to be Disposed of." Accumulated
amortization of goodwill was $11,205 and $15,071 as of December 31, 1994 and
1995, respectively.
e. Deferred Financing Costs
Deferred financing costs are amortized over the life of the related debt
using the effective interest rate method. As of December 31, 1994 and 1995,
deferred financing costs were $6,271, and $4,688, respectively, and
accumulated amortization of those costs were $4,024, and $2,050,
respectively.
f. Customer Acquisition Costs
Costs, net of revenues received for the initial transfer of the records,
related to the acquisition of large volume accounts (accounts consisting of
10,000 or more cartons) are capitalized and amortized for an appropriate
period not exceeding 12 years, unless the customer terminates its
relationship with the Company, at which time the unamortized cost is charged
to expense. However, in the event of such termination, the Company collects
and records as income permanent removal fees that generally equal or exceed
the amount of unamortized customer acquisition costs. As of December 31, 1994
and 1995 those costs were $5,114 and $6,492, respectively, and accumulated
amortization of those costs were $841 and $1,282, respectively.
g. Deferred Rent
The Company has entered into various leases for buildings used in the
storage of records. Certain leases have fixed escalation clauses or other
features which require normalization of the rental expense over the life of
the lease resulting in deferred rent being reflected in the accompanying
balance sheets. In addition, the Company has assumed various unfavorable
leases in connection with certain of its acquisitions. The discounted present
value of these lease obligations in excess of market rate at the date of the
acquisition was recorded as a deferred rent liability and is being amortized
over the remaining lives of the respective leases.
h. Inventories
Inventories are carried at the lower of cost using the first-in, first-out
basis or market and are comprised primarily of cartons.
i. Accrued expenses
Accrued expenses consist of the following:
December 31,
----------------
1994 1995
----- -------
Accrued incentive compensation ............. $1,202 $ 1,701
Accrued vacation ........................... 809 1,014
Accrued interest ........................... 145 1,737
Accrued workers' compensation .............. 499 2,415
Other ...................................... 2,055 4,050
----- -------
Accrued expenses ........................... $4,710 $10,917
===== =======
F-15
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
j. Net Income (Loss) Per Common Share
Net income (loss) per common share is computed based on the weighted
average number of common and common stock equivalent shares outstanding
during each period. Common stock equivalents consist of preferred stock that
is convertible into common stock and employee options to purchase common
stock. Pursuant to certain SEC regulations, the calculation of weighted
average shares outstanding assumes the conversion of preferred stock for all
periods presented. The stock options have not been included in the
calculation of common stock equivalents because their dilutive effect was
immaterial.
k. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
l. Cash and Cash Equivalents
The Company defines cash and cash equivalents to include cash on hand and
cash invested in short-term securities which have original maturities of less
than 90 days.
3. Debt
Debt consists of the following:
<TABLE>
<CAPTION>
December 31,
------------------
1994 1995
------ --------
<S> <C> <C>
Working Capital Line and $36,000 Term Loan Refinanced in 1995 $59,934 $ --
Term Loans A and B ........................................... -- 59,625
$50,000 Acquisition Credit Facility .......................... -- 34,400
$15,000 Working Capital Facility ............................. -- 1,700
Chrysler Notes ............................................... 14,693 14,772
Real Estate Mortgages ........................................ 10,855 10,797
Other ........................................................ 776 580
------ --------
Long-term Debt ............................................... 86,258 121,874
Less -- current portion ...................................... (628) (2,578)
------ --------
Long-term Debt, Net of Current Portion ....................... $85,630 $119,296
====== ========
</TABLE>
During 1994, the Company had a revolving credit facility of $44,625. This
facility along with a $36,000 senior term loan was refinanced on January 31,
1995 under an amended and restated credit agreement (the Credit Agreement).
Interest on the $36,000 senior debt term loan and the $44,625 revolving
credit facility was based, at the Company's option, on a choice of base rates
plus a margin. The margin varied depending upon the base rate selected.
F-16
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
The Credit Agreement is with a syndicate of lenders and provides for four
separate credit facilities representing an aggregate commitment of $125,000
as follows:
Maturity
Amount Date
------ --------
Term Loan A ............................ $10,000 2000
Term Loan B ............................ 50,000 2002
Working Capital Facility ............... 15,000 2000
Acquisition Credit Facility ............ 50,000 2002
Commencing in 1996, Term Loans A and B are payable in quarterly
installments of $625 and $125, respectively. Term Loan B has a balloon
payment due upon maturity of $46,375. The Working Capital Facility is due in
full upon maturity and the Acquisition Credit Facility is payable in eight
quarterly installments equal to one-eighth of the outstanding balance
commencing in 2000.
Interest rates on all four facilities under the Credit Agreement are
based, at the Company's option, on a choice of base rates plus a margin. The
margin varies for each facility depending upon the base rate selected. The
margins are subject to adjustment after January 1996 based on the Company's
ability to meet certain financial covenant targets. At December 31, 1995, the
effective interest rates for Term Loans A and B were 8.22% and 8.72%,
respectively, and for the Working Capital Facility and Acquisition Credit
Facility were 9.75% and 8.72%, respectively. There is a commitment fee of
1/2% per year on the unused portion of the Working Capital Facility and
Acquisition Credit Facility.
The $15,000 Chrysler Notes were issued in 1990 and mature in 2000. Annual
principal payments of $5,000 commence in 1998. A warrant was issued in
connection with the Chrysler Notes to which management assigned an initial
value of $750 for financial reporting purposes (see Note 5). The value of the
warrant is being accounted for as an original issue discount of the Chrysler
Notes and is being amortized as interest expense over the life of the loan
using the effective interest rate method. The note is junior only to the
Credit Agreement and has an effective interest rate of 13.7%.
The Credit Agreement and Chrysler Notes specify certain minimum or maximum
relationships between operating cash flows (earnings before interest, taxes,
depreciation and amortization) and interest, total debt and fixed charges.
There are restrictions on dividends, sales or pledging of assets, capital
expenditures and change in business and ownership; cash dividends are
effectively prohibited. The Company was in compliance with the applicable
provisions of these agreements at December 31, 1995. Loans under the Credit
Agreement are secured by substantially all of the stock and assets of the
Company's subsidiaries, with the exception of a secondary position on two
owned properties encumbered by first mortgages.
The real estate mortgages consist of an $8,037, 10 year, 11% mortgage
based on 30 year amortization with a balloon payment due October, 2000 and a
$3,000, 8% note that is payable in various installments commencing in 1996
and maturing in November, 2006.
The Company is required to maintain interest rate protection under the
Credit Agreement. In 1988, the Company entered into an interest rate swap
(which expired in October 1995) whereby the Company paid a fixed interest
rate of 9.28% and received a rate equal to the 3-month LIBOR rate. The
interest was based on the outstanding notional principal amount which was
$2,338 at December 31, 1994. The Company has also purchased two interest rate
caps under which it will receive payments in the event that the three month
LIBOR rate exceeds those specified in the caps. Each cap covers $10,000 of
notional principal amount. One had a rate cap of 6.5% and expired on August
11, 1995 and the other has a rate cap of 7.5% and expires August 12, 1997.
On March 24, 1995, the Company entered into two three-year interest rate
collar swap transactions. Under these agreements, interest costs for the debt
covered by the notional amount of these contracts will essentially float when
the three-month LIBOR is between 6% and 7.5% but the Company will receive a
payment from the bank in the event that the three month LIBOR interest rate
exceeds 7.5%, or make a payment to the bank if such rate
F-17
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
is below 6%. Each transaction covers $10,000 of notional principal amount
which will result in a maximum interest cost (including margin and
transaction costs) of approximately 10.54% and 10.67%, respectively, for the
covered amounts. In the event of non-performance by the counterparty, the
Company would be exposed to additional interest rate risk if the variable
interest rate were to exceed the ceiling (7.5%) under the terms of the swap
agreement.
Maturities of long-term debt are as follows:
Year Amount
---- --------
1996 ....................................... $ 2,578
1997 ....................................... 3,386
1998 ....................................... 8,320
1999 ....................................... 8,366
2000 ....................................... 28,824
Thereafter ................................. 70,400
------
$121,874
======
Based on the borrowing rates currently available to the Company for loans
with similar terms and average maturities, the Company has estimated the
following fair values for its long-term debt and swap agreements as of
December 31, 1995 as follows:
Carrying Fair
Amount Value
-------- ----------
Credit Agreement ............. $(95,725) $(95,725)
Chrysler Notes ............... (14,772) (15,737)
Real Estate Mortgages ........ (10,797) (11,849)
Other ........................ (580) (580)
Swap Agreements .............. 25 (638)
The fair value of the various swap agreements is based on the estimated
amount a bank would charge to terminate the various swap agreements.
4. Acquisitions and Dispositions
During 1994, the Company purchased substantially all of the assets, and
assumed certain liabilities, of three separate records management businesses.
During 1995, the Company purchased substantially all of the assets, subject
to certain liabilities, of four records management businesses. Each of these
acquisitions was accounted for using the purchase method of accounting and
accordingly, the results of operations for each acquisition have been
included in the consolidated results of the Company from the respective
acquisition dates. The excess of the purchase price over the underlying fair
value of the assets and liabilities of each acquisition has been assigned to
goodwill ($2,484 and $26,054 in 1994 and 1995, respectively) and is being
amortized over the estimated benefit period of 25 years. Funds used to make
the various acquisitions were provided through the Company's acquisition
credit facilities. A summary of the cash consideration and allocation of the
purchase price as of the acquisition dates are as follows:
1994 1995
----- --------
Fair value of assets acquired ..... $3,223 $41,286
Liabilities assumed ............... (377) (8,238)
--- ------
Cash paid ......................... $2,846 $33,048
=== ======
F-18
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
The following unaudited pro forma combined information shows the results of
the Company's operations for the years ended December 31, 1994 and 1995 as
though each of the completed acquisitions had occurred as of January 1, 1994.
1994 1995
------- -------
Revenues ............................................ $103,644 $112,675
Net income (loss) ................................... 574 (577)
Accretion of redeemable Put Warrant ................. 1,412 2,107
----- -----
Net loss applicable to Common Stockholders .......... $ (838) $ (2,684)
===== =====
Net loss per common share ........................... $(0.10) $(0.34)
The pro forma results have been prepared for comparative purposes only and
are not necessarily indicative of the actual results of operations had the
acquisitions taken place as of January 1, 1994 or the results that may occur
in the future. Furthermore, the pro forma results do not give effect to all
cost savings or incremental costs which may occur as a result of the
integration and consolidation of the companies.
In 1995, the Company made a decision to sell one of its subsidiaries and has
estimated that the purchase price will be $900 less than the book value of
the assets and related goodwill. Consequently, the Company has recorded an
impairment of the related goodwill in the accompanying statement of
operations for 1995.
5. Common and Preferred Stock and Redeemable Put Warrant
During 1995, the Company declared a 15.4215-for-1 stock split of the Class
A and Class B Common Stock in the form of a stock dividend payable on
November 29, 1995 to stockholders of record on November 28, 1995. All
weighted average common share and stock related data in the consolidated
financial statements have been retroactively restated to reflect the stock
split.
The Company has authorized the following eight classes of capital stock as
of December 31, 1995:
Number of Shares
-------------------------
Par Issued and
Equity Type Value Authorized Outstanding
- ----------------------------------- -------- --------- ------------
Class A Common (voting) ........... $0.01 13,000,000 44,888
Class B Common (non-voting) ....... $0.01 10,300,000 --
Class C Common (non-voting) ....... $0.01 1 --
Series A1 Preferred (non-voting) .. $0.01 6,500 6,500
Series A2 Preferred (non-voting) .. $0.01 98,000 98,000
Series A3 Preferred (voting) ...... $0.01 43,500 43,500
Series B Preferred (voting) ....... $0.01 148,000 --
Series C Preferred (voting) ....... $0.01 351,395 351,395
Upon consummation of the underwritten public offering of common stock (See
Note 10), all shares of preferred stock were automatically converted into
shares of common stock. The number of common shares received upon conversion
were as follows:
Preferred Common
-------- ----------
Series A1 and Series A3 ........... 50,000 987,314
Series A2 ......................... 98,000 1,935,146
Series C .......................... 351,395 4,809,793
The preferred stock is entitled to weighted average anti-dilution
protection and receives dividends on a common stock equivalent basis.
F-19
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
In anticipation of the public offering, the Board of Directors approved and
the shareholders ratified a recapitalization plan as follows:
The designation of three new classes of stock:
Authorized
Class Shares
- ----- -----------
Preferred Stock, $0.01 par value .................... 2,000,000
Common Stock, $0.01 par value ....................... 13,000,000
Nonvoting Common Stock, $0.01 par value ............. 1,000,000
In connection with the issuance of the Chrysler Notes, the Company also
issued a warrant, dated December 14, 1990 (the Warrant), exercisable for
444,385 shares of common stock for nominal consideration upon the occurrence
of certain specified events, including the effectiveness of an underwritten
public offering of the Company's capital stock, and at any time after
December 14, 1995. Chrysler Capital had the right to put (the Put) all or any
part of the Warrant to the Company at any time after December 14, 1995, at
the higher of a formula price based on a specified multiple of the Company's
operating cash flow for the preceding 12 months, subject to certain
adjustments, or fair market value of the Company (the Put Price). The Put was
to terminate upon the consummation of an underwritten public offering which
yielded net proceeds of not less than $10 million to the Company. Chrysler
Capital and the Company reached an agreement pursuant to which Chrysler
Capital would not exercise the Warrant or the Put until April 30, 1996 and
the Company would redeem the Warrant upon completion of the closing of the
public offering (See Note 10). On February 7, 1996, the Warrant was redeemed
for $6,612. This Warrant has been accreted each year using the effective
interest rate method based on the Warrant's estimated redemption value at its
estimated redemption date of February 15, 1996 and is reflected as a
redeemable put warrant in the accompanying balance sheets.
In September, 1991 the Company created a non-qualified stock option plan
pursuant to which up to 444,385 shares of Class A common stock of the Company
can be issued at the discretion of the stock option committee to key
employees, consultants and directors.
The following is a summary of stock option transactions during the applicable
periods:
Option Price
Options Per Share
------- ------------------
Options outstanding, December 31, 1992 ..... 302,040 $6.48 - $12.58
Expired ................................... (18,506) 6.48
-----
Options outstanding, December 31, 1993 ..... 283,534 6.48 - 12.58
Expired ................................... (23,903) 6.48
-----
Options outstanding, December 31, 1994 ..... 259,631 6.48 - 12.58
Granted ................................... 162,184 12.58 - 16.00
Exercised ................................. (15,976) 12.58
Expired ................................... (6,370) 12.58
-----
Options outstanding, December 31, 1995 ..... 399,469 $6.48 - $16.00
=====
The stock options were granted at an amount equal to or greater than the fair
market value at the date of grant as determined by the Board of Directors.
There are no shares available for grant under the 1991 plan as of December
31, 1995. The majority of options become exercisable ratably over a period of
five years unless the holder terminates employment. As of December 31, 1995,
175,380 of the options outstanding were exercisable.
Effective November 30, 1995, the Board of Directors approved the adoption of
the 1995 Stock Incentive Plan (the Stock Option Plan), which replaced the
previous stock option plan. A total of 1,000,000 shares of Class A Common
Stock are available for grant as options and other rights under the Stock
Option Plan, including the options issued under the 1991 plan. The number of
options available for grant at December 31, 1995 was 555,615.
F-20
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
6. Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109
which requires the recognition of deferred tax assets and liabilities for the
expected tax consequences of temporary differences between the tax and
financial reporting bases of assets and liabilities.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are
presented below:
December 31,
--------------------
1994 1995
------- ---------
Current deferred tax assets:
Accrued liabilities ................................ $ 527 $ 1,585
Other .............................................. 251 358
----- -------
Current deferred tax assets ......................... $ 778 $ 1,943
===== =======
Non-current deferred tax assets (liabilities):
Accrued liabilities ................................ $ 1,147 $ 3,462
Net operating loss carryforwards ................... 3,280 2,522
AMT credit ......................................... 206 628
Deferred income .................................... 791 360
Other .............................................. 511 792
----- -------
Non-current deferred tax assets ..................... 5,935 7,764
----- -------
Other assets principally due to differences in
amortization ....................................... (1,165) (2,051)
Plant and equipment, principally due to differences
in depreciation ................................... (5,383) (7,201)
Customer acquisition costs ......................... (1,335) (1,716)
Other .............................................. (520) (417)
----- -------
Non-current deferred tax liabilities ................ (8,403) (11,385)
----- -------
Net non-current deferred tax liability .............. $(2,468) $ (3,621)
===== =======
The Company and its subsidiaries file a consolidated Federal income tax
return. The provision for income taxes consists of the following components:
Years ended December 31,
------------------------
1993 1994 1995
----- ----- ------
Federal -- current ......................... $ 131 $ 68 $ 422
Federal -- deferred ........................ 1,645 1,416 837
State -- current ........................... 191 175 96
State -- deferred .......................... 121 298 342
--- --- ----
$2,088 $1,957 $1,697
=== === ====
A reconciliation of total income tax expense and the amount computed by
applying the U.S. Federal income tax rate of 34% to income before income
taxes is as follows:
1993 1994 1995
----- ----- ------
Computed "expected" tax provision ............ $1,243 $1,102 $ 661
Increase in income taxes resulting from:
State taxes ................................. 206 312 289
Non-deductible Goodwill amortization ........ 521 521 843
Other ....................................... 118 22 (96)
--- --- ----
$2,088 $1,957 $1,697
=== === ====
F-21
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
The Company has estimated Federal net operating loss carryforwards of
$7,296 at December 31, 1995 to reduce future Federal income taxes, if any,
which begin to expire in 2005.
The Company has estimated state net operating loss carryforwards of
approximately $441 to reduce future state income taxes, if any.
The Company has alternative minimum tax credit carryforwards of $628 which
have no expiration date and are available to reduce future income taxes, if
any.
7. Commitments and Contingencies
a. Leases
Iron Mountain leases most of its facilities under various operating
leases. A majority of these leases have renewal options of five to ten years
and have either fixed escalation clauses or Consumer Price Index escalation.
The Company also leases equipment under operating and capital leases,
primarily computers which have an average lease life of three years. Trucks
and office equipment are also leased and have remaining lease lives ranging
from one to five years. Rent expense was $12,680, $13,555, and $15,661 for
the years ended December 31, 1993, 1994 and 1995, respectively.
Minimum future lease payments are as follows:
Year Operating
----------------------------------------------------- ----------
1996 ................................................ $ 18,278
1997 ................................................ 15,571
1998 ................................................ 13,585
1999 ................................................ 13,332
2000 ................................................ 13,537
Thereafter .......................................... 53,465
--------
Total minimum lease payments ........................ $127,768
========
b. Litigation
In 1992, the Company was named co-defendant in a suit alleging personal
injuries sustained in an automobile collision with a driver employed by a
courier company used at the time by Iron Mountain. The courier company
subsequently filed for bankruptcy. In March, 1995, a judgment was entered
against the Company in the Superior Court of the State of California for
County of Los Angeles. The Company has accrued $600 in the accompanying
financial statements which approximates the uninsured portion of the
judgment.
Iron Mountain is presently involved as a defendant in various litigation
which has occurred in the normal course of business. Management believes it
has meritorious defenses in all such actions, and in any event, the amount of
damages, if such matters were decided adversely, would not have a material
adverse effect on Iron Mountain's financial condition or results of
operations.
c. Other
The Company may be responsible for environmental clean-up costs at certain
of its facilities. Estimated costs of $800 to perform the necessary
remediation work are included in other liabilities in the accompanying
balance sheets. In 1994, the Company incurred losses at one of its facilities
in California, resulting from the Northridge earthquake. The Company has
filed a claim for reimbursement with its insurance carrier and has received
partial reimbursement to date, with the balance of $1,400 expected to be
received upon the insurance company's completion of its review of the pending
claim. Management believes the ultimate outcome of the above issues will not
have a material adverse effect on Iron Mountain's financial condition or
results of operations.
F-22
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Amounts in thousands except share data)
8. Related Party Transactions
a. Rental Arrangements
Iron Mountain leases space to an affiliated company, Schooner Capital
Corporation (Schooner) for its corporate headquarters located in Boston,
Massachusetts. Accordingly, for the years ended December 31, 1993, 1994 and
1995, Schooner paid Iron Mountain rent totaling $48, $58, and $49,
respectively. Iron Mountain leases one facility from a landlord which is a
related party. Total rental payments for the years ended December 31, 1993,
1994 and 1995 for this facility totaled $88, $88, and $93, respectively. In
the opinion of management, both of these leases were entered into at market
prices and terms.
b. Long Term Debt
Iron Mountain is obligated in the amount of $383 on a junior subordinated
note bearing interest at 8%, payable in March, 2000. This note, originally
issued in connection with an acquisition, was purchased by and is now held by
Schooner.
9. Profit Sharing Retirement Plan
The Company has a defined contribution plan which covers all non-union
employees meeting certain service requirements. Eligible employees may elect
to defer from 1 to 15% of compensation per pay period up to the amount
allowed by the Internal Revenue Code. The Company makes matching
contributions based on the amount of the employee contribution and years of
credited service, according to a schedule as described in the Plan documents.
The Company has expensed $131, $146, and $294, for the years ended
December 31, 1993, 1994 and 1995, respectively.
10. Subsequent Events
In January and February 1996, the Company acquired three records services
businesses for $10,047 in transactions that will be accounted for as
purchases.
On February 6, 1996, the Company completed an initial public offering of
its stock. The net proceeds from the public offering of $34,968 were used to
repay $28,313 of indebtedness and interest under the acquisition credit
facility, to retire a warrant of $6,612, and for working capital.
F-23
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
National Business Archives, Inc.:
Towson, Maryland.
We have audited the accompanying balance sheet of National Business Archives,
Inc. as of December 31, 1993 and 1994, and the related statements of income,
stockholder's equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of National Business Archives,
Inc. as of December 31, 1993 and 1994, and the results of its operations and
its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
Wolpoff & Company, LLP
Baltimore, Maryland
November 3, 1995
F-24
<PAGE>
NATIONAL BUSINESS ARCHIVES, INC.
BALANCE SHEETS
ASSETS
December 31,
-----------------------
1993 1994
--------- ----------
Current Assets:
Cash--Note 1 .............................. $ -- $ 1,000
Note Receivable, Related Party--Note 2 .... -- 1,416,148
Accounts Receivable--Note 1 ............... 714,974 687,645
Inventory--Note 1 ......................... 75,620 69,149
Prepaid Expenses .......................... 149,724 44,362
------- --------
Total Current Assets ................... 940,318 2,218,304
------- --------
Property, Plant and Equipment--Notes 1 and
4:
Shelving .................................. 2,702,645 3,153,726
Motor Vehicles ............................ 479,961 498,011
Computers and Software .................... 195,033 212,830
Furniture, Fixtures and Equipment ......... 148,638 195,544
Leasehold Improvements .................... 76,820 318,258
------- --------
3,603,097 4,378,369
Less Accumulated Depreciation ............. 1,083,347 1,255,781
------- --------
Property, net .......................... 2,519,750 3,122,588
------- --------
Other Assets .............................. 7,498 56,001
------- --------
Total Assets ........................... $3,467,566 $5,396,893
======= ========
The notes to financial statements are an integral part of this statement.
F-25
<PAGE>
NATIONAL BUSINESS ARCHIVES, INC.
BALANCE SHEETS
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
<TABLE>
<CAPTION>
December 31,
------------------------
1993 1994
---------- ----------
<S> <C> <C>
Current Liabilities:
Accounts Payable ..................................... $ 171,566 $ 302,222
Accrued Expenses ..................................... 176,355 238,354
Deferred Revenue--Note 1 ............................. 977,212 1,201,314
Long-term Liabilities, Current Portion--Notes 2 and 4 652,584 63,092
Note Payable, Related Party--Note 2 .................. 150,000 --
Dividends Payable--Note 3 ............................ 11,064 --
-------- --------
Total Current Liabilities. ........................ 2,138,781 1,804,982
-------- --------
Long-term Liabilities:
Note Payable, Bank--Note 3 ........................... -- 2,333,901
Notes Payable, Stockholder--Note 2 ................... 1,913,333 355,000
Motor Vehicle Loans Payable--Note 4 .................. 171,636 100,582
-------- --------
2,084,969 2,789,483
Less Current Portion ................................. 652,584 63,092
-------- --------
Total Long-term Liabilities ....................... 1,432,385 2,726,391
-------- --------
Deferred Rent--Note 5 ................................ 1,068,904 1,007,488
-------- --------
Total Liabilities .................................... 4,640,070 5,538,861
-------- --------
Commitments--Notes 2 and 5
Stockholder's Equity (Deficit):
Common Stock ......................................... 100 100
Accumulated Deficit .................................. (1,172,604) (142,068)
-------- --------
Total Stockholder's Equity (Deficit) .............. (1,172,504) (141,968)
-------- --------
Total Liabilities and Stockholder's
Equity (Deficit) ................................. $ 3,467,566 $5,396,893
======== ========
</TABLE>
The notes to financial statements are an integral part of this statement.
F-26
<PAGE>
NATIONAL BUSINESS ARCHIVES, INC.
STATEMENTS OF INCOME
Year Ended December 31,
------------------------
1993 1994
--------- -----------
Revenue:
Storage .............................. $3,406,317 $3,872,529
Service and Storage Material Sales ... 2,586,223 2,825,546
------- ---------
Total Revenue ..................... 5,992,540 6,698,075
------- ---------
Operating Expenses:
Cost of Sales (Excluding Depreciation) 3,273,478 3,866,897
Selling, General and Administrative .. 1,040,057 1,093,935
Depreciation and Amortization ........ 286,843 344,800
------- ---------
Total Operating Expenses .......... 4,600,378 5,305,632
------- ---------
Operating Income ..................... 1,392,162 1,392,443
Interest Expense ..................... 187,115 101,490
------- ---------
Net Income--Note 1 ................... $1,205,047 $1,290,953
======= =========
The notes to financial statements are an integral part of this statement.
F-27
<PAGE>
NATIONAL BUSINESS ARCHIVES, INC.
STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1993 1994
----------- ------------
<S> <C> <C>
Common Stock:
5,000 Shares Authorized, 100 Shares Issued and
Outstanding,
No Par Value .......................................... $ 100 $ 100
--------- ----------
Retained Earnings (Deficit):
Beginning Balance ....................................... (2,283,254) (1,172,604)
Net Income .............................................. 1,205,047 1,290,953
Dividends ............................................... (94,397) (260,417)
--------- ----------
Ending Balance .......................................... (1,172,604) (142,068)
--------- ----------
Total Stockholder's Equity (Deficit) .................... $(1,172,504) $ (141,968)
========= ==========
</TABLE>
The notes to financial statements are an integral part of this statement.
F-28
<PAGE>
NATIONAL BUSINESS ARCHIVES, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1993 1994
---------- ------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income .............................................. $ 1,205,047 $ 1,290,953
-------- ----------
Adjustments to Reconcile Net Income to Net Cash Provided
by Operating Activities
Depreciation and Amortization .......................... 286,843 344,800
(Gain) Loss on Disposal of Assets ...................... (1,115) 3,818
Increase in Accounts Payable ........................... 26,685 130,656
Increase in Accrued Expenses ........................... 145,939 61,991
Change in Accounts Receivable .......................... (121,414) 27,329
Change in Inventory .................................... (19,161) 6,471
Change in Prepaid Expenses ............................. (27,949) 105,362
Decrease in Deferred Rent Payable ...................... (62,830) (61,416)
Increase in Deferred Revenue ........................... 154,985 224,102
-------- ----------
Total Adjustments .................................... 381,983 843,113
-------- ----------
Net Cash Provided by Operating Activities ........... 1,587,030 2,134,066
-------- ----------
Cash Flows From Investing Activities:
Property and Equipment Expenditures ..................... (534,070) (955,924)
Proceeds from Disposal of Assets ........................ 7,783 12,973
Other Assets ............................................ -- (57,000)
Loan to Related Party ................................... -- (1,416,148)
-------- ----------
Net Cash Used by Investing Activities ................ (526,287) (2,416,099)
-------- ----------
Cash Flows From Financing Activities:
Stockholder Loan Proceeds ............................... 672,222 --
Stockholder Note Principal Payments ..................... (580,558) (1,558,333)
Net Bank Loan Proceeds .................................. -- 2,333,901
Bank Loan Principal Payments ............................ (1,218,662) --
Motor Vehicle Loan Proceeds ............................. 106,226 21,419
Repayment of Motor Vehicle Loans ........................ (106,638) (92,473)
Net Proceeds to Related Party ........................... 150,000 (150,000)
Dividends Paid .......................................... (83,333) (271,481)
-------- ----------
Net Cash Used by Financing Activities ................ (1,060,743) 283,033
-------- ----------
Net Change in Cash ...................................... -- 1,000
Cash at Beginning of Year ............................... -- --
-------- ----------
Cash at End of Year ..................................... $ -- $ 1,000
======== ==========
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for Interest ................. $ 166,875 $ 106,965
======== ==========
</TABLE>
The notes to financial statements are an integral part of this statement.
F-29
<PAGE>
NATIONAL BUSINESS ARCHIVES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Activity
National Business Archives, Inc. was incorporated under the laws of
Maryland pursuant to Articles of Incorporation dated June 18, 1987. The
Company provides record storage and management services in the
Baltimore-Washington area.
Cash
Cash in excess of the minimum balance required is swept daily to and
offset against the revolving loan (see Note 3).
Allowance for Doubtful Accounts
The Company established an allowance for doubtful accounts of $120,000 in
the current year.
Inventory
Inventory is stated at the lower of cost or market and is comprised of
computer tape cases and records and storage boxes used in the business.
Property, Plant and Equipment
Property is recorded at cost. Depreciation is computed using either the
straight-line method or accelerated methods with useful lives ranging from 5
to 7 years for equipment, 20 years for shelving and 31.5 to 39 years for
leasehold improvements.
Revenue Recognition
Revenue is recognized when earned. Storage revenue is billed either
monthly, quarterly or annually, depending on the terms of the lease. The
estimated amount of storage revenue collected in advance as of December 31,
1993 and 1994, is shown as deferred revenue.
Income and Taxes
The shareholder has elected under Subchapter S of the Internal Revenue
Code to report the Company's income at the shareholder level. Accordingly, no
provision for income taxes is included herein.
NOTE 2--RELATED PARTY TRANSACTIONS
Note Receivable, Related Party
In December 1994, the Company advanced $1,416,148 to James F. Knott
Development Corp., an entity related to the shareholder. The unsecured loan
is due on demand and bears interest at 9.5%. The note was repaid in January
1995.
On May 19, 1994, the loan remaining from the sole shareholder was repaid
when the revolving loan was modified. The interest expense in 1993 and 1994
was $108,652 and $39,037.
F-30
<PAGE>
NATIONAL BUSINESS ARCHIVES, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 2--RELATED PARTY TRANSACTIONS -- (Continued)
The sole shareholder loaned an additional $355,000 to the Company. This
unsecured loan is subordinated to the bank loans. The terms are as follows:
<TABLE>
<CAPTION>
Balance
--------------------
Lender 12/31/93 12/31/94 Interest Rate Terms Maturity Date
---------------- --------- ------- ------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Stockholder .... $1,558,333 $ -0- Prime + 2% * October 1, 1996
Stockholder .... 355,000 355,000 -- Non-interest October 1, 1996
bearing
------- -----
$1,913,333 $355,000
======= =====
</TABLE>
* Principal was payable in consecutive monthly installments of $45,833
commencing on November 1, 1993 (36 X $45,833 = $1,650,000).
The remaining stockholder note balance of $355,000 matures in 1996.
Note Payable, Related Party
James F. Knott Development Corp., an entity related to the shareholder,
advanced the Company various amounts in 1993 and 1994. The loans were due on
demand and bear interest at 6.5%. The balance at December 31, 1993 and 1994,
was $150,000 and $-0-, respectively. Interest on the unsecured loans for 1993
and 1994 was $7,228 and $23,807, respectively.
Office and Warehouse Leases
See Note 5.
NOTE 3--NOTE PAYABLE, BANK
On December 19, 1994, the revolving loan was modified for the second time
and the amount available was increased to $3,000,000. The balance at December
31, 1993 and 1994, was $-0- and $2,333,901, respectively. The terms of the
loan are interest only at prime + 1/2% (prime at December 31, 1994, was 8.5%)
until maturity on December 31, 1996. The loan is secured by all property and
assets of the Company. The maximum unpaid outstanding principal available
under the revolving loan is $2,500,000 and $1,500,000 as of December 31, 1995
and 1996, respectively. Interest on this loan was $51,408 and $25,049 in 1993
and 1994, respectively.
Under the loan agreement, the Company is permitted to pay dividends to its
sole shareholder in an aggregate amount equal to the amount of federal and
state income taxes due on the taxable income of the Company, as if such
taxable income was the sole taxable income of the shareholder.
NOTE 4--MOTOR VEHICLE LOANS PAYABLE
Pertinent information on the motor vehicle loans payable is as follows:
<TABLE>
<CAPTION>
Balance
------------------
Total
Interest Monthly
Lender 12/31/93 12/31/94 Rate Payments Maturity Collateral
- ---------------------- ------- ------- ------- ------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ford Motor Credit .... Automobiles/
$171,636 $100,582 6.42-12% $9,442 3/95-8/97 Trucks
Less Current Portion . 103,077 63,092
----- -----
$ 68,559 $ 37,490
===== =====
</TABLE>
F-31
<PAGE>
NATIONAL BUSINESS ARCHIVES, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 4--MOTOR VEHICLE LOANS PAYABLE -- (Continued)
Interest on these loans was $15,077 and $11,825 in 1993 and 1994,
respectively.
The remaining principal payments on these loans are as follows:
1995 .............................. $ 63,092
1996 .............................. 33,596
1997 .............................. 3,894
------
$100,582
======
NOTE 5--COMMITMENTS
Deferred Rent
Office and warehouse leases:
<TABLE>
<CAPTION>
Square Effective Lease Free Expiration
Lessor* Feet Date Term Rent Date
- --------------------------------- ------ ------- ---------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
B.W.I.P. Associates Limited 11 Yrs. 7.5
Partnership .................. 68,200 12/01/87 Mths.** 8 Mths. 7/15/99
Dorsey Run Industrial Park 10 Yrs. 9
Limited Partnership (DRIP) .... 142,885 11/01/89 Mths. 14 Mths. 7/31/00
DRIP ............................ 42,413 9/01/94 5 Years -- 8/31/99
DRIP ............................ 97,587 3/01/95 4 Yrs. 6 Mths. -- 8/31/99
</TABLE>
* Lessors are related to sole shareholder.
** Lease term was extended 1 year and 7.5 months in the current year.
Annual rental expense recognized on the straight-line basis on the above
leases for 1993 and 1994 was $1,092,132 and $1,146,564, respectively.
Future minimum annual rental payments are as follows:
1995 ...................................... $1,764,714
1996 ...................................... 1,825,706
1997 ...................................... 1,834,600
1998 ...................................... 1,826,606
1999 ...................................... 1,427,525
2000 ...................................... 510,099
----------
Total minimum future rental payments ......... $9,189,250
==========
NOTE 6--SUBSEQUENT EVENT
On March 1, 1995, the Company sold all of its assets to Iron Mountain
Records Management, Inc. and all debt was repaid from the proceeds of the
sale. In addition, the Company's assets were released from security interests
held by the bank with the full payment of the note payable (see Note 3).
F-32
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Data Management Business Records Storage, Inc.:
We have audited the accompanying balance sheet of Data Management Business
Records Storage, Inc. as of June 30, 1995 and the related statement of
operations and retained earnings (deficit), and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Data Management Business
Records Storage, Inc. as of June 30, 1995 and the results of their operations
and their cash flows for the year then ended in conformity with generally
accepted accounting principles.
MORRISON AND SMITH
Tuscaloosa, Alabama
September 18, 1995
(except for Note 14, as
to which the date is
December 1, 1995)
F-33
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, September 30,
1995 1995
---------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Cash ................................................... $ 125,982 $ 626,578
Accounts receivables, net .............................. 576,979 517,903
Materials inventory .................................... 7,909 7,909
Prepaid expenses ....................................... 11,744 12,867
Other .................................................. 115,154 374
-------- -----------
Total current assets ................................ 837,768 1,165,631
-------- -----------
Plant, property and equipment, net ..................... 3,334,017 2,435,362
-------- -----------
Intangible assets ...................................... 572,558 533,228
Notes receivable, intercompany ......................... 316,551 373,082
Deferred income tax .................................... 810,431 554,752
Other .................................................. 11,748 11,748
-------- -----------
1,711,288 1,472,810
-------- -----------
Total assets ...................................... $ 5,883,073 $ 5,073,803
======== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable--trade ................................ $ 92,193 $ 61,592
Accrued expenses ....................................... 136,505 137,043
Unearned income ........................................ 309,735 309,735
Current portion--leases ................................ 68,242 63,240
Current portion--notes ................................. 5,353,941 4,428,159
-------- -----------
Total current liabilities ........................... 5,960,616 4,999,769
-------- -----------
Leases payable, long-term .............................. 114,216 96,885
Notes payable, long-term ............................... 1,328,764 1,292,495
Notes payable, intercompany ............................ 50,000 38,760
Deferred compensation payable .......................... 12,115 --
Earnest money deposit .................................. 154,988 --
-------- -----------
Total long-term liabilities ......................... 1,660,083 1,428,140
-------- -----------
Total liabilities ................................. 7,620,699 6,427,909
Stockholders' equity (deficit)
Common stock ........................................... 500 500
Paid-in capital ........................................ 1,321,809 1,321,809
Retained earnings (deficit) ............................ (3,059,935) (2,676,415)
-------- -----------
(1,737,626) (1,354,106)
======== ===========
Total liabilities and stockholders'
equity (deficit) ............................... $ 5,883,073 $ 5,073,803
======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-34
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
Three
Year Ended Months Ended
June 30, September 30,
1995 1995
----------- -------------
(Unaudited)
Revenues:
Storage .................................... $ 3,143,737 $ 797,715
Services and storage material sales ........ 1,683,035 414,650
Net gain (loss) on sale of assets .......... (4,045) 738,049
--------- -----------
Total Revenues ............................ 4,822,727 1,950,414
--------- -----------
Operating expenses:
Cost of sales (excluding depreciation) ..... 891,293 310,610
Selling, administrative and general expenses 2,730,013 767,702
Depreciation and amortization .............. 510,831 115,653
--------- -----------
Total operating expenses .................. 4,132,137 1,193,965
--------- -----------
Operating income ............................ 690,590 756,449
Interest expense ............................ (551,569) (121,915)
Other income (expense), net ................. 611 4,664
--------- -----------
Income before provision for income taxes .... 139,632 639,198
Provision for income taxes .................. 55,589 255,678
--------- -----------
Net income .................................. 84,043 383,520
Retained earnings (deficit)--beginning ...... (3,143,978) (3,059,935)
--------- -----------
Retained earnings (deficit)--ending ......... $(3,059,935) $(2,676,415)
========= ===========
The accompanying notes are an integral part of these financial statements.
F-35
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three
Year Ended Months Ended
June 30, September 30,
1995 1995
---------- -------------
(Unaudited)
<S> <C> <C>
Cash Flow from Operating Activities:
Cash received from customers and affiliates ........................... $ 4,769,087 $1,271,441
Cash paid for cost of sales ........................................... (873,587) (218,510)
Cash paid for operating expenses ...................................... (2,693,965) (805,400)
Interest expense ...................................................... (550,807) (113,677)
Income taxes paid ..................................................... -- (457)
Interest and dividends received ....................................... 1,082 3,691
Other income (expense) ................................................ (471) 973
-------- -----------
Net Cash from Operating Activities .................................. 651,339 138,061
-------- -----------
Cash Flow from Investing Activities:
Proceeds from escrow money deposit .................................... 154,988 --
Proceeds from sale of assets and equipment ............................ 12,117 1,686,742
Payments for purchase of property and equipment ....................... (554,247) (280,623)
Payments (to) from employees for advances ............................. (9,635) 9,670
Payments (to) from affiliates for advances ............................ (151,360) (67,771)
Payments for investments and intangibles .............................. (3,494) (726)
Payments for deposits ................................................. -- (374)
-------- -----------
Net Cash from Investing Activities .................................. (551,631) 1,346,918
-------- -----------
Cash Flows from Financing Activities:
Proceeds from borrowings .............................................. 272,330 --
Repayment of debt ..................................................... (276,748) (984,383)
-------- -----------
Net Cash from Financing Activities .................................. (4,418) (984,383)
-------- -----------
Net change in cash and cash equivalents ................................ 95,290 500,596
Cash and cash equivalents at beginning of period ....................... 30,692 125,982
-------- -----------
Cash and cash equivalents at end of period ............................. $ 125,982 $ 626,578
======== ===========
Reconciliation of net income to net cash provided by operating
activities:
Net income ............................................................ $ 84,043 $ 383,520
Depreciation and amortization ......................................... 510,831 115,653
Deferred compensation ................................................. 6,304 --
(Gain) loss on sale of assets ......................................... 4,045 (738,049)
(Increase) decrease in accounts receivable ............................ (72,453) 59,076
(Increase) in inventory ............................................... (1,581) --
(Increase) decrease in prepayments and escrow ......................... (49,272) 104,361
Increase (decrease) in accounts payable, accrued expenses and
unearned income .................................................... 114,290 (42,178)
Decrease in deferred tax benefit ...................................... 55,132 255,678
-------- -----------
Net cash provided by operating activities .............................. $ 651,339 $ 138,061
======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-36
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 1--ORGANIZATIONAL HISTORY OF THE COMPANY
Data Management Business Records Storage, Inc. ("the Company"), organized
in 1985, provides data management and storage ("DMS") services in the
Atlanta, Georgia market. The Company currently has 1,447,024 cubic feet of
warehouse capacity.
The Company is a wholly owned subsidiary of Outdoor West, Inc., a
management and holding company. Outdoor West, Inc. also owns two subsidiaries
which operate in the outdoor advertising business, Outdoor West, Inc. of
Georgia and Outdoor West, Inc. of Tennessee.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting
The Company's financial statements are presented on the accrual basis.
Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include
money market accounts and highly liquid debt instruments purchased with a
maturity of three months or less.
The Company maintains cash balances at several financial institutions.
Accounts at each institution are insured by the Federal Deposit Insurance
Corporation up to $100,000. Uninsured balances held in accounts at the
Company's primary lender aggregate $25,982 at June 30, 1995.
Allowance for Doubtful Trade Receivables
Bad debts are accounted for on the reserve method. The allowance for
doubtful accounts at June 30, 1995 was $837.
Materials Inventory
Materials inventory is valued at cost using the first-in, first-out
method.
Property and Depreciation
Property and equipment are recorded at cost. Depreciation is provided on
the straight-line method over the estimated useful lives of the respective
assets. Maintenance and repairs are charged to expense as incurred; major
renewals and betterments are capitalized. When items of property and
equipment are sold or retired, the related cost and accumulated depreciation
are removed from the accounts and any gain or loss is recognized.
Major classifications of property and equipment and their respective
depreciable lives are summarized below:
Years
------
Buildings ........................................... 15-40
Leasehold improvements .............................. 5-40
Autos and trucks .................................... 3-6
Equipment, construction ............................. 5-12
Shelving ............................................ 12
Computer equipment .................................. 5
Office furniture and fixtures ....................... 5-10
Leased assets ....................................... 7-25
F-37
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (Continued)
Intangible Assets
In acquisitions of record storage businesses, agreements not to compete
and goodwill were part of the purchase price. Non-compete agreements are
amortized over the lives of the agreements ranging from ten to twenty years;
goodwill is amortized over forty years. Loan costs are amortized over the
lives of the loans.
Income Taxes
The Company is included in a consolidated federal income tax return of an
affiliated group. Income tax expense in the Company's statement of operations
has been allocated based on the ratio that each member's separate taxable
income bears to the sum of the separate taxable incomes of all members having
taxable income for the year. Unused net operating losses and tax credits
available for carryforward to future years are detailed in Note 4.
NOTE 3--INTANGIBLE ASSETS
Intangible assets as of June 30, 1995 consist of:
Accumulated
Cost Amortization Net
--------- ----------- ---------
Non-compete agreements ............ $ 698,000 $418,282 $279,718
Loan costs ........................ 257,197 166,422 90,775
Goodwill .......................... 253,781 51,716 202,065
------- --------- -------
Total .......................... $1,208,978 $636,420 $572,558
======= ========= =======
NOTE 4--FEDERAL INCOME TAXES
The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards Number 109, "Accounting for
Income Taxes". Under the provisions of Statement No. 109, a current tax
liability or asset is recognized for the estimated taxes currently payable or
refundable for the current year and a deferred tax liability or asset is
recognized for the estimated future tax effects attributable to temporary
differences and carryforwards. Temporary differences represent the difference
between the book and tax bases of assets or liabilities that will result in
taxable or deductible amounts in future years when the asset or liability is
recovered or settled.
Summary of the provision for income tax expense (benefit) for the year
ended June 30, 1995 is as follows:
Currently payable ................................... $ 457
Deferred ............................................ (4,595)
Utilization of operating loss carryforward .......... 59,727
------
Provision for income tax expense .................... $55,589
======
A reconciliation of income tax at the statutory rate to the Company's
effective rate is as follows:
Computed at the expected statutory rate ............. 38.0%
Officer's life insurance ............................ .9
Amortization of goodwill ............................ 1.7
Deferred compensation ............................... 1.7
Other differences ................................... (2.5)
----
Effective rate ...................................... 39.8%
====
F-38
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 4--FEDERAL INCOME TAXES -- (Continued)
For the year ended June 30, 1995, the Company was included in a
consolidated federal income tax return. The Company had carryovers as
follows:
Carryover Amount Expiration
--------------------------- --------- -----------
Net operating loss ........ $2,109,000 2004-2009
Contributions ............. 5,510 1996-1999
The deferred tax benefit consisted of the following at June 30, 1995:
Deferred tax benefit:
Net operating loss carryforward .......... $801,420
Other temporary differences .............. 9,011
-------
810,431
Valuation allowance ...................... -0-
-------
Net deferred tax benefit ................. $810,431
=======
Even though the Company has net operating loss carryforwards from fiscal
years ended June 30, 1985 through June 30, 1994, management believes that it
is more likely than not that it will generate taxable income sufficient to
realize the tax benefit associated with net operating loss and tax credit
carryforwards. This belief is based upon, among other factors, expectations
of continued growth in sales and changes in operations, as well as
consideration of available tax planning strategies. Specifically, the Company
has plans to consolidate operations in the DMS business by selling a
warehouse and moving files to an existing leased facility. The sale of the
warehouse facility is expected to result in a significant gain as the
facility's best use, due to its location and structure, is other than
warehouse space. Additionally, the Company has plans to sell the operating
assets of the DMS business at a significant gain. Management believes that no
valuation allowance is appropriate given the current estimates of future
taxable income. If the Company is unable to generate sufficient taxable
income in the future through operating results, or through the sales
discussed in Note 14, increases in the valuation allowance will be required
through a charge to income tax expense.
NOTE 5--CAPITAL STOCK
Common stock of the Company has a par value of $0.10 per share; 5,000
shares were authorized, issued and outstanding.
NOTE 6--PROPERTIES AND FACILITIES
1995
------------
Land ................................................ $ 364,657
Buildings ........................................... 1,831,905
Leasehold improvements .............................. 126,501
Autos and trucks .................................... 355,032
Equipment ........................................... 110,916
Shelving ............................................ 2,586,900
Computer equipment .................................. 334,018
Office furniture and fixtures ....................... 128,503
Leased assets ....................................... 313,667
----------
6,152,099
Less accumulated depreciation ....................... (2,818,082)
----------
$ 3,334,017
==========
F-39
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 7--NOTES PAYABLE
<TABLE>
<CAPTION>
Interest Balance
Maturity Collateral and Repayment Terms Rate June 30, 1995
- ---------- --------------------------------------------------- ------------ --------------
<S> <C> <C> <C>
6/96 Substantially all of assets of the Company except
those subject to prior liens and the outstanding
stock of the Company pari passu with other major
lender. Interest due monthly and principal
payments of approximately $60,000 due 9/30/95; 7.62%-
12/31/95 and 3/31/96. Remaining principal balance LIBOR+
due 6/30/96. 3.25% $5,124,242
2/01-3/01 Certain assets of DMS on purchase money
contracts, non-competes; due $16,667 monthly 10.00% 1,071,038
9/99 Real estate of DMS due $4,152 monthly 9.00% 384,892
9/94-4/96 Rolling stock and equipment, principal and
interest of approximately $9,000 due monthly Various 102,533
------------
$6,682,705
============
</TABLE>
Principal maturities of notes payable for the five years ending after
June 30, 1995 are:
6/30/96 ............................................. $ 5,353,941
6/30/97 ............................................. 195,314
6/30/98 ............................................. 196,611
6/30/99 ............................................. 522,343
6/30/00 ............................................. 272,365
Maturities after 5 years ............................ 142,131
----------
Total maturities ................................. 6,682,705
Less current maturities ............................. (5,353,941)
----------
Long term maturities ............................. $ 1,328,764
==========
At June 30, 1995, a substantial portion of the Company's notes payable
were due within one year. However, as discussed in Note 14, substantially all
of the operating assets of the Company were sold effective November 30, 1995.
The proceeds of this sale were sufficient to pay all of the Company's notes
payable.
Additional Restrictions Required by Long-Term Debt
The Company, its parent and affiliates entered into loan agreements with
Massachusetts Mutual Life Insurance Company and National Westminster Bank
USA. The affiliated group is required to comply with certain restrictive
covenants which require, among other things, limitations on capital
expenditures and corporate overhead and a deadline for providing audited
financial statements. While the affiliated group was in violation of these
agreements, the two lenders have issued waivers for the covenant violations
as of June 30, 1995.
NOTE 8--TRANSACTIONS WITH RELATED PARTIES
The Company has various lease and management agreements with affiliates.
The Company's parent, Outdoor West, Inc., charges the Company a management
fee which covers executive management supervision in addition to general
management services which include leasing, accounting, finance, personnel and
general supervision
F-40
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 8--TRANSACTIONS WITH RELATED PARTIES -- (Continued)
responsibilities. Amounts included in the statement of operations with
respect to transactions with affiliates for June 30, 1995 are:
Outdoor
West, The Eagle
Inc. Group
--------- ----------
Income
Land Lease ......................... $ -- $ 4,900
Expenses
Management fees ..................... 398,000 --
Interest ............................ -- 13,932
Building rental ..................... -- 103,875
------- --------
Net transactions with related parties $(398,000) $(112,907)
======= ========
Receivables from and payables to affiliates as of June 30, 1995 are:
Accounts receivable from:
Outdoor West, Inc. ......................... $316,551
=======
Notes payable to:
Outdoor West, Inc. of Georgia .............. $ 50,000
=======
Charles H. Renfroe is Chairman of the Board of Directors of the Company.
The Eagle Group is a sole proprietorship, owned by Mr. Renfroe, which
operates a mini-warehouse project and leases office and warehouse space to
Outdoor West, Inc. of Georgia and to the Company. In addition, the Eagle
Group owns 19 parcels of land leased to Outdoor West, Inc. of Georgia and
Tennessee.
In the opinion of management, all of the transactions with related parties
are at rates and terms equivalent to those that prevail in arm's-length
transactions.
NOTE 9--UNEARNED INCOME
Unearned income represents primarily income billed one month in advance
for record storage. Most of this was recognized as income in July, 1995.
NOTE 10--OBLIGATIONS UNDER CAPITAL LEASE
The Company is the lessee of property under capital leases with
expirations as disclosed in the following table. Assets and liabilities under
capital leases are recorded at the lower of the present value of the minimum
lease payments or the fair value of the asset. The assets are depreciated
over the lower of their related lease terms or their estimated productive
lives. Depreciation of assets under capital leases is included in
depreciation expense for 1995.
Interest rates on capitalized leases vary and are imputed based on the
lower of the Company's incremental borrowing rate at the inception of each
lease or the lessor's implicit rate of return.
General Description of Capital Leases
June 30,
1995 Termination
Leased Property Balance Dates
--------------- ----------- ----------------
Equipment ......................... $182,457 10/05/96-12/19/99
=========
F-41
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 10--OBLIGATIONS UNDER CAPITAL LEASE -- (Continued)
Net Obligations Under Capital Leases at June 30, 1995:
Capital Less: Balance
Lease Imputed Sheet
Balance Interest Values
------- ------- --------
Current liabilities ........... $ 84,078 $15,836 $ 68,242
===== ===== ======
Long-term liabilities ......... $129,366 $15,150 $114,216
===== ===== ======
Gross Assets and Accumulated Depreciation
June 30, 1995
--------------
Equipment and automobiles ......... $313,667
Less accumulated depreciation ..... (68,721)
------------
$244,946
============
Minimum Future Lease Payments
Years Ended June 30
-------------------
1996 .............................................. $ 84,078
1997 .............................................. 73,109
1998 .............................................. 30,229
1999 .............................................. 17,352
2000 .............................................. 8,676
------
Total minimum lease payments .................... 213,444
Less imputed interest ............................... 30,986
------
Present value of net minimum lease payments ......... $182,458
======
NOTE 11--OBLIGATIONS UNDER OPERATING LEASES
The Company leases real estate under operating leases expiring in various
years through January 31, 2008.
Minimum future rental payments under non-cancellable operating leases
having remaining terms in excess of one year as of June 30, 1995 for each of
the next five years in the aggregate are:
Years Ended June 30 Amount
------------------ ----------
1996 .............................................. $ 745,918
1997 .............................................. 528,299
1998 .............................................. 425,770
1999 .............................................. 428,208
2000 .............................................. 418,197
Subsequent to 2000 ................................ 3,373,556
--------
$5,919,948
========
Rental expense under all operating leases for the fiscal year ended
June 30, 1995:
Rental Expense ...................................... $491,139
======
The Company leases real estate from affiliates. The leases are classified
as operating leases and provide for minimum annual rentals of $103,875 with
expirations ranging from February 28, 1996 to January 6, 2000. See Note 8.
F-42
<PAGE>
DATA MANAGEMENT BUSINESS RECORDS STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 12--COMMITMENTS AND CONTINGENCIES
The Company began a self-insured program for its group health plan
January 1, 1990. The Company is liable for claims up to $20,000 per employee
annually and aggregate claims up to $154,861 annually. Self-insurance costs
are accrued based upon the aggregate of the liability for reported claims and
an actuarially determined estimated liability for claims incurred but not
reported.
NOTE 13--PROFIT SHARING PLAN
Effective January 1, 1994, the Company implemented a profit sharing plan
described in Internal Revenue Code Section 401(k). All employees of the
Company are eligible to participate once they meet the eligibility and
participation requirements of the plan. Employees become eligible for
participation in the plan after attaining age 21 and completing 12 months of
service.
Under the terms of the plan, participants may contribute a portion of
their compensation to the plan on a tax deferred basis. Employee
contributions may not exceed the annual limitations established by the
Treasury. The Company matches 10% of the first 6% of compensation contributed
by each participant. During the year ended June 30, 1995 the cost of the plan
to the Company totaled $7,128.
NOTE 14--SUBSEQUENT EVENTS
On July 31, 1995 the Company sold a warehouse and distribution facility.
Proceeds from the sale were $1,850,000. The transaction resulted in a gain of
approximately $740,000 which will be included in net income from operations
for the fiscal year ending June 30, 1996.
On December 1, 1995, the Company sold, effective November 30, 1995,
substantially all of its operating assets.
F-43
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners Nashville Vault Company, Ltd.:
We have audited the accompanying balance sheet of Nashville Vault Company,
Ltd. (a Tennessee limited partnership) as of December 31, 1995, and the
related statements of income, partners' capital and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nashville Vault Company,
Ltd. at December 31, 1995, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted
accounting principles.
Geo. S. Olive & Co. LLC
Indianapolis, Indiana
January 16, 1996
F-44
<PAGE>
NASHVILLE VAULT COMPANY, LTD.
(A TENNESSEE LIMITED PARTNERSHIP)
BALANCE SHEET
December 31,
1995
------------
ASSETS
Current assets:
Cash and cash equivalents ............... $ 275,806
Accounts receivable--trade .............. 180,609
Prepaid expenses ........................ 60
----------
Total current assets .................. 456,475
Property and equipment:
Building and improvements ............... 1,148,652
Furniture and equipment ................. 269,798
Vehicles ................................ 88,386
----------
1,506,836
Accumulated depreciation and amortization (833,520)
----------
$ 673,316
----------
$1,129,791
==========
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses ... $ 104,662
Deferred revenue ........................ 43,253
Convertible notes payable ............... 325,000
----------
Total current liabilities ............. 472,915
PARTNERS' CAPITAL ....................... 656,876
----------
$1,129,791
==========
The accompanying notes are an integral part of these financial statements.
F-45
<PAGE>
NASHVILLE VAULT COMPANY, LTD.
(A TENNESSEE LIMITED PARTNERSHIP)
STATEMENT OF INCOME
Year Ended
December 31,
1995
----------------
Revenue:
Storage ........................................... $ 636,302
Service and storage material sales ................ 738,338
--------------
Total revenue .................................. $1,374,640
Operating expenses:
Cost of sales (excluding depreciation) ............ 499,389
Selling, general and administrative expenses ...... 326,674
Depreciation and amortization ..................... 122,021
--------------
Total operating expenses ....................... 948,084
--------------
Operating income .................................... 426,556
Other income (expense):
Interest income ................................... 18,994
Interest expense .................................. (80,022)
--------------
(61,028)
--------------
Net income .......................................... $ 365,528
==============
STATEMENT OF PARTNERS' CAPITAL
Balance, Beginning of Year .......................... $ 306,499
Net income ........................................ 365,528
Cash distributions ................................ (15,151)
--------------
Balance, End of Year ................................ $ 656,876
==============
The accompanying notes are an integral part of these financial statements.
F-46
<PAGE>
NASHVILLE VAULT COMPANY, LTD.
(A TENNESSEE LIMITED PARTNERSHIP)
STATEMENT OF CASH FLOWS
Year Ended
December 31,
1995
----------------
Operating Activities:
Net income ............................................... $ 365,528
Items not affecting net cash provided by operating
activities:
Depreciation and amortization ......................... 122,021
Gain on disposal of property and equipment ............ (141)
Changes in other items:
Accounts receivable--trade ......................... (333)
Prepaid expenses ................................... 16,761
Accounts payable and accrued expenses .............. 41,230
Deferred revenue ................................... (2,012)
--------------
Net cash provided by operating activities .......... $ 543,054
Investing Activities:
Purchase of property and equipment ....................... (30,908)
Proceeds from sale of property and equipment ............. 2,300
Proceeds from sale of investments ........................ 310,000
Purchase of investments .................................. (210,000)
--------------
Net cash provided by investing activities .......... 71,392
Financing Activities:
Payments on debt ......................................... (489,969)
Cash distribution to partners ............................ (15,151)
--------------
Net cash used by financing activities .............. (505,120)
--------------
Net increase in Cash and Cash Equivalents .................. 109,326
Cash and Cash Equivalents, Beginning of Year ............... 166,480
--------------
Cash and Cash Equivalents, End of Year ..................... $ 275,806
==============
Supplemental Cash Flows Information:
Cash paid during the year for interest ................... $ 80,022
Equipment acquired with installment note ................. 48,854
The accompanying notes are an integral part of these financial statements.
F-47
<PAGE>
NASHVILLE VAULT COMPANY, LTD.
(A TENNESSEE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
1. Nature of Operations
Nashville Vault Company, Ltd. (the "Partnership") is a limited partnership
formed pursuant to the Uniform Limited Partnership Act of Tennessee on
February 21, 1985 to renovate, own and operate a maximum security facility
containing safe deposit boxes and secured storage vaults in Nashville.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. Summary of Significant Accounting Policies
Cash Equivalents
The Partnership considers all liquid investments with original maturities
of three months or less to be cash equivalents. At December 31, 1995, cash
equivalents consisted of savings accounts. From time to time during the year,
the Partnership's cash accounts exceeded federally insured limits.
Property and Equipment
Property and equipment are carried at cost, and such cost is being
recovered using straight-line and accelerated methods of depreciation, with
useful lives of 15 to 31.5 years for building and improvements, 5 to 7 years
for furniture and equipment, and 5 years for vehicles.
Revenue Recognition
Revenue is recognized when earned. Revenue billed in advance is shown as
deferred revenue.
Advertising Costs
The Partnership expenses advertising costs as incurred. Advertising costs
were $6,787 in 1995.
Income Tax Status
Since the entity is a partnership, it is not subject to federal and state
income taxes and, accordingly, no provision for federal and state taxes on
income is required. The partners include their allocable share of the net
income or loss in their respective income tax returns.
3. Convertible Notes Payable
The 12% convertible notes, payable to certain limited partners, are
convertible into limited partnership units at a conversion price of $12,500
for one limited partnership unit. On January 1, 1996, all convertible notes
were converted into 26 limited partnership units.
4. Employee Benefits
On January 1, 1994, the Partnership established a 401(k) defined
contribution plan for the benefit of substantially all of its employees,
which allows for both employee and Partnership contributions. The Partnership
contribution consists of a matching contribution of 25 percent of employee
contributions, up to 3.75 percent of eligible employee compensation. The
Partnership contribution to the plan was $3,924 for 1995. This plan was
terminated on December 31, 1995.
F-48
<PAGE>
NASHVILLE VAULT COMPANY, LTD.
(A TENNESSEE LIMITED PARTNERSHIP) -- (Continued)
5. Partnership Agreement
The Agreement of Limited Partnership (as amended) specifies the allocation
of profits, losses, and distributions to be allocated 1% to the General
Partner and 99% to the Investor Limited Partners.
Under the agreement, the limited partners are not liable for any debts of
the Partnership nor are they required to make any additional capital
contributions.
6. Related Party Transactions
The Partnership leases the ground on which its building is located from
family members of stockholders of the General Partner and pays real estate
taxes and other related expenses under the lease which expires November 30,
2000. On January 1, 1996, the Partnership exercised an option to purchase the
land for $250,000. Rent expense in 1995 was $29,000.
The General Partner, USA Vault Corporation, is guaranteed a monthly
management fee for the operation of the Partnership. The fee begins at $1,000
per month increasing to $2,000 and $3,000 monthly when annual gross revenue
exceeds $200,000 and $300,000, respectively. The Partnership incurred
management fees to the General Partner of $32,000 in 1995.
The Partnership pays fees to a company owned by the president of USA Vault
Corporation for accounting and bookkeeping services. Fees paid totaled
$12,000 for 1995.
7. Major Customer
Sales from a major customer approximated 10% of sales and 19% of accounts
receivable at December 31, 1995.
8. Subsequent Event
On January 4, 1996, the Partnership sold, effective January 1, 1996,
substantially all of its operating assets for approximately $3,450,000 to
Iron Mountain Record Management, Inc.
F-49
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Directors and Stockholders
Data Archive Services, Inc. and Data Archive Services of Miami, Inc.:
We have audited the accompanying combined balance sheet of Data Archive
Services, Inc. and Data Archive Services of Miami, Inc. (Florida
Corporations) as of May 31, 1996, and the related combined statements of
operations and retained earnings, and cash flows for the year then ended.
These combined financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the combined financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the combined
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Data Archive
Services, Inc. and Data Archive Services of Miami, Inc. as of May 31, 1996,
and the results of their operations and their cash flows for the year then
ended, in conformity with generally accepted accounting principles.
The combined financial statements include the financial statements of Data
Archive Services, Inc. and Data Archive Services of Miami, Inc., which are
related through controlled ownership and management.
Perless, Roth, Jonas & Hartney, CPAs, PA
Miami, Florida
July 30, 1996
(except for Note 11,
for which the date
is August 9, 1996)
F-50
<PAGE>
DATA ARCHIVE SERVICES, INC.
COMBINED BALANCE SHEET
MAY 31, 1996
ASSETS
Current Assets:
Cash ........................................ $ 155,435
Accounts Receivable ......................... 291,711
Due from Related Party ...................... 19,379
Inventories ................................. 4,061
Prepaid Expenses ............................ 45,673
Income Taxes Receivable ..................... 34,485
-------
Total Current Assets ..................... 550,774
Property, Plant and Equipment:
Shelving .................................... 565,513
Office Furniture and Equipment .............. 217,686
Vaults ...................................... 110,139
Leasehold Improvements ...................... 61,914
Vehicle ..................................... 18,237
-------
973,489
Less: Accumulated Depreciation .............. (490,025)
-------
Property, Plant and Equipment, Net ....... 483,464
Other Assets ................................ 46,730
-------
Total Assets ............................. $1,080,938
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-Term Liabilities .... $ 129,407
Accounts Payable ............................ 251,207
Accrued Expenses ............................ 126,909
Loan Payable to Stockholder ................. 165,154
Deferred Revenue ............................ 170,140
Income Taxes Payable ........................ 8,365
-------
Total Current Liabilities ................ 851,182
Long-Term Liabilities:
Lease Obligation Payable .................... 7,117
Installment Obligations Payable ............. 145,298
Line of Credit Payable to Bank .............. 100,000
Less: Current Portion of Long-Term
Liabilities ............................... (129,407)
-------
Total Long-Term Liabilities .............. 123,008
Stockholders' Equity:
Capital Stock ............................... 11,000
Additional Paid-in Capital .................. 50,050
Retained Earnings ........................... 45,698
-------
Total Stockholders' Equity ............... 106,748
-------
Total Liabilities and Stockholders' Equity $1,080,938
=======
The accompanying notes are an integral part of these financial statements.
F-51
<PAGE>
DATA ARCHIVE SERVICES, INC.
COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEAR ENDED MAY 31, 1996
Revenues:
Storage ............................................. $1,106,051
Service and Storage Material Sales .................. 609,955
---------
Total Revenues .................................... 1,716,006
Operating Expenses:
Cost of Sales (Excluding Depreciation) .............. 962,801
Selling, General and Administrative ................. 919,022
Depreciation and Amortization ....................... 38,285
---------
Total Operating Expenses .......................... 1,920,108
---------
Operating Loss ...................................... (204,102)
Interest Expense, Net ............................... (3,177)
Loss Before Income Tax Benefit ...................... (207,279)
Income Tax Benefit .................................. 1,190
---------
Net Loss ............................................ (206,089)
Retained Earnings--Beginning of Year ................ 251,787
---------
Retained Earnings--End of Year ...................... $ 45,698
=========
The accompanying notes are an integral part of these financial statements.
F-52
<PAGE>
DATA ARCHIVE SERVICES, INC.
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MAY 31, 1996
Cash Flows From Operating Activities:
Net Loss ............................................ $(206,089)
Adjustments to Reconcile Net Loss to Net
Cash Provided by Operating Activities:
Depreciation and Amortization ...................... 38,285
Loss on Abandonment of Assets ...................... 26,725
Increase in Accounts Receivable .................... (82,260)
Increase in Inventories ............................ (1,146)
Increase in Prepaid Expenses ....................... (6,538)
Increase in Income Taxes Receivable ................ (34,485)
Decrease in Due from Related Party ................. 49,793
Decrease in Other Assets ........................... 29,875
Increase in Accounts Payable ....................... 166,391
Increase in Accrued Expenses ....................... 72,577
Increase in Deferred Revenue ....................... 52,710
Increase in Income Taxes Payable ................... 6,624
---------
Total Adjustments ................................ 318,551
---------
Net Cash Provided by Operating Activities ........ 112,462
---------
Cash Flows From Investing Activities:
Property, Plant and Equipment Expenditures .......... (369,522)
Cash Flows From Financing Activities:
Advances from Stockholder ........................... 288,050
Repayments to Stockholder ........................... (122,896)
Proceeds from Line of Credit ........................ 100,000
Proceeds from Lease and Installment Obligations ..... 150,337
Repayments on Lease and Installment Obligations ..... (48,190)
---------
Net Cash Provided by Financing Activities ........ 367,301
---------
Net Increase in Cash ................................ 110,241
Cash at Beginning of Year ........................... 45,194
---------
Cash at End of Year ................................. $ 155,435
=========
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for Interest .............. $ 7,485
=========
Cash Paid During the Year for Income Taxes .......... $ 13,443
=========
The accompanying notes are an integral part of these financial statements.
F-53
<PAGE>
DATA ARCHIVE SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
MAY 31, 1996
NOTE 1--NATURE OF BUSINESS
The accompanying financial statements represent the combined accounts of
Data Archive Services, Inc. and Data Archive Services of Miami, Inc.
(Affiliate). Data Archive Services, Inc. and Affiliate (the Companies) are
records management companies providing storage and related services primarily
in Dade, Broward and Palm Beach Counties.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
a. Principles of Combination
The financial statements reflect the financial position and results of
operations of the Companies on a combined basis. All significant intercompany
balances and transactions have been eliminated.
b. Property and Equipment
Property and equipment are recorded at cost and depreciated using the
straight-line and declining balance methods with the following useful lives:
Years
------
Leasehold Improvements 14-20
Shelving 8-33
Vaults and Security Systems 8-10
Office Furniture and Equipment 5-7
Vehicle 6
Expenditures for repairs and maintenance are charged to expense as
incurred. Expenditures for major renewals and betterments, which
significantly extend the useful lives of existing property and equipment, are
capitalized and depreciated. Upon retirement or disposition of property and
equipment, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is recognized in income.
c. Allowance for Doubtful Trade Receivables
Bad debts are accounted for on the reserve method. As at May 31, 1996, no
reserve for doubtful accounts was required.
d. Revenue Recognition
Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to
the customer. Amounts related to future storage for customers when storage
fees are billed in advance are accounted for as deferred revenue and
amortized over the applicable period. These amounts are included in deferred
revenue in the accompanying financial statements.
e. Inventories
Inventories are carried at the lower of cost using the first-in, first-out
basis, or market and are comprised primarily of boxes.
f. Cash and Cash Equivalents
The Companies define cash and cash equivalents to include cash on hand and
cash invested in short-term securities which have original maturities of less
than 90 days.
F-54
<PAGE>
DATA ARCHIVE SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (Continued)
g. Financial Statements Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions which affect the reporting of assets and liabilities as of the
dates of the financial statements and revenues and expenses during the
reporting period. Actual results may differ from these estimates.
h. Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS No. 109), "Accounting For Income
Taxes". Under SFAS No. 109, an asset and liability approach is required. Such
approach results in the recognition of deferred tax assets and liabilities
for the expected future tax consequences of temporary differences between the
book carrying amounts and the tax basis of assets and liabilities.
NOTE 3--LONG-TERM LIABILITIES
<TABLE>
<CAPTION>
<S> <C>
Long-Term Liabilities consist of the following:
Line of Credit with Bank--$100,000
Line of Credit Secured by Substantially all of the Assets. Interest,
Paid Monthly, Calculated at 1% above Published Prime. Principal
Balance is due and Payable March 22, 1997 ............................ $100,000
Financing, Primarily for Shelving
Principal and Interest Calculated at 12.27%, Paid in Monthly
Installments of $3,184 ............................................... 140,552(A)
Other Financing for Shelving, Equipment, and a Vehicle. Principal and
Interest Ranging from 9.82% to 13.19%, Paid in Monthly Installments of
$734 ................................................................. 11,863
----------
Long-Term Liabilities .................................................. 252,415
Less: Current Portion .................................................. 129,407
----------
Long-Term Liabilities, Net of Current Portion .......................... $123,008
==========
</TABLE>
The scheduled repayment of long-term liabilities is as follows:
<TABLE>
<CAPTION>
Year Amount
----- ---------
<S> <C>
1997 ............................................................... $129,407
1998 ............................................................... 27,891
1999 ............................................................... 30,144
2000 ............................................................... 32,000
2001 ............................................................... 32,973
-------
$252,415
=======
</TABLE>
(A) This obligation is non-cancelable with no offset. Therefore the payoff
amount, if Data Archive Services, Inc. cancels this agreement, is
based upon the remaining payments. The cancellation amounts versus the
outstanding indebtedness for the 12 months ended May 31 are as
follows:
Number
of
Remaining Outstanding Cancellation
Year Payments Indebtedness Indebtedness
---------------- ------- ----------- -------------
1996 59 $140,552 $187,856
1997 47 118,363 149,648
1998 35 93,294 111,440
1999 23 64,971 73,232
2000 11 32,971 35,024
F-55
<PAGE>
DATA ARCHIVE SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (Continued)
NOTE 4--CONTINGENCIES AND COMMITMENTS
Obligations Under Operating Leases
The Companies presently lease all their facilities under various operating
leases. Several of these leases have renewal options of three (3) years and
have consumer price index escalation clauses. The Companies also lease
computer equipment and warehouse equipment under operating leases expiring at
various dates within a two (2) year period. Rent expense for the year ended
May 31, 1996 is as follows:
Rent--Premises ...................................... $432,742
=======
Rent--Computer and Warehouse Equipment .............. $ 91,537
=======
Minimum future lease payments for the 12 months ended May 31, are as
follows:
Lease
Computer
and
Lease Warehouse
Year Premises Equipment
----------------------------------- --------- ----------
1997 .............................. $ 358,263 $ 79,658
1998 .............................. 356,291 32,840
1999 .............................. 356,291 --
2000 .............................. 356,291 --
2001 .............................. 356,291 --
Thereafter ........................ 3,767,123 --
------- --------
$5,550,550 $112,498
======= ========
Certain of the operating leases contracted for by the companies are
contracted with the controlling shareholder of the Companies. This is
discussed more fully in Note 7 "Transactions With Related Parties".
Concentration of Credit Risk
The Companies maintain their bank accounts with FDIC financial
institutions. As at May 31, 1996, the cash balance in one (1) of the accounts
exceeded the insured limits by approximately $42,000.
NOTE 5--PROFIT SHARING PLAN
Effective January 1, 1995, the Companies implemented a profit sharing plan
described in Internal Revenue Code Section 401(k). All employees of the
Companies are eligible to participate once they meet the eligibility and
participation requirements of the plan. Employees become eligible for
participation in the plan after attaining age 21 and completing 12 months of
service.
Under the terms of the plan, participants may contribute a portion of
their compensation to the plan on a tax deferred basis. Employee
contributions may be made with a maximum deferral up to 15 percent of
compensation, not to exceed the annual limitations established by the
Treasury.
The Companies are required to make contributions to the plan, but the
amount of the contribution is determined by the Companies. During the year
ended May 31, 1996, the Companies contributed $12,013 to the plan.
NOTE 6--CAPITAL STOCK
Common stock of Data Archive Services, Inc. has a par value of $1.00 per
share; 1,000 shares are authorized, issued and outstanding. Common stock of
Data Archive Services of Miami, Inc. (Affiliate) has a par value of $0.01 per
share; 1,000,000 shares are authorized, issued and outstanding. There have
been no changes in the capital stock of both companies during the fiscal year
ended May 31, 1996.
F-56
<PAGE>
DATA ARCHIVE SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (Continued)
NOTE 7--TRANSACTIONS WITH RELATED PARTIES
P. Douglas McCraw, chief operating officer and controlling shareholder of
the Companies has entered into certain lease and loan arrangements with the
Companies. The Companies have entered into various lease and loan
arrangements either through Mr. McCraw or other companies controlled by Mr.
McCraw.
These lease and loan arrangements are as follows:
<TABLE>
<CAPTION>
Number
of
Lease Months
Expense Remaining Total
May 31, on Lease
Lessor and Description 1996 Lease Obligation
------------------------------------------ ----------- ------- -----------
<S> <C> <C> <C>
DAS Imaging Systems, Inc.
Computer Equipment ..................... $73,140 17 $ 103,615
P. Douglas McCraw
Ft. Lauderdale Storage Facility ........ 22,366 238 4,478,446
Galt Ocean Mile Partnership
Ft. Lauderdale Storage Facility ........ 27,943 87 120,147
P. Douglas McCraw Month
Lower Matecumbe Facility ............... to
10,845 Month --
P. Douglas McCraw
Miami Storage Facility .................. 84,241 84 628,766
P. Douglas McCraw
Miami Storage Facility ................. 28,603 160 321,221
Receivables from and Payables to Related
Parties:
Loan Receivable from:
DAS Imaging Systems, Inc. ............. $ 19,379
=========
Loan Payble to:
P. Douglas McCraw--Non-Interest
Bearing Loan ......................... $ 165,154
=========
Amounts Included in Accounts Payable:
P. Douglas McCraw--Lease--Miami
Storage Facilities ................... $ 27,559
Galt Ocean Mile Partnership--Lease
Ft. Lauderdale Storage Facility ...... 7,308
P. Douglas McCraw--Lease--Other
Facilities ........................... 4,518
---------
$ 39,385
=========
</TABLE>
NOTE 8--INCOME TAXES
The income tax benefit (provision) consisted of the following:
Current Federal Credit .............................. $ 24,615
Current Federal Provision ........................... (18,532)
Current State Provision ............................. (4,893)
-------
Total Current Credit ............................. $ 1,190
=======
At May 31, 1996, there are no temporary differences which would give rise
to deferred tax assets and liabilities except as follows. Data Archive
Services, Inc. has a federal operating loss carryforward of $167,621, and a
state
F-57
<PAGE>
DATA ARCHIVE SERVICES, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (Continued)
operating loss carryforward of $318,682, which will expire in 2011.
Realization of the deferred tax asset of $75,000 associated with the loss
carryforwards is dependent upon the future earnings of this company. Because
of the uncertainty of realization of this asset, a valuation allowance has
been recognized for the entire deferred tax asset.
NOTE 9--FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures About Fair Value of Financial Instruments." These estimates have
been determined by the Companies using available market information and
appropriate valuation techniques based on information as of May 31, 1996. As
considerable judgment is inherent in the development of these estimates, they
are not necessarily indicative of the amounts that the companies could
realize in the current market exchange.
The recorded amounts and fair values are as follows:
May 31, 1996
--------------------
Recorded Fair
Amount Value
------- ---------
Assets:
Cash ........................................ $155,435 $155,435
Due from Related Party ...................... 19,379 19,379
Liabilities:
Current Portion of Long-Term Liabilities .... 129,407 129,407
Long-Term Liabilities ....................... 123,008 123,008
NOTE 10--SIGNIFICANT COMPONENTS OF COMBINED FINANCIAL STATEMENTS
The significant components of the entities, before elimination, comprising
the combined financial statements are as follows:
Data
Archive Data Archive
Services, Services of
Inc. Miami, Inc.
----------- ------------
Total Assets ............................... $ 953,885 $255,729
========= ==========
Total Liabilities .......................... $1,000,747 $102,119
========= ==========
Total Stockholders'
Equity (Deficit) ........................ $ (46,862) $153,610
========= ==========
Net Income (Loss) .......................... $ (276,619) $ 70,530
========= ==========
NOTE 11--SUBSEQUENT EVENTS
Effective August 1, 1996, all of the outstanding capital stock of the
Companies was sold to Iron Mountain Records Management, Inc. All debt of the
Companies will be repaid from the proceeds of the sale.
F-58
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Iron Mountain Incorporated:
We have audited the accompanying balance sheet of Data Storage Systems,
Inc. (a California corporation) as of December 31, 1995, and the related
statements of operations, shareholders' deficit and cash flows for the year
then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Data Storage Systems,
Inc. as of December 31, 1995 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted
accounting principles.
Arthur Andersen LLP
San Jose, California
May 17, 1996
F-59
<PAGE>
DATA STORAGE SYSTEMS, INC.
BALANCE SHEET
DECEMBER 31, 1995
Assets
Current Assets:
Cash ......................................... $ 185,278
Accounts receivable .......................... 243,923
Prepaid expenses and other ................... 23,624
----------
Total current assets ..................... 452,825
Property and Equipment:
Equipment and improvements ................... 1,020,762
Less--Accumulated depreciation ............... 828,074
----------
Net property and equipment ................... 192,688
Other Assets ................................. 12,297
----------
Total assets ............................. $ 657,810
==========
Liabilities and Shareholders' Deficit
Current Liabilities:
Accounts payable ............................. $ 27,822
Accrued liabilities .......................... 70,876
Deferred revenue ............................. 65,504
Notes payable ................................ 993,402
Accrued interest ............................. 313,875
----------
Total current liabilities ................ 1,471,479
----------
Shareholders' Deficit:
Series A preferred stock, no par value-
Authorized--1,000,000 shares
Outstanding--1,000,000 shares .............. 1,000,000
Series B preferred stock, no par value-
Authorized--500,000 shares
Outstanding--266,666 shares ................ 365,333
Series C preferred stock, no par value-
Authorized--2,000,000 shares
Outstanding--1,083,334 shares .............. 650,000
Common stock, no par value-
Authorized--137,000,000 shares
Outstanding--110,756,630 shares ............ 1,178,967
Accumulated deficit .......................... (4,007,969)
----------
Total shareholders' deficit .............. (813,669)
----------
Total liabilities and shareholders'
deficit .................................... $ 657,810
==========
The accompanying notes are an integral part of these financial statements.
F-60
<PAGE>
DATA STORAGE SYSTEMS, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
Revenues:
Storage ............................................. $ 739,177
Service and storage material sales .................. 586,673
--------
1,325,850
--------
Operating Expenses:
Cost of sales (excluding depreciation) .............. 556,092
Selling, general, and administrative ................ 316,905
Depreciation and amortization ....................... 131,314
--------
Total operating expenses ........................ 1,004,311
--------
Operating Income .................................... 321,539
Interest Expense .................................... 127,477
--------
Net income .......................................... $ 194,062
========
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Series Series
Series A B C Total
Preferred Preferred Preferred Common Accumulated Shareholders'
Stock Stock Stock Stock Deficit Deficit
--------- ------- ------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $1,000,000 $365,333 $650,000 $ 79,333 $(4,202,031) $(2,107,365)
Issuance of common stock
on conversion of notes
payable ................ -- -- -- 1,099,634 -- 1,099,634
Net income ............... -- -- -- -- 194,062 194,062
------- ----- ----- ------- --------- -----------
Balance at December 31, 1995 $1,000,000 $365,333 $650,000 $1,178,967 $(4,007,969) $ (813,669)
======= ===== ===== ======= ========= ===========
</TABLE>
F-61
<PAGE>
DATA STORAGE SYSTEMS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
Cash Flows from Operating Activities:
Net income .................................................... $ 194,062
Adjustments to reconcile net income to net cash
used in operating activities--
Depreciation and amortization ............................. 69,575
Net changes in assets and liabilities-
Accounts receivable ..................................... 2,361
Inventory ............................................... (3,300)
Prepaids and other ...................................... 12,337
Accounts payable ........................................ (142,056)
Accrued liabilities ..................................... (179,529)
--------
Net cash used in operating activities .................. (46,550)
--------
Cash Flows from Financing Activities:
Proceeds from notes payable ................................... 206,258
--------
Net Increase in Cash ............................................ 159,708
Cash at Beginning of Period ..................................... 25,570
--------
Cash at End of Period ........................................... $ 185,278
========
Supplemental Disclosure of Noncash Financing Activities:
The Company issued 109,963,296 shares of common stock on conversion
of notes payable amounting to $1,099,634
The accompanying notes are an integral part of these financial statements.
F-62
<PAGE>
DATA STORAGE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
1. ORGANIZATION OF THE COMPANY:
Data Storage Systems, Inc. (a California corporation) operates a
records-storage warehouse in San Jose, California.
The Company entered into a merger agreement with Iron Mountain Records
Management, Inc. in November 1995. The merger was effective as of February 29,
1996. Iron Mountain is the surviving entity and the Company became a wholly
owned subsidiary of Iron Mountain.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Cash
For purposes of the statements of cash flows, the Company considers all
highly liquid investments with an original maturity of 90 days or less to be
cash equivalents.
Equipment and Improvements
Equipment and improvements are stated at cost and depreciated using the
straight-line method over the estimated useful lives (ranging from three to
seven years) or over the shorter of the estimated useful life of the asset or
its lease term for leasehold improvements. Equipment and improvements consist
of the following:
Warehouse equipment ................................. $ 931,814
Office equipment .................................... 68,006
Improvements ........................................ 20,942
--------
$1,020,762
========
Revenue Recognition
Revenue is recognized ratably over the time that the Customer's records
are in storage. Customers are billed one month in advance for storage and in
arrears for service. Advance billings for storage are recorded as deferred
revenue.
Income Taxes
The Company accounts for income taxes pursuant to the provisions of
Statement of Financial Accounting Standards No. 109 "Accounting for Income
Taxes" (SFAS 109). SFAS 109 requires recognition of deferred tax liabilities
and assets for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method,
deferred tax liabilities and assets are determined using the current
applicable enacted tax rate and provisions of the enacted tax law.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
3. NOTES PAYABLE AND RELATED PARTIES:
At December 31, 1995, the Company had several notes payable totaling
$993,402 to shareholders with varying interest rates ranging from 10.0% to
18.8%. These notes are payable upon demand. The fair value of the notes
F-63
<PAGE>
DATA STORAGE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
payable does not materially differ from the carrying value. On February 29,
1996, these notes and the related accrued interest were converted to shares
of common stock in connection with the acquisition of the Company by Iron
Mountain Records Management, Inc.
4. PREFERRED STOCK:
Series A, Series B, and Series C Convertible Preferred Stock
The Convertible Preferred Stock outstanding consists of 1,000,000,
266,666, and 1,083,334 shares of Series A Convertible Preferred Stock
("Series A"), Series B Convertible Preferred Stock ("Series B"), and Series C
Convertible Preferred Stock ("Series C"), respectively.
The rights and preferences of the Series A, Series B and Series C
Convertible Preferred Stock are as follows:
Dividends
The holders of the Series C shall be entitled when and if declared by the
Board of Directors, to dividends at a rate of $0.05 per share, per annum,
payable in preference and priority to payment of any dividend to the holders
of Series A, Series B or Common Stock. The holders of the Series A shall be
entitled when and if declared by the Board of Directors, to dividends at a
rate of $0.09 per share, per annum, payable in preference and priority to
payment of any dividend to the holders of Series B or Common Stock. The
holders of the Series B shall be entitled when and if declared by the Board
of Directors, to dividends at a rate of $0.12 per share, per annum, payable
in preference and priority to payment of any dividend to the holders of
Common Stock. After an equal amount per share has been paid on all Common and
Preferred Stock, the holders of Series B shall be entitled to dividends in an
amount per share equal to any further dividend on Common Stock. Dividends are
not cumulative.
Liquidation Preference
In the event of any liquidation, dissolution, or winding up of the
Company, either voluntary or involuntary, distributions to the shareholders
of the Company shall be made in the following manner:
The holders of the Series C shall be entitled to receive, prior and in
preference to any distribution of any assets or surplus funds of the Company
to the holders of the Series A, Series B or Common Stock, an amount equal to
$0.60 per share for each share of Series C held by them. If the assets and
funds are insufficient to permit the payment of the entire preferential
amount, then the entire assets and funds legally available for distribution
shall be distributed ratably among the holders of Series C.
The holders of the Series A shall be entitled to receive, prior and in
preference to any distribution of any assets or surplus funds of the Company
to the holders of the Series B or Common Stock, an amount equal to $1.00 per
share for each share of Series A held by them. If the remaining assets and
funds are insufficient to permit the payment of the entire preferential
amount, then the entire assets and funds legally available for distribution
shall be distributed ratably among the holders of Series A.
The holders of the Series B shall be entitled to receive, prior and in
preference to any distribution of any assets or surplus funds of the Company
to the holders of Common Stock, an amount equal to $1.37 per share for each
share of Series B held by them. If the remaining assets and funds are
insufficient to permit the payment of the entire preferential amount, then
the entire assets and funds legally available for distribution shall be
distributed ratably among the holders of Series B.
After the distribution of the preferential amounts to the preferred
shareholders, the holders of Common Stock shall be entitled to receive an
amount equal to $0.40 per share for each share of Common Stock held by them.
After the aforementioned distributions to the holders of Preferred and Common
Stock, all remaining assets and funds of the Company legally available for
distribution shall be distributed ratably among the holders of Common and
F-64
<PAGE>
DATA STORAGE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Preferred Stock based on the number of shares of Common, Series A, B and C
(on an as converted basis) then issued and outstanding.
Conversion
Each share of Series A, B and C shall be convertible into the number of
shares of Common Stock which results from dividing $1.00 in the case of
Series A and B, and $0.60 in the case of Series C by the conversion price per
share applicable to such series of Preferred Stock at the time of conversion.
The conversion rate is subject to adjustment for anti-dilution as defined in
the Certificate of Incorporation.
Each share of Series A, B and C shall automatically be converted into
shares of Common Stock immediately upon the closing of the issuance of shares
following the effectiveness of a registration statement under the Securities
Act of 1933 when the net proceeds equal or exceed $5,000,000 and the price
per share of Common Stock is not less than $4.00.
Additionally, Series B shall automatically be converted into shares of
Common Stock: (1) immediately upon the closing of any sale or sales of its
Preferred Stock when the aggregate gross proceeds equal or exceeds $1,000,000
and the price per share of Preferred Stock is not less than $1.00, (2) the
last day of any fiscal year in which the Company realizes gross revenues of
at least $1,000,000 and (3) the last day of any fiscal year in which the
Company realizes after-tax operating income of at least $200,000. Because of
the pending merger of the Company, no conversion of the Series B took place.
5. COMMITMENTS:
The Company leases its facility under an operating lease which expires in
December 1997. Future minimum rental payments as of December 31, 1995 under
this lease are $432,000, ($216,000 for 1996 and $216,000 for 1997). Facility
rent expense for the year ended December 31, 1995 was $218,420.
6. INCOME TAXES:
As of December 31, 1995, the Company had Federal net operating loss
("NOL") carryforwards for tax purposes of approximately $2,538,548 which
expire in fiscal years 2004 and 2008. The Company had a net deferred tax
asset at December 31, 1995 of approximately $1,057,000. Realization of the
deferred tax asset is dependent upon the Company achieving adequate levels of
taxable income. A valuation allowance has been recognized against the entire
net deferred tax asset because of uncertainty of realization of the asset.
The use of the NOL is limited to maximum amounts each year as a result of the
change in control to Iron Mountain.
F-65
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Iron Mountain Incorporated:
I have audited the accompanying balance sheet of DataVault Corporation as of
December 31, 1995 and the related statements of income and accumulated
deficit, and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of DataVault Corporation as of
December 31, 1995 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.
Robert F. Gayton, CPA
Natick, Massachusetts
August 7, 1996
F-66
<PAGE>
DATAVAULT CORPORATION
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
Current Assets:
Cash ......................................... $ 115,492
Accounts receivable .......................... 315,555
Prepaid expenses and supplies ................ 45,828
---------
Total current assets ...................... 476,875
Property, Plant and Equipment (Note 2):
Land ......................................... 130,000
Building and improvements .................... 1,224,857
Furniture and equipment ...................... 1,125,925
---------
2,480,782
Less--Accumulated depreciation ............... 1,228,376
---------
Property, plant and equipment, net ........ 1,252,406
Other Assets:
Customer acquisition costs ................... 45,600
Deferred financing costs ..................... 49,014
---------
Total other assets ........................ 94,614
---------
Total Assets ................................. $1,823,895
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt ............ $ 44,450
Accounts payable ............................. 17,890
Deferred income .............................. 47,438
---------
Total current liabilities ................. 109,778
Long-Term Debt (Note 2):
Mortgage note payable--bank .................. 665,076
Mortgage note payable--bank .................. 70,001
Mortgage note payable--SBA ................... 609,003
Equipment notes payable ...................... 7,558
---------
1,351,638
Less--Current portion ........................ 44,450
---------
Total long-term debt, net of current
portion .................................... 1,307,188
Notes Payable to Stockholder (Note 3) ........ 379,499
---------
Total Liabilities ......................... 1,796,465
---------
Commitments and Contingencies (Note 4)
Stockholders' Equity:
Common stock, no par value --
Authorized--30,000 shares
Issued and outstanding--15,000 shares ...... 7,500
Additional paid-in capital ................... 50,000
Accumulated deficit .......................... (30,070)
---------
Total Stockholders' Equity ................ 27,430
---------
Total Liabilities and Stockholders' Equity ... $1,823,895
=========
The accompanying notes are an integral part of these financial statements.
F-67
<PAGE>
DATAVAULT CORPORATION
STATEMENT OF INCOME AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1995
Revenue:
Storage ............................................. $1,637,995
Service ............................................. 519,479
---------
Total revenue .................................... 2,157,474
Operating Expenses:
Cost of sales (excluding depreciation) .............. 410,860
Selling, general and administrative ................. 1,333,609
Depreciation and amortization ....................... 198,901
---------
Total operating expenses ......................... 1,943,370
---------
Operating Income ................................. 214,104
Interest Expense .................................... 124,270
---------
Income before income tax ......................... 89,834
Provision for State Income Tax ...................... 456
---------
Net income ....................................... 89,378
Cash distribution of Subchapter S Earnings .......... (24,309)
Accumulated Deficit--Beginning ...................... (95,139)
---------
Accumulated Deficit--Ending ......................... $ (30,070)
=========
The accompanying notes are an integral part of these financial statements.
F-68
<PAGE>
DATAVAULT CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
Cash Flows From Operating Activities:
Net income .................................................... $ 89,378
Adjustments to reconcile net income to cash provided by
operating activities--
Depreciation and amortization ................................ 198,901
Changes in:
Accounts receivable ......................................... 28,467
Prepaid expenses and supplies ............................... 27,626
Accounts payable ............................................ (23,081)
Deferred income ............................................. (1,356)
--------
Cash provided by operating activities ...................... 319,935
Cash Flows From Investing Activities:
Acquisition of fixed assets ................................... (43,970)
Cash Flows from Financing Activities:
Repayment of notes ............................................ (184,915)
Repayment of shareholder loan ................................. (67,598)
Distribution of Subchapter S earnings ......................... (24,309)
--------
Cash used by financing activities .......................... (276,822)
--------
Net decrease in cash ....................................... (857)
Cash--beginning of year .................................... 116,349
--------
Cash--end of year .......................................... $ 115,492
========
Supplemental disclosure of cash flow information:
Cash paid for interest ........................................ $ 124,270
Cash paid for taxes ........................................... 456
The accompanying notes are an integral part of these financial statements.
F-69
<PAGE>
DATAVAULT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1--ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization--DataVault Corporation (the Company) is a Massachusetts
corporation. The Company provides record storage and management services in
the New England area.
Use of Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the
dates of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Revenue Recognition--Revenue is recognized when the services are provided.
Amounts related to future storage that have been billed in advance are
recorded as deferred revenue and recognized over the applicable period.
Plant and Equipment--Plant and equipment are recorded at cost. Maintenance
and repairs are charged to expense and major improvements are capitalized.
Depreciation is computed on the straight line and declining balance methods
over estimated useful lives as follows:
Building and improvements .................. 15-31 years
Furniture and fixtures ..................... 5 years
Equipment .................................. 5 years
Deferred Costs--Deferred financing costs are amortized over the life of
the related debt. Customer acquisition costs related to the initial transfer
of records are amortized over the term of the initial storage agreement.
Income Taxes--The Company has elected to be taxed as a Small Business
Corporation. Accordingly, net income and other items of Federal and state tax
significance are reported on the income tax returns of the individual
shareholders.
NOTE 2--LONG-TERM DEBT
During 1993, the Company constructed an addition to the records storage
facility. The Company refinanced the existing mortgage loan in conjunction
with supplemental financing for the addition. The refinanced mortgage will be
paid in monthly installments over a 20 year period. The interest rate will be
9% adjustable every three years with initial monthly payments of $6,361.
The additional bank mortgage note of $70,001 is due in monthly
installments of $640 over 20 years at an interest rate of 8.75%, adjustable
every three years.
Additional financing for the records storage facility has been obtained
from Bay Colony Development Corp., a Certified Development Company. This
financing has been funded by debentures issued by the development company and
guaranteed by the Small Business Administration. Monthly payments of $5,290
will be made over 20 years and include interest at 6.359% and a service fee.
The mortgage notes are secured by land, buildings and business assets of
the Corporation and the personal guaranty of the sole shareholder.
The equipment notes are payable in monthly installments of approximately
$2,100 over various periods up to five years at interest rates from 8% to
14%. The notes are secured by certain furniture and equipment.
F-70
<PAGE>
DATAVAULT CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (Continued)
DECEMBER 31, 1995
Maturities of long-term debt are as follows:
Year Amount
----------------------------------------------------- ----------
1996 $ 44,450
1997 38,660
1998 40,570
1999 42,610
2000 44,800
Thereafter 1,140,548
--------
$1,351,638
========
The fair value of the Company's assets and liabilities which qualify as
financial instruments under Statement of Financial Accounting Standards No.
107, "Disclosures about Fair Value of Financial Instruments", approximates
the carrying value of amounts presented in the balance sheet.
NOTE 3--NOTES PAYABLE TO STOCKHOLDER
Stockholder notes are due on demand, bear interest at rates varying from
7.5% to 12% and are subordinated to mortgage and term notes payable.
NOTE 4--COMMITMENTS AND CONTINGENCIES
In addition to the storage facility referred to in Note 2, the Company
operates an additional data storage facility and maintains its corporate
headquarters in premises leased through the year 2000 at an annual rental of
approximately $84,000.
NOTE 5--RENTALS UNDER STORAGE AGREEMENTS
The following is a schedule by years of approximate minimum future rentals
under non-cancellable storage agreements as of December 31, 1995:
Year Amount
---- ---------
1996 ................................................ $1,345,000
1997 ................................................ 1,183,000
---------
$2,528,000
=========
NOTE 6--SUBSEQUENT EVENT
Effective February 1, 1996, the Company sold all of its assets to Iron
Mountain Records Management, Inc. All debt was repaid from the proceeds of
the sale.
F-71
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Directors
Iron Mountain Incorporated:
We have audited the accompanying balance sheet of International Record
Storage and Retrieval Service, Inc. as of December 31, 1995 and the related
statements of operations, stockholders' deficit, and cash flows for the year
then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of International Record Storage
and Retrieval Service, Inc. as of December 31, 1995, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Rothstein, Kass & Company, P.C.
Roseland, New Jersey
July 19, 1996
F-72
<PAGE>
INTERNATIONAL RECORD STORAGE AND RETRIEVAL SERVICE, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
December
31, June 30,
1995 1996
---------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash ................................................... $ 134,340 $ 66,151
Accounts receivable, less allowance for doubtful
accounts of $16,000 in 1995 and 1996 ................. 255,276 264,020
Inventories ............................................ 13,505 12,997
Prepaid expenses and other ............................. 24,690 33,576
-------- ----------
Total current assets ................................. 427,811 376,744
Equipment and improvements, less accumulated depreciation
of $244,831 in 1995 and $277,428 in 1996 ............... 437,522 452,340
Deferred income taxes .................................... 171,000 160,000
Other assets ............................................. 21,667 21,667
-------- ----------
$ 1,058,000 $ 1,010,751
======== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Current portion of long-term debt ...................... $ 13,474 $ 14,459
Accounts payable ....................................... 5,449 31,757
Accrued expenses ....................................... 62,558 69,714
Due affiliates ......................................... 617,173 513,261
Deferred income ........................................ 86,096 89,529
Deferred compensation, current portion ................. 40,401 41,940
-------- ----------
Total current liabilities ............................ 825,151 760,660
-------- ----------
Notes payable, net of current portion .................... 7,572 --
Deferred compensation, net of current portion ............ 772,518 751,156
Deferred rent ............................................ 236,035 233,254
Commitments and contingency
Stockholders' deficiency:
Common stock, no par value, authorized, issued and
outstanding 100 shares ............................... 100 100
Additional paid-in capital ............................. 970,792 970,792
Accumulated deficit .................................... (1,754,168) (1,705,211)
-------- ----------
Total stockholders' deficiency ....................... (783,276) (734,319)
-------- ----------
$ 1,058,000 $ 1,010,751
======== ==========
</TABLE>
See independent public accountants' report and notes to financial statements.
F-73
<PAGE>
INTERNATIONAL RECORD STORAGE AND RETRIEVAL SERVICE, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------------
Year
Ended
December
31,
1995 1995 1996
----------- ----------- ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Revenues:
Storage ............................... $ 962,463 $ 462,275 $ 528,604
Service and storage material sales .... 620,428 322,215 312,739
--------- --------- ----------
Total revenues ...................... 1,582,891 784,490 841,343
--------- --------- ----------
Operating expenses:
Costs of sales (excluding depreciation) 790,127 380,347 430,969
Selling, general and administrative ... 427,748 212,704 247,085
Depreciation and amortization ......... 72,723 36,065 34,741
--------- --------- ----------
Total operating expenses ............ 1,290,598 629,116 712,795
--------- --------- ----------
Operating income ....................... 292,293 155,374 128,548
Interest expense ....................... 66,681 34,536 32,591
--------- --------- ----------
Income before provision for income taxes 225,612 120,838 95,957
Provision for income taxes ............. 21,000 13,000 11,000
--------- --------- ----------
Net income ............................. 204,612 107,838 84,957
Accumulated deficit:
Beginning of period .................... (1,908,780) (1,908,780) (1,754,168)
Dividends .............................. (50,000) -- (36,000)
--------- --------- ----------
End of period .......................... $(1,754,168) $(1,800,942) $(1,705,211)
========= ========= ==========
</TABLE>
See independent public accountants' report and notes to financial statements.
F-74
<PAGE>
INTERNATIONAL RECORD STORAGE AND RETRIEVAL SERVICE, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
Year
Ended
December
31,
1995 1995 1996
---------- -------- ----------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income .......................................... $ 204,612 $107,838 $ 84,957
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for doubtful accounts .................... 8,000 8,000 --
Depreciation ....................................... 72,723 36,065 34,741
Provision for deferred income taxes ................ 21,000 13,000 11,000
Gain on disposal of property and equipment ......... (7,468) (7,468) --
Increase (decrease) in cash attributable to changes
in assets and liabilities:
Accounts receivable ............................... (102,421) (82,045) (8,744)
Inventories ....................................... 1,825 (4,824) 508
Prepaid expenses and other ........................ (22,921) (33,881) (8,886)
Accounts payable .................................. (8,110) 40,228 26,308
Accrued expenses .................................. 42,810 27,031 7,156
Deferred income ................................... 13,016 8,074 3,433
Deferred compensation and other liabilities ....... (50,195) (31,099) (19,823)
Deferred rent ..................................... 20,452 5,281 (2,781)
-------- ------ --------
Net Cash Provided by Operating Activities ............ 193,323 86,200 127,869
-------- ------ --------
Cash Flows from Investing Activities:
Proceeds from the sale of property and equipment .... 17,565 17,565 --
Acquisitions of property and equipment .............. (67,810) (67,027) (49,559)
-------- ------ --------
Net Cash used in Investing Activities ................ (50,245) (49,462) (49,559)
-------- ------ --------
Cash Flow from Financing Activities:
Repayment of notes payable .......................... (59,089) (42,814) (6,587)
Advances from (repayments to) affiliates ............ 81,310 61,673 (103,912)
Dividends paid ...................................... (50,000) -- (36,000)
-------- ------ --------
Net Cash Provided by (used in) Financing Activities .. (27,779) 18,859 (146,499)
-------- ------ --------
Increase (Decrease) in Cash .......................... 115,299 55,597 (68,189)
Cash, beginning of period ............................ 19,041 19,041 134,340
-------- ------ --------
Cash, end of period .................................. $ 134,340 $ 74,638 $ 66,151
======== ====== ========
Supplemental Disclosure of Cash Flow Information, cash $
paid during the period for interest ................ $ 66,681 34,536 $ 32,591
======== ====== ========
</TABLE>
See independent public accountants' report and notes to financial statements.
F-75
<PAGE>
INTERNATIONAL RECORD STORAGE AND RETRIEVAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--NATURE OF BUSINESS:
The Company is engaged principally in the storage of records for customers
in the New Jersey-New York area and providing ancillary services in
conjunction with such records.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue Recognition
Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to
the customer. The Company invoices storage charges to its customers in
advance and these advanced billings are recorded as accounts receivable and
the related revenues are included as deferred income in the accompanying
financial statements.
Inventories
Inventories are carried at the lower of cost or market using the first-in
first-out basis and are comprised primarily of cartons.
Income Taxes
The Company has elected to be treated as an "S" Corporation under the
applicable sections of the Internal Revenue Code. Under these sections,
corporate income or loss is allocated to the stockholders for inclusion in
their personal income tax returns. Accordingly, there is no provision for
federal income tax in the accompanying financial statements. State income
taxes are recorded in accordance with Statement of Financial Accounting
Standards
No. 109.
Equipment and Improvements
Equipment and improvements are stated at cost and depreciated using the
straight-line method with the following useful lives:
Office Equipment .................................... 5 years
Transportation equipment ............................ 5 to 10 years
Shelving and warehouse improvements ................. 10 to 15 years
Impairment of Long-Lived Assets
The Company periodically assesses the recoverability of the carrying
amounts of long-lived assets, including intangible assets. A loss is
recognized when expected undiscounted future cash flows are less than the
carrying amount of the asset. The impairment loss is the difference by which
the carrying amount of the asset exceeds its fair value.
Deferred Rent
The Company's lease for its building used in the storage of records has
fixed escalation clauses which require the normalization of rental expense
over the life of the lease, resulting in deferred rent being reflected in the
accompanying balance sheets.
F-76
<PAGE>
INTERNATIONAL RECORD STORAGE AND RETRIEVAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Fair Value of Financial Instruments
The fair value of the Company's assets and liabilities which qualify as
financial instruments under Statement of Financial Accounting Standards (SFAS)
No. 107, "Disclosures about Fair Value of Financial Instruments", approximates
the carrying amounts presented in the balance sheets.
Unaudited Financial Statements
The unaudited financial statements included herein have been prepared in
accordance with generally accepted accounting principles. In the opinion of
management, the unaudited financial statements include all adjustments of a
normal and recurring nature which are necessary for a fair presentation. The
results of operations for the six months ended June 30, 1995 and 1996 are not
necessarily indicative of the results expected for the full year.
NOTE 3--EQUIPMENT AND IMPROVEMENTS:
Equipment and improvements consist of the following:
December
31, June 30,
1995 1996
---------- ----------
(Unaudited)
Office equipment ........................... $ 97,919 $ 106,427
Transportation equipment ................... 108,217 108,217
Shelving and warehouse improvements ........ 476,217 515,124
-------- --------
682,353 729,768
Less accumulated depreciation .............. (244,831) (277,428)
-------- --------
$ 437,522 $ 452,340
======== ========
NOTE 4--NOTES PAYABLE:
Long-term debt consists of various loans payable in monthly installments
of approximately $1,200 including interest at rates ranging between 8.4% and
10.2% with the final payment June 1997. The loans are collateralized by
certain equipment.
Aggregate principal payment requirements in each of the years subsequent
to December 31, 1995 are as follows:
1996 ................................................ $13,474
1997 ................................................ 7,572
NOTE 5--RELATED PARTY TRANSACTIONS:
The Company is affiliated, through common ownership, with a real estate
management company, International Management Services, Inc. (IMS). IMS
provides certain administrative services to the Company under agreements
designed to reimburse IMS for the approximate cost of providing such
services. Amounts due affiliates are non-interest bearing and have no
specific repayment terms.
The Company incurred charges for management fees to IMS of approximately
$90,000 for the year ended December 31, 1995 and $44,000 and $50,000 for the
six months ended June 30, 1995 (unaudited) and 1996 (unaudited),
respectively.
F-77
<PAGE>
INTERNATIONAL RECORD STORAGE AND RETRIEVAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 6--DEFERRED COMPENSATION:
The Company is obligated under an Income Continuation agreement dated
October 1, 1994 with a former employee providing for a payment of $100,000
annually for the life of the employee. In 1994, the Company recorded an
expense of $864,297 representing the present value of the benefits for the
employee's life expectancy discounted at the rate of 7.5% per annum. Payments
commenced in September 1994 and amounted to $100,000 for the year ended
December 31, 1995 and $50,000 for each of the six month periods ended June
30, 1995 (unaudited) and 1996 (unaudited).
NOTE 7--INCOME TAXES:
The provision for income taxes in the accompanying statements of
operations consists of the following:
Year
Ended Six Months Ended
December June 30,
31, ----------------------
1995 1995 1996
---------- -------- ----------
(Unaudited) (Unaudited)
State income taxes deferred ... $21,000 $13,000 $11,000
======== ====== ========
A reconciliation of total income tax expense and the amount computed by
applying the state income tax rate of 9% to income before income taxes is as
follows:
Year
Ended Six Months Ended
December June 30,
31, ----------------------
1995 1995 1996
---------- -------- ----------
(Unaudited) (Unaudited)
Computed "expected" tax
provision .................. $20,000 $11,000 $ 9,000
Other ....................... 1,000 2,000 2,000
-------- ------ --------
$21,000 $13,000 $11,000
======== ====== ========
The Company has approximately $1,000,000 of net operating loss
carryforwards for state income tax purposes at December 31, 1995. These
carryforwards, which management expects will be fully utilized, expire
through the year 2000.
The components of the Company's deferred tax assets and liabilities are as
follows:
Year Six
Ended Months
December Ended
31, June 30,
1995 1996
---------- ----------
(Unaudited)
Deferred Tax Assets:
Tax benefit attributable to:
Net operating loss carryforwards ......... $ 89,000 $ 80,000
Deferred rent ............................ 21,000 21,000
Deferred compensation .................... 73,000 71,000
Other .................................... 2,000 2,000
Deferred tax liability, tax depreciation in
excess of book depreciation .............. (14,000) (14,000)
-------- --------
Net Deferred Tax Asset .................... $171,000 $160,000
======== ========
F-78
<PAGE>
INTERNATIONAL RECORD STORAGE AND RETRIEVAL SERVICE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
NOTE 8--RETIREMENT PLANS:
The Company maintains a 401(k) plan for the benefit of its employees. The
Company contributes to the plan annually, at their discretion, up to 4% of
each participant's compensation. The expense amounted to $4,311 for the year
ended December 31, 1995 and $1,960 and $1,839 for the six months ended June
30, 1995 (unaudited) and 1996 (unaudited), respectively.
NOTE 9--LEASE COMMITMENTS:
The Company occupies general office and warehouse facilities under an
operating lease expiring December 31, 2002, providing for minimum annual
rentals as follows:
Year ending
December 31,
1996 ................................................ $ 318,000
1997 ................................................ 318,000
1998 ................................................ 318,000
1999 ................................................ 318,000
2000 ................................................ 350,000
Thereafter .......................................... 700,000
--------
$2,322,000
========
Rent expense for facilities charged to operations was $273,791 for the
year ended December 31, 1995 and $113,556 and $158,506 for the six months
ended June 30, 1995 (unaudited) and 1996 (unaudited), respectively.
NOTE 10--CONTINGENCY:
The Company is a defendant in a legal proceeding with the lessor of its
office and warehouse facilities relating to alleged damages suffered in
connection with the cancellation of a proposed sale of the property to a
third party. The claim does not specify an amount of damages and the Company
has responded to the complaint and made a counter claim. It is management's
opinion that the outcome of this litigation will not have a material effect
on the Company's financial position or results of operations.
F-79
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of
Iron Mountain Incorporated:
We have audited the accompanying balance sheet of DKA Industries, Inc. d/b/a
Systems Record Storage (a Florida corporation) as of December 31, 1995, and
the related statements of operations and accumulated deficit and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of DKA Industries, Inc. d/b/a
Systems Record Storage as of December 31, 1995, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Arthur Andersen LLP
Orlando, Florida
August 30, 1996
F-80
<PAGE>
DKA INDUSTRIES, INC.
d/b/a SYSTEMS RECORD STORAGE
BALANCE SHEETS--DECEMBER 31, 1995, AND JUNE 30, 1996
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1995 1996
-------------- ----------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash $ 24,665 $ 22,083
Accounts receivable 121,064 170,858
Inventories 3,049 5,286
Prepaid expenses and other 11,695 11,320
--------- ---------
Total current assets 160,473 209,547
Property and Equipment, net 150,729 141,362
Goodwill, net 20,625 20,312
--------- ---------
Total assets $ 331,827 $ 371,221
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Current maturities of notes payable $ 89,013 $ 47,411
Note payable to related party 285,000 285,000
Accounts payable and accrued expenses 10,807 21,959
Deferred income 58,617 69,074
--------- ---------
Total current liabilities 443,437 423,444
Notes payable, less current maturities 218,781 215,310
Deferred income 63,401 55,167
Deferred rent 10,318 8,598
--------- ---------
Total liabilities 735,937 702,519
--------- ---------
Commitments and Contingencies
Stockholders' Deficit:
Common stock, $1 par value, 1,000 shares authorized, issued
and outstanding 1,000 1,000
Accumulated deficit (405,110) (332,298)
--------- ---------
Total stockholders' deficit (404,110) (331,298)
--------- ---------
Total liabilities and stockholders' deficit $ 331,827 $ 371,221
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-81
<PAGE>
DKA INDUSTRIES, INC.
d/b/a SYSTEMS RECORD STORAGE
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1995,
AND THE SIX-MONTH PERIOD ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Year Six Months
Ended Ended
December 31, June 30,
1995 1996
-------------- ----------
(Unaudited)
<S> <C> <C>
Revenues:
Storage $ 638,442 $ 358,150
Service and storage material sales 386,637 219,328
---------- ---------
Total revenues 1,025,079 577,478
---------- ---------
Operating Expenses:
Costs of sales (excluding depreciation and
amortization) 462,387 224,599
Selling, general and administrative 400,310 200,031
Depreciation and amortization 72,625 36,313
---------- ---------
Total operating expenses 935,322 460,943
---------- ---------
Operating Income 89,757 116,535
Interest Expense 56,387 30,023
---------- ---------
Net income 33,370 86,512
Accumulated Deficit, beginning of period (425,768) (405,110)
Distributions (12,712) (13,700)
---------- ---------
Accumulated Deficit, end of period $ (405,110) $(332,298)
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-82
<PAGE>
DKA INDUSTRIES, INC.
d/b/a SYSTEMS RECORD STORAGE
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995,
AND THE SIX-MONTH PERIOD ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Year Six Months
Ended Ended
December 31, June 30,
1995 1996
-------------- ----------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 33,370 $ 86,512
Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation and amortization 72,625 36,313
Changes in assets and liabilities--
Accounts receivable 8,819 (49,794)
Inventories (1,430) (2,237)
Prepaid expenses and other -- 375
Accounts payable and accrued expenses (12,079) 11,152
Deferred income 128 2,223
Deferred rent (3,440) (1,720)
--------- ---------
Net cash provided by operating activities 97,993 82,824
--------- ---------
Cash Flows used in Investing Activities:
Acquisitions of property and equipment (75,528) (26,633)
--------- ---------
Cash Flow From Financing Activities:
Repayment on notes payable (253,660) (45,073)
Additional borrowing on notes payable 268,522 --
Distributions to shareholders (12,712) (13,700)
--------- ---------
Net cash provided by (used in) financing
activities 2,150 (58,773)
--------- ---------
Net increase (decrease) in cash 24,615 (2,582)
Cash, beginning of period 50 24,665
--------- ---------
Cash, end of period $ 24,665 $ 22,083
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 56,387 $ 30,023
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-83
<PAGE>
DKA INDUSTRIES
d/b/a SYSTEMS RECORD STORAGE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. Nature of Business
DKA Industries, Inc. d/b/a Systems Record Storage (the Company) provides
record storage and management services in the Orlando, Florida, area.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue Recognition
Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to
the customer. Amounts related to future storage for customers where storage
fees are billed in advance are accounted for as deferred income and
recognized in the applicable period.
Inventories
Inventories are carried at the lower of cost or market using the first-in,
first-out basis, and are comprised primarily of cartons.
Goodwill
Goodwill is amortized over 40 years. For 1995, amortization was $625. As
of December 31, 1995, there was $4,375 of accumulated amortization.
Income Taxes
The Company has elected to be treated as an S corporation under the
applicable sections of the Internal Revenue Code. Under these sections,
corporate income or loss is allocated to the stockholders for inclusion in
their personal income tax returns. Accordingly, there is no provision for
federal income taxes in the accompanying financial statements.
Property and Equipment
Equipment and improvements are stated at cost and depreciated or amortized
using accelerated methods with the following useful lives:
<TABLE>
<CAPTION>
Years
------
<S> <C>
Office and computer equipment 5-7
Transportation equipment 5
Warehouse equipment and
improvements 7-10
</TABLE>
Deferred Rent
The Company's lease for its building used in the storage of records has
uneven rental payments which requires the normalization of rental expense
over the life of the lease, resulting in deferred rent being reflected in the
accompanying balance sheet.
F-84
<PAGE>
DKA INDUSTRIES
d/b/a SYSTEMS RECORD STORAGE
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Fair Value of Financial Instruments
The fair value of the Company's assets and liabilities which qualify as
financial instruments under Statement of Financial Accounting Standards No.
107, "Disclosures about Fair Value of Financial Instruments," approximates
the carrying amounts presented in the balance sheet.
Unaudited Financial Statements
The unaudited financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, the unaudited financial statements
include all adjustments of a normal and recurring nature which are necessary
for a fair presentation. The results of operations for the six months ended
June 30, 1996, are not necessarily indicative of the results expected for the
full year.
3. Significant Customer
One major customer accounted for approximately 38 percent of revenue
during 1995 and 27 percent of accounts receivable at December 31, 1995.
4. Property and Equipment
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
December 31,
1995
------------
<S> <C>
Office and computer equipment $ 68,250
Transportation equipment 60,976
Warehouse equipment and improvements 388,636
---------
517,862
Less -- Accumulated depreciation and
amortization (367,133)
---------
$ 150,729
=========
</TABLE>
5. Notes Payable
Notes payable consisted of the following at December 31, 1995:
<TABLE>
<CAPTION>
Amount
---------
<S> <C>
Line of credit agreement with maximum borrowing of $50,000, bearing interest at prime
plus 1% (9.5% at December 31, 1995), collateralized by accounts receivable,
inventory, equipment and improvements. The line of credit is payable upon demand
and expires September 23, 1996. As of December 31, 1995, the Company had $35,000
available on the line of credit. $15,000
F-85
<PAGE>
DKA INDUSTRIES
d/b/a SYSTEMS RECORD STORAGE
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Amount
Note payable, collateralized by accounts receivable, inventory, equipment and
improvements, due in monthly installments through November 29, 2000, of $3,357, plus
interest at prime plus 1% (9.5% at December 31, 1995). $ 201,387
Note payable, collateralized by the purchased assets of the Company, due in monthly
principal and interest payments of $2,500 through October 1998, interest at 11%. 71,686
Other notes payable, collateralized by certain transportation equipment of the
Company, principal due in monthly installments of $887 through August 1998,
interest at prime plus 1% (9.5% at December 31, 1995). 19,721
--------
307,794
Less -- Current maturities (89,013)
--------
$218,781
========
</TABLE>
Aggregate principal payment requirements in each of the years subsequent
to December 31, 1995, are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31, Amount
- ------------- --------
<S> <C>
1996 $ 89,013
1997 71,751
1998 66,495
1999 40,284
2000 40,251
--------
$307,794
========
</TABLE>
All the notes payable were paid in full subsequent to December 31, 1995,
in connection with the acquisition described in Note 9.
6. Related Party Transactions
As of December 31, 1995, the Company had a $285,000 note payable to a
former owner of the Company. The note payable is due on demand. The interest
on the note payable is 10 percent and payable monthly. The note payable was
paid in full subsequent to December 31, 1995, in connection with the
acquisition described in Note 9.
7. Retirement Plans
The Company maintains a 401(k) plan for the benefit of its employees. All
employees who have completed 12 months of service, 1,000 hours and attained
the age of 21 are eligible to enroll in the plan. Employees may contribute up
to 15 percent of their pay. Employees are always 100 percent vested in their
contributions. The Company matches 25 percent of employee salary deferral
contribution, up to a maximum of 4 percent. Employees are 20 percent vested
in employer contributions after three years of service and become an
additional 20 percent vested for each subsequent year of service. The
employer matching contribution expense amounted to $1,941 for the year ended
December 31, 1995. Subsequent to December 31, 1995, the plan was terminated
(see Note 9).
F-86
<PAGE>
DKA INDUSTRIES
d/b/a SYSTEMS RECORD STORAGE
NOTES TO FINANCIAL STATEMENTS -- (Continued)
8. Lease Commitments
The Company occupies office and warehouse facilities and rents a vehicle
under operating leases that expire during December 1998, providing for
minimum annual rentals as follows:
<TABLE>
<CAPTION>
Year Ending
December 31, Amount
- -------------
<S> <C>
1996 $238,438
1997 238,438
1998 237,940
--------
$714,816
========
</TABLE>
Rent expense for facilities charged to operations was $232,960 for the
year ended December 31, 1995.
9. Subsequent Event
Effective August 1, 1996, substantially all of the Company's assets and
certain liabilities were acquired by Iron Mountain Records Management, Inc.
Proceeds from the sale were used to repay all the outstanding notes payable,
and the remainder was distributed to the owners.
F-87
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Iron Mountain Incorporated:
We have audited the accompanying balance sheet of Mohawk Business Record
Storage, Inc. (a Minnesota corporation) as of December 31, 1995, and the
related statements of operations and retained earnings and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mohawk Business Record
Storage, Inc. as of December 31, 1995, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
Arthur Andersen LLP
Minneapolis, Minnesota
September 6, 1996
F-88
<PAGE>
MOHAWK BUSINESS RECORD STORAGE, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1995 1996
-------------- ------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 223,478 $ 112,547
Accounts receivable (less allowance for doubtful accounts of
$5,000 and $9,000 in 1995 and 1996, respectively) 1,186,858 1,228,167
Notes receivable, stockholder 100,000 --
Inventories 31,548 49,009
Prepaid expenses and other 51,110 81,718
Current portion of note receivable, related company 15,996 15,996
----------- -----------
Total current assets 1,608,990 1,487,437
----------- -----------
Property and Equipment 9,049,148 9,160,561
Less -- Accumulated depreciation (5,013,510) (5,355,137)
----------- -----------
Net property and equipment 4,035,638 3,805,424
----------- -----------
Other Assets:
Other 15,000 15,000
Long-term note receivable, related company 222,004 216,004
----------- -----------
237,004 231,004
----------- -----------
$ 5,881,632 $ 5,523,865
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 47,887 $ 64,378
Notes payable--
Bank 1,625,000 1,000,000
Related parties 333,200 2,024,100
Accrued expenses 507,450 442,461
Deferred revenue 551,947 439,255
---------- -----------
Total current liabilities 3,065,484 3,970,194
---------- -----------
Long-term Notes Payable, stockholders 1,400,000 --
Commitments and Contingencies (Note 4) -- --
Stockholders' Equity:
Common stock, 25,000 shares, $1 par, 4,000 shares issued and
outstanding 4,000 4,000
Paid-in capital 46,000 46,000
Retained earnings 1,366,148 1,503,671
----------- ----------
Total stockholders' equity 1,416,148 1,553,671
----------- ----------
$ 5,881,632 $5,523,865
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-89
<PAGE>
MOHAWK BUSINESS RECORD STORAGE, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Year Ended
December 31, Six Months Ended June 30
1995 1995 1996
--------------- --------- -----------
(Unaudited)
<S> <C> <C> <C>
Revenues:
Storage $4,705,253 $2,310,469 $ 2,651,026
Service and storage material sales 4,094,977 2,053,952 2,085,531
---------- ---------- -----------
Total revenues 8,800,230 4,364,421 4,736,557
---------- ---------- -----------
Operating Expenses:
Cost of sales (excluding
depreciation) 4,644,836 2,387,642 2,356,940
Selling, general and administrative 2,833,687 1,535,504 1,613,978
Depreciation and amortization 657,586 218,298 358,670
---------- ---------- -----------
Total operating expenses 8,136,109 4,141,444 4,329,588
---------- ---------- -----------
Operating Income 664,121 222,977 406,969
Interest Expense 297,868 141,785 134,918
Interest Income 28,382 16,448 9,968
---------- ---------- -----------
Net Income 394,635 97,640 282,019
Retained Earnings, beginning of
period 1,262,433 1,262,433 1,366,148
Dividend Distributions (290,920) -- (144,496)
---------- ---------- -----------
Retained Earnings, end of period $1,366,148 $1,360,073 $ 1,503,671
========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-90
<PAGE>
MOHAWK BUSINESS RECORD STORAGE, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended
December 31, Six Months Ended June 30
1995 1995 1996
--------------- ---------- ----------
(Unaudited)
<S> <C> <C> <C>
Operating Activities:
Net income $ 394,635 $ 97,640 $ 282,019
Adjustments to reconcile net income to
net cash provided by operating
activities--
Depreciation and amortization 657,586 218,298 358,670
Gain (Loss) on sale of assets (6,662) 31,138 (11,955)
Changes in assets and liabilities:
Accounts receivable (38,848) 168,318 (41,309)
Inventories (2,299) (8,245) (17,461)
Prepaid expenses and other (29,817) (101,092) (30,608)
Deferred revenue 69,238 (115,562) (112,692)
Accounts payable and accrued expenses 233,202 97,613 (48,498)
----------- ---------- ---------
Net cash provided by operating activities 1,277,035 388,108 378,166
----------- ---------- ---------
Investing Activities:
Purchase of property and equipment (1,869,325) (1,251,924) (128,456)
Notes receivable 12,000 (52,500) 106,000
Proceeds from sale of assets 31,143 20,500 11,955
Other (15,000) (15,000) --
----------- ---------- ---------
Net cash used for investing activities (1,841,182) (1,298,924) (10,501)
----------- ---------- ---------
Financing Activities:
Proceeds from notes payable 1,659,482 1,292,745 343,880
Principal payments on notes payable (744,582) (204,100) (677,980)
Dividend distributions (290,920) -- (144,496)
----------- ---------- ---------
Net cash provided by (used for) financing
activities 623,980 1,088,645 (478,596)
----------- ---------- ---------
Net Increase (Decrease) in Cash 59,833 177,829 (110,931)
Cash and Cash Equivalents, beginning of
period 163,645 163,645 223,478
----------- ----------- ----------
Cash and Cash Equivalents, end of period $ 223,478 $ 341,474 $ 112,547
========== =========== ==========
Supplemental Disclosure:
Interest paid $ 301,018 $ 144,935 $ 134,918
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-91
<PAGE>
MOHAWK BUSINESS RECORD STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. Organization of Business and Significant Accounting Policies
Mohawk Business Record Storage, Inc. (the Company), a Minnesota
corporation, is a full-service records management company providing storage
and related services for all media. The Company serves numerous legal,
banking, healthcare, accounting, insurance, entertainment and retail
organizations in the Minneapolis and Saint Paul, Minnesota metropolitan
areas.
Property and Equipment
Depreciation and amortization of property and equipment are recorded using
the straight-line and accelerated methods. Property and equipment consist of
the following:
<TABLE>
<CAPTION>
December 31,
Useful Lives 1995
----------------- ------------
<S> <C> <C>
Warehouse and disintegration
equipment 7 to 10 years $ 5,585,597
Leasehold improvements 10 to 39 years 1,441,291
Transportation equipment 5 to 10 years 723,603
Office equipment 5 to 10 years 1,298,657
----------
$9,049,148
==========
</TABLE>
Minor maintenance costs are expensed as incurred. Major improvements to
the leased buildings are capitalized as leasehold improvements and
depreciated as described above.
Revenue Recognition
Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to
the customer. Amounts related to future storage for customers where storage
fees are billed in advance are accounted for as deferred revenue and
amortized over the applicable period. These amounts are included in deferred
revenue in the accompanying balance sheet. The Company has one customer which
accounted for 13% of revenues for the year ended December 31, 1995.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
Inventories
Inventories are carried at the lower of cost (first-in, first-out basis)
or market and are comprised primarily of cartons.
Accrued Expenses
Accrued expenses consisted of the following:
<TABLE>
<CAPTION>
December 31,
1995
----------------
<S> <C>
Accrued incentive
compensation $ 307,621
Accrued profit sharing 160,000
Other 39,829
--------------
Accrued expenses $507,450
==============
</TABLE>
F-92
<PAGE>
MOHAWK BUSINESS RECORD STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Income Taxes
The Company has elected to be taxed as an S corporation under the
applicable Internal Revenue Code sections. The net income of the Company is
included in the individual income tax returns of the stockholders.
Accordingly, there is no provision for federal income taxes in the
accompanying financial statements.
Financial Instruments
Unless otherwise noted, financial instruments are stated at cost, which
approximates fair value.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. These estimates relate primarily to the realizability of
accounts receivable and the adequacy of certain accrued expenses. Actual
results could differ from those estimates.
Concentrations of Credit Risk
Credit risk with respect to accounts receivable is generally spread across
a large number of customers with dispersion across different businesses. As
of December 31, 1995, one customer accounted for 17% of outstanding accounts
receivable.
Unaudited Financial Information
The financial information as of June 30, 1996 and for the six-month
periods ended June 30, 1995 and 1996 is unaudited and has been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, such information reflects all
normal recurring adjustments necessary for a fair presentation. Operating
results for the six months ended June 30, 1996 are not necessarily indicative
of the results that may be expected for the year ending December 31, 1996.
2. Debt
Notes Payable
Notes payable consisted of the following:
<TABLE>
<CAPTION>
December 31,
1995
------------
<S> <C>
Unsecured notes payable to stockholders, principal due February 1997, interest payable
monthly at the prime rate (8.5% at December 31, 1995) $1,400,000
Unsecured notes payable to related parties, due on demand, interest payable monthly at
the prime rate (8.5% at December 31, 1995) 333,200
----------
Total notes payable 1,733,200
Less -- Current maturities (333,200)
----------
Notes payable, net of current maturities $1,400,000
==========
</TABLE>
F-93
<PAGE>
MOHAWK BUSINESS RECORD STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Line of Credit
The Company has a $2,000,000 revolving credit agreement with a bank which
is payable on demand. Borrowings bear interest at the prime rate and are
collateralized by property and equipment, certain intangible assets and the
personal guarantees of the Company's stockholders.
The line-of-credit agreement contains various covenants which require the
Company to maintain certain specified financial ratios. The Company was in
compliance with these covenants as of December 31, 1995.
Additional information relating to the line of credit is as follows:
<TABLE>
<CAPTION>
1995
-----------
<S> <C>
Borrowings outstanding at year-end $1,625,000
Available borrowings at year-end 375,000
Average borrowings outstanding during the
year 1,436,000
Range of interest rates during the year 8.5%-9.0%
</TABLE>
3. Notes Receivable
Stockholder
The Company loaned $452,300 to one of its stockholders on May 12, 1992.
Interest is being paid monthly to the Company at the prime rate. Principal is
payable upon demand. The balance due to the Company under this agreement as
of December 31, 1995 was $100,000 and was repaid during the six-month period
ended June 30, 1996.
Related Company
The Company loaned $400,000 to a related partnership certain of whose
partners are also stockholders of the Company. The proceeds of this loan were
used to purchase a building that the Company is renting from this partnership
(see Note 4). Interest is payable monthly by the partnership at the prime
rate. Monthly principal payments are $1,333. Principal outstanding at
December 31, 1995 was $238,000.
4. Commitments and Contingencies
Operating Leases -- Related Parties
The Company has lease agreements for warehouse and office space with a
partnership whose partners are also stockholders of the Company. The leases
are operating leases with varying terms expiring between May 1998 and November
2009. The Company pays all maintenance, insurance and utilities. Rent expense
under these leases was $509,000 for 1995.
The Company has another lease agreement for additional warehouse space
with a partnership, certain of whose partners are also stockholders of the
Company. The lease is an operating lease with a term of 10 years through July
2000. The Company pays all taxes, maintenance, insurance and utilities. Rent
expense under this lease was $472,000 for 1995.
F-94
<PAGE>
MOHAWK BUSINESS RECORD STORAGE, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Future minimum lease payments on these operating leases for each of the
next five years and thereafter are as follows:
<TABLE>
<CAPTION>
<S> <C>
1996 $ 980,000
1997 980,000
1998 857,000
1999 769,000
2000 and thereafter 3,226,000
$6,812,000
==========
</TABLE>
Purchase Order Commitment
In June 1996, the Company committed to purchase approximately $450,000 in
additional warehouse storage racking.
5. Employee Benefits
Profit-Sharing Plan
The Company has a profit-sharing plan covering substantially all of its
full-time employees. Contributions are determined annually by the board of
directors. Benefits are provided upon retirement, disability or death on the
basis of funds added to the trust accounts and earnings during periods of
participation. The total contribution to this plan was $160,000 for the year
ended December 31, 1995.
Employee Benefit Plan
The Company has adopted a salary deduction benefit plan which provides
child care, medical and dental premiums, and other unreimbursed medical
expenses. All regular employees who complete more than 25 hours per week of
service are eligible to participate on a voluntary basis. The Company does
not match employee contributions.
Bonus Plans
The Company has agreed to pay bonuses to each of two of its stockholders
equal to 20% of the net profits of the Company, as defined. Two other
stockholders and a member of senior management each are entitled to receive
bonuses equal to 5% of the net profits of the Company. In addition, the vice
president of one of the Company's divisions receives a bonus equal to 10% of
that division's net profits, as defined. Bonus expense for the year ended
December 31, 1995 was $703,000.
6. Sale of Operating Assets
On September 6, 1996, the Company entered into an agreement to sell
substantially all of its operating assets to Iron Mountain Records
Management, Inc.
F-95
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Iron Mountain Incorporated:
We have audited the accompanying balance sheet of Security Archives
Corporation (a Minnesota corporation) as of December 31, 1995, and the
related statements of operations and accumulated deficit and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Security Archives
Corporation as of December 31, 1995, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
Arthur Andersen LLP
Minneapolis, Minnesota
August 23, 1996
(except for Note 6, as
to which the date is
September 6, 1996)
F-96
<PAGE>
SECURITY ARCHIVES CORPORATION
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1995 1996
-------------- ----------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 32,819 $ 49,044
Accounts receivable, net of allowance for doubtful accounts
of $49,382 and $4,408 140,950 165,006
Inventories 9,905 23,229
Prepaid expenses 33,192 31,710
--------- -----------
Total current assets 216,866 268,989
--------- -----------
Property and Equipment 997,992 1,067,355
Less -- Accumulated depreciation (358,283) (418,255)
--------- -----------
Net property and equipment 639,709 649,100
--------- -----------
Other Assets: 37,818 27,410
--------- -----------
$ 894,393 $ 945,499
========= ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable $ 10,992 $ 36,554
Current portion of long-term debt --
Capital leases and other debt 21,747 206,313
Related parties 59,437 611,600
Accrued expenses 44,875 31,499
--------- -----------
Total current liabilities 137,051 885,966
--------- -----------
Long-term Notes Payable 257,891 --
Long-term Notes Payable -- related parties 768,926 34,346
Commitments and Contingencies
Stockholder's Equity:
Capital stock 25,000 shares, $1 par 1,200 shares issued and
outstanding 1,200 1,200
Paid-in capital 646,229 646,229
Accumulated deficit (916,904) (622,242)
--------- -----------
Total stockholder's equity (deficit) (269,475) 25,187
--------- -----------
$ 894,393 $ 945,499
========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-97
<PAGE>
SECURITY ARCHIVES CORPORATION
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
Year Ended Six Months Ended June
December 31, 30
-----------------------
1995 1995 1996
--------------- --------- ----------
(Unaudited)
<S> <C> <C> <C>
Revenues:
Storage $ 917,637 $ 459,566 $ 497,501
Service and storage materials sales 500,989 222,107 489,278
----------- --------- ---------
Total revenues 1,418,626 681,673 986,779
----------- --------- ---------
Operating Expenses:
Cost of sales (excluding depreciation) 669,017 328,210 388,016
Selling, general and administrative 525,518 234,249 197,393
Depreciation and amortization 99,159 46,080 59,972
----------- --------- ---------
Total operating expenses 1,293,694 608,539 645,381
----------- --------- ---------
Income from operations 124,932 73,134 341,398
----------- --------- ---------
Interest expense 92,988 46,815 46,736
Net Income 31,944 26,319 294,662
Accumulated Deficit, beginning of
period (948,848) (948,848) (916,904)
----------- --------- ---------
Accumulated Deficit, end of period $ (916,904) $(922,529) $(622,242)
=========== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-98
<PAGE>
SECURITY ARCHIVES CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended Six Months Ended
December 31, June 30
----------------------
1995 1995 1996
--------------- -------- ----------
(Unaudited)
<S> <C> <C> <C>
Operating Activities:
Net income
$ 31,944 $ 26,319 $ 294,662
Adjustments to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization 99,159 46,080 59,972
Changes in assets and liabilities:
Accounts receivable (2,424) (31,408) (24,056)
Inventories 1,538 (2,292) (13,324)
Prepaid expenses (4,962) (4,558) 1,482
Accounts payable and accrued expenses 1,565 6,884 12,186
Other 10,068 6,958 10,408
--------- -------- ---------
Net cash provided by operating activities 136,888 47,983 341,330
--------- -------- ---------
Investing Activities:
Purchase of property and equipment (193,797) (103,791) (69,363)
--------- -------- ---------
Financing Activities:
Proceeds from notes payable 227,000 112,284 49,983
Principal payments on notes payable (161,606) (56,122) (305,725)
--------- -------- ---------
Net cash provided by (used for) financing
activities 65,394 56,162 (255,742)
--------- -------- ---------
Net increase in Cash 8,485 354 16,225
Cash and cash equivalents, at beginning of
period 24,334 24,334 32,819
--------- -------- ---------
Cash and cash equivalents, at end of period $ 32,819 $ 24,688 $ 49,044
========= ========= =========
Supplemental Disclosure:
Interest paid $ 92,989 $ 46,815 $ 41,815
========= ======== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-99
<PAGE>
SECURITY ARCHIVES CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. Organization of Business and Significant Accounting Policies
Security Archives Corporation (the Company), a Minnesota corporation, is a
full service records management company providing storage and related
services for all media. The Company serves numerous legal, banking,
healthcare, accounting, insurance, entertainment and retail organizations in
the Los Angeles, California metropolitan area.
Inventories
Inventories are carried at the lower of cost (using the first-in,
first-out basis) or market and are comprised primarily of cartons.
Property and Equipment
Depreciation and amortization of property and equipment are recorded using
the straight-line and accelerated methods. Property and equipment consist of
the following:
<TABLE>
<CAPTION>
Useful December 31,
Lives 1995
------------------ ------------
<S> <C> <C>
Warehouse and disintegration equipment 9 years $645,326
Leasehold improvements 10 years 103,928
Transportation equipment 5 years 112,946
Office equipment 5 to 10 years 135,792
--------
$997,992
========
</TABLE>
Minor maintenance costs are expensed as incurred. Major improvements are
capitalized and depreciated as described above.
Revenue Recognition
Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to
the customer. The Company has two customers which accounted for 25% of
revenues for the year ended December 31, 1995.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.
Other Assets
Other assets consist of customer acquisition costs. Costs, net of revenues
received for the initial transfer of records, related to the acquisition of
accounts are capitalized and amortized for an appropriate period not
exceeding three years, unless the customer terminates its relationship with
the Company, at which time the unamortized cost is charged to expense.
However, in the event of such termination, the Company collects and records
as income permanent removal fees that generally equal or exceed the amount of
unamortized customer acquisition costs.
Financial Instruments
Unless otherwise noted, financial instruments are stated at cost, which
approximates fair value.
F-100
<PAGE>
SECURITY ARCHIVES CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. These estimates relate primarily to the realizability of
accounts receivable and the adequacy of certain accrued expenses. Actual
results could differ from those estimates.
Unaudited Financial Information
The financial information as of June 30, 1996 and for the six-month
periods ended June 30, 1996 and 1995 is unaudited and has been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, such information reflects all
normal recurring adjustments necessary for a fair presentation. Operating
results for the six months ended June 30, 1996 are not necessarily indicative
of the results that may be expected for the year ending December 31, 1996.
Included in service and storage materials sales for the six months ended June
30, 1996 is $250,000 of fees paid to the Company for removal of cartons for a
large customer that transferred its business to Iron Mountain Incorporated.
2. Notes Payable
Notes payable consisted of the following:
<TABLE>
<CAPTION>
December 31,
1995
------------
<S> <C>
Long-term revolving note payable, providing for borrowings of up
to $600,000, interest payable monthly at 8.25%, principal due
May 31, 1997 $ 234,554
Obligations under capital leases, payable in various installments
through 1999, 8.75-9.25% imputed interest 45,084
Long-term revolving note payable, providing for borrowings of up
to $50,000, interest payable monthly at the prime rate plus 1%
(9.5% at December 31, 1995), principal due May 31, 1997 --
Unsecured notes payable to stockholder, principal due in various
installments through 2000, interest payable monthly at rates
varying from 9.75-10% 826,695
Other related party obligations 1,668
----------
Total notes payable 1,108,001
Less -- Current maturities (81,184)
----------
Notes payable, net of current maturities $1,026,817
==========
</TABLE>
F-101
<PAGE>
SECURITY ARCHIVES CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (Continued)
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
Year Amount
<S> <C>
1996 $ 81,184
1997 904,709
1998 76,989
1999 41,778
2000 3,341
$1,108,001
==========
</TABLE>
3. Operating Leases
Future minimum payments, by year and in the aggregate, under noncancelable
operating leases with initial or remaining terms of one year or more consist
of the following at December 31, 1995:
<TABLE>
<CAPTION>
Minimum
Year Payment
-------- ----------
<S> <C>
1996 $ 367,452
1997 367,452
1998 367,452
1999 367,452
2000 367,452
Thereafter 926,022
Total $2,763,282
==========
</TABLE>
The Company's rent expense for operating leases was $380,832 for the year
ended December 31, 1995, and $204,210 for the six month period ended June 30,
1996.
4. Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109
which requires the recognition of deferred tax assets and liabilities for the
expected tax consequences of temporary differences between the tax and
financial reporting bases of assets and liabilities.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are
presented below (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Deferred income tax assets $ 312
Deferred income tax liabilities (42)
Valuation allowance (270)
-----
$ --
=====
</TABLE>
As of December 31, 1995, the Company has NOL carryforwards of $745,106
which expire in varying amounts through 2009. The primary deferred tax
liabilities consist of tax over book depreciation. The valuation allowance
relates to uncertainties surrounding the realization of the NOL
carryforwards.
F-102
<PAGE>
SECURITY ARCHIVES CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. Related Party Transactions
The Company provides management services to affiliated entities in
exchange for a management fee. Management fee revenue was $92,040 for the
year ended December 31, 1995 and $28,020 for the six months ended June 30,
1996.
In addition, the Company has notes payable to a related party. Interest
expense on related party notes payable was $58,302 for the year ended
December 31, 1995 and $31,907 for the six months ended June 30, 1996.
6. Sale of Operating Assets
On September 6, 1996 the Company entered into an agreement to sell
substantially all of its operating assets to Iron Mountain Records
Management, Inc. All debt of the Company will be repaid from the proceeds of
the sale.
F-103
<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
================================================================================
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus
in connection with the offer made in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company or any of the Underwriters. This Prospectus does
not constitute an offer to sell or solicitation of an offer to buy any
security other than the Notes offered hereby, nor does it constitute an offer
to sell, or a solicitation of an offer to buy, to any person in any
jurisdiction where such an offer or solicitation would be unlawful. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein
is correct as of any time subsequent to the date hereof.
-------------
TABLE OF CONTENTS
Page
Prospectus Summary 3
Summary Historical and Pro Forma
Information 8
Risk Factors 10
The Company 15
The Transactions 15
Recent and Pending Acquisitions 17
Use of Proceeds 18
Capitalization 18
Pro Forma Condensed Consolidated
Financial Information 19
Selected Consolidated Financial and
Operating Information 30
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 32
Business 42
Management 55
Certain Transactions 60
Principal Stockholders 61
Description of the Notes 63
Description of New Credit Facility 84
Description of Capital Stock 85
Underwriting 86
Validity of Securities 86
Experts 86
Additional Information 87
Index to Financial Statements F-1
$150,000,000
[LOGO]
Iron Mountain
Incorporated
% Senior Subordinated Notes
due 2006
-------------
P R O S P E C T U S
-------------
Donaldson, Lufkin & Jenrette
Securities Corporation
Bear, Stearns & Co. Inc.
Prudential Securities Incorporated
, 1996
================================================================================
<PAGE>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission
fee $ 51,725
NASD filing fee 15,500
Blue Sky fees and expenses 15,000
Rating Agency fees and expenses 80,000
Printing and engraving fees 200,000
Accountants' fees and expenses 300,000
Legal fees and expenses 100,000
Trustee's fees and expenses 6,000
Miscellaneous 31,775
--------
Total $800,000
========
</TABLE>
The foregoing, except for the Securities and Exchange Commission fee and the
NASD filing fee, are estimated.
Item 14. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") provides,
in effect, that any person made a party to any action by reason of the fact
that he is or was a director, officer, employee or agent of the Company may
and, in certain cases, must be indemnified by the Company against, in the
case of a non-derivative action, judgments, fines, amounts paid in settlement
and reasonable expenses (including attorney's fees) incurred by him as a
result of such action, and in the case of a derivative action, against
expenses (including attorney's fees), if in either type of action he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company. This indemnification does not apply, in a
derivative action, to matters as to which it is adjudged that the director,
officer, employee or agent is liable to the Company, unless upon court order
it is determined that, despite such adjudication of liability, but in view of
all the circumstances of the case, he is fairly and reasonable entitled to
indemnity for expenses, and, in a non-derivative action, to any criminal
proceeding in which such person had reasonable cause to believe his conduct
was unlawful.
Article Sixth of the Company's Amended and Restated Certificate of
Incorporation provides that the Company shall indemnify each person who is or
was an officer or director of the Company to the fullest extent permitted by
Section 145 of the DGCL.
Article Seventh of the Company's Amended and Restated Certificate of
Incorporation states that no director of the Company shall be liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director, except to the extent that exculpation from liability is not
permitted under the Delaware General Corporation Law as in effect when such
breach occurred.
Reference is made to Section 7 of the Underwriting Agreement filed as
Exhibit 1 hereto, pursuant to which the underwriters have agreed to indemnify
officers and directors of the Company against certain liabilities.
Item 15. Recent Sales of Unregistered Securities.
The Company's Amended and Restated Certificate of Incorporation provides
for 16,000,000 shares of authorized capital stock, each with par value $.01
per share, as follows: 13,000,000 shares of authorized Common Stock,
1,000,000 shares of authorized Nonvoting Common Stock and 2,000,000 shares of
Preferred Stock. On February 6, 1996, simultaneously with the consummation of
the Company's Initial Public Offering and without any action on the part of
the holders thereof, all outstanding shares of the Company's Series A1
Convertible Preferred Stock, par value $0.01 per share ("Series A1 Preferred
Stock"), Series A2 Convertible Preferred Stock, par value $0.01 per share,
Series A3 Convertible Preferred Stock, par value $0.01 per share, and Series
C Convertible Preferred Stock, par value $0.01 per share (the "Old Preferred
Stock"), was automatically converted into shares
II-1
<PAGE>
of Common Stock (or, in the case of one holder, shares of Common Stock and
500,000 shares of Nonvoting Common Stock). All of the shares of Common Stock
and Nonvoting Common Stock issued as a result of such conversion were issued
by the Company in reliance on the exemptions provided by Sections 3(a)(9) and
4(2) of the Securities Act. No commission or other remuneration was paid or
given by the Company directly or indirectly for effecting the exchange.
On January 31, 1994, one shareholder of the Company exchanged 98,000
shares of Series A1 Preferred Stock for an equal number of shares of Series
A2 Preferred Stock. On November 28, 1995, another shareholder of the Company
exchanged 43,500 shares of Series A1 Preferred Stock for an equal number of
shares of Series A3 Preferred Stock. All such shares were issued by the
Company in reliance on the exemptions provided by Sections 3(a)(9) and 4(2)
of the Securities Act. No commission or other remuneration was paid or given
by the Company directly or indirectly for effecting the exchange.
In 1995, the Company (i) issued options to acquire an aggregate of 162,184
shares of its Class A Common Stock pursuant to its stock option plan to
certain of its officers and employees and (ii) issued to one employee an
aggregate of 1,036 shares of Class A Common Stock pursuant to the exercise of
stoock options granted under the Company's stock option plan for an aggregate
purchase price of $200,984. In 1995, the Company also issued options to
acquire an aggregate of 65,152 shares of its Common Stock pursuant to its
stock option plan to certain of its officers and employees (which grants were
conditioned on the consummation of the Initial Public Offering). In April
1996, the Company issued options to acquire an additional 361,452 shares. All
securities referred to in this paragraph were issued by the Company in
reliance on the exemption provided by Section 4(2) of the Securities Act or
Rule 701 promulgated thereunder.
Item 16. Exhibits and Financial Statement Schedules.
Each exhibit marked by an asterisk (*) is incorporated by reference to the
Company's Registration Statement No. 33-99950 filed with the Securities and
Exchange Commission on December 1, 1995. Each exhibit marked with a double
asterisk (**) is incorporated by reference to Amendment No. 2 to the
Company's Registration Statement filed with the Securities and Exchange
Commission on January 11, 1996. Each exhibit marked with a triple asterisk
(***) is incorporated by reference to the Company's Registration Statement
No. 333-10359 filed with the Securities and Exchange Commission on August 16,
1996. Exhibit 3.2 is incorporated by reference to the Company's Quarterly
Report on Form 10-Q (File No. 0-27584) filed with the Securities and Exchange
Commission on August 14, 1996. Exhibit numbers in parentheses refer to the
exhibit numbers in the applicable filing.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Item Exhibit
- ------ ---- -------
<S> <C> <C>
1 Form of Underwriting Agreement Filed herewith as
Exhibit 1
3.1 Amended and Restated Certificate of Incorporation of the *(3.1)
Company
3.1A Certificate of Incorporation of Iron Mountain Records To be filed by
amendment
3.1B Certificate of Incorporation of Metro Business Archives, To be filed by
Inc. amendment
3.1C Certificate of Incorporation of Criterion Atlantic Filed herewith as
Property, Inc. Exhibit 3.1C
3.1D Certificate of Incorporation of Criterion Property, Inc. Filed herewith as
Exhibit 3.1D
3.1E Articles of Incorporation of Hollywood Property, Inc. Filed herewith as
Exhibit 3.1E
3.1F Certificate of Incorporation of IM San Diego, Inc. Filed herewith as
Exhibit 3.1F
II-2
<PAGE>
Exhibit
Number Item Exhibit
- ------- ---- -------
3.1G Certificate of Incorporation of Iron Mountain Information Filed herewith as
Partners, Inc. Exhibit 3.1G
3.1H Articles of Organization of Iron Mountain Data Protection Filed herewith as
Services, Inc. Exhibit 3.1H
3.1I Articles of Incorporation of Iron Mountain Records Filed herewith as
Management of Maryland, Inc. Exhibit 3.1I
3.1J Articles of Incorporation of Iron Mountain Records Filed herewith as
Management of Ohio, Inc. Exhibit 3.1J
3.1K Certificate of Incorporation of Iron Mountain Wilmington, Filed herewith as
Inc. Exhibit 3.1K
3.1L Articles of Incorporation of Data Storage Systems, Inc. Filed herewith as
Exhibit 3.1L
3.1M Certificate of Formation of Iron Mountain Records Filed herewith as
Management of Missouri LLC Exhibit 3.1M
3.1N Articles of Organization of Iron Mountain Records Filed herewith as
Management of Boston, Inc. Exhibit 3.1N
3.1O Articles of Incorporation of Data Archive Services, Inc. To be filed by
amendment
3.1P Articles of Incorporation of Data Archives Services of Filed herewith as
Miami, Inc. Exhibit 3.1P
3.2 Bylaws of the Company, as amended * (3)
3.2A Bylaws of Iron Mountain Records Management, Inc. Filed herewith as
Exhibit 3.2A
3.2B Bylaws of Metro Business Archives, Inc. Filed herewith as
Exhibit 3.2B
3.2C Bylaws of Criterion Atlantic Property, Inc. Filed herewith as
Exhibit 3.2C
3.2D Bylaws of Criterion Property, Inc. Filed herewith as
Exhibit 3.2D
3.2E Bylaws of Hollywood Property, Inc. Filed herewith as
Exhibit 3.2E
3.2F Bylaws of IM San Diego, Inc. Filed herewith as
Exhibit 3.2F
3.2G Bylaws of Iron Mountain Information Partners, Inc. Filed herewith as
Exhibit 3.2G
3.2H Bylaws of Iron Mountain Data Protection Services, Inc. Filed herewith as
Exhibit 3.2H
3.2I Bylaws of Iron Mountain Records Management of Maryland, Filed herewith as
Inc. Exhibit 3.2I
3.2J Regulations of Iron Mountain Records Management of Ohio, Filed herewith as
Inc. Exhibit 3.2J
3.2K Bylaws of Iron Mountain Wilmington, Inc. Filed herewith as
Exhibit 3.2K
3.2L Bylaws of Data Storage Systems, Inc. Filed herewith as
Exhibit 3.2L
3.2M Limited Liability Company Agreement of Iron Mountain Filed herewith as
Records Management of Missouri LLC Exhibit 3.2M
3.2N Bylaws of Iron Mountain Records Management of Boston, Filed herewith as
Inc. Exhibit 3.2N
3.2O Bylaws of Data Archives Services, Inc. Filed herewith as
Exhibit 3.2O
II-3
<PAGE>
Exhibit
Number Item Exhibit
- ------ ---- -------
3.2P Bylaws of Data Archive Services of Miami, Inc. Filed herewith as
Exhibit 3.2P
4.1 Registration Rights Agreement between the Company and * (4.1)
certain Stockholders, dated as of December 14, 1990
4.2 Form of Indenture for the Notes Filed herewith as
Exhibit 4.2
5 Opinion of Sullivan & Worcester LLP To be filed by
amendment
10.1 Credit Agreement between the Company and Chase Manhattan * (10.1)
Bank (N.A.) as Agent, dated as of December 10, 1990,
amended and restated as of April 15, 1993 and further
amended and restated as of January 31, 1995
10.2 Consent and Amendment No. 1 to the Credit Agreement, * (10.2)
dated as of November 1, 1995 between the Company and
Chase Manhattan Bank (N.A.) as Agent
10.3 Consent and Amendment No. 2 to the Credit Agreement, * (10.3)
dated as of November 2, 1995 between the Company and
Chase Manhattan Bank (N.A.) as Agent
10.3A Amendment No. 3 to the Credit Agreement, dated as of Filed herewith as
August 29, 1996, among the Company the lenders party Exhibit 10.3A
thereto and The Chase Manhattan Bank, as Agent
10.4 Note Purchase Agreement between the Company and Chrysler * (10.4)
Capital Corporation, dated as of December 14, 1990, as
amended.
10.4A Letter agreement, dated July 15, 1996, between the *** (10.4A)
Company and Chrysler Capital Corporation
10.5 Subordinated Term Note between the Company and Schooner * (10.5)
Capital Corporation, dated February 11, 1991
10.6 Iron Mountain Incorporated 1995 Stock Incentive Plan * (10.6)
10.7 Form of Iron Mountain Incorporated 1995 Stock Option Plan ** (10.7)
for Non- Employee Directors
10.8 Asset Purchase and Sale Agreement, dated as of July 8, * (10.8)
1994, between Iron Mountain Data Protection Services,
Inc. and Digital Equipment Corporation
10.9 Asset Purchase and Sale Agreement, dated as of October * (10.9)
31, 1994, among Iron Mountain Records Management of
Ohio, Inc., Storage and Retrieval Concepts, Inc.,
Thomas Waldon and Dann Scheiferstein
10.10 Asset Purchase and Sale Agreement, dated as of February * (10.10)
28, 1995, among Iron Mountain Records Management
("IMRM"), National Business Archives, Inc., and James
F. Knott
10.11 Asset Purchase Agreement, dated July 19, 1995, among * (10.11)
IMRM, DataFile Services, Inc. and Cynthia and Lee
Macklin
10.12 Asset Purchase and Sale Agreement, dated as of October 5, * (10.12)
1995, among IMRM, Brooks Records Center, Inc. and Forty
Acres, Ltd.
10.13 Asset Purchase and Sale Agreement, dated as of November * (10.13)
1, 1995, among IMRM, Nashville Vault Company, Ltd. and
USA Vault Corporation
10.14 Asset Purchase and Sale Agreement, dated November 14, * (10.14)
1995, among IMRM, Data Vault Corporation and Ralph
Stoddard III
10.15 Merger Agreement, dated as of November 17, 1995, among * (10.15)
IMRM, Temp DSSI, Inc. and Data Storage Systems, Inc.
10.16 Asset Purchase and Sale Agreement, dated November 17, * (10.16)
1995, among IMRM, Florida Data Bank, Inc., Carl J.
Strang III, Carl J. Strang II and 6/10 Corporation
II-4
<PAGE>
Exhibit
Number Item Exhibit
- ------- ---- -------
10.17 Asset Purchase and Sale Agreement, dated November 22, * (10.17)
1995 among IMRM, Data Management Business Records
Storage, Inc. and Outdoor West, Inc.
10.18 Record Center Storage Services Agreement between IMRM and * (10.18)
Resolution Trust Corporation, dated July 31, 1992
10.19 Lease between IMRM and IM Houston (CR) Limited * (10.19)
Partnership, dated January 1, 1991
10.20 Asset Purchase and Sale Agreement, dated July 11, 1996, ***(10.20)
among IMRM,
The Fortress Corporation and certain subsidiaries
10.21 Stock Purchase and Sale Agreement, dated as of August 9, *** (10.21)
1996, among IMRM and the shareholders of Data Archive
Services of Miami, Inc.
and Data Archives Services, Inc.
10.22 Asset Purchase and Sale Agreement, dated August 13, 1996, *** (10.22)
among IMRM, International Record Storage and Retrieval
Service, Inc. and Laurance Winnerman, Sanford Winnerman
and Penny Novak
10.23 Asset Purchase Agreement, dated as of September 6, 1996, Filed herewith as
among IMRM, Mohawk Business Record Storage, Inc., Exhibit 10.23
Michael M. Rabin, Richard K. Rabin, Herman Ladin and
Sidney Ladin
11 Statement re: computation of per share earnings *** (11)
12 Statement re: computation of ratio of earnings to fixed Filed herewith as
charges Exhibit 12
21 Subsidiaries of the Company *** (21)
23.1 Consent of Sullivan & Worcester LLP Contained in
Exhibit 5; to be
filed by
amendment
23.2 Consent of Arthur Andersen LLP Filed herewith as
Exhibit 23.2
23.3 Consent of Wolpoff & Company, LLP Filed herewith as
Exhibit 23.3
23.4 Consent of Morrison and Smith Filed herewith as
Exhibit 23.4
23.5 Consent of Geo. S. Olive & Co. LLC Filed herewith as
Exhibit 23.5
23.6 Consent of Robert F. Gayton, CPA Filed herewith as
Exhibit 23.6
23.7 Consent of Perless, Roth, Jonas & Hartney, CPAs, PA Filed herewith as
Exhibit 23.7
23.8 Consent of Rothstein, Kass & Company, P.C. Filed herewith as
Exhibit 23.8
24 Powers of Attorney Power of Attorney
of C.R. Boden
filed herewith as
Exhibit 24; others
previously filed
on Pages II-6 and
II-7 of the
Registration
Statement
25 Statement re eligibility of trustee Filed herewith as
Exhibit 25
</TABLE>
II-5
<PAGE>
(b) Financial Statement Schedules
The following Financial Statement Schedule is filed herewith:
Schedule II--Valuation and Qualifying Accounts
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrants,
the Registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
a Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, such Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Iron Mountain Incorporated has duly caused this amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, Commonwealth of Massachusetts, on
September 11, 1996.
IRON MOUNTAIN INCORPORATED
By:/s/C. Richard Reese
-----------------------------------------
Name: C. Richard Reese
Title: Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the Registrant's Registration Statement on Form S-1
relating to Iron Mountain Incorporated's Senior Subordinated Notes and the
guarantees thereof has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*
- --------------------- Chairman of the Board of Directors September 11, 1996
C. Richard Reese and Chief Executive Officer
*
- --------------------- President, Chief Operating Officer September 11, 1996
David S. Wendell and Director
*
- --------------------- Executive Vice President, Chief September 11, 1996
Eugene B. Doggett Financial Officer and Director
*
- --------------------- Director September 11, 1996
Constantin R. Boden
*
- --------------------- Director September 11, 1996
Arthur D. Little
*
- --------------------- Director September 11, 1996
Vincent J. Ryan, Jr.
*
- --------------------- Vice President and Corporate September 11, 1996
Jean A. Bua Controller
*By:/s/C. Richard Reese
-------------------
C. Richard Reese
Attorney-in-fact
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
their undersigned Registrants have each duly caused this amendment to their
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, Commonwealth of
Massachusetts, on September 11, 1996.
IRON MOUNTAIN RECORDS MANAGEMENT, INC.
METRO BUSINESS ARCHIVES, INC.
CRITERION ATLANTIC PROPERTY, INC.
CRITERION PROPERTY, INC.
HOLLYWOOD PROPERTY, INC.
IM SAN DIEGO, INC.
IRON MOUNTAIN INFORMATION PARTNERS, INC.
IRON MOUNTAIN DATA PROTECTION
SERVICES, INC.
IRON MOUNTAIN RECORDS MANAGEMENT OF
MARYLAND, INC.
IRON MOUNTAIN RECORDS MANAGEMENT OF
OHIO, INC.
IRON MOUNTAIN WILMINGTON, INC.
DATA STORAGE SYSTEMS, INC.
IRON MOUNTAIN RECORDS MANAGEMENT OF
MISSOURI LLC
IRON MOUNTAIN RECORDS MANAGEMENT OF
BOSTON, INC.
DATA ARCHIVE SERVICES, INC.
DATA ARCHIVE SERVICES OF MIAMI, INC.
By: /s/C. Richard Reese
-----------------------------------------
Name: C. Richard Reese
Title: Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
amendment to the Registrants' Registration Statement on Form S-1 relating to
Iron Mountain Incorporated's Senior Subordinated Notes and the guarantees
thereof has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- -------------------- --------------------------------- ------------------
<S> <C> <C>
*
- ------------------- Chairman of the Board and Director, September 11, 1996
C. Richard Reese and Chief Executive Officer
*
- ------------------- Executive Vice President and Chief September 11, 1996
Eugene B. Doggett Financial Officer, and Manager of
Iron Mountain Records Management
of Missouri, LLC
*
- ------------------- Vice President and Corporate September 11, 1996
Jean A. Bua Controller
*By: /s/C. Richard Reese
--------------------
C. Richard Reese
Attorney-in-fact
</TABLE>
II-8
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Iron Mountain Incorporated:
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Iron Mountain Incorporated for each
of the three years in the period ended December 31, 1995 and have issued our
report thereon dated February 26, 1996. Our audits were made for the purpose
of forming an opinion on those statements taken as a whole. The accompanying
supplemental schedule is the responsibility of the Company's management and
is presented for purposes of complying with the Securities and Exchange
Commission's rules and regulations under the Securities and Exchange Act of
1934 and is not a required part of the basic financial statements. The
supplemental schedule has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
Arthur Andersen LLP
Los Angeles, California
February 26, 1996
S-1
<PAGE>
SCHEDULE II
IRON MOUNTAIN INCORPORATED
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1993, 1994 and 1995
(In thousands)
<TABLE>
<CAPTION>
Balance at Balance
beginning Charged to at end
of year expense Deductions of year
-------------- -------------- --------- --------
<S> <C> <C> <C> <C>
Year ended December 31, 1993
Allowance for doubtful accounts $424 $581 $(503) $502
Year ended December 31, 1994
Allowance for doubtful accounts $502 $356 $(327) $531
Year ended December 31, 1995
Allowance for doubtful accounts $531 $630 $(510) $651
</TABLE>
S-2
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Item Exhibit
- --------- --------------------------------------------------------------------------- --------------------
<S> <C> <C>
1 Form of Underwriting Agreement Filed herewith as
Exhibit 1
3.1 Amended and Restated Certificate of Incorporation of the Company *(3.1)
3.1A Certificate of Incorporation of Iron Mountain Records Management, Inc. To be filed by
amendment
3.1B Certificate of Incorporation of Metro Business Archives, Inc. To be filed by
amendment
3.1C Certificate of Incorporation of Criterion Atlantic Property, Inc. Filed herewith as
Exhibit 3.1C
3.1D Certificate of Incorporation of Criterion Property, Inc. Filed herewith as
Exhibit 3.1D
3.1E Articles of Incorporation of Hollywood Property, Inc. Filed herewith as
Exhibit 3.1E
3.1F Certificate of Incorporation of IM San Diego, Inc. Filed herewith as
Exhibit 3.1F
<PAGE>
Exhibit
Number Item Exhibit
- --------- --------------------------------------------------------------------------- --------------------
3.1G Certificate of Incorporation of Iron Mountain Information Partners, Inc. Filed herewith as
Exhibit 3.1G
3.1H Articles of Organization of Iron Mountain Data Protection Services, Inc. Filed herewith as
Exhibit 3.1H
3.1I Articles of Incorporation of Iron Mountain Records Management of Maryland, Filed herewith as
Inc. Exhibit 3.1I
3.1J Articles of Incorporation of Iron Mountain Records Management of Ohio, Inc. Filed herewith as
Exhibit 3.1J
3.1K Certificate of Incorporation of Iron Mountain Wilmington, Inc. Filed herewith as
Exhibit 3.1K
3.1L Articles of Incorporation of Data Storage Systems, Inc. Filed herewith as
Exhibit 3.1L
3.1M Certificate of Formation of Iron Mountain Records Management of Missouri Filed herewith as
LLC Exhibit 3.1M
3.1N Articles of Organization of Iron Mountain Records Management of Boston, Filed herewith as
Inc. Exhibit 3.1N
3.1O Articles of Incorporation of Data Archive Services, Inc. To be filed by
amendment
3.1P Articles of Incorporation of Data Archives Services of Miami, Inc. Filed herewith as
Exhibit 3.1P
3.2 Bylaws of the Company, as amended * (3)
3.2A Bylaws of Iron Mountain Records Management, Inc. Filed herewith as
Exhibit 3.2A
3.2B Bylaws of Metro Business Archives, Inc. Filed herewith as
Exhibit 3.2B
3.2C Bylaws of Criterion Atlantic Property, Inc. Filed herewith as
Exhibit 3.2C
3.2D Bylaws of Criterion Property, Inc. Filed herewith as
Exhibit 3.2D
3.2E Bylaws of Hollywood Property, Inc. Filed herewith as
Exhibit 3.2E
3.2F Bylaws of IM San Diego, Inc. Filed herewith as
Exhibit 3.2F
3.2G Bylaws of Iron Mountain Information Partners, Inc. Filed herewith as
Exhibit 3.2G
3.2H Bylaws of Iron Mountain Data Protection Services, Inc. Filed herewith as
Exhibit 3.2H
3.2I Bylaws of Iron Mountain Records Management of Maryland, Inc. Filed herewith as
Exhibit 3.2I
3.2J Regulations of Iron Mountain Records Management of Ohio, Inc. Filed herewith as
Exhibit 3.2J
3.2K Bylaws of Iron Mountain Wilmington, Inc. Filed herewith as
Exhibit 3.2K
3.2L Bylaws of Data Storage Systems, Inc. Filed herewith as
Exhibit 3.2L
3.2M Limited Liability Company Agreement of Iron Mountain Records Management of Filed herewith as
Missouri LLC Exhibit 3.2M
3.2N Bylaws of Iron Mountain Records Management of Boston, Inc. Filed herewith as
Exhibit 3.2N
3.2O Bylaws of Data Archives Services, Inc. Filed herewith as
Exhibit 3.2O
<PAGE>
Exhibit
Number Item Exhibit
- --------- --------------------------------------------------------------------------- --------------------
3.2P Bylaws of Data Archive Services of Miami, Inc. Filed herewith as
Exhibit 3.2P
4.1 Registration Rights Agreement between the Company and certain Stockholders, * (4.1)
dated as of December 14, 1990
4.2 Form of Indenture for the Notes Filed herewith as
Exhibit 4.2
5 Opinion of Sullivan & Worcester LLP To be filed by
amendment
10.1 Credit Agreement between the Company and Chase Manhattan Bank (N.A.) as * (10.1)
Agent, dated as of December 10, 1990, amended and restated as of April
15, 1993 and further amended and restated as of January 31, 1995
10.2 Consent and Amendment No. 1 to the Credit Agreement, dated as of November * (10.2)
1, 1995 between the Company and Chase Manhattan Bank (N.A.) as Agent
10.3 Consent and Amendment No. 2 to the Credit Agreement, dated as of November * (10.3)
2, 1995 between the Company and Chase Manhattan Bank (N.A.) as Agent
10.3A Amendment No. 3 to the Credit Agreement, dated as of August 29, 1996, among Filed herewith as
the Company the lenders party thereto and The Chase Manhattan Bank, as Exhibit 10.3A
Agent
10.4 Note Purchase Agreement between the Company and Chrysler Capital * (10.4)
Corporation, dated as of December 14, 1990, as amended.
10.4A Letter agreement, dated July 15, 1996, between the Company and Chrysler *** (10.4A)
Capital Corporation
10.5 Subordinated Term Note between the Company and Schooner Capital * (10.5)
Corporation, dated February 11, 1991
10.6 Iron Mountain Incorporated 1995 Stock Incentive Plan * (10.6)
10.7 Form of Iron Mountain Incorporated 1995 Stock Option Plan for Non- Employee ** (10.7)
Directors
10.8 Asset Purchase and Sale Agreement, dated as of July 8, 1994, between Iron * (10.8)
Mountain Data Protection Services, Inc. and Digital Equipment Corporation
10.9 Asset Purchase and Sale Agreement, dated as of October 31, 1994, among Iron * (10.9)
Mountain Records Management of Ohio, Inc., Storage and Retrieval
Concepts, Inc., Thomas Waldon and Dann Scheiferstein
10.10 Asset Purchase and Sale Agreement, dated as of February 28, 1995, among * (10.10)
Iron Mountain Records Management ("IMRM"), National Business Archives,
Inc., and James F. Knott
10.11 Asset Purchase Agreement, dated July 19, 1995, among IMRM, DataFile * (10.11)
Services, Inc. and Cynthia and Lee Macklin
10.12 Asset Purchase and Sale Agreement, dated as of October 5, 1995, among IMRM, * (10.12)
Brooks Records Center, Inc. and Forty Acres, Ltd.
10.13 Asset Purchase and Sale Agreement, dated as of November 1, 1995, among * (10.13)
IMRM, Nashville Vault Company, Ltd. and USA Vault Corporation
10.14 Asset Purchase and Sale Agreement, dated November 14, 1995, among IMRM, * (10.14)
Data Vault Corporation and Ralph Stoddard III
10.15 Merger Agreement, dated as of November 17, 1995, among IMRM, Temp DSSI, * (10.15)
Inc. and Data Storage Systems, Inc.
10.16 Asset Purchase and Sale Agreement, dated November 17, 1995, among IMRM, * (10.16)
Florida Data Bank, Inc., Carl J. Strang III, Carl J. Strang II and 6/10
Corporation
<PAGE>
Exhibit
Number Item Exhibit
- --------- --------------------------------------------------------------------------- --------------------
10.17 Asset Purchase and Sale Agreement, dated November 22, 1995 among IMRM, Data * (10.17)
Management Business Records Storage, Inc. and Outdoor West, Inc.
10.18 Record Center Storage Services Agreement between IMRM and Resolution Trust * (10.18)
Corporation, dated July 31, 1992
10.19 Lease between IMRM and IM Houston (CR) Limited Partnership, dated January * (10.19)
1, 1991
10.20 Asset Purchase and Sale Agreement, dated July 11, 1996, among IMRM, ***(10.20)
The Fortress Corporation and certain subsidiaries
10.21 Stock Purchase and Sale Agreement, dated as of August 9, 1996, among IMRM *** (10.21)
and the shareholders of Data Archive Services of Miami, Inc.
and Data Archives Services, Inc.
10.22 Asset Purchase and Sale Agreement, dated August 13, 1996, among IMRM, *** (10.22)
International Record Storage and Retrieval Service, Inc. and Laurance
Winnerman, Sanford Winnerman and Penny Novak
10.23 Asset Purchase Agreement, dated as of September 6, 1996, among IMRM, Mohawk Filed herewith as
Business Record Storage, Inc., Michael M. Rabin, Richard K. Rabin, Herman Exhibit 10.23
Ladin and Sidney Ladin
11 Statement re: computation of per share earnings *** (11)
12 Statement re: computation of ratio of earnings to fixed charges Filed herewith as
Exhibit 12
21 Subsidiaries of the Company *** (21)
23.1 Consent of Sullivan & Worcester LLP Contained in Exhibit
5; to be filed by
amendment
23.2 Consent of Arthur Andersen LLP Filed herewith as
Exhibit 23.2
23.3 Consent of Wolpoff & Company, LLP Filed herewith as
Exhibit 23.3
23.4 Consent of Morrison and Smith Filed herewith as
Exhibit 23.4
23.5 Consent of Geo. S. Olive & Co. LLC Filed herewith as
Exhibit 23.5
23.6 Consent of Robert F. Gayton, CPA Filed herewith as
Exhibit 23.6
23.7 Consent of Perless, Roth, Jonas & Hartney, CPAs, PA Filed herewith as
Exhibit 23.7
23.8 Consent of Rothstein, Kass & Company, P.C. Filed herewith as
Exhibit 23.8
24 Powers of Attorney Power of Attorney of
C.R. Boden filed
herewith as Exhibit
24; others
previously filed on
Pages II-6 and II-7
of the Registration
Statement
25 Statement re eligibility of trustee Filed herewith as
Exhibit 25
</TABLE>
Each exhibit marked by an asterisk (*) is incorporated by reference to the
Company's Registration Statement No. 33-99950 filed with the Securities and
Exchange Commission on December 1, 1995. Each exhibit marked with a double
asterisk (**) is incorporated by reference to Amendment No. 2 to the Company's
Registration Statement filed with the Securities and Exchange Commission on
January 11, 1996. Exhibit 3.2 is incorporated by reference to the Company's
Quarterly Report on Form 10-Q (File No. 0-27584) filed with the Securities and
Exchange Commission on August 14, 1996. Exhibit numbers in parentheses refer to
the exhibit numbers in the applicable filing.
Draft 9/6/96
$150,000,000
------------
IRON MOUNTAIN INCORPORATED
___% SENIOR SUBORDINATED NOTES DUE 2006
UNDERWRITING AGREEMENT
----------------------
September __, 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
PRUDENTIAL SECURITIES INCORPORATED
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Iron Mountain Incorporated, a Delaware corporation (the
"Company"), proposes to issue and sell $150,000,000 principal amount of its ___%
Senior Subordinated Notes due 2006 (each a "Security" and collectively, the
"Securities") to the several underwriters named in Schedule I hereto (the
"Underwriters"). The Securities are to be issued pursuant to the provisions of
an Indenture to be dated as of September __, 1996 (the "Indenture") between the
Company and First Bank National Association, as Trustee (the "Trustee"). The
Securities will be guaranteed as set forth in the Indenture by substantially all
of the Company's present and future "Restricted Subsidiaries" (as defined in the
Indenture) (each such guarantee being referred to herein as a "Guarantee" and
collectively as the "Guarantees" and each such guarantor being referred to
herein as a "Guarantor" and collectively as the "Guarantors").
1. Registration Statement and Prospectus. The
Company has filed with the Securities and Exchange Commission
<PAGE>
(the "Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively called the "Securities Act"), a registration statement on Form S-1
including a prospectus relating to the Securities, which may be amended. Any
preliminary prospectus that is contained in such registration statement (or any
amendment thereto) prior to the time that it is declared effective by the
Commission or that is filed with the Commission pursuant to Rule 424(a) of the
Securities Act is hereinafter referred to as the Preliminary Prospectus; the
registration statement as amended at the time when it becomes effective,
including a registration statement (if any) filed pursuant to Rule 462(b) under
the Securities Act increasing the size of the offering registered under the
Securities Act and information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act, is hereinafter referred to as the Registration Statement; and
the prospectus in the form first used to confirm sales of Securities is
hereinafter referred to as the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto, at ____% of the principal amount thereof (the "Purchase Price") plus
accrued interest thereon, if any, from __________ __, 1996 to the date of
payment and delivery.
3. Terms of Public Offering. The Company is advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Securities as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
4. Delivery and Payment. (a) Delivery to the Underwriters of
and payment for the Securities and the related Guarantees shall be made as
described below at 10:00 A.M., New York City time, on September __, 1996 (the
"Closing Date") (being the third or fourth business day, unless otherwise
permitted by the Commission pursuant to Rule 15c6-1 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), following the date of the initial
public offering). The Closing Date and the location of delivery of and the form
of payment for the Securities and the related Guarantees may be varied by
agreement between you and the Company.
(b) The Securities and the related Guarantees to be purchased
by each Underwriter hereunder will be represented by one or more definitive
global notes in book-entry form which will be deposited by or on behalf of the
Company with The Depository
2
<PAGE>
Trust Company ("DTC") or its designated custodian. On the Closing Date, the
Company will deliver the Securities and the related Guarantees to Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), for the account of each
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by certified or official bank check or checks, payable to the
order of the Company in federal (same day) funds, or by a wire transfer of
federal (same day) funds to the account specified by the Company, by causing DTC
to credit the Securities and the related Guarantees to the account of DLJ at
DTC. Such notes shall be made available to DLJ for inspection not later than
9:30 A.M., New York City time, on the business day next preceding the Closing
Date. Notes in definitive form evidencing the Securities shall be delivered with
any transfer taxes thereon duly paid by the Company.
(c) The documents to be delivered on the Closing Date by or on
behalf of the parties hereto pursuant to Section 8 hereof, including any
additional documents requested by the Underwriters pursuant to Section 8 hereof,
will be delivered at the offices of Jones, Day, Reavis & Pogue, 599 Lexington
Avenue, New York, New York 10022. A meeting will be held at such offices at 2:00
p.m., New York City time, on the business day next preceding the Closing Date,
at which meeting the final drafts of documents to be delivered pursuant to the
preceding sentence will be available for review by or on behalf of the parties
hereto. For the purposes of this Section 4, "business day" means each day other
than Saturday or Sunday which is not a day on which banking institutions in New
York are generally authorized or obligated by law or executive order to close.
5. Agreements of the Company. The Company agrees
with you:
(a) To timely file with the Commission a prospectus in the
form most recently included in an amendment to the registration
statement relating to the Securities and the related Guarantees with
such changes and additions as are required or permitted under Rule 430A
or Rule 424(b) under the Securities Act and have been provided in
advance to and approved by DLJ on behalf of the Underwriters.
(b) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) when any post-effective amendment
to the Registration Statement has become effective, (ii) of any request
by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Securities for offering or sale in
any jurisdiction, or the initiation of any proceeding for such
purposes, and (iv) of the happening of any event during the period
referred to in paragraph (e)
3
<PAGE>
below which makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires the
making of any additions to or changes in the Registration Statement or
the Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) To furnish to you, without charge, four signed copies of
the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits, and to furnish to you and
each Underwriter designated by you such number of conformed copies of
the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the
Registration Statement, whether before or after the time when it
becomes effective, or to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to
which you shall reasonably object; and to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or amendment or supplement to the Prospectus
which may be necessary or advisable in connection with the distribution
of the Securities and the related Guarantees by you, and to use its
best efforts to cause the same to become promptly effective.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in the
opinion of counsel for the Underwriters a prospectus is required by law
to be delivered in connection with sales by an Underwriter or a dealer,
to furnish to each Underwriter and dealer as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as
such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus
to comply with the Securities Act, the Exchange Act, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and any
state and securities or Blue Sky laws, forthwith to prepare and file
with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances
4
<PAGE>
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers
as you shall specify, such number of copies thereof as such Underwriter
or dealers may reasonably request.
(g) Prior to any public offering of the Securities, to
cooperate with you and counsel for the Underwriters in connection with
the registration or qualification of the Securities for offer and sale
by the several Underwriters and by dealers under the state securities
or Blue Sky laws of such jurisdictions as you may request, to continue
such qualification in effect so long as required for distribution of
the Securities and the related Guarantees and to file such consents to
service of process or other documents as may be necessary in order to
effect such registration or qualification provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or execute a general consent to service of process.
(h) To make generally available to its security holders as
soon as reasonably practicable an earnings statement covering a period
of at least twelve months beginning after the effective date of the
Registration Statement (but in no event commencing later than 90 days
after such date) which shall satisfy the provisions of Section 11(a) of
the Securities Act, and to advise you in writing when such statement
has been so made available.
(i) Whether or not required by the rules and regulations of
the Commission, so long as any Securities are outstanding and so long
as the Indenture so requires, (i) unless such obligation is waived in
writing by the holders of its Securities, to furnish to such holders
(A) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report thereon by the Company's certified independent
accountants, and (B) all financial information that would be required
to be included in a Form 8-K filed with the Commission if the Company
were required to file such reports, and (ii) to file a copy of all such
information and reports with the Commission for public availability
(unless the Commission will not accept such a filing) and to make such
information available to investors who request it in writing.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly
available information of the Company mailed to the security holders of
the Company or filed with the
5
<PAGE>
Commission and such other publicly available information concerning the
Company and its subsidiaries as you may reasonably request.
(k) To pay, or cause to be paid, all costs, expenses, fees and
taxes incident to (i) the preparation, printing, filing and
distribution under the Securities Act of the Registration Statement
(including financial statements and exhibits), each Preliminary
Prospectus and all amendments and supplements to any of them prior to
or during the period specified in paragraph (e), (ii) the printing and
delivery of the Prospectus and all amendments or supplements thereto
during the period specified in paragraph (e), (iii) the printing and
delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the
Securities and the related Guarantees (including in each case any
disbursements of counsel for the Underwriters relating to such printing
and delivery), (iv) the registration or qualification of the Securities
and the related Guarantees for offer and sale under the securities or
Blue Sky laws of the several states (including in each case the fees
and disbursements of counsel for the Underwriters relating to such
registration or qualification and memoranda relating thereto), (v) the
filing fees of the National Association of Securities Dealers, Inc. in
connection with the offering, (vi) if applicable, the listing of the
Securities and the related Guarantees on any securities exchange
including the National Association of Securities Dealers Automated
Quotation system ("Nasdaq") National Market System and (vii) furnishing
to the Underwriters such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the
Securities and the related Guarantees by the Underwriters or by dealers
to whom Securities and related Guarantees may be sold.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or any Guarantor or warrants to purchase debt securities of the
Company or any Guarantor substantially similar to the Securities or the
Guarantees (other than (i) the Securities, (ii) the Guarantees and
(iii) commercial paper issued in the ordinary course of business),
without your prior written consent.
(m) To use its best efforts to do and perform, or cause to be
done or performed, all things required or necessary to be done and
performed under this Agreement by the Company and the Guarantors prior
to the Closing Date and to satisfy all conditions precedent to the
delivery of the Securities.
6
<PAGE>
(n) To cause each subsidiary of the Company which becomes a
"Restricted Subsidiary" (other than an "Excluded Restricted
Subsidiary")(each as defined in the Indenture) after the date hereof,
in writing and in form and substance satisfactory to counsel to the
Underwriters, to join as a party to this Agreement, but only for the
purpose of providing the same indemnification to the Underwriters as
the Company and its subsidiaries party hereto are providing under
Section 7 of this Agreement.
6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement when it became effective
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities
Act and the Trust Indenture Act and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph (b)
do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter expressly for
use therein.
(c) Each Preliminary Prospectus, each post-effective amendment
to the Registration Statement, if any, and each Registration Statement
filed pursuant to Rule 462(b) under the Securities Act, if any,
complied, and, if applicable, will comply when so filed in all material
respects with the Securities Act; and did not, and, if applicable, will
not contain an untrue statement of a material fact or did not omit,
and, if applicable, will not omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(d) The Company and each of its subsidiaries has been
duly incorporated or formed, is validly existing as a
corporation or limited liability company in good standing
7
<PAGE>
under the laws of its jurisdiction of incorporation or formation and
has the corporate power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties,
and each is duly qualified and is in good standing as a foreign
corporation or limited liability company authorized to do business in
each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect
(financial or otherwise) on the Company and its subsidiaries, taken as
a whole.
(e) All of the outstanding shares of capital stock of, or
other ownership interests in, each of the Company's subsidiaries have
been duly authorized and validly issued and are fully paid and
non-assessable, and are owned directly or indirectly by the Company,
free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature, except for the security interests
granted under the Credit Agreement between The Chase Manhattan Bank,
N.A., as Agent, as amended as of ________ __, 19__ .
(f) The Securities have been duly authorized by the Company
for issuance and sale pursuant to this Agreement, each Guarantee has
been duly authorized by the Guarantor to which it relates and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to the Underwriters against payment therefor as
provided by this Agreement, the Securities and the Guarantees will be
entitled to the benefits of the Indenture, and will be valid and
binding obligations of the Company and the Guarantors, respectively,
enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors and is a valid and binding
agreement of the Company and the Guarantors enforceable in accordance
with its terms except as (i) rights to indemnity and contribution
hereunder may be limited by applicable law, (ii) the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally and (iii) rights
of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
8
<PAGE>
(h) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and the Guarantors party thereto and is a valid and binding
agreement of the Company and the Guarantors party thereto, enforceable
in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
(i) The Securities and the Guarantees conform as to
legal matters to the description thereof contained in the
Prospectus.
(j) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or comparable
organizational documents or in default (and no condition exists which,
with notice or lapse of time or both, would constitute a default) in
the performance of any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or in
any other agreement, indenture or instrument material to the conduct of
the business of the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective property is bound.
(k) The execution, delivery and performance of this Agreement,
the Indenture, the Securities and the Guarantees and compliance by the
Company and the Guarantors with all the provisions hereof and thereof,
as the case may be, and the consummation of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may be
required under the securities or Blue Sky laws of the various states
and except as have been obtained under the Securities Act and the Trust
Indenture Act), and will not conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the charter or
by-laws or comparable organizational documents of the Company or any of
its subsidiaries or any agreement, indenture or other instrument to
which it or any of its subsidiaries is a party or by which it or any of
its subsidiaries or their respective property is bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to the Company, any of its subsidiaries or their
respective property.
9
<PAGE>
(l) Except as otherwise set forth in the Prospectus (or, if
the Prospectus is not yet in existence, the most recent Preliminary
Prospectus), there are no material legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or
to which any of their respective property is subject, and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated. No contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement is not so described
or filed as required.
(m) Neither the Company nor any of its subsidiaries is
currently in violation of any foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), nor any federal or state law
relating to discrimination in the hiring, promotion or pay of employees
nor any applicable federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder, which in each case might result
in any material adverse change in the business prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(n) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its respective
business; the Company and each of its subsidiaries has fulfilled and
performed all of its material obligations with respect to such permits
and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof which might result
in any material adverse change in the business prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole; and, except as described in the Prospectus (or, if
the Prospectus is not yet in existence, the most recent Preliminary
Prospectus), such permits contain no restrictions that materially
interfere with the business or operations of the Company or any of its
subsidiaries as currently conducted.
(o) In the ordinary course of its business, when the Company
or any of its subsidiaries acquires a parcel of real property, the
Company conducts a review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs
10
<PAGE>
and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a material adverse effect
(financial or otherwise) on the Company and its subsidiaries, taken as
a whole.
(p) Except as otherwise set forth in the Prospectus (or, if
the Prospectus is not yet in existence, the most recent Preliminary
Prospectus) or such as are not material to the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, the Company and each of its
subsidiaries has good and marketable title, free and clear of all
liens, claims, encumbrances and restrictions except liens for taxes not
yet due and payable, to all property and assets described in the
Registration Statement as being owned by it. All leases to which the
Company or any of its subsidiaries is a party are valid and binding and
no default by the Company or any of its subsidiaries, or to the
knowledge of the Company or any of its subsidiaries, by any other
party, has occurred or is continuing thereunder, which might result in
any material adverse change in the business prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, and the Company and its subsidiaries enjoy peaceful
and undisturbed possession under all such leases to which any of them
is a party as lessee with such exceptions as do not materially
interfere with the use made or proposed to be made by the Company or
such subsidiary.
(q) The Company and each of its subsidiaries maintains
reasonably adequate insurance against such losses and risks in such
amounts as are prudent and customary in the business in which they are
engaged.
(r) Arthur Andersen LLP are independent public
accountants with respect to the Company as required by the
Securities Act.
(s) The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus
(or, if the Prospectus is not yet in existence, the most recent
Preliminary Prospectus)(and any amendment or supplement thereto),
present fairly the consolidated financial position, results of
operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply;
such statements and
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related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the
other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (or, if the Prospectus is not
yet in existence, the most recent Preliminary Prospectus)(and any
amendment or supplement thereto) is, to the Company's knowledge, in all
material respects, accurately presented and prepared on a basis
reasonably consistent with the books and records of the Company.
(t) Neither the Company nor any Guarantor is an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(u) No holder of any security of the Company who has any right
to require registration of shares of Common Stock or any other security
of the Company has the right to have such securities included in the
Registration Statement or such holder has validly and irrevocably
waived such right.
(v) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida).
(w) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus and all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable.
(x) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, the
Company or any subsidiary thereof except as otherwise disclosed in the
Registration Statement.
(y) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
(z) There is (i) no significant unfair labor practice
complaint pending against the Company or any of its subsidiaries or, to
the best knowledge of the Company, threatened against any of them,
before the National Labor Relations Board or any state or local labor
relations board, and no significant grievance or arbitration proceeding
arising out of or under any collective bargaining agreement
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is pending against the Company or any of its subsidiaries or, to the
best knowledge of the Company, threatened against any of them, and (ii)
no significant strike, labor dispute, slowdown or stoppage pending
against the Company or any of its subsidiaries or, to the best
knowledge of the Company, threatened against it or any of its
subsidiaries except for such actions specified in clause (i) or (ii)
above, which, singly or in the aggregate, could not reasonably be
expected to have a material adverse effect (financial or otherwise) on
the Company and its subsidiaries, taken as a whole.
(aa) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(bb) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company or any of its
subsidiaries have been paid, other than those being contested in good
faith and for which adequate reserves have been provided.
(cc) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent applications,
trademarks, service marks, trade names, licenses, copyrights and
proprietary or other confidential information currently employed by
them in connection with their respective businesses, and neither the
Company nor any such subsidiary has received any notice of infringement
of or conflict with asserted rights of any third party with respect to
any of the foregoing which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in any
material adverse change in the business prospects, financial condition
or results of operations of the Company and its subsidiaries, taken as
a whole, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
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(dd) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loan or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(ee) Immediately after each subsidiary of the Company has
entered into the Guarantees to which it is a party, (a) the fair value
of the assets of such subsidiary will exceed the debts and liabilities,
subordinated, contingent or otherwise, of such subsidiary, (b) the
present fair saleable value of the property of such subsidiary will be
greater than the amount that will be required to pay the probable
liabilities of such subsidiary on its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other
liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured, (c) such subsidiary will
be able to pay its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become
absolute and matured, and (d) such subsidiary will not have an
unreasonably small capital with which to conduct the business in which
it is engaged as such business is conducted and is proposed to be
conducted following the Closing Date.
(ff) Neither the Company nor any of its subsidiaries intends,
or intends to permit any of its subsidiaries, to incur debts beyond its
ability to pay such debts as they mature, taking into account the
timing and the amounts of cash to be received by the Company or any of
its subsidiaries and the timing and the amounts of cash to be payable
on or in respect of the Company's indebtedness or the indebtedness of
each subsidiary.
7. Indemnification. (a) Each of the Company and its
subsidiaries party hereto jointly and severally agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages,
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liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriters furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages and liabilities and judgments purchased Securities,
or any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Securities to such person, and if the
Prospectus (as so amended and supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or judgment.
(b) In case any action shall be brought against any
Underwriter or any person controlling such Underwriter, based upon any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company and the Company's subsidiaries party hereto, such
Underwriter shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses. Any
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the employment of such counsel
shall have been specifically authorized in writing by the Company, (ii) the
Company shall have failed to assume the defense and employ counsel or (iii) the
named parties to any such action (including any impleaded parties) include both
such Underwriter or such controlling person and the Company and such Underwriter
or such controlling person shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person, it being understood, however, that the
Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such Underwriters and controlling persons, which firm shall be
designated in writing by Donaldson, Lufkin & Jenrette Securities Corporation and
that all such fees and expenses shall be reimbursed as they are incurred). The
Company and the Company's subsidiaries party hereto shall not be liable for any
settlement of any such action effected without the
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Company's written consent, but if settled with the written consent of the
Company, the Company and the Company's subsidiaries party hereto jointly and
severally agree to indemnify and hold harmless any Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement. Notwithstanding the immediately preceding sentence, if in any case
where the fees and expenses of counsel are at the expense of the indemnifying
party and an indemnified party shall have requested the indemnifying party to
reimburse the indemnified party for such fees and expenses of counsel as
incurred, such indemnifying party agrees that it shall be liable for any
settlement of any action effected without its written consent if (i) such
settlement is entered into more than 20 business days after the receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall have failed to reimburse the indemnified party in accordance with such
request for reimbursement prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Company's subsidiaries party
hereto, the Company's directors, its officers who sign the Registration
Statement and any person controlling the Company or any of the Company's
subsidiaries party hereto within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company and such subsidiaries to each Underwriter, but only with
reference to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter expressly for use in the Registration Statement,
the Prospectus or any Preliminary Prospectus, as amended or supplemented. In
case any action shall be brought against the Company or any of the Company's
subsidiaries party hereto, any of the Company's directors, any such officer or
any person controlling the Company or any of the Company's subsidiaries party
hereto based on the Registration Statement, the Prospectus or any preliminary
prospectus and in respect of which indemnity may be sought against any
Underwriter, the Underwriter shall have the rights and duties given to the
Company and such subsidiaries (except that if the Company shall have assumed the
defense thereof, such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company and such subsidiaries, the Company's directors, any such officers and
any person controlling the Company or such subsidiaries shall have
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the rights and duties given to the Underwriter, by Section 7(b)
hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities and the
related Guarantees or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company, and the
total underwriting discounts and commissions received by the Underwriters, bear
to the total price to the public of the Securities, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault of the Company
on the one hand and the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Company's subsidiaries party hereto and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
and the related Guarantees underwritten by it and distributed to the public were
offered to the public exceeds the
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amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7(d) are
several in proportion to the respective principal amount of Securities and
related Guarantees purchased by each of the Underwriters hereunder and not
joint.
8. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters to purchase the Securities under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing
Date.
(b) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Securities Act within the applicable
time period prescribed for such filing under the Securities Act; and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending before or contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any
downgrading, nor shall any notice have been given of any intended or
potential downgrading in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g) (2)
under the Securities Act.
(d) (i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have
been any material adverse change, or any development involving a
prospective material adverse change, in the business prospects,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, except as otherwise described in or contemplated by
the Prospectus, (ii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus there shall
not have been any material change, or any development involving a
prospective material adverse change, in the capital stock or in the
long-term debt of the Company from that set forth in the Registration
Statement and Prospectus, except as otherwise described in
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or contemplated by the Prospectus, (iii) the Company and its
subsidiaries shall have no liability or obligation, direct or
contingent, which is material to the Company and its subsidiaries,
taken as a whole, other than those reflected in the Registration
Statement and the Prospectus and (iv) on the Closing Date you shall
have received a certificate dated the Closing Date, signed by C.
Richard Reese, in his capacity as Chairman of the Board and Chief
Executive Officer, and by Eugene B. Doggett, in his capacity as
Executive Vice President and Chief Financial Officer of the Company,
confirming the matters set forth in paragraphs (a), (b), (c) and (d) of
this Section 8.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Sullivan & Worcester LLP, counsel for the Company, to
the effect that:
(i) each of the Company and its subsidiaries listed
on Exhibit 21 to the Registration Statement has been duly
incorporated or formed, is validly existing as a corporation
or limited liability company in good standing under the laws
of its jurisdiction of incorporation or formation and has the
corporate or limited liability company power and authority
required to carry on its business as it is currently being
conducted and to own, lease and operate its properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation or
limited liability company authorized to do business in each
jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) all of the outstanding shares of capital stock
of, or other ownership interests in, each of the Company's
subsidiaries have been duly and validly authorized and issued
and are fully paid and non-assessable, and except as set forth
in the Prospectus are owned beneficially by the Company, free
and clear of any perfected security interest, or, to the
knowledge of such counsel, any other security interest, claim,
lien, encumbrance or adverse interest of any nature;
(iv) the Securities have been duly authorized by all
necessary corporate action and, when executed and
authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this
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Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company
enforceable in accordance with their terms except as (A) the
enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and (B) rights of acceleration and
the availability of equitable remedies may be limited by
equitable principles of general applicability;
(v) this Agreement has been duly authorized, executed
and delivered by the Company and the Guarantors and is a valid
and binding agreement of the Company and the Guarantors
enforceable in accordance with its terms except (A) as rights
to indemnity and contribution hereunder may be limited by
applicable law, (B) enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and (C) the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(vi) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by the Company and the Guarantors and is a valid and
binding agreement of the Company and the Guarantors,
enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and (B) rights of acceleration and
the availability of equitable remedies may be limited by
equitable principles of general applicability;
(vii) the Registration Statement has become effective
under the Securities Act, no stop order suspending its
effectiveness has been issued and, to the knowledge of such
counsel, no proceedings for that purpose are pending before or
contemplated by the Commission;
(viii) the statements under the captions "Management
- Executive Compensation - Compensation Committee Interlocks
and Insider Participation" in the fourth, sixth and seventh
paragraphs thereunder, "Management-Stock Option Information,"
"Certain Transactions," "Description of the Notes,"
"Description of New Credit Facility" and "Underwriting" in the
Prospectus, as amended or supplemented, and Items 14 and 15 of
Part II of the Registration Statement, insofar as such
statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present the
information called for with
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respect to such legal matters, documents and proceedings;
(ix) to such counsel's knowledge, neither the Company
nor any of its subsidiaries is in violation of its respective
charter or by-laws or comparable organizational documents and,
to such counsel's knowledge, neither the Company nor any of
its subsidiaries is in default in the performance of any
obligation, agreement or condition contained in the Credit
Agreement between the Company and The Chase Manhattan Bank,
N.A., as Agent, as amended as of ___________ __, 199_, the
Note Purchase Agreement between the Company and Chrysler
Capital Corporation, dated as of December 14, 1990, as
amended, and the Subordinated Term Note between the Company
and Schooner Capital Corporation dated February 11, 1991
except as such defaults would not, singly or in the aggregate,
result in a material adverse change in the business prospects,
financial condition or results of operations of the Company or
any of its subsidiaries, taken as a whole;
(x) the execution, delivery and performance of this
Agreement, the Indenture and the Securities and compliance by
the Company with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and
thereby do not (A) require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as
such may be required under the securities or Blue Sky laws of
the various states and except as have been obtained under the
Securities Act and the Trust Indenture Act), and (B) conflict
with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws or comparable
organizational documents of the Company or any of its
subsidiaries or any agreement, indenture or other instrument
known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective properties is bound, or
violate or conflict with any laws, administrative regulations
or rulings or, to such counsel's knowledge, court decrees
applicable to the Company or any of its subsidiaries or their
respective properties;
(xi) such counsel does not know (A) of any legal or
governmental proceeding pending or threatened to which the
Company or any of its subsidiaries is a party or to which any
of their respective property is subject which is required to
be described in the Registration Statement or the Prospectus
and is not so described, or
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(B) of any contract or other document which is required to be
described in the Registration Statement or the Prospectus or
is required to be filed as an exhibit to the Registration
Statement which is not described or filed as required;
(xii) to such counsel's knowledge, (A) neither the
Company nor any of its subsidiaries is in violation of any
federal or state law or regulation relating to the storage,
handling or transportation of hazardous or toxic materials,
(B) the Company and its subsidiaries have received all
permits, licenses or other approvals required of them under
applicable federal and state environmental laws and
regulations to conduct their respective businesses as
described in the Prospectus and (C) the Company and each of
its subsidiaries is in compliance with all terms and
conditions of any such permit, license or approval, except any
such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses
or approvals as would not, singly or in the aggregate, result
in a material adverse change in the business prospects,
financial condition or results of operations of the Company
and its subsidiaries, taken as a whole;
(xiii) neither the Company nor any Guarantor is an
"investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended;
(xiv) to such counsel's knowledge, no holder of any
security of the Company has any right to require registration
of shares of Common Stock or any other security of the Company
in connection with the Registration Statement;
(xv) each of the Guarantees has been duly authorized
and, when executed, and when the Security upon which such
Guarantee is noted shall have been authenticated in accordance
with the provisions of the Indenture and delivered and paid
for by the Underwriters in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be a valid and binding agreement of such Guarantor
enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, voidable preference,
moratorium or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
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(xvi) the execution, delivery and performance of each
of the Guarantees and compliance by each subsidiary of the
Company which is a party to such Guarantee with all the
provisions thereof and the consummation of the transactions
contemplated thereby do not (A) require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as
such may be required under the securities or Blue Sky laws of
the various states and except as have been obtained under the
Securities Act and the Trust Indenture Act), and (B) conflict
with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws or comparable
organizational documents of the Company or any of its
subsidiaries or any agreement, indenture or other instrument
known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective properties is bound, or
violate or conflict with any laws, administrative regulations
or rulings or, to such counsel's knowledge, court decrees
applicable to the Company or any of its subsidiaries or their
respective properties.
(xvii) (A) the Registration Statement (including any
Registration Statement filed under 462(b) of the Securities
Act, if any) and the Prospectus and any supplement or
amendment thereto (except for financial statements as to which
no opinion need be expressed) comply as to form in all
material respects with the Securities Act and the Trust
Indenture Act, and (B) such counsel believes that (except for
financial statements, as aforesaid and except for that part of
the Registration Statement that constitutes the Form T-1) the
Registration Statement at the time it became effective and at
the date of such opinion did not contain and does not contain
any untrue statement of a material fact or omit and does not
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
that the Prospectus, as amended or supplemented, if applicable
(except for financial statements, as aforesaid), as of its
date and at the date of such opinion, did not and does not
contain any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
In giving such opinion with respect to the matters covered by clause
(xvii) such counsel may state that their opinion and belief are based
upon their participation in the preparation of the Registration
Statement and Prospectus and
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any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified. In giving such opinion with respect to the matters
covered by clauses (v), (vi), (xv) and (xvi) relating to Guarantees of
Guarantors organized under the laws of the states of California,
Florida, Maryland and Ohio, if any, such counsel may rely on the
opinion of local counsel satisfactory to the Underwriters.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Garry B. Watzke, Esq., general counsel for the
Company, as to the matters referred to in clauses (viii), (x)(B), (xi),
(xii), (xiv), (xvi)(B) and (xvii)(B) of the foregoing paragraph (e) and
as to the following additional matters:
(i) to such counsel's knowledge, neither the
Company nor any of its subsidiaries is in violation of its
respective charter or by-laws or comparable organizational
documents and, to such counsel's knowledge, neither the
Company nor any of its subsidiaries is in default in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or other evidence of
indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the
Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective properties are
bound;
(ii) all leases to which the Company or any of
its subsidiaries is a party relating to real property in
Massachusetts or California are valid and binding and no
default has occurred or is continuing thereunder, which might
result in any material adverse change in the business,
prospects, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, and the Company
and its subsidiaries enjoy peaceful and undisturbed possession
under all such leases to which any of them is a party as
lessee with such exceptions as do not materially interfere
with the use made by the Company or such subsidiary; and
(iii) to such counsel's knowledge, the Company
and each of its subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under
any applicable Environmental Laws, as are necessary to own,
lease and operate its respective properties and to conduct its
respective business in
24
<PAGE>
the manner described in the Prospectus; to such counsel's
knowledge without having conducted any independent
investigation, the Company and each of its subsidiaries has
fulfilled and performed all of its material obligations with
respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow,
revocation or termination thereof or would result in any other
material impairment of the rights of the holder of any such
permit, except in each case as would not, singly or in the
aggregate, have a material adverse effect (financial or
otherwise) on the Company and its subsidiaries, taken as a
whole and, except as described in the Prospectus, such permits
contain no restrictions that materially interfere with the
business or operations of the Company or any of its
subsidiaries as currently conducted;
In giving such opinion with respect to the matters covered by clause
(xvii)(B) of the foregoing paragraph (e) such counsel may state that
his opinion and belief are based upon his participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified.
(g) The opinions of Sullivan & Worcester LLP and Garry B.
Watzke described in paragraphs (e) and (f) above, respectively, shall
be rendered to you at the request of the Company and shall so state
therein.
(h) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Jones, Day, Reavis & Pogue, counsel for the
Underwriters, as to the matters referred to in clauses (iv), (v), (vi),
(viii) (but only with respect to the statements under the caption
"Description of Securities" and "Underwriting") and (xvii) of the
foregoing paragraph (e). In giving such opinion with respect to the
matters covered by clause (xvii) such counsel may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified.
(i) You shall have received a letter or letters on and
as of the date of this Agreement (each, an "initial
letter"), in form and substance satisfactory to you, from
Arthur Andersen LLP, Wolpoff & Company, LLP, Morrison and
Smith, Geo. S. Olive & Co. LLC, Robert F. Gayton, CPA,
Perles, Roth, Jonas & Hartney, CPAs, PA and Rothstein Kass &
Company, P.C., each independent public accountants, with
25
<PAGE>
respect to the financial statements and certain financial
information contained in the Registration Statement and the
Prospectus and a letter or letters on and as of the Closing
Date, in form and substance satisfactory to you, from Arthur
Andersen LLP, Wolpoff & Company, LLP, Morrison and Smith,
Geo. S. Olive & Co. LLC, Robert F. Gayton, CPA, Perles,
Roth, Jonas & Hartney, CPAs, PA and Rothstein Kass &
Company, P.C. confirming the information contained in the
initial letter or letters provided by such accountants.
(j) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company
at or prior to the Closing Date.
9. Termination. This Agreement may be terminated at any time
prior to the Closing Date by you by written notice to the Company if any of the
following has occurred: (i) since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any material adverse
change or development involving a prospective material adverse change in the
business prospects, financial condition or results of operations of the Company
or any of its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, which would, in your judgment, make it
impracticable to market the Securities and the related Guarantees on the terms
and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
involving the United States or change in economic conditions or in the financial
markets of the United States that, in your judgment, is material and adverse and
would, in your judgment, make it impracticable to market the Securities and the
related Guarantees on the terms and in the manner contemplated in the
Prospectus, (iii) the suspension or material limitation of trading in securities
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market System or limitation on prices for securities on any such
exchange or National Market System, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company or any subsidiary, or (v) the declaration of a banking
moratorium by either federal or New York State authorities.
If on the Closing Date any one or more of the Underwriters
shall fail or refuse to purchase the Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Securities
and related Guarantees which such defaulting Underwriter or Underwriters, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the total principal amount of Securities
26
<PAGE>
and related Guarantees to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the principal amount of Securities and related Guarantees set forth opposite its
name in Schedule I bears to the total principal amount of Securities and related
Guarantees which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Securities and the related Guarantees which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase on
such date; provided that in no event shall the principal amount of Securities
and related Guarantees which any Underwriter has agreed to purchase pursuant to
Section 2 hereof be increased pursuant to this Section 9 by an amount in excess
of one-ninth of such principal amount of Securities and related Guarantees
without the written consent of such Underwriter. If on the Closing Date any
Underwriter or Underwriters shall fail or refuse to purchase Securities and
related Guarantees and the aggregate principal amount of Securities and related
Guarantees with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities and related Guarantees to be
purchased on such date by all Underwriters and arrangements satisfactory to you
and the Company for purchase of such Securities and related Guarantees are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (a) if to the Company, to Iron
Mountain Incorporated, 745 Atlantic Avenue, Boston, Massachusetts 02111, and (b)
if to any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, its officers
and directors and of the several Underwriters set forth in or made pursuant to
this Agreement shall remain operative and in full force and effect, and will
survive delivery of and payment for the Securities and the related Guarantees,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter or by or
27
<PAGE>
on behalf of the Company, the officers or directors of the Company or any
controlling person of the Company, (ii) acceptance of the Securities and the
related Guarantees and payment for them hereunder and (iii) termination of this
Agreement.
If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company agrees
to reimburse the several Underwriters for all out-of-pocket expenses (including
the fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from any of the several Underwriters merely because of
such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
28
<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the several Underwriters.
Very truly yours,
IRON MOUNTAIN INCORPORATED
By: _________________________________
Title:
IRON MOUNTAIN RECORDS MANAGEMENT, INC.
METRO BUSINESS ARCHIVES, INC.
CRITERION ATLANTIC PROPERTY, INC.
CRITERION PROPERTY, INC.
HOLLYWOOD PROPERTY, INC.
IM SAN DIEGO, INC.
IRON MOUNTAIN INFORMATION PARTNERS, INC.
IRON MOUNTAIN DATA PROTECTION SERVICES,
INC.
IRON MOUNTAIN RECORDS MANAGEMENT OF
MARYLAND, INC.
IRON MOUNTAIN RECORDS MANAGEMENT OF
OHIO, INC.
IRON MOUNTAIN WILMINGTON, INC.
DATA STORAGE SYSTEMS, INC.
IRON MOUNTAIN RECORDS MANAGEMENT OF
MISSOURI LLC
IRON MOUNTAIN RECORDS MANAGEMENT OF
BOSTON, INC.
DATA ARCHIVE SERVICES, INC.
DATA ARCHIVE SERVICES OF MIAMI, INC.
By______________________________________
C. Richard Reese
Chairman of the Board of Directors and
Chief Executive Officer
29
<PAGE>
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
PRUDENTIAL SECURITIES INCORPORATED
Acting severally on behalf of
themselves
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By________________________
30
<PAGE>
SCHEDULE I
Principal Amount of
Securities
Underwriter to be Purchased
----------- ---------------
Donaldson, Lufkin & Jenrette $
Securities Corporation
Bear, Stearns & Co. Inc.
Prudential Securities Incorporated
------------
Total $150,000,000
31
EXHIBIT 3.1C
Certificate of Incorporation
of
CRITERION ATLANTIC PROPERTY, INC.
FIRST: The name of the corporation is Criterion Atlantic Property, Inc.
SECOND: The address of its registered office in the State of Delaware is
32 Loockerman Square, Suite L-100 in the City of Dover, County of Kent. The name
of its registered agent at such address is The Prentice-Hall Corporation System,
Inc.
THIRD: The nature of the business or purposes to be conducted or promoted
is to carry on and to engage in any lawful business, act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware; and to possess and exercise all the powers and privileges granted by
the General Corporation Law of the State of Delaware or by any other law of the
State of Delaware or by this Certificate of Incorporation together with any
powers incidental thereto.
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is one thousand (1,000) shares of Common Stock, $.01 par
value (the "Common Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of the Common Stock of the corporation.
4.1 COMMON STOCK.
4.1.1 Voting. The holders of shares of Common Stock are entitled to
one vote for each share held at all meetings of stockholders (and written
actions in lieu of meetings). There shall be no cumulative voting.
<PAGE>
4.1.2 Dividends. Dividends may be declared and paid on the Common
Stock from funds lawfully available therefor when and as determined by the Board
of Directors.
4.1.3 Liquidation. Upon the dissolution or liquidation of the
corporation, whether voluntary or involuntary, holders of Common Stock will be
entitled to receive the net assets of the corporation available for distribution
to its stockholders.
FIFTH: The name and mailing address of the incorporator are as follows:
NAME MAILING ADDRESS
Bryan G. Tyson Sullivan & Worcester
One Post Office Square
Boston, Massachusetts 02109
SIXTH: The name and mailing address of the persons who are to serve as
directors until the first annual meeting of stockholders, or until their
successors are elected and qualify, are:
NAME MAILING ADDRESS
C. Richard Reese Schooner Capital Corporation
99 Bedford Street
Boston, Massachusetts 02111
Eugene B. Doggett Schooner Capital Corporation
99 Bedford Street
Boston, Massachusetts 02111
Jas. Murray Howe Sullivan & Worcester
One Post Office Square
Boston, Massachusetts 02109
SEVENTH: The corporation is to have perpetual existence.
EIGHTH: The stockholders of the corporation shall not be personally liable
for the payment of the corporation's debts to any extent whatever.
-2-
<PAGE>
NINTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of S291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under the provisions of S279 of Title 8 of the Delaware Code order a
meeting of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
TENTH: No director shall be personally liable to the corporation or any
stockholder for monetary damages for breach of fiduciary duty as a director,
except, in addition to any and all other requirements for such liability, (i)
for any breach of such director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) to the extent
-3-
<PAGE>
provided under Section 174 of Title 8 of the Delaware Code (relating to the
General Corporation Law of the State of Delaware) or any amendment thereto or
successor provision thereto, or (iv) for any transaction for which such director
derived an improper personal benefit. Neither the amendment nor repeal of this
Article TENTH, nor the adoption of any provision of this Certificate of
Incorporation inconsistent with this Article TENTH, shall eliminate or reduce
the effect of this Article TENTH in respect of any matter occurring, or any
cause of action, suit or claim that, but for this Article TENTH, would accrue or
arise, prior to such amendment, repeal, or adoption of an inconsistent
provision.
ELEVENTH: The Board of Directors shall have the power to adopt, amend or
repeal the bylaws of the corporation.
TWELFTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate hereby declaring and certifying that
this is my act and deed and the facts herein stated are true, and accordingly
have hereunto set my hand this fifth day of November, 1990.
/s/ Bryan G. Tyson
---------------------------
Bryan G. Tyson
-4-
EXHIBIT 3.1D
Certificate of Incorporation
of
CRITERION PROPERTY, INC.
FIRST: The name of the corporation is Criterion Property, Inc.
SECOND: The address of its registered office in the State of Delaware is
No. 229 South State Street in the City of Dover, County of Kent. The name of its
registered agent at such address is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business or purposes to be conducted or promoted
is to carry on and to engage in any lawful business, act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware; and to possess and exercise all the powers and privileges granted by
the General Corporation Law of the State of Delaware or by any other law of the
State of Delaware or by this Certificate of Incorporation together with any
powers incidental thereto.
FOURTH: The total number of shares of all classes of stock which the
corporation shall have authority to issue is 1,000 shares of Common Stock, $.01
par value (the "Common Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of the Common Stock of the corporation.
4.1 Voting. The holders of shares of Common Stock are entitled to one vote
for each share held at all meetings of stockholders (and written actions in lieu
of meetings). There shall be no cumulative voting.
4.2 Dividends. Dividends may be declared and paid on the Common Stock from
funds lawfully available therefor when and as determined by the Board of
Directors.
-1-
<PAGE>
4.3 Liquidation. Upon the dissolution or liquidation of the corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled to
receive the net assets of the corporation available for distribution to its
stockholders.
FIFTH: The name and mailing address of the incorporator are
NAME MAILING ADDRESS
Bryan G. Tyson Sullivan & Worcester
One Post Office Square
Boston, Massachusetts 02109
SIXTH: The names and mailing addresses of the persons who are to serve as
directors until the first annual meeting of stockholders, or until their
successors are elected and qualify, are:
NAME MAILING ADDRESS
C. Richard Reese Schooner Capital Corporation
99 Bedford Street
Boston, Massachusetts 02111
Eugene B. Doggett Schooner Capital Corporation
99 Bedford Street
Boston, Massachusetts 02111
Jas. Murray Howe Sullivan & Worcester
One Post Office Square
Boston, Massachusetts 02109
SEVENTH: The corporation is to have perpetual existence.
EIGHTH: The stockholders of the corporation shall not be personally liable
for the payment of the corporation's debts to any extent whatever.
NINTH: The following additional provisions are inserted for the management
of the business and the conduct of the affairs of the corporation.
-2-
<PAGE>
9.1 Except as otherwise provided in the Certificate of Incorporation or by
the By-Laws of the corporation as from time to time amended, the business and
affairs of the corporation shall be managed by its Board of Directors, and,
without limitation, the Board of Directors of the corporation is hereby
specifically authorized and empowered from time to time in its discretion:
(a) to make, alter, amend and repeal the By-Laws of the corporation; and
(b) to determine for any purpose and in any manner not inconsistent with
the other provisions of this Certificate of Incorporation the amount of the
gross assets, of the liabilities, of the net assets or of the net profits of the
corporation as the same exist or shall have existed at any time or for any
period or periods, and to create, increase, abolish or reduce any reserve or
reserves for accrued, accruing or contingent liabilities or expenses, including
taxes and other charges.
9.2 The Board of Directors in its discretion may submit any contract,
transaction or act for approval or ratification at any annual meeting of the
stockholders or at any meeting of the stockholders called for the purpose of
considering any such contract, transaction or act, and any contract, transaction
or act that shall be approved or be ratified by the vote of the holders of a
majority of the stock of the corporation which is represented in person or by
proxy at such meeting and entitled to vote thereat (provided that a lawful
quorum of stockholders be there represented in person or by proxy) shall be as
valid and as binding upon the corporation and upon all of the stockholders of
the corporation as though it had been approved or ratified by every stockholder
of the corporation.
9.3 Meetings of the stockholders may be held without the State of
Delaware, if the By-Laws so provide. The books of the corporation may be kept
(subject to any statutory provision) outside the State of Delaware at such place
or places as may be from time to time
-3-
<PAGE>
designated by the Board of Directors or in the By-Laws of the corporation.
Elections of directors need not be by ballot unless the By-Laws shall otherwise
provide.
9.4 The corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, by reason of the fact that such person is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust or
other entity to the fullest extent permitted by law or any agreement, vote of
stockholders or directors or otherwise, or by any By-Law of this corporation,
but the adoption of any such By-Law shall not be deemed to be exclusive of any
other rights to indemnification any such person may be entitled to under any
law, agreement, vote of stockholders or directors or otherwise.
TENTH: Whenever a compromise or arrangement is proposed between the
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
-4-
<PAGE>
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
ELEVENTH: No director shall be personally liable to the corporation or any
stockholder for monetary damages for breach of fiduciary duty as a director,
except, in addition to any and all other requirements for such liability, (i)
for any breach of such director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) to the extent
provided under Section 174 of Title 8 of the Delaware Code (relating to the
General Corporation Law of the State of Delaware) or any amendment thereto or
successor provision thereto, or (iv) for any transaction for which such director
derived an improper personal benefit. Neither the amendment nor repeal of this
Article ELEVENTH, nor the adoption of any provision of this certificate of
incorporation inconsistent with this Article ELEVENTH, shall eliminate or reduce
the effect of this Article ELEVENTH in respect of any matter occurring, or any
cause of action, suit or claim that, but for this Article ELEVENTH, would accrue
or arise, prior to such amendment, repeal, or adoption of an inconsistent
provision.
TWELFTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
-5-
<PAGE>
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate hereby declaring and certifying that
this is my act and deed and the facts herein stated are true, and accordingly
have hereunto set my hand this fourth day of November, 1988.
/s/ Bryan G. Tyson
------------------
Bryan G. Tyson
-6-
EXHIBIT 3.1E
ARTICLES OF INCORPORATION OF
HOLLYWOOD PROPERTY, INC.
ARTICLE I
The name of this corporation is Hollywood Property, Inc. (the
"Corporation").
ARTICLE II
The purpose of this Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
ARTICLE III
The initial agent for service of process shall be Prentice-Hall
Corporation System, Inc.
ARTICLE IV
This Corporation is authorized to issue one class of shares. The
total number of shares which this Corporation is authorized to issue is 1,000,
par value $.01.
ARTICLE V
The liability of the directors of the Corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.
ARTICLE VI
The Corporation is authorized to provide indemnification of agents,
as that term is defined in Section 317 of the California General Corporation
Law, in excess of that expressly permitted by said Section 317 for those agents
of the Corporation for breach of duty to the Corporation and its shareholders,
under any bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, to the fullest extent such indemnification may be authorized hereby,
subject to the limits on such excess indemnification set forth in Section 204 of
the California General Corporation Law. The Corporation is further authorized to
provide insurance for agents as set forth in Section 317 of the California
Corporations Code, provided that, in cases where the corporation owns all or a
portion of the shares of the company issuing the insurance policy, the company
and/or the policy must meet one of the two sets of conditions set forth in
Section 317, as amended.
<PAGE>
Any repeal or modification of the foregoing provisions of this
Article VI by the shareholders of this Corporation shall not adversely affect
any right or protection of an agent of this Corporation existing at the time of
such repeal or modification.
Dated: July 17, 1990
/s/ Garry B. Watzke
-------------------
Garry B. Watzke
Incorporator
-2-
EXHIBIT 3.1F
Certificate of Incorporation
of
IM San Diego, Inc.
FIRST: The name of the corporation is IM San Diego, Inc.
SECOND: The registered office of the Corporation in the State of Delaware is
located at 32 Loockerman Square, Suite L-100, Dover, Kent County, Delaware
19901; and the name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage, anywhere in the world, in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware; and to possess and exercise all powers and
privileges granted by the General Corporation Law of Delaware.
FOURTH: The total number of shares of capital stock which the Corporation is
authorized to issue is 1,000 (one thousand) shares, all of which shall be shares
of Common Stock of the par value of $1.00 per share.
FIFTH: The name and mailing address of the incorporator is as follows:
Name Mailing Address
Garry B. Watzke 745 Atlantic Avenue, Boston, MA 02111
SIXTH: The name and mailing address of the person who is to serve as sole
director until the first meeting of stockholders, or until his successor is
elected and qualified, whichever first occurs, is as follows:
C. Richard Reese 745 Atlantic Avenue, Boston, MA 02111
SEVENTH: For the management of the business and for the conduct of the affairs
of the Corporation, and in further definition, limitation and regulation of the
powers of its directors and stockholders, it is further provided:
1. The number of directors of the Corporation shall be as prescribed in the
By-laws of the Corporation but such number may from time to time be
increased or decreased in such manner as may be prescribed by the By-laws.
In no event shall the number of Directors be less than the minimum number
prescribed by law.
2. In furtherance and not in limitation of the powers conferred by the laws
of the State of Delaware, the Board of Directors is expressly authorized
and empowered:
<PAGE>
-2-
(a) Subject to the applicable provisions of the By-laws then in effect,
to determine, from time to time, whether and to what extent and at
what times and places and under what conditions and regulations the
accounts and books of the Corporation, or any of them, shall be open
to the inspection of the stockholders, and no stockholder shall have
any right to inspect any account or document of the Corporation,
except as conferred by the laws of the State of Delaware, unless and
until authorized so to do by resolution of the Board of Directors or
of the stockholders of the Corporation.
(b) Without the assent or vote of the stockholders to authorize and
issue obligations of the Corporation, secured or unsecured, to
include therein such provisions as to redeemability, convertibility
or otherwise, as the Board of Directors, in its sole discretion, may
determine, and to authorize the mortgaging or pledging, as security
therefor, of any property of the Corporation, real or personal,
including after-acquired property.
(c) To establish a bonus, profit-sharing or other types of incentive or
compensation plans for the employees (including officers and
Directors) of the Corporation and to fix the amount of profits to be
distributed or shared and to determine the persons to participate in
any such plans and the amounts their respective participants.
(d) To make, alter, amend or repeal the By-laws of the Corporation.
(e) To determine for any purpose and in any manner not inconsistent with
the other provisions of this Certificate of Incorporation the amount
of the gross assets, of the liabilities, of the net assets or of the
net profits of the Corporation as the same exist or shall have
existed at any time or for any period or periods, and to create,
increase, abolish or reduce any reserve or reserves for accrued,
accruing or contingent liabilities or expenses, including taxes and
other charges.
In addition to the powers and authorities hereinbefore or by statute
expressly conferred upon it, the Board of Directors may exercise all such
powers and do all such acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the provisions of the laws of the
State of Delaware, of the Certificate of Incorporation and of the By-laws
of the Corporation.
3. Any Director or any officer elected or appointed by the stockholders or by
the Board of Directors may be removed at any time in such manner as shall
be provided in the By-laws of the Corporation.
4. In the absence of fraud, no contract or other transaction between the
Corporation and any other corporation, and no act of the Corporation,
shall in any way be affected or invalidated by the fact that any of the
Directors of the Corporation are pecuniarily or otherwise interested in,
or are directors or officers of, such other corporation and, in the
absence of fraud, any Director may be a member, may be a party to, or may
be
<PAGE>
-3-
pecuniarily or otherwise interested in, any contract or transaction of the
Corporation; provided, in any case, that the fact that he or such firm is
so interested shall be disclosed or shall have been known to the Board of
Directors or a majority thereof; and any Director of the Corporation who
is also a director or officer of any such other corporation, or who is
also interested, may be counted in determining the existence of a quorum
at any meeting of the Board of Directors of the Corporation which shall
authorize any such Contract, act or transaction and may vote thereat to
authorize any such contract, act or transaction, with like force and
effect as if he were not such director or officer of such corporation, or
not so interested.
5. Any contract, act or transaction of the Corporation or of the Directors
may be ratified by a vote of a majority of the shares having voting powers
at any meeting of stockholders, or at any special meeting called for such
purpose, and such ratification shall, so far as permitted by law and by
this Certificate of Incorporation, be as valid and as binding as though
ratified by every stockholder of the Corporation.
6. No director of the Corporation shall be liable to any person on account of
any action undertaken by him as such director in reliance in good faith
upon the existence of any fact or circumstance reported or certified to
the Board of Directors by any officer of the Corporation or by any
independent auditor, engineer, or consultant retained or employed as such
by the Board of Directors.
7. Meetings of the stockholders may be held without the State of Delaware, if
the Bylaws so provide. The books of the Corporation may be kept (subject
to any statutory provision) outside the State of Delaware at such place or
places as may be from time to time designated by the Board of Directors or
in the By-laws of the Corporation. Elections of directors need not be by
ballot unless the By-laws shall otherwise provide.
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class of creditors, and/or of all the stockholders or class
of stockholders, of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of the creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
<PAGE>
-4-
NINTH: No director shall be personally liable to the Corporation or any
stockholder for monetary damages for breach of fiduciary duty as a director,
except, in addition to any and all other requirements for such liability, (i)
for any breach of such director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) to the extent
provided under Section 174 of Title 8 of the Delaware Code (relating to the
General Corporation Law of the State of Delaware ) or any amendment thereto or
successor provision thereto, or (iv) for any transaction for which such director
derived an improper personal benefit. Neither the amendment nor repeal of this
Article NINTH, nor the adoption of any provision of this Certificate of
Incorporation inconsistent with the Article NINTH, shall eliminate or reduce the
effect of this Article NINTH in respect of any matter occurring, or any cause of
action, suit or claim that, but for this Article NINTH, would accrue or arise
prior to such amendment, repeal, or adoption of an inconsistent provision.
TENTH: The stockholders of the Corporation shall not be personally liable for
the payment of the Corporation's debts.
ELEVENTH: The Corporation shall indemnify, defend and hold harmless any person
who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, investigative or other, including appeals, by reason of the fact
that he or she is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employer or agent of any corporation, partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, to the fullest extent authorized by Section 145 of the
Delaware General Corporation Law, as amended from time to time, against all
expenses, liabilities and losses (including attorneys' fees, judgment, fines,
ERISA excise taxes and penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith;
provided, however, that, except with respect to proceedings seeking to enforce
the rights to indemnification granted herein, the Corporation shall indemnify
any such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if the proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. Without limiting the
generality or the effect of the foregoing, the Corporation may enter into one or
more agreements with any person which provide for indemnification greater or
different than that provided in this Article ELEVENTH. Any repeal or
modification of the provisions of this Article ELEVENTH, or the adoption of any
provision inconsistent herewith, shall not adversely affect any right or
protection existing hereunder immediately prior to such repeal, modification or
adoption of an inconsistent provision. Notwithstanding the foregoing, all
indemnification provided for in this Article ELEVENTH shall not be deemed
exclusive of any other rights to which those entitled to receive indemnification
or reimbursement hereunder may be entitled under any By-law of the Corporation,
agreement, vote of stockholders or disinterested directors or otherwise.
TWELFTH: From time to time any of the provisions of this Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of
<PAGE>
-5-
the Corporation by this Certificate of Incorporation are granted subject to the
provisions of this Article TWELFTH.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 23rd day of
September, 1993.
/s/ Garry B. Watzke
-------------------
Garry B. Watzke
Sole Incorporator
EXHIBIT 3.1G
Certificate of Incorporation
of
Iron Mountain Information Partners, Inc.
FIRST: The name of the corporation is Iron Mountain Information Partners, Inc.
SECOND: The registered office of the Corporation in the Sate of Delaware is
located at 32 Loockerman Square, Suite L-100, Dover, Kent County, Delaware
19904; and the name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage, anywhere in the world, in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware; and to possess and exercise all powers and
privileges granted by the General Corporation Law of Delaware.
FOURTH: The total number of Shares of capital stock which the Corporation is
authorized to issue is 1,000 (one thousand) shares, all of which shall be shares
of Common Stock of the par value of $1.00 per share.
FIFTH: The name and mailing address of the incorporator are as follow:
NAME MAILING ADDRESS
Garry B. Watzke 745 Atlantic Avenue, Boston, MA 02111
SIXTH: The name and mailing address of the person who is to serve as sole
director until the first meeting of stockholders, or until his successor is
elected and qualified, whichever first occurs, is as follows:
C. Richard Reese 745 Atlantic Avenue, Boston, MA 02111
SEVENTH: For the management of the business and for the conduct of the affairs
of the Corporation, and in further definition, limitation and regulation of the
powers of its directors and stockholders, it is further provided:
1. The number of directors of the Corporation shall be as prescribed in the
By-laws of the Corporation but such number may from time to time be
increased or decreased in such manner as may be prescribed by the By-laws.
In not event shall the number of Directors be less than the minimum number
prescribed by law.
2. In furtherance and not in limitation of the powers conferred by the laws
of the State of Delaware, the Board of Directors is expressly authorized
and empowered:
(a) Subject to the applicable provisions of the By-laws then in effect,
to determine, from time to time, whether and to what extent and at
what times and places and under what conditions and regulations the
accounts and books of the
-1-
<PAGE>
Corporation, or any of them, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to inspect any
account or document of the Corporation, except as conferred by the
laws of the State of Delaware, unless and until authorized so to do
by resolution of the Board of Directors or of the stockholders of
the Corporation.
(b) Without the assent or vote of the stockholders to authorize and
issue obligations of the Corporation, secured or unsecured, to
include therein such provisions as to redeemability, convertibility
or otherwise, as the Board of Directors, in its sole discretion, may
determine, and to authorize the mortgaging or pledging, as security
therefor, of any property of the Corporation, real or personal,
including after-acquired property.
(c) To establish a bonus, profit-sharing or other types of incentive or
compensation plans for the employees (including officers and
Directors) of the corporation and to fix the amount of profits to be
distributed or shared and to determine the persons to participate in
any such plans and the amounts their respective participants.
(d) To make, alter, amend or repeal the By-laws of the Corporation.
(e) To determine for any purpose and in any manner not inconsistent with
the other provisions of this Certificate of Incorporation the amount
of the gross assets, of the liabilities, of the net assets or of the
net profits of the Corporation as the same exist or shall have
existed at any time or for any period or periods, and to create,
increase, abolish or reduce any reserve or reserves for accrued,
accruing or contingent liabilities or expenses, including taxes and
other charges.
In addition to the powers and authorities hereinbefore or by statue
expressly conferred upon it, the Board of Directors may exercise all such
powers and do all such acts and things as may be exercised or done by the
Corporation, subject, nevertheless, tot he provisions of the laws of the
State of Delaware, of the Certificate of Incorporation and of the By-laws
of the Corporation.
3. Any Director or any officer elected or appointed by the stockholders or by
the Board of Directors may be removed at any time in such manner as shall
be provided in the By-laws of the Corporation.
4. In the absence of fraud, no contract or other transaction between the
Corporation and any other corporation, and no act of the Corporation,
shall in any way be affected or invalidated by the fact that any of the
Directors of the Corporation are pecuniarily or otherwise interested in,
or are directors or officers of, such other corporation and, in the
absence of fraud, any Director may be a member, may be a party to, or may
be pecuniarily or otherwise interested in, any contract or transaction of
the Corporation; provided, in any case, that the fact that he or such firm
is so interested shall be disclosed or shall have been known to the Board
of Directors or a majority thereof; and any Director of the Corporation
who is also a director or officer of any such
-2-
<PAGE>
other corporation, or who is also interested, may be counted in
determining the existence of a quorum at any meeting of the Board of
Directors of the Corporation which shall authorize any such contract, act
or transaction and may vote thereat to authorize any such contract, act or
transaction, with like force and effect as if he were not such director or
office of such corporation, or not so interested.
5. Any contract, act or transaction of the Corporation or of the Directors
may be ratified by a vote of a majority of the shares having voting powers
at any meeting of stockholders, or at any special meeting called for such
purpose, and such ratification shall, so far as permitted by law and by
this Certificate of Incorporation, be as valid and as binding as though
ratified by every stockholder of the Corporation.
6. No Director of the Corporation shall be liable to any person on account of
any action undertaken by him as such director in reliance in good faith
upon the existence of any fact or circumstance reported or certified to
the Board of Directors by any officer of the Corporation or by any
independent auditor, engineer, or consultant retained or employed as such
by the Board of Directors.
7. Meetings of the stockholders may be held without the State of Delaware, if
the By- laws so provide. The books of the Corporation may be kept (subject
to any statutory provision) outside the State of Delaware at such place or
places as may be from time to time designed by the Board of Directors or
in the By-laws of the Corporation. Elections of directors need not be by
ballot unless the By-laws shall otherwise provide.
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class of creditors, and/or of all the stockholders or class
of stockholders, of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of the creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
NINTH: No director shall be personally liable to the Corporation or any
stockholder for monetary damages for breach of fiduciary duty as a director,
except, in addition to any and all other requirements for such liability, (i)
for any breach of such director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
-3-
<PAGE>
involve intentional misconduct or a knowing violation of law, (iii) to the
extent provided under Section 174 of Title 8 of the Delaware Code (relating to
the General Corporation Law of the State of Delaware) or any amendment thereto
or successor provision thereto, or (iv) for any transaction for which such
director derived an improper personal benefit. Neither the amendment nor repeal
of this Article NINTH, nor the adoption of any provision of this Certificate of
Incorporation inconsistent with the Article NINTH, shall eliminate or reduce the
effect of this Article NINTH in respect of any matter occurring, or any cause of
action, suit or claim that, but for this Article NINTH, would accrue or arise
prior to such amendment, repeal, or adoption of an inconsistent provision.
TENTH: The stockholders of the Corporation shall not be personally liable for
the payment of the Corporation's debts.
ELEVENTH: The Corporation shall indemnify, defend and hold harmless any person
who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suite or proceeding, whether civil, criminal,
administrative, investigative or other, including appeals, by reason of the fact
that he or she is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employer or agent of any corporation, partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, to the fullest extent authorized by Section 145 of the
Delaware General Corporation Law, as amended from time to time, against all
expenses, liabilities and losses (including attorneys' fees, judgment, fines,
ERISA excise taxes and penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith;
provided, however, that, except with respect to proceedings seeking to enforce
the rights to indemnification granted herein, the Corporation shall indemnify
any such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if the proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. Without limiting the
generality or the effect of the foregoing, the Corporation may enter into one or
more agreements with any person which provide for indemnification greater or
different than that provided in this Article ELEVENTH. Any repeal or
modification of the provisions of this Article ELEVENTH, or the adoption of any
provision inconsistent herewith, shall not adversely affect any right or
protection existing hereunder immediately prior to such repeal, modification or
adoption of an inconsistent provision. Notwithstanding the foregoing, all
indemnification provided for in this Article ELEVENTH shall not be deemed
exclusive of any other rights to which those entitled to receive indemnification
or reimbursement hereunder may be entitled under any By-law of the Corporation,
agreement, vote of stockholder or disinterested directors or otherwise.
TWELFTH: From to time to time any of the provisions of his Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
Certificate of Incorporation are granted subject to the provisions of this
Article TWELFTH.
-4-
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand and seal this ____ day of
July, 1994.
/s/ Garry B. Watzke
------------------------
Garry B. Watzke
Sole Incorporator
-5-
EXHIBIT 3.1H
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL JOSEPH CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF ORGANIZATION
(UNDER G.L. Ch. 156B)
ARTICLE I
The name of the corporation is:
Iron Mountain Data Protection Services, Inc.
ARTICLE II
The purpose of the corporation is to engage in the following business
activities:
To engage in the provision of management, storage and protection services for
vital records, and to engage in any other activity, singly or in partnership
with others, in which a corporation may lawfully participate under Chapter 156B
of the General Laws of Massachusetts.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8-1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch. Additions to more than one
article may be continued on a single sheet so long as each article requiring
each such addition is clearly indicated.
<PAGE>
ARTICLE III
The type and classes of stock and the total number of shares and par value, if
any, of each type and class of stock which the corporation is authorized to
issue is as follows:
- --------------------------------------------------------------------------------
WITHOUT PAR VALUE STOCKS | WITH PAR VALUE STOCKS
------------------------ | ---------------------
TYPE NUMBER OF SHARES | TYPE NUMBER OF SHARES PAR VALUE
---- ---------------- | ---- ---------------- ---------
|
COMMON: 0 | COMMON: 10,000 $1.00
|
PREFERRED: 0 | PREFERRED: 0 0
- --------------------------------------------------------------------------------
ARTICLE IV
If more than one type, class or series is authorized, a description of each
with, if any, the preferences, voting powers, qualifications, special or
relative rights or privileges as to each type and class thereof and any series
now established.
Not applicable
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon transfer
of shares of stock of any class are as follows:
None
Article VI
Other lawful provisions, if any, for the conduct and regulation of business and
affairs of the corporation, for its voluntary dissolution, or for limiting,
defining, or regulating the powers of the corporation, or of its directors or
stockholders, or of any class of stockholder: (if there are no provisions state
"NONE".)
See Additional Sheets VI A through VI C.
Note: The preceding six (6) articles are considered to be permanent and may
ONLY be changed by filing appropriate Articles of Amendment.
<PAGE>
ARTICLE VII
The effective date of organization of the corporation shall be the date approved
and filed by the Secretary of the Commonwealth. If a later effective date is
desired, specify such date which shall not be more than thirty days after the
date of filing.
The information contained in ARTICLE VIII is NOT a PERMANENT part of the
Articles of Organization and may be changed ONLY by filing the appropriate form
provided therefor.
ARTICLE VIII
a. The street address of the corporation IN MASSACHUSETTS is: (post office
boxes are not acceptable)
745 Atlantic Avenue, 10th Floor, Boston, Massachusetts 02111-2735
b. The name, residence and post office address (if different) of the
directors and officers of the corporation are as follows:
NAME RESIDENCE POST OFFICE ADDRESS
---- --------- -------------------
President: C. Richard Reese 203 Hickory Road 745 Atlantic Avenue
Weston, MA 02193 Boston, MA 02111-2735
Treasurer: Eugene B. Doggett 98 Lexington Street 745 Atlantic Avenue
Weston, MA 02193 Boston, MA 02111-2735
Clerk: Garry B. Watzke 4 Peter Circle 745 Atlantic Avenue
Marblehead, MA 01945 Boston, MA 02111-2735
Director: C. Richard Reese 203 Hickory Road 745 Atlantic Avenue
Weston, MA 02193 Boston, MA 02111-2735
c. The fiscal year (i.e., tax year) of the corporation shall end on the last
day of the month of: December
d. The name and BUSINESS address of the RESIDENT AGENT of the corporation,
if any, is: NONE
ARTICLE IX
By-laws of the corporation have been duly adopted and the president, treasurer,
clerk and directors whose names are set forth above, have been duly elected.
IN WITNESS WHEREOF and under the pains and penalties of perjury, I/WE, whose
signature(s) appear below as incorporator(s) and whose names and business or
residential address(es) ARE CLEARLY TYPED OR PRINTED beneath each signature do
hereby associate with the intention of forming this corporation under the
provisions of General Laws Chapter 156B and do hereby sign these Articles of
Organization as incorporator(s) this 21st day of June, 1994
/s/ Garry B. Watzke
---------------------
Note: If an already-existing corporation is acting an Incorporator, type in the
exact name of the corporation, the state or other jurisdiction where it was
incorporated, the name of the person signing on behalf of said corporation and
the title he/she holds or other authority by which such action is taken.
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
I hereby certify that, upon an examination of these articles
of organization, duly submitted to me, it appears that the
provisions of the General Laws relative to the organization of
corporations have been complied with, and I hereby approve said
articles; and the filing fee in the amount of $200.00 having been
paid, said articles are deemed to have been filed with me this 21st
day of June, 1994.
Effective date
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
FILING FEE: 1/10 of 1% of the total amount of the authorized capital
stock, but not less than $200.00. For the purpose of filing, shares
of stock with a par value less than one dollar or no par stock shall
be deemed to have a par value of one dollar per share.
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
Garry B. Watzke, Esq.
745 Atlantic Avenue, 10th Floor
Boston, MA 02111-2735
Telephone: (617) 357-4057
<PAGE>
CONTINUATION SHEET VI A
-----------------------
Other Lawful Provisions
-----------------------
6. The following additional provisions are hereby established for the
management, conduct and regulation of the business and affairs of the
Corporation, and for creating, limiting, defining, and regulating the powers of
the Corporation and of its Directors and stockholders:
(a) The Board of Directors is authorized and empowered from time to
time in its discretion to make, amend or repeal the By-laws in part or in whole,
except with respect to any provision thereof which by law or the By-laws
requires action by the stockholders.
(b) The Board of Directors shall have full power and authority to
determine the terms and manner of issue, including but not limited to the
consideration therefor, and to issue or cause the issue of all shares of capital
stock of the Corporation now or from time to time hereafter authorized.
(c) Meetings of the stockholders may be held outside The
Commonwealth of Massachusetts at such location within the United States as the
Board of Directors may determine. The books of the Corporation may be kept
(subject to any provision contained in the statutes) at such place or places
within The Commonwealth of Massachusetts as may be designated from time to time
by the Board of Directors or in the By-Laws of the Corporation. Elections of
Directors need not be by ballot unless the By-Laws of the Corporation shall so
provide.
(d) Any contract, transaction or act of the Board of Directors
purporting to be in behalf of the Corporation which shall be authorized,
approved or ratified by the holders of a majority of the outstanding shares of
the Corporation's stock at any special meeting duly called for that purpose, or
at any annual meeting at which a quorum is present or represented, or by their
consent in writing, shall be valid and binding as though authorized, approved
and ratified by every shareholder of the Corporation.
(e) No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of judiciary
duty as a director notwithstanding any provision of law imposing such liability;
provided, however, this provision shall not eliminate or limit the liability of
a director (i) for any breach of the Director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section sixty-one or sixty-two of Chapter 156B of the General Laws, or (iv) for
any transaction from which the director derived an improper personal benefit.
Each person who shall be, or shall have been, a director or
officer of the Corporation, or who shall serve, or shall have served, at its
request as a director or officer of another corporation, or as trustee or
officer of an association or trust in which the Corporation owns stock or
shares, or of which the Corporation is a creditor, shall be
<PAGE>
CONTINUATION SHEET VI B
-----------------------
indemnified by the Corporation against all liabilities and expenses at any time
imposed upon or reasonably incurred by him in connection with, arising out of or
resulting from any action, suit or proceeding in which he may be involved or
with which he may be threatened, by reason of his then serving or theretofore
having served as such director, trustee or officer, or by reason of any alleged
act or omission by him in any such capacity (including, without limitation, the
making of loans to shareholders, if and to the extent performed in conformity
with the provisions of these Articles), whether or not he shall be serving as
such director, trustee or officer at the time any or all of such liabilities or
expenses shall be imposed upon or incurred by him. The matters covered by the
foregoing indemnity shall include any amounts paid by any such person in
compromise or settlement, if such compromise or settlement shall be approved as
in the best interests of the Corporation by resolution of a disinterested
majority of the Board of Directors, or by vote of disinterested stockholders,
holding a majority of the shares of stock entitled to vote, present or
represented at a meeting called for the purpose; but such matters shall not
include liabilities or expenses imposed or incurred in connection with any
matters as to which such person shall be finally adjudged in such action, suit
or proceeding not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Corporation. The matters covered by the
foregoing indemnity shall also include payment by the Corporation of expenses
incurred in defending a civil or criminal action or proceeding in advance of
final disposition of such action or proceeding, provided, that the Corporation
shall have received an undertaking by the person indemnified to repay such
payment if he shall be adjudicated to be not entitled to indemnification under
Section 67 of Chapter 156B of the General Laws.
Each person who shall be or become a director, trustee or
officer as aforesaid shall be deemed to have accepted and to have continued to
serve in such office in reliance upon the indemnity herein provided. These
indemnity provisions shall be separable, and if any portion hereof shall be
finally adjudged to be invalid, such invalidity shall not affect any other
portion which can be given effect. These indemnity provisions shall not be
exclusive of any other right which any director, trustee or officer may have or
hereafter acquire, whether under any by-law, vote of stockholders, agreement,
judgment, decree, provision of law, or otherwise, and these indemnity provisions
and all other such rights shall be cumulative.
(f) No contract or other transaction between the Corporation and any
other person, firm or corporation shall, in the absence of fraud, in any way be
affected or invalidated, nor shall any officer or director be subject to
surcharge with respect to any such contract or transaction, by the fact that
such officer or director, or any firm of which any officer or director is a
shareholder, officer or director, is a party to, or may be pecuniarily or
otherwise interested in, such contract or transaction, provided, that the fact
that the individual or such firm or corporation is so interested shall be known
to the Board of Directors prior to or shall be disclosed to the Board of
Directors at the meeting at which, or
<PAGE>
CONTINUATION SHEET VI C
-----------------------
prior to the directors' executing their written consents by which, action to
authorize, ratify, or approve such contract or transaction shall be taken. Any
director of the Corporation may vote upon or give his written consent to any
contract or other transaction between the Corporation and any subsidiary or
affiliated corporation without regard to the fact that he is also a director or
officer of such subsidiary or affiliated corporation.
(g) Each director and officer of the Corporation shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account of the Corporation, reports made to the Corporation by any of
its officers or employees or by counsel, accountants, appraisers or other
experts or consultants selected with reasonable care by the directors or
officers of the Corporation, or upon other records of the Corporation.
(h) Except as may be otherwise provided herein, the Corporation
reserves the right to amend, alter, change or repeal any provision contained in
these Articles of Organization, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation.
(i) No stockholder shall have any right to examine any property or
any books, accounts or other writings of the Corporation if there is reasonable
ground for belief that such examination will for any reason be adverse to the
interests of the Corporation, and a vote of the directors refusing permission to
make such examination and setting forth that in the opinion of the directors
such examination would be adverse to the interest of the Corporation shall be
prima facie evidence that such examination would be adverse to the interests of
the Corporation. Every such examination shall be subject to such reasonable
regulations as the directors may establish in regard thereto.
(j) The directors may specify the manner in which the accounts of
the Corporation shall be kept and may determine what constitutes net earnings,
profits and surplus, what amounts, if any, shall be reserved for any corporate
purpose, and what amounts, if any shall be declared as dividends. Unless the
Board of Directors otherwise specifies, the excess of the consideration received
for any share of capital stock over its par value shall be paid-in surplus. All
surplus shall be available for any corporate purpose, including the payment of
dividends.
(k) The purchase or other acquisition or retention by the
Corporation of shares of its own capital stock shall not be deemed a reduction
of its capital. Upon any reduction of capital or capital stock, no stockholder
shall have any right to demand any distribution from the Corporation, except as
and to the extent that the stockholders shall so have provided at the time
authorizing such reduction.
(l) The Corporation shall have the power to be a partner in any
business enterprise which it would have power to conduct itself.
EXHIBIT 3.1I
ARTICLES OF INCORPORATION
OF
IRON MOUNTAIN RECORDS MANAGEMENT OF MARYLAND, INC.
-------------------------------
The undersigned, being a natural person and acting as incorporator, does
hereby adopt the following Articles of Incorporation for the purpose of forming
a business corporation in the State of Maryland, pursuant to the provisions of
the Maryland General Corporation Law.
FIRST: (1) The name of the incorporator is Garry B. Watzke.
(2) The said incorporator's address, including the street and
number, if any, including the county or municipal area, and including the state
or country is 745 Atlantic Avenue, Boston, Massachusetts, 02111.
(3) The said incorporator is at least eighteen years of age.
(4) The said incorporator is forming the corporation named in
these Articles of Incorporation under the general laws of the State of Maryland,
to wit, the Maryland General Corporation Law.
SECOND: The name of the corporation (hereinafter called the "corporation")
is Iron Mountain Records Management of Maryland, Inc.
THIRD: The corporation is formed for the following purpose or purposes: To
engage in the business of managing, sorting, indexing, storing and providing
other services in respect of business, legal, accounting, medical, engineering
and other records, whether recorded on paper, film, magnetic or other media.
To engage in such other businesses or activities as a corporation
organized under the Maryland General Corporation Law may lawfully engage in,
either alone or in a joint venture or partnership with others.
To have all of the powers conferred upon corporations organized under the
provisions of the Maryland General Corporation Law.
FOURTH: The address, including street and number, if any, and the county
or municipal area, of the principal office of the corporation within the State
of Maryland, is c/o The Prentice-Hall Corporation System, Maryland, 11 East
Chase Street, Baltimore City, Maryland 21202.
FIFTH: The name and address, including street and number, if any, and the
county or municipal area, of the resident agent of the corporation within the
State of Maryland, is
<PAGE>
-2-
The Prentice-Hall Corporation System, Maryland, 11 East Chase Street, Baltimore
City, Maryland 21202.
SIXTH: (1) The total number of shares of stock which the corporation has
authority to issue is 1,000, all of which are of a par value of one dollar
($1.00) each and are designated as Common Stock.
(2) The aggregate par value of all the authorized shares of stock is
one thousand dollars.
(3) The Board of Directors of the corporation is authorized, from
time to time, to issue any additional stock or convertible securities of the
corporation without the approval of the holders of outstanding stock.
(4) Provisions, if any, governing the restriction on the
transferability of any of the shares of stock of the corporation may be set
forth in the Bylaws of the corporation or in any agreement or agreements duly
entered into.
(5) To the extent permitted by Section 2-104(b)(5) of the Maryland
General Corporation Law, notwithstanding any provision of the Maryland General
Corporation Law requiring a greater proportion than a majority of the votes
entitled to be cast in order to take or authorize any action, any such action
may be taken or authorized upon the concurrence of at least a majority of the
aggregate number of votes entitled to be cast thereon.
(6) No holder of any of the shares of any class of the corporation
shall be entitled as of right to subscribe for, purchase, or otherwise acquire
any shares of any class of the corporation which the corporation proposes to
issue or any rights or options which the corporation proposes to grant for the
purchase of shares of any class of the corporation or for the purchase of any
shares, bonds, securities, or obligations of the corporation which are
convertible into or exchangeable for, or which carry any rights, to subscribe
for, purchase, or otherwise acquire shares of any class of the corporation; and
any and all of such shares, bonds, securities, or obligations of the
corporation, whether now or hereafter authorized or created, may be issued, or
may be reissued or transferred if the same have been reacquired and have
treasury status, and any and all of such rights and options may be granted by
the Board of Directors to such persons, firms, corporations, and associations,
and for such lawful consideration, and on such terms, as the Board of Directors
in its discretion may determine, without first offering the same, or any
thereof, to any said holder.
SEVENTH: (1) The number of directors of the corporation, until such number
shall be changed by the Bylaws of the corporation, is one.
(2) The name of the person who will serve as director of the
corporation until the first annual meeting of stockholders and until his
successors are elected and qualify is as follows: C. Richard Reese.
<PAGE>
-3-
(3) The initial Bylaws of the corporation shall be adopted by the
initial director. Thereafter, the power to adopt, alter, and repeal the Bylaws
of the corporation shall be vested in the Board of Directors of the corporation.
(4) The liability of the directors of the corporation is limited to
the fullest extent permitted by the provisions of Section 2-405.2 of the
Maryland General Corporation Law, as the same may be amended and supplemented.
(5) The corporation shall, to the fullest extent permitted by the
Maryland General Corporation Law, as the same may be amended and supplemented,
and, without limiting the generality of the foregoing, in accordance with
Section 2-418 of said Maryland General Corporation Law, indemnify any and all
persons whom it shall have power to indemnify under said law from and against
any and all of the expenses, liabilities or other matters referred to in or
covered by said Maryland General Corporation Law.
EIGHTH: From time to time any of the provisions of these Articles of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the Maryland General Corporation Law at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and any
contract rights at any time conferred upon the stockholders of the corporation
by these Articles of Incorporation are granted subject to the provisions of this
Article.
IN WITNESS WHEREOF, I have adopted and signed these Articles of
Incorporation and do hereby acknowledge that the adoption and signing are my
act.
Dated: January 16,1995
/s/ Garry B. Watzke
---------------------------
Garry B. Watzke
EXHIBIT 3.1J
ARTICLES OF INCORPORATION
OF
IRON MOUNTAIN RECORDS MANAGEMENT OF OHIO, INC.
The undersigned, being a natural person and acting as the incorporator,
does hereby adopt the following Articles of Incorporation for the purpose of
forming a corporation pursuant to the provisions of Chapter 1701 of the Revised
Code of Ohio, as amended and implemented, and as hereinafter sometimes referred
to as the "General Corporation Law".
FIRST: The name of the corporation (hereinafter called the "corporation")
is Iron Mountain Records Management of Ohio, Inc.
SECOND: The place in the State of Ohio where the principal office of the
corporation is to be located is 5857 Highland Ridge Drive, City of Cincinnati,
County of Hamilton 45232.
THIRD: The purposes for which the corporation is formed shall be to engage
in any lawful act or activity for which corporations may be formed under Chapter
1701 of the Revised Code of Ohio.
FOURTH: The authorized number of shares of the corporation is one hundred,
all of which are of a par value of one dollar each and are of the same class and
are to be common shares.
FIFTH: The period of existence of the corporation is perpetual.
SIXTH: No holder of any of the shares of the corporation shall be entitled
as of right to purchase or subscribe for any unissued shares of any class or any
additional shares of any class to be issued by reason of any increase of the
authorized number of shares of the corporation of any class, or bonds,
certificates of indebtedness, debentures, or other securities convertible into
shares of the corporation or carrying any right to purchase shares of any class,
but any such unissued shares or such additional authorized issue of any shares
or of other securities convertible into shares, or carrying any right to
purchase shares, may be issued and disposed of pursuant to resolution of the
Board of Directors to such persons, firms, corporations, or associations, and
upon such terms as may be deemed advisable by the Board of Directors in the
exercise of its discretion.
SEVENTH: 1. Notwithstanding any provision in the General Corporation Law
requiring for any purpose the vote, consent, waiver or release of the holders of
a designated greater proportion (but less than all) of the shares of any
particular class or of each class, if the shares are classified, the vote,
consent, waiver or release of the holders of at least a majority of the voting
power, or of at least a majority of the shares entitled to vote, of such
particular class or of each class, if the shares are classified, shall be
required in lieu of any such designated greater proportion otherwise required by
any provision of the General Corporation Law.
<PAGE>
-2-
2. Whenever the General Corporation Law shall fail to prescribe a
designated proportion of voting power required for any purpose, the vote,
consent, waiver or release of at least a majority of the voting power
represented at a meeting of shareholders at which a quorum is present shall be
sufficient for any such purposes; and at any such meeting the shareholders
entitled to exercise at least a majority of the voting power relating to any
such purpose shall constitute a quorum.
3. The corporation shall have the power, without the approval, which
might otherwise be required, of any of its shareholders, to repurchase any of
its shares if and when any shareholder desires to, or on the happening of any
event is required to, sell such shares, and shall have the power, without the
approval of any of its shareholders, to purchase any of its issued shares to the
fullest extent permitted by Section 1701.35 of the General Corporation Law.
EIGHTH: The corporation shall, to the fullest extent permitted by Section
1701.13 of the General Corporation Law, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities, or other matters referred to or covered by said section; and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which any person seeking indemnification may be entitled under the
Regulations, any agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, trustee, officer, employee, or agent, and shall
inure to the benefit of the heirs, executors, and administrators of such a
person.
NINTH: From time to time any of the provisions of the Articles of
Incorporation may be amended, altered, or repealed, and other provisions
authorized by the General Corporation Law and the laws of the State of Ohio at
the time in force may be added or inserted in the manner and at the time
prescribed by said laws, and all rights at any time conferred upon the
shareholders of the corporation by the Articles of Incorporation are granted
subject to the provisions of this Article NINTH.
Signed on October 19, 1994. /s/ Garry B. Watzke
---------------------------
Garry B. Watzke
Sole Incorporator
EXHIBIT 3.1K
Certificate of Incorporation
of
Iron Mountain Wilmington, Inc.
FIRST: The name of the corporation is Iron Mountain Wilmington, Inc.
SECOND: The registered office of the Corporation in the State of Delaware is
located at 32 Loockerman Square, Suite L-100, Dover, Kent County, Delaware 19904
and the name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage, anywhere in the world, in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware, and to possess and exercise all powers and
privileges granted by the General Corporation Law of Delaware.
FOURTH: The total number of shares of capital stock which the Corporation is
authorized to issue is 1,000 (one thousand) shares, all of which shall be shares
of Common Stock of the par value of $1.00 per share.
FIFTH: The name and mailing address of the incorporator are as follows:
NAME MAILING ADDRESS
Garry B. Watzke 745 Atlantic Avenue, Boston, MA 02111
SIXTH: The name and mailing address of the person who is to serve as sole
director until the first meeting of stockholders, or until his successor is
elected and qualified, which ever first occurs, are as follows:
NAME MAILING ADDRESS
C. Richard Reese 745 Atlantic Avenue, Boston, MA 02111
SEVENTH: For the management of the business and for the conduct of the affairs
of the Corporation, and in further definition, limitation and regulation of the
powers of its directors and stockholders, it is further provided:
1. The number of directors of the Corporation shall be as prescribed in
the Bylaws of the Corporation but such number may from time to time be increased
or decreased in such manner as may be prescribed by the By-laws. In no event
shall the number of Directors be less than the minimum number prescribed by law.
<PAGE>
-2-
2. In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly authorized
and empowered:
(a) Subject to the applicable provisions of the By-laws then in
effect, to determine, from time to time, whether and to what extent and at what
times and places and under what conditions and regulations the accounts and
books of the Corporation, or any of them, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to inspect any account or
document of the Corporation, except as conferred by the laws of the State of
Delaware, unless and until authorized so to do by resolution of the Board of
Directors or of the stockholders of the Corporation.
(b) Without the assent or vote of the stockholders to authorize and
issue obligations of the Corporation, secured or unsecured, to include therein
such provisions as to redeemability, convertibility or otherwise, as the Board
of Directors, in its sole discretion, may determine, and to authorize the
mortgaging or pledging, as security therefor, of any property of the
Corporation, real or personal, including after-acquired property.
(c) To establish a bonus, profit-sharing or other types of incentive
or compensation plans for the employees (including officers and Directors) of
the Corporation and to fix the amount of profits to be distributed or shared and
to determine the persons to participate in any such plans and the amounts their
respective participants.
(d) To make, alter, amend or repeal the By-laws of the Corporation.
(e) To determine for any purpose and in any manner not inconsistent
with the other provisions of this Certificate of Incorporation the amount of the
gross assets, of the liabilities, of the net assets or of the net profits of the
Corporation as the same may exist or shall have existed at any time or for any
period or periods, and to create, increase, abolish or reduce any reserve or
reserves for accrued, accruing or contingent liabilities or expenses, including
taxes and other charges.
In addition to the powers and authorities hereinbefore or by statute
expressly conferred upon it, the Board of Directors may exercise all such powers
and do all such acts and things as may be exercised or done by the Corporation,
subject, nevertheless, to the provisions of the laws of the State of Delaware,
of the Certificate of Incorporation and of the By-laws of the Corporation.
3. Any Director or any officer elected or appointed by the stockholders or
by the Board of Directors may be removed at any time in such manner as shall be
provided in the By-laws of the Corporation.
4. In the absence of fraud, no contract or other transaction between the
Corporation and any other corporation, and no act of the Corporation, shall in
any way be affected or invalidated by the fact that any of the Directors of the
Corporation are pecuniarily or otherwise interested in, or are directors or
officer of, such other corporation and, in the absence of fraud, any Director
may be a member, may be a party to, or may be pecuniarily
<PAGE>
-3-
or otherwise interested in, any contract or transaction of the Corporation;
provided, in any case, that the fact that he or such firm is so interested shall
be disclosed or shall have been known to the Board of Directors or a majority
thereof; and any Director of the Corporation who is also a director or officer
of any such other corporation, or who is also interested, may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
of the Corporation which shall authorize any such contract, act or transaction
and may vote thereat to authorize any such contract, act or transaction, with
like force and effect as if he were not such director or officer of such
corporation, or not so interested.
5. Any contract, act or transaction of the Corporation or of the Directors
may be ratified by vote of a majority of the shares having voting powers at any
meeting of stockholders, or at any special meeting called for such purpose, and
such ratification shall, so far as permitted by law and by this Certificate of
Incorporation, be as valid and as binding as though ratified by every
stockholder of the Corporation.
6. No Director of the Corporation shall be liable to any person on account
of any action undertaken by him as such director in reliance in good faith upon
the existence of any fact or circumstance reported or certified to the Board of
Directors by any officer of the Corporation or by any independent auditor,
engineer, or consultant retained or employed as such by the Board of Directors.
7. Meetings of the stockholders may be held without the State of Delaware,
if the By-laws so provide. The books of the Corporation may be kept (subject to
any statutory provision) outside the State of Delaware at such place or places
as may be from time to time designated by the Board of Directors or in the
By-laws of the Corporation. Elections of directors need not be by ballot unless
the By-laws shall otherwise provide.
EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class of creditors, and/or of the stockholders or class of
stockholders, of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as consequences of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
<PAGE>
-4-
NINTH: No director shall be personally liable to the Corporation, or any
stockholder for monetary damages for breach of fiduciary duty as a director,
except, in addition to any and all other requirements for such liability, (i)
for any breach of such director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) to the extent
provided under Section 174 of the General Corporation Law of Delaware or any
amendment thereto or successor provision thereto, or (iv) for any transaction
for which such director derived an improper personal benefit. Neither the
amendment nor repeal of this Article NINTH, nor the adoption of any provision of
this Certificate of Incorporation inconsistent with the Article NINTH, shall
eliminate or reduce the effect of this Article NINTH in respect of any matter
occurring, or any cause of action, suit or claim that, but for this Article
NINTH, would accrue or arise prior to such amendment, repeal, or adoption of an
inconsistent provision.
TENTH: The stockholders of the Corporation shall not be personally liable for
the payment of the Corporation's debts.
ELEVENTH: The Corporation shall indemnify, defend and hold harmless any person
who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, investigative or other, including appeals, by reason of the fact
that he or she is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employer or agent of any corporation, partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, to the fullest extent authorized by Section 145 of the
General Corporation law of Delaware, as amended from time to time, against all
expenses (including attorneys' fees), judgments, fines, and amounts paid or to
be paid in settlement actually and reasonably incurred or suffered by such
person in connection therewith if such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had no reason to believe his or her conduct was unlawful; provided,
however, that, except with respect to proceedings seeking to enforce the rights
to indemnification granted herein, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if the proceeding (or part thereof) was authorized
by the Board of Directors of the Corporation. Without limiting the generality or
the effect of the foregoing, the Corporation may enter into one or more
agreements with any person which provide for indemnification greater or
different than that provided in this Article ELEVENTH. Any repeal or
modification of the provisions of this Article ELEVENTH, or the adoption of any
provision inconsistent herewith, shall not adversely affect any right or
protection existing hereunder immediately prior to such repeal, modification or
adoption of an inconsistent provision. Notwithstanding the foregoing, the
indemnification provided for in this Article ELEVENTH shall not be deemed
exclusive of any other rights to which those entitled to receive indemnification
or reimbursement hereunder may be entitled under any By-law of the Corporation,
agreement, vote of stockholders or disinterested directors or otherwise.
<PAGE>
-5-
TWELFTH: From time to time any of the provisions of this Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
Certificate of Incorporation are granted subject to the provisions of this
Article TWELFTH.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th day of
November, 1995.
/s/ Garry B. Watzke
-------------------------
Garry B. Watzke
EXHIBIT 3.1L
RESTATED ARTICLES OF INCORPORATION
OF
Data Storage Systems, Inc.
I.
The name of the corporation is Data Storage Systems, Inc.
II.
The purpose of the corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business, or the
practice of a profession permitted to be incorporated by the California
Corporations Code.
III.
(A) This corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares which the corporation is authorized to issue is nine million
(9,000,000) shares. Five million (5,000,000) shares shall be Common Stock. Four
million (4,000,000) shares shall be Preferred Stock.
(B) The Preferred Stock may be issued from time to time in one or more
series. Excepting the Series A Preferred Stock, Series B Preferred Stock, and
the Series C Preferred Stock, the Board of Directors is hereby authorized,
within the limitations and restrictions stated in these Articles, to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), the
redemption price or prices, and the liquidation preferences of any wholly
unissued series of Preferred Stock, and the number of shares constituting any
such series and the designation thereof, or any of them; and to increase or
decrease the number of shares of any series subsequent to the issue of shares of
that series, but not below the number of shares of such
<PAGE>
series then outstanding. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally fixing the number of
shares of such series.
(C) The rights, preferences, restrictions and other matters relating to
the four million (4,000,000) shares of Preferred Stock are as follows:
1. Designation. One million (1,000,000) of the shares of Preferred Stock
are hereby designated "Series A Preferred Stock" (hereinafter referred to as the
"Series A Stock") and five hundred thousand (500,000) of the shares of Preferred
Stock are hereby designated "Series B Preferred Stock" (hereinafter referred to
as the "Series B Stock") and one million six hundred thousand (1,600,000) of the
shares of Preferred Stock are hereby designated "Series C Preferred Stock"
(hereinafter referred to as the "Series C Stock") with the rights, preferences
and privileges as specified herein.
2. Dividends. The holders of the Series C Stock shall be entitled to
receive, out of any funds legally available therefor, dividends, payable in
preference and priority to any payment of any dividend on Series A Stock, Series
B Stock or Common Stock and in an amount per share of up to $0.05 annually
before any such funds are applied to the payment of dividends on Series A Stock,
Series B Stock or Common Stock. The holders of the Series A Stock shall be
entitled to receive, out of any funds legally available therefor, dividends,
payable in preference and priority to any payment of any dividend on Series B
Stock or Common Stock and in an amount per share of up to $0.09 annually before
any such funds are applied to the payment of dividends on Series B Stock or
Common Stock. The holders of the Series B stock shall be entitled to receive,
out of any funds legally available therefor, dividends, payable in preference
and priority to any payment of any dividend on Common Stock and in an amount per
share of up to $0.12 annually before any such funds are applied to the payment
of dividends on Common Stock, and then after an equal amount per share has been
paid on all Common and Preferred Stock, in an amount per share equal to any such
further dividend on Common Stock, all such amounts to be payable only when and
as declared by the Board. Such dividends shall not be cumulative and no right
shall accrue to the holders of the Series A Stock, Series B Stock or Series C
Stock by reason of the Board's failure to pay or declare such dividends.
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3. Liquidation Preference. In the event of any liquidation, dissolution,
or winding up of the corporation, either voluntary or involuntary, distributions
to the shareholders of the corporation shall be made in the following manner:
(a) The holders of the Series C Stock shall be entitled to receive,
prior and in preference to any distribution of any of the assets or surplus
funds of the corporation to the holders of the Series A Stock, Series B Stock or
Common Stock by reason of their ownership of such stock, the amount of $0.60 per
share for each share of Series C Stock then held by them, adjusted for any
combinations, consolidations, or stock distributions or dividends with respect
to such shares. If the assets and funds thus distributed among the holders of
the Series C Stock shall be insufficient to permit the payment to such holders
of the full aforesaid preferential amount, then the entire assets and funds of
the corporation legally available for distribution shall be distributed among
the holders of the Series C Stock in proportion to the full preferential amount
each such holder is otherwise entitled to receive.
(b) After payment to the holders of the Series C Stock of the
amounts set forth in (a), the holders of the Series A Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the corporation to the holders of the Series B Stock or Common
Stock by reason of their ownership of such stock, the amount of $1.00 per share
for each share of Series A Stock then held by them, adjusted for any
combinations, consolidations, or stock distributions or dividends with respect
to such shares. If the assets and funds thus distributed among the holders of
the Series A Stock shall be insufficient to permit the payment to such holders
of the full aforesaid preferential amount, then the entire assets and funds of
the corporation legally available for distribution shall be distributed among
the holders of the Series A Stock in proportion to the full preferential amount
each such holder is otherwise entitled to receive.
(c) After payment to the holders of the Series C Stock of the
amounts set forth in (a), and after payment of the holders of Series A stock of
the amounts set forth in (b), the holders of the Series B Stock shall be
entitled to receive, prior and in preference to any distribution of any of the
assets or surplus funds of the corporation to the holders of the Common Stock by
reason of their ownership of such stock, the amount of $1.37 per share for each
share of Series B Stock then held by them, adjusted for any combinations,
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consolidations, or stock distributions or dividends with respect to such shares.
If the assets and funds thus distributed among the holders of the Series B Stock
shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amount, then the entire remaining assets and funds of the
corporation legally available for distribution shall be distributed among the
holders of the Series B Stock in proportion to the full preferential amount each
such holder is otherwise entitled to receive.
(d) After payment to the holders of Series C Stock of the amount set
forth in (a), and to the holders of Series A Stock of the amounts set forth in
(b), and to the holders of Series B Stock of the amounts set forth in (c), the
holders of Common Stock shall then be entitled to receive $0.40 per share for
each share of Common Stock held by them.
(e) After payment to the holders of Series C Stock of the amounts
set forth in (a), and payment to the holders of Series A Stock the amounts set
forth in (b), and payment to the holders of Series B Stock the amounts set forth
in (c), and payment to the holders of Common Stock of the amounts set forth in
(d), the entire assets and funds of the corporation legally available for
distribution, if any, shall be distributed ratably among the holders of the
Common Stock and the holders of Preferred Stock on the basis of the number of
shares of Common Stock (i) held by each of them and (ii) issuable at the time of
such liquidation upon the conversion of the Preferred Stock.
(f) A consolidation or merger of the corporation with or into any
other corporation or corporations, or a sale of all or substantially all of the
assets of the corporation, shall not be deemed to be a liquidation, dissolution,
or winding up within the meaning of this paragraph.
4. Redemption.
(a) On June 2, 1995, the corporation shall redeem the Series A Stock
and Series C Stock by paying in cash for each share of Series A Stock and Series
C Stock redeemed, the price of $1.00 per share and $0.60 per share,
respectively.
(b) The amount payable to the holders of Series A Stock and Series C
Stock upon redemption thereof pursuant to paragraph 4(a) of this Article is
hereinafter referred to as the "Redemption Price."
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(c) At least sixty (60) days prior to the date fixed for any
redemption of Series A Stock and Series C Stock (hereinafter referred to as the
"Redemption Date"), written notice shall be mailed, postage prepaid, to each
holder of record, at such holder's post office address last shown on the records
of the corporation, notifying such holder of the election of the corporation to
redeem such shares, specifying the Redemption Date, the applicable Redemption
Price, and the date on which such holder's Conversion Rights (as defined in
paragraph 6) as to such shares terminate and calling upon such holder to
surrender to the corporation, in the manner and at the place designated, his
certificate or certificates representing the shares to be redeemed (such notice
is hereinafter referred to as the "Redemption Notice"). On or after the
Redemption Date, each holder of stock to be redeemed shall surrender such
holder's certificate or certificates representing such shares to the
corporation, in the manner and at the place designated in the Redemption Notice,
and thereupon the Redemption Price of such shares shall be payable to the order
of the person whose name appears on such certificate or certificates as the
owner of such shares and each surrendered certificate shall be cancelled. In the
event less than all the shares represented by any such certificate are redeemed,
a new certificate shall be issued representing the unredeemed shares. From and
after the Redemption Date, unless there shall have been a default in payment of
the Redemption Price, all rights of the holders of the stock designated for
redemption in the Redemption Notice as shareholders of the corporation (except
the right to receive the Redemption Price without interest upon surrender of
their certificate or certificates) shall cease and determine with respect to
such shares, and such shares shall not subsequently be transferred on the books
of the corporation or be deemed to be outstanding for any purpose whatsoever.
(d) On or prior to the Redemption Date, the corporation shall
deposit the Redemption Price of all shares of stock designated for redemption in
the Redemption Notice and not yet redeemed with a bank or trust company having
aggregate capital and surplus in excess of $20,000,000 as a trust fund for the
benefit of the respective holders of the shares designated for redemption and
not yet redeemed, with irrevocable instructions and authority to the bank or
trust company to pay the Redemption Price for such shares to their respective
holders on or after the Redemption Date upon receipt of notification from the
corporation
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that such holder has surrendered his share certificate to the corporation
pursuant to paragraph 4(c) of this Article. Such instructions shall also provide
that any funds deposited by the corporation pursuant to this paragraph 4(d) for
the redemption of shares that are subsequently converted into shares of Common
Stock pursuant to paragraph 6 of this Article shall be returned to the
corporation forthwith upon such conversion. The balance of any funds deposited
by the corporation pursuant to this paragraph 4(d) remaining unclaimed at the
expiration of two (2) years following the Redemption Date shall be returned to
the corporation upon direction by Board of Directors.
(e) In the event of any redemption of only a part of the then
outstanding shares of any series of Preferred Stock, this corporation shall
effect such redemption pro rata according to the number of shares of such series
held by each holder thereof.
5. Voting Rights. The holder of each share of the Series A Stock, Series B
Stock and Series C Stock shall be entitled to the number of votes equal to the
number of shares of Common Stock into which such share of Series A Stock, Series
B Stock and Series C Stock could be converted, shall have voting rights and
powers equal to the voting rights and powers of the Common Stock, and shall be
entitled to notice of any shareholders' meeting in accordance with the Bylaws of
the corporation. Fractional votes shall not, however, be permitted and any
fractional voting rights resulting from the above formula (after aggregating all
shares into which shares of Series A Stock, Series B Stock and Series C Stock
held by each holder could be converted) shall be rounded to the nearest whole
number (with one-half being rounded upward).
6. Conversion. The holders of the Series A stock, Series B Stock and
Series C Stock shall have conversion rights as follows (the "Conversion
rights"):
(a) Right to Convert. Each share of Series A Stock, Series B Stock
and Series C Stock shall be convertible, at the option of the holder, at any
time after the date of issuance of such share at the office of the corporation
or any transfer agent for such stock, into fully paid and nonassessable shares
of Common Stock at the Conversion Price (as hereafter defined) therefore in
effect at the time of conversion determined as provided herein.
(b) Automatic Conversion. Each share of Series A Stock, Series B
Stock and Series C Stock shall automatically convert into fully paid and
nonassessable shares of
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Common Stock at the then effective conversion Price immediately upon the closing
of a firmly underwritten registered public offering covering a primary sale of
Common Stock at a public offering price (prior to underwriting discounts and
expenses) of $4.00 per share or above with a total offering gross of $5,000,000
or more. Each share of Series B Stock shall automatically convert into fully
paid and nonassessable shares of Common Stock at the then effective Conversion
Price immediately upon any of the following events:
(i) the closing of any sale or sales by the corporation of
shares of its Preferred Stock at a price of not less than $1.00 per share of the
Company's Preferred Stock, as presently constituted, the aggregate gross
proceeds to the corporation of which equals or exceeds $1,000,000;
(ii) the last day of any fiscal year in which the corporation
realizes gross revenues of at least $1,000,000; and
(iii) the last day of any fiscal year in which the corporation
realizes after-tax operating income (assuming the same tax rate on operating
income as on the corporation's net income as a whole) of at least $200,000.
Upon such automatic conversion, the rights, preferences and privileges of
the Series A Stock, Series B Stock or Series C Stock, as applicable, shall
thereupon cease and determine, and the holders shall thereafter be treated in
all respects as holders of the number of shares of Common Stock issuable at the
Conversion Price in excess on the date of the automatic conversion, taking
account of any necessary adjustments of the Conversion Price in accordance with
this paragraph 6. The corporation shall notify each holder in writing of the
automatic conversion upon the occurrence of such event. Each holder shall within
ten (10) days of his receipt of such notice, surrender his certificate(s)
representing his Series A Stock, Series B Stock or Series C Stock at the place
specified in such notice, and shall thereupon be entitled to receive
certificates representing the Common Stock into which his Series A Stock, Series
B Stock or Series C Stock was converted.
(c) Conversion Price. Each share of Series A Stock, Series B Stock
and Series C Stock shall be convertible into that number of shares of Common
which results from dividing $1.00, in the case of the Series A Sock, and the
Series B Stock, and $.60 in the case of the Series C Stock, by the Conversion
Price per share applicable to such Series of
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Preferred at the time of conversion. The price at which shares of Common Stock
shall be deliverable upon conversion of the Series A Stock, Series B Stock and
Series C Stock (the "Conversion Price") shall initially be $1.00 per share,
$1.00 per share and $.60 per share, respectively. Such conversion shall be
subject to adjustment as provided herein.
(d) Mechanics of Elective Conversion. Before any holder of Series A
Stock, Series B Stock or Series C Stock shall be entitled to convert the same
into shares of Common Stock, he shall surrender the certificate or certificates
for such shares at the office of the corporation or of any transfer agent for
such stock, and shall have given written notice to the corporation at such
office that he elects to convert the same and shall state in the notice the name
or names in which he wishes the certificate or certificates for shares of Common
Stock to be issued. The Corporation shall then, as soon as is practicable, issue
and deliver at such office to such holder, or to his nominee or nominees, a
certificate or certificates for the number of shares of Common Stock to which he
shall be entitled. Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of surrender of the shares to be
converted, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date.
(e) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definitions. For purposes of this Section 6(e),
the following definitions shall apply:
(1) "Option" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities.
(2) "Original Issue Date" shall mean the date on which a
share of Series C Preferred Stock was first issued.
(3) "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or indirectly convertible into
or exchangeable for Common Stock.
(4) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued (or, pursuant to Section 6(e)(iii), deemed to be
issued) by
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the corporation after the Original Issue Date, other than shares of Common Stock
issued or issuable:
(A) upon conversion of shares of Series A Stock or
Series C Stock;
(B) to officers or employees of, or consultants
to, the corporation pursuant to any stock purchase plan or arrangement, stock
option plan, or other stock incentive plan or agreement approved by the
corporation's Board of Directors;
(C) pursuant to any warrants issued to purchase
shares of the corporation's Series C Stock; or
(D) by way of dividend or other distribution on
shares excluded from the definition of Additional Shares of Common Stock by the
foregoing clauses (A), (B), (C) or this clause (D).
(ii) No Adjustment of Conversion Price. No adjustment in the
number of shares of Common Stock into which the Series A Stock or Series C Stock
is convertible shall be made, by adjustment in the Conversion Price in respect
to the issuance of Additional Shares of Common Stock or otherwise, unless the
consideration per share for an Additional Share of Common Stock issued or deemed
to be issued by the corporation is less than the Conversion Price in effect on
the date of, and immediately prior to, the issue of such Additional Share.
(iii) Issue of Securities Deemed Issue of Additional Shares of
Common Stock.
(1) Options and Convertible Securities. In the event the
corporation at any time or from time to time after the Original Issue Date shall
issue any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of shares (as set
forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such
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a record date shall have been fixed, as of the close of business on such record
date, provided that Additional Shares of Common Stock shall not be deemed to
have been issued with respect to a series of Preferred Stock unless the
consideration per share (determined pursuant to Section 6(e)(v) hereof), of such
Additional Shares of Common Stock would be less than the respective Conversion
Price of such series in effect on the date of and immediately prior to such
issue, or such record date, as the case may be, and provided further that in any
case in which Additional Shares of Common Stock are deemed to be issued:
(A) no further adjustment in the Conversion Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) if such Options or Convertible Securities by
their terms provided, with the passage of time or otherwise, for any increase in
the consideration payable to the corporation, or decreases in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Price computed upon the original issue thereof (or upon
the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(C) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the respective Conversion Prices computed upon the
original issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon, shall, upon such
expiration, be recomputed as if:
(i) in the case of Convertible Securities or
Options for Common Stock the only Additional Shares of Common Stock issued were
the shares of Common Stock, if any, actually issued upon the exercise of such
Options or conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
corporation for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the corporation upon
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such exercise, or for the issue of all such Convertible Securities which were
actually converted or exchanged, plus the Additional consideration, if any,
actually received by the corporation upon such conversion or exchange, and
(ii) in the case of Options for Convertible
Securities only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the corporation for the Additional Shares of Common
Stock deemed to have been then issued was the consideration actually received by
the corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the corporation
(determined pursuant to Section 6(e)(v)) upon the issue of the Convertible
Securities with respect to which such Options were actually exercised;
(D) no readjustment pursuant to clause (B) or (C)
above shall have the effect of increasing the Conversion Price to an amount
which exceeds the lower of (i) such Conversion Price on the original adjustment
date, or (ii) such Conversion Price that would have resulted from any issuance
of Additional Shares of Common Stock between the original adjustment date and
such readjustment date (nor shall any shares issued upon conversion prior to
such readjustment be affected by such readjustment);
(E) in the case of any Options that expire by
their terms not more than thirty (30) days after the date of issue thereof, no
adjustment of the Conversion Price shall be made until the expiration or
exercise of all such Options, whereupon such adjustment shall be made in the
same manner provided in class (C) above; and
(F) if such record date shall have been fixed and
such Options or Convertible Securities are not issued on the date fixed
therefor, the adjustment previously made in the Conversion Price which became
effective on such record date shall be cancelled as of the close of business on
such record date, and thereafter the Conversion Price shall be adjusted pursuant
to this subparagraph 6(e)(iii) as of the actual date of their issuance.
(2) Stock Dividends, Stock Distributions and
Subdivisions. In the event the corporation at any time or from time to time
after the Original Issue Date
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shall declare or pay dividend or make any other distribution on the Common Stock
payable in Common Stock, or effect a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend in
Common Stock), then and in any such event, Additional Shares of Common Stock
shall be deemed to have been issued:
(A) in the case of such dividend or distribution,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend or
distribution, or
(B) in the case of any such subdivision, at the
close of business on the date immediately prior to the date upon which such
corporate action becomes effective.
If such record date shall have been fixed and such dividend shall not have
been fully paid on the date fixed therefor, the adjustment previously made in
the Conversion Price which became effective on such record date shall be
cancelled as of the close of business on such record date, and thereafter the
Conversion Price shall be adjusted pursuant to this subparagraph 6(e)(iii) as of
the time of the actual payment of such dividend.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event the corporation shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 6(e)(iii) but excluding Additional
Shares of Common Stock issued pursuant to Section 6 (e)(iii)(2) which event is
dealt with in Section 6(3)(vi) hereof) without consideration or for a
consideration per share less than the Conversion Price in effect on the date of
and immediately prior to such issue, then in such event, the Conversion Price
shall be reduced, concurrently with such issue in order to increase the number
of shares of Common Stock into which the Series A Stock and Series C Stock is
convertible, to a price equal to the consideration per share received by the
corporation for such Additional Shares of Common Stock.
(v) Determination of Consideration. For purposes of this
Section 6(e), the consideration received by the corporation for the issue of any
Additional Shares of Common Stock shall be computed as follows:
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(1) Cash and Property. Such consideration shall:
(A) insofar as it consists of cash, be computed at
the aggregate amount of cash received by the corporation;
(B) insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common Stock
are issued together with other shares or securities or other assets of the
corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (A) and (B) above, as
determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The
consideration per share received by the corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section 6(e)(iii)(1),
relating to Options and Convertible Securities, shall be determined by dividing:
(a) the total amount, if any, received or
receivable by the corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
(b) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(vi) Adjustment for Dividends, Distributions, Subdivisions,
Combinations or Consolidation of Common Stock.
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(1) Stock Dividends, Distribution or Subdivisions. In
the event the corporation shall issue Common Stock pursuant to Section
6(e)(iii)(2) in a stock dividend, stock distribution or subdivision, the
Conversion Price in effect immediately prior to such stock dividend, stock
distribution or subdivision shall, concurrently with the effectiveness of such
stock dividend, stock distribution or subdivision, be proportionately decreased.
(2) Combinations or Consolidations. In the event the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Conversion Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.
(vii) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger of the corporation with or into another corporation
or the conveyance of all or substantially all the assets of the corporation to
another corporation, each share of Series A Stock and Series C Stock shall
thereafter be convertible into the number of shares of stock or other securities
or property to which a holder of the number of shares of Common Stock of the
corporation deliverable upon conversion of such Series A Stock or Series C Stock
would have been entitled upon such consolidation, merger or conveyance; and, in
any such case, appropriate adjustment (as determined by the Board of Directors)
shall be made in the application of the provisions herein set forth with respect
to the rights and interest thereafter of the holders of the Series A Stock and
Series C Stock, to the end that the provisions set forth herein (including
provisions with respect to changes in and other adjustments of the Conversion
Price) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable upon
the conversion of the Series C Stock.
(f) No Impairment. The corporation will not, by amendment of these
Restated Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the corporation but
will at all times in good faith assist in the
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carrying out of all the provisions of this Section 6 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Stock and Series C Stock
against impairment.
(g) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the respective Conversion Prices pursuant to this
Section 6, the corporation at its expense shall promptly compute such
adjustments or readjustments in accordance with the terms hereof and furnish to
each holder of Series A Stock and Series C Stock a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The corporation shall, upon the written
request at any time of any holder of Series A Stock or Series C Stock, furnish
or cause to be furnished to such holder a like certificate setting forth (i)
such adjustments and readjustments, (ii) the Conversion Price at the time in
effect, and (iii) the number of shares of Common Stock and the amount, if any,
of other property which at the time would be received upon the conversion of
such holder's shares.
(h) Notices of Record Date. In the event of any taking by the
corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the corporation shall mail to each
holder of Series A Stock and Series C Stock at least ten (10) days prior to the
date specified therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend or distribution.
(i) Common Stock Reserved. The corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
the Series A Stock, Series B Stock and Series C Stock.
7. Consent to Certain Distributions. Each holder of Series A Stock, Series
B Stock and Series C Stock shall be deemed to have consented, for purposes of
Sections 502, 503 and 506 of the General Corporations Law, to distributions made
by the corporation and approved by the Board of Directors of the corporation in
connection with the repurchase of shares of Common Stock issued to or held by
directors and employees of, or consultants to,
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the corporation upon termination of their employment or services pursuant to
agreements providing for the right of said repurchase between the corporation
and such persons.
8. Voting Rights. Except as otherwise required by law and the provisions
of this Section 8, the holders of Series A Stock, Series B Stock and Series C
Stock shall be entitled to notice of any shareholders' meeting and to vote
together with the holders of Common Stock as a single class of capital stock
upon any matter submitted to shareholders for a vote, on the following basis:
(a) Holders of Common Stock and Series B Stock shall have one (1)
vote per share; and
(b) Holders of Series A Stock and Series C Stock shall have that
number of votes per share as is equal to the number of shares of Common Stock
into which each such share of Series A Stock or Series C Stock held by such
holder is convertible at the record date for the determination of the
shareholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken or any written consent of
shareholders is solicited.
(c) So long as at least one million (1,000,000) shares of Series A
Stock remain outstanding, the holders of the Series A Stock then outstanding
shall be entitled, voting together as a class, to elect two (2) directors of the
corporation at each election of directors. Any vacancy occurring because of the
death, resignation or removal of a director elected by the holders of Series A
Stock shall be filled by the vote or written consent of the holders of a
majority of the shares of Series A Stock, or in the absence of such action by
such holders, by action of the remaining directors then in office.
(d) The holders of Common Stock, Series B Preferred and Series C
Preferred shall be entitled, voting together as a separate class, to elect two
(2) directors of the corporation at each election of directors. Any vacancy
occurring because of the death, resignation or removal of a director elected by
the holders of Common Stock, Series B Preferred and Series C Preferred shall be
filled by the vote or written consent of the holders of a majority of the shares
of Common Stock, Series B Preferred and Series C Preferred or, in the absence of
such action by such holders, by action of the remaining directors then in
office.
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(e) All directors not elected by the holders of Series A Stock,
Series B Stock, Series C Stock or by the holders of Common Stock as set forth
above shall be elected by the holders of Common Stock and the holders of
Preferred Stock, voting together and not as separate classes, with each share
voting as provided in this Section 8. Any vacancy occurring because of the
death, resignation or removal of a director elected by the holders of Common
Stock and the holders of Preferred Stock voting together shall be filled by the
vote or written consent of a majority of the holders of Common Stock and the
holders of Preferred Stock voting together as provided above or, in the absence
of action by such holders of Common Stock and Preferred stock, by action of the
remaining directors then in office.
9. Covenants. In addition to any other rights provided by law, so long as
any shares of Preferred Stock shall be outstanding, the corporation shall not,
without first obtaining the affirmative vote or written consent of the holders
of not less than a majority of the outstanding shares of Preferred Stock voting
together as a class:
(a) amend or repeal any provision of, or add any provision to, the
corporation's Restated Articles of Incorporation or Bylaws if such action would
alter or change the preferences, rights or privileges of, or the restrictions
provided for the benefit of the Preferred Stock;
(b) create any new series or class of stock having any preference or
priority as to dividends or assets superior to or on a parity with any such
preference or priority of the Preferred stock;
(c) increase the total number of authorized shares of the Preferred
Stock;
(d) pay or declare any dividend or distribution on any shares of
Common Stock or apply any of its assets to the redemption, retirement, purchase
or other acquisition directly or indirectly, through subsidiaries or otherwise,
of any shares of Common Stock except from employees or consultants of the
corporation upon termination of employment;
(e) effect any sale, lease, assignment, transfer or other conveyance
of all or substantially all of the assets of the Corporation or any of its
subsidiaries, or any consolidation or merger involving the Corporation or any of
its subsidiaries, or any reclassification or other change of any stock, or any
recapitalization of the Corporation.
-17-
<PAGE>
10. Residual Rights. All rights accruing to the outstanding shares of the
corporation not expressly provided for to the contrary herein shall be vested in
the Common Stock.
IV.
(A) The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law. Any
repeal or modification of this Article shall only be prospective and shall not
affect the rights under this Article in effect at the time of the alleged
occurrence of any action or omission to act giving rise to liability.
(B) The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and its shareholders through bylaw provisions, through
agreements with the agents, and/or through shareholder resolutions, or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject to the limits on such excess
indemnification set forth in Section 204 of the California Corporations Code.
Any repeal or modification of this Article shall only be prospective and shall
not affect the rights under this Article in effect at the time of the alleged
occurrence of any action or omission to act giving rise to indemnification.
-18-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
Whitney G. Newton certifies that:
1. He is the President and the Secretary of Data Storage Systems, Inc.,
a California corporation.
2. Article III, Paragraph (C) of the articles of incorporation of this
corporation is amended to read as follows:
"(C) The rights, preferences, restrictions and other matters
relating to the four million (4,000,000) shares of Preferred Stock
are as follows:
1. Designation. One million (1,000,000) of the shares of Preferred
Stock are hereby designated "Series A Preferred Stock" (hereinafter
referred to as the "Series A Stock") and five hundred thousand
(500,000) of the shares of Preferred Stock are hereby designated
"Series B Preferred Stock" (hereinafter referred to as the "Series B
Stock") and two million (2,000,000) of the shares of Preferred Stock
are hereby designated "Series C Preferred Stock" (hereinafter
referred to as the "Series C Stock") with the rights, preferences
and privileges as specified herein."
3. The foregoing amendment of articles of incorporation has been duly
approved by the board of directors.
4. The foregoing amendment of articles of incorporation has been duly
approved by the required vote of shareholders in accordance with
Section 902 of the Corporations Code. The total number of
outstanding shares of the corporation is 3,133, 334. The number of
shares voting in favor of the amendment equaled or exceeded the vote
required. The percentage vote required was more than 50%.
I further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and
correct of my own knowledge.
DATE: July 24, 1991
/s/ Whitney G. Newton
Whitney G. Newton, President
/s/ Whitney G. Newton
Whitney G. Newton, Secretary
<PAGE>
CERTIFICATE OF RESTATEMENT
OF
ARTICLES OF INCORPORATION
OF
Data Storage Systems, Inc.
Whitney G. Newton certifies that:
1. He is the Chief Executive Officer and the Secretary of Data Storage
Systems, Inc., a California corporation.
2. The Articles of Incorporation of the Corporation, as amended to the
date of the filing of this certificate, including amendments set forth herein
but not separately filed (and with the omissions required by section 910 of the
Corporations Code) are restated as in Exhibit A attached hereto.
3. The Restated Articles of Incorporation have been duly approved by the
Board of Directors of the Corporation.
4. The amendments herein set forth have been duly approved by the required
vote of shareholders in accordance with section 903 of the Corporations Code.
The total number of outstanding shares of the Corporation is 788,334 shares of
Common Stock; 1,000,000 shares of Series A Preferred Stock; 266,666 shares of
Series B Preferred Stock, and 1,083,334 shares of Series C Preferred Stock. The
number of shares voting in favor of the amendment equaled or exceeded the
percentage vote required. The percentage vote required
<PAGE>
-2-
was more than 50% of each class of shares voting separately.
March 12, 1991.
/s/ Whitney G. Newton
Whitney G. Newton
Chief Executive Officer
/s/ Whitney G. Newton
Whitney G. Newton
Secretary
Each of the undersigned declares under penalty of perjury that he has read
the foregoing certificate and knows the contents thereof and that the same is
true of his own knowledge.
Executed at San Francisco, California, on March 12, 1991.
/s/ Whitney G. Newton
Whitney G. Newton
<PAGE>
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
OF
DATA STORAGE SYSTEMS, INC.
(surviving corporation)
Kathryn McGovern hereby certifies that:
1. She is the President and Secretary of Data Storage Systems, Inc. a
California corporation (the "Corporation").
2. The Agreement Merger in the form attached was duly approved by the
Board of Directors and shareholders of the Corporation.
3. The principal terms of the Agreement of Merger were approved by the
Corporation by a vote of a number of shares of Common Stock which
equaled or exceeded the vote required. The vote required was greater
than 50% of the outstanding shares of Common Stock.
4. The Corporation has one class of stock outstanding, designated
"Common Stock" of which 297,588,558 shares of Common Stock were
outstanding and entitled to vote on the merger. There are no shares
of Preferred Stock outstanding.
I further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of my own knowledge.
Dated: March 15, 1996 By: /s/ Kathryn McGovern
----------------------
Kathryn McGovern
President and Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
DATA STORAGE SYSTEMS, INC.
The undersigned, Kathryn McGovern hereby certifies that:
1. I am the duly elected Chief Executive Officer and Secretary of Data
Storage Systems, Inc., a California Corporation.
2. Article III, Section A of the articles of incorporation of this
corporation is amended and restated to read as follows:
"This corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares which the corporation is authorized to issue is one hundred forty
million (140,000,000) shares. One hundred thirty-seven million (137,000,000)
shares shall be Common Stock. Three million (3,000,000) shares shall be
Preferred Stock."
3. The first sentence of Article III, Section C, paragraph 6(b) is hereby
amended and restated to read as follows:
"Each share of Series A Stock, Series B Stock and Series C stock shall
automatically convert into fully paid and nonassessable shares of Common Stock
at the then effective Conversion Price immediately upon the closing of a firmly
underwritten registered public offering covering a primary shall of Common Stock
at a public offering price (prior to underwriting discounts and expenses) of
$4.00 per share or above with a total offering gross of $5,000,000 or more or
upon the consent of a majority of each class of Series A Stock, Series B Stock
and Series C Stock."
<PAGE>
-2-
4. The foregoing amendment of articles of incorporation has been duly
approved by the board of directors.
5. The foregoing amendment of articles of incorporation has been duly
approved by the required vote of shareholders in accordance with Section 902 of
the Corporations Code. The total number of outstanding shares of the corporation
is 1,000,000 shares of Series A Preferred Stock, 1,083,334 shares of Series C
Preferred Stock and 1,060,000 of Common Stock. The number of shares voting in
favor of the amendment equaled or exceeded the vote required. The percentage
vote required was more than 50% of the Preferred Stock voting as a single class
and more than 50% of the Common Stock voting as a single class.
I further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of my own knowledge.
DATE: November 3, 1995
/s/ Kathryn McGovern
Kathryn McGovern, Chief Executive Officer
and Secretary
<PAGE>
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
OF TEMP DSSI, INC.
(disappearing corporation)
Eugene B. Doggett and Garry B. Watzke hereby certify that:
1. They are the Executive Vice President and Secretary, respectively,
of Temp DSSI, Inc., a California corporation (the "Corporation").
2. The Agreement Merger in the form attached was duly approved by the
Board of Directors and shareholders of the Corporation.
3. The shareholder approval was by the holders of 100% of the
outstanding shares of the Corporation.
4. There is only one class of shares and the number of outstanding
shares is 100.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Dated: March 15, 1996 By: /s/ Eugene B. Doggett
-------------------------
Eugene B. Doggett
Executive Vice President
Dated: March 15, 1996 By: /s/ Garry B. Watzke
----------------------
Garry B. Watzke
Secretary
<PAGE>
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER, dated as of March 15, 1996 (the "Agreement"), is
made and entered into by Temp DSSI, Inc., a California corporation ("Acquiror
Sub") and Data Storage Systems, Inc. a California corporation ("Target" or
"Surviving Corporation") (Target and Acquiror Sub being hereinafter collectively
referred to as the "Constituent Corporations").
Recitals
A. Iron Mountain Records Management, Inc., a Delaware corporation
("Acquiror"), Target and Acquiror Sub have entered into a Reorganization
Agreement dated November 17, 1995 (the "Reorganization Agreement"), providing,
among other things, for the execution and filing of this Merger Agreement and
the merger of Acquiror Sub with and into Target upon the terms set forth in the
Reorganization Agreement and this Merger Agreement (the "Merger").
B. The respective Boards of Directors of each of the Constituent
Corporations deem it advisable and in the best interests of each of such
corporations and their respective shareholders that Acquiror Sub be merged with
and into Target.
Agreement
NOW, THEREFORE, in consideration of the promises and mutual agreements
contained in this Merger Agreement, Acquiror and the Constituent Corporations
hereby agree that Acquiror Sub shall be merged with and into Target in
accordance with the provisions of the laws of the State of California, upon the
terms and subject to the conditions set forth as follows:
Article 1
The Merger
1.1 Filing. This Merger Agreement, together with the officers'
certificates of each of the Constituent Corporations required by the General
Corporation Law of the State of California (the "California Law"), shall be
filed with the Secretary of State of the State of California at the time
specified in the Reorganization Agreement.
1.2 Effectiveness. The Merger shall become effective upon the filing of
this Merger Agreement with the Secretary of State of the State of California
(the "Effective Time").
1.3 Merger. At the Effective Time, Acquiror Sub shall be merged into
Target and the separate corporate existence of Acquiror Sub shall thereupon
cease. Target shall be the Surviving Corporation in the Merger and the separate
corporate existence of Target, with all
<PAGE>
-2-
of its purposes, objects, rights, privileges, powers, immunities and franchises,
shall continue unaffected and unimpaired by the Merger.
1.4 Further Action. If at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Merger
Agreement or to vest the Surviving Corporation with the full right, title and
possession to all assets, property, rights, privileges, immunities, powers and
franchises of either or both of the Constituent Corporations, the officers and
directors of the Surviving Corporation are fully authorized in the name of
either or both of the constituent Corporations or otherwise to take all such
action.
Article 2
Corporate Governance Matters
2.1 Articles. The Articles of Incorporation of Target in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
of the Surviving Corporation unless and until amended as provided by law.
2.2 Bylaws. The Bylaws of the Target in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation unless and until
amended as provided by law.
2.3 Directors. From and after the Effective Time, the directors of
Acquiror Sub shall be the directors of the Surviving Corporation and they shall
hold office as provided in the Bylaws of the Surviving Corporation.
2.4 Officers. The officers of the Surviving Corporation shall be the
officers of Acquiror Sub on the Effective Time and they shall continue to hold
office from and after the Effective Time as provided in the Bylaws of the
Surviving Corporation.
Article 3
Manner of Converting Shares of the Constituent Corporations
3.1 Conversion of Target Shares.
(a) At and as of the Effective Time, (A) each Target Share (other
than any Dissenting Share) shall be converted into the right to receive an
amount (the "Merger Consideration") equal to (i) the difference between
$3,310,776 and the total liabilities of the Target as of the close of business
on February 29, 1996 (ii) divided by the aggregate number of Target Shares
outstanding as of the Effective Time (without interest), and (B) each Dissenting
Share shall be converted into the right to receive payment from the Surviving
Corporation with respect thereto in accordance with the provisions of the
California General Corporation Law; provided, however, that the Merger
Consideration shall be subject to equitable adjustment in the event of any stock
split, stock dividend, reverse stock split, or other change in the number of
Target Shares outstanding between the date hereof and the
<PAGE>
-3-
Effective Time; and further provided that there shall be withheld from payment
to each holder of record a pro rata portion of the Merger Consideration which
would otherwise be paid to such person such amount which, when aggregated, is
equal to the Closing Escrow Deposit (as defined in Section 3.6). No target
Shares shall be deemed to be outstanding or to have any rights, other than those
set forth below in Section 3.2, after the Effective Time.
For purposes hereof, the following terms shall have the following
meanings:
(i) "Target Shares" shall mean each issued and outstanding
share of the Common Stock, no par value, of the Target issued and outstanding as
of the Effective Time.
(ii) "Dissenting Shares" shall mean any Target Share which any
stockholder who has exercised his or her appraisal rights under the California
General Corporation Law holds of record.
3.2 Acquiror Sub Common Stock. At the Effective Time, each then
outstanding share of common stock, $1.00 par value, of Acquiror Sub shall cease
to be an existing and issued share and shall become and be converted into, by
virtue of the Merger and without any action on the part of Acquiror, Acquiror
Sub or Target, one share of Common Stock of the Surviving Corporation and the
aggregate of such shares shall constitute the only outstanding shares of capital
stock of the Surviving Corporation.
3.3 Closing of Target Transfer Books. At and after the Effective Time,
holders of certificates representing Target Shares shall cease to have any
rights as shareholders of Target and the stock transfer books of Target shall be
closed with respect to Target Shares issued and outstanding immediately prior to
the Effective Time and no further transfer of such shares shall thereafter be
made on such stock transfer books. If, after the Effective Time, valid
certificates previously representing such shares are presented to Acquiror or
Target, they shall be exchanged as provided in Section 3.4.
3.4 Exchange of Certificates for Merger Consideration. Promptly following
the Effective Time, Acquiror or the Surviving Corporation shall transmit to the
former Target shareholders appropriate documents to be used by them to surrender
their Target Shares certificates in exchange for payment of the Merger
Consideration. Until so surrendered and exchanged, each certificate for Target
Shares shall represent solely the rights to receive payment of the Merger
Consideration that it is entitled to pursuant to Section 3.1 (or to perfect the
holder thereof's right to receive payment for such shares pursuant to Chapter 13
of the California Law and Section 3.5 hereof); provided, however, that customary
and appropriate certifications and indemnities allowing exchange against lost or
destroyed certificates shall be provided.
3.5 Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, Target Shares that are issued and outstanding immediately prior to the
Effective Time and that are held by shareholders who have not voted such shares
in favor of the Merger and who have delivered a written demand for purchase of
such shares in the manner provided in Chapter 13 of the California Law
("Dissenting Shares") shall not be canceled and
<PAGE>
-4-
converted into rights to receive payment of the Merger Consideration in
accordance with Section 3.1 unless and until such holder shall have failed to
perfect, or shall have effectively withdrawn or lost, such holder's right to
demand purchase and payment under the California Law. If such holder shall have
so failed to perfect, or shall have effectively withdrawn or lost such right,
such holder's Target Shares shall thereupon be deemed to have been canceled and
converted as described in Section 3.1 at the Effective time, and each such share
shall represent solely the right to receive payment of the Merger Consideration
in accordance with such Section 3.1. From and after the Effective Time, no
holder of Target Shares who has demanded the purchase of shares as provided in
Chapter 13 of the California Law shall be entitled to vote such holder's shares
for any purpose or to receive payment of dividends or other distributions with
respect to such holder's shares (except dividends and other distributions
payable to shareholders of record at a date which is prior to the Effective
Time).
3.6 Post-Closing Escrow. A pro rata portion of the Merger Consideration
payable in respect of each Target Share equal in the aggregate to $500,000 (the
"Closing Escrow Deposit") shall be paid to Cooley Godward Castro Huddleston &
Tatum, as escrow agent (the "Post-Closing Escrow Agent") under that certain
Post-Closing Escrow Agreement in the form annexed to the Reorganization
Agreement as Exhibit 1.6 (the "Post-Closing Escrow Agreement"). The Post-Closing
Escrow Agent shall hold, invest and disburse the Post-Closing Escrow Deposit and
any interest or dividends therein (together with the Escrow Deposit, the "Escrow
Fund") as provided in the Post-Closing Escrow Agreement. The Post-Closing Escrow
Agreement shall provide for disbursement of funds to the former shareholders of
Target (other than funds required to cover claims) on December 15, 1996.
Article 4
Termination and Amendment
4.1 Termination. Notwithstanding the approval of this Merger Agreement by
the shareholders of Acquiror Sub and Target, this Merger Agreement shall
terminate forthwith in the event that the Reorganization Agreement shall be
terminated as therein provided.
4.2 Amendment. This Merger Agreement may be amended by the parties hereto
at any time before or after approval hereof by the shareholders of either
Acquiror Sub or Target, but, after any such approval, no amendment shall be made
which without the further approval of such shareholders would (i) have a
material adverse effect on the shareholders of either Acquiror Sub or Target,
(ii) change any of the principal terms of the Merger Agreement, or (iii) change
any term of the Articles of Incorporation of the Surviving Corporation. This
Merger Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
<PAGE>
-5-
IN WITNESS WHEREOF, the parties have duly executed this Merger Agreement
as of the date first written above.
DATA STORAGE SYSTEMS, INC.
a California corporation
By: /s/ Kathryn McGovern By: /s/ Kathryn McGovern
------------------------- ------------------------
Its Secretary Its President
TEMP DSSI, INC.
a California corporation
By: /s/ Garry B. Watzke By: /s/ John F. Kenny
------------------------- ------------------------
Its Secretary
Title: Vice President
Iron Mountain Records Management, Inc.
a Delaware corporation
By: /s/ Garry B. Watzke By: /s/ John F. Kenny
------------------------- ------------------------
Its Secretary
Title: Vice President
EXHIBIT 3.1M
CERTIFICATE OF FORMATION
OF
IRON MOUNTAIN RECORDS MANAGEMENT OF MISSOURI LLC
The undersigned, an authorized natural person, for the purpose of forming
a limited liability company, under the provisions and subject to the
requirements of the State of Delaware (particularly Chapter 18, Title 6 of the
Delaware Code and the acts amendatory thereof and supplemental thereto, and
known, identified, and referred to as the "Delaware Limited Liability Company
Act"), hereby certified that:
FIRST: The name of the limited liability company (hereinafter called the
"limited liability company") is Iron Mountain Records Management of Missouri
LLC.
SECOND: The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
The Prentice-Hall Corporation System, Inc., 1013 Centre Road, Wilmington, DE
19805.
Executed on April 23, 1996
/s/ Garry B. Watzke
Garry B. Watzke
Authorized Person
EXHIBIT 3.2M
LIMITED LIABILITY COMPANY AGREEMENT
OF
IRON MOUNTAIN RECORDS MANAGEMENT OF MISSOURI LLC
A Delaware Limited Liability Company
This Limited Liability Company Agreement of Iron Mountain Records
Management of Missouri LLC (this "Agreement"), dated as of April 24, 1996, is
adopted by and executed and agreed to by Iron Mountain Records Management, Inc.
and Iron Mountain Records Management of Maryland, Inc. (individually, a "Member"
and collectively referred to as the "Members").
ARTICLE 1
DEFINITIONS
P. 1.01. Definition. The following terms shall have the following meanings when
used in this Agreement:
"Act" means the Delaware Limited Liability Company Act and any successor
statute, as amended form time to time.
"Adjusted Capital Account Deficit" means the Capital Account maintained for each
Member as of the end of each fiscal year of the Company after giving effect to
the following adjustments:
(a) Increased by any amounts which the Member is obligated to restore
under the stands set forth in Treas. Reg. ss. 1.704-1(b)(2)(ii)(c) or is deemed
obligated to restore under Treas. Reg. ss. 1.704-2(g)(1) (relating to minimum
gains) and Treas. Reg. ss. 1.704-2(i))(5) (relating to member minimum gains);
and
(b) Decreased by:
(i) All losses and deductions that, as of the end of the applicable
fiscal year, are reasonably expected to be allocated to the Member in years
subsequent to the applicable fiscal year under Code ss.ss. 704(e)(2) and 706(d)
and under Treas. Reg. ss. 1.751-1(b)(ii); and
(ii) Distributions that are reasonably expected to be made to the
applicable Member to the extent that such distributions exceed offsetting
increases in the applicable Member's Capital Account that are reasonably
expected to occur during (or prior to) the year in which such distributions are
reasonably expected to be made. Notwithstanding anything to the contrary
contained herein, an Adjusted Capital Account Deficit shall be determined in
accordance with Treas. Reg. ss. 1.704-1(b)(2)(ii)(d).
"Adjusted Capital Contribution" means, as of any day, a Member's Capital
Contribution adjusted as follows:
<PAGE>
(a) Increased by the amount of any Company liabilities which, in
connection with distributions pursuant to P. P. 4.06 or 10.03, are assumed by
such Member or are secured by any Company Property distributed to such Member;
and
(b) Reduced by the amount of cash and the fair market value (as determined
by the Members) of any Company Property distributed to such Member pursuant to
P. P. 4.06 and 10.03 and the amount of any liabilities of such Member assumed by
the Company or which are secured by any Property contributed by such member to
the Company.
In the event any Person transfers all or any portion of its Interest, the
transferee shall succeed to the Adjusted Capital Contribution of the transferor
to the extent it relates to the transferred Interest.
"Affiliate" of another Person means: (a) any entity or individual that directly
or indirectly controls or holds the power to vote 10% or more of the outstanding
voting securities of the Person in question; (b) any Person 10% or more of whose
voting securities are directly or indirectly owned, controlled or held with
power to vote, by such other Person; (c) any Person directly or indirectly
controlling, controlled by, or under common control with such other Person; (d)
any officer, director or partner of such other Person; and (e) if such other
Person is an officer, director or partner, any company for which such Person
acts in any such capacity.
"Agreed Value" of any Contributed Property means the fair market value of the
property at the time of contribution as determined by the Members; provided,
however, that the Agreed Value of any Property deemed contributed to the Company
for federal income tax purposes upon termination and reconstitution thereof
pursuant to Code ss. 708 shall be determined in accordance with P. 3.06. Subject
to P. 3.06, in the event that more than a single item of Property is contributed
to the Company in a single or integrated transaction, the Members shall use such
method as they deem reasonable and appropriate to allocate the aggregate Agreed
Value of Contributed Properties among each separate property in proportion to
the respective fair market value of each item of such Property.
"Articles" means the Certificate of Formation filed for the Company in
accordance with the Act.
"Bankruptcy" means, with respect to any Member: (i) an assignment for the
benefit of creditors; (ii) a voluntary petition in bankruptcy; (iii)
adjudication as a bankrupt or insolvent; (iv) the filing of a petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation
or similar relief under any statute, regulation or law; (v) the filing of an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Member in any proceeding of this
nature; or (vi) seeking, consenting to, or acquiescing in the appointment of a
trustee, receiver, or liquidator of such Member's properties or of all or any
substantial part of the Member's properties.
"Book-Tax Disparity" shall mean with respect to any item of Contributed Property
or Revalued Property, as of the date of any determination, the difference
between the Carrying Value of such Contributed Property or Revalued Property and
the adjusted basis thereof for federal income tax
-2-
<PAGE>
purposes as of such date. A Member's share of the Company's Book-Tax Disparities
in all of its Contributed Property and Revalued Property will be reflected by
the difference between such Member's Capital Account balance, as maintained
pursuant to Article 3, and the balance of such Member's Capital Account computed
as if it had been maintained strictly in accordance with federal income tax
accounting principles.
"Capital Contributions" means the total amount of capital contributed by a
Member to the Company, as determined from time to time, which shall include the
Net Agreed Value of any Contributed Property.
"Carrying Value" means:
a) With respect to a Contributed property, the Agreed Value of such
Property reduced (but not below zero) by all depreciation, depletion
(computed as a separate item of deduction), amortization and cost recovery
deductions charged to the Members' Capital Accounts;
b) With respect to a Revalued Property, the fair market value of such
Property at the time of revaluation, as determined by the Members in
accordance with P. 3.07 hereof, reduced (but not below zero) by all
depreciation, depletion, amortization and cost recovery deductions charged
to the Members' Capital Accounts; and
c) With respect to any other Company Property, the adjusted basis of such
Property for federal income tax purposes, all as of the time of
determination.
The Carrying Value of any Property shall be adjusted from time to time in
accordance with P. 3.07 hereof.
"Code" means the Internal Revenue Code of 1986 and any successor statute, as
amended from time to time.
"Company" means Iron Mountain Records Management of Missouri LLC, a Delaware
limited liability company.
"Company Property" or "Property" means all properties, assets and rights of any
type owned by the Company.
"Contributed Property" means any property contributed to the Company at any time
or from time to time (or deemed contributed to the Company upon a termination
and reconstitution thereof under Code ss. 708). Once the Carrying Value of
Contributed Property has been adjusted pursuant to P. 3.07 hereof, such property
shall be deemed Revalued Property and shall no longer be deemed Contributed
Property.
"Corporation Act" means the Delaware General Corporation Law and any successor
statute, as amended from time to time.
-3-
<PAGE>
"Impasse" means the failure of a Member to consent to or approve any of the
following actions, after any such action has been proposed by the other Member:
(i) to sell or exchange all or any substantial part of the Company Property;
(ii) to change the Company's purpose or the purpose for which the Company
Property is owned; (iii) to refinance any of the Company's indebtedness; (iv) to
incur more than Fifty Thousand Dollars ($50,000) of indebtedness in the
aggregate; or (v) to raise any additional capital for the Company and/or issue
any additional Membership Interests. An Impasse shall be considered to have
occurred if the Members are unable to agree with respect to any of the foregoing
actions within ten (10) days after any such action has been proposed.
"Limited Liability Company Agreement" means this Agreement as it may from time
to time be amended.
"Majority Interest" means one or more Members holding more than 50% of the
Units.
"Member" means each Person identified as such in the introductory paragraph and
each Person hereafter admitted to the Company as a Member as provided in this
Agreement. The Members' Interests are set forth on attached and incorporated
Exhibit "A".
"Membership Interest" or "Interest" means the membership interest or interest of
a member in the Company, including the right to any and all benefits to which
such member may be entitled in accordance with this Agreement, and the
obligations as provided in this Agreement and the Act.
"Net Agreed Value" means, as follows:
(a) In the case of any Contributed Property, the Agreed Value of such
property net of liabilities either assumed by the Company upon such contribution
or to which such property is subject when contributed to the Company, as
determined in accordance with Code ss.752; and
(b) In the case of any property distributed to a Member, the Company's
Carrying Value of such property at the time such property is distributed, net of
any indebtedness either assumed by such distributee Member upon such
distribution or to which such property is subject at the time of distribution
determined in accordance with Code ss.752.
"Net Cash Receipts" means the gross cash proceeds from the operation of the
Company's business less the portion thereof used to establish reserves for or to
pay Company expenses, debt payments and capital expenditures. "Net Cash
Receipts" shall include any net cash proceeds from the sale or disposition of
company Property and from the refinancing of indebtedness of the Company, shall
be increased by any reduction of reserves previously established by the Members,
and shall not be reduced by depreciation, cost recovery, amortization or similar
noncash deductions.
"Person" means any individual, corporation, trust, partnership, joint venture,
limited liability company or other entity.
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"Proceeding" has the meaning given that term in P. 7.01.
"Profits" and "Losses" mean, for each fiscal year, an amount equal to the
Company's taxable income or loss for such year, determined in accordance with
Code ss.703(a) (including all items required to be stated separately) with the
following adjustments:
(a) Any income exempt from federal income tax shall be included;
(b) Any expenditures of the Company described in Code ss.705(a)(2)(B)
(including expenditures treated as such pursuant to Treas. Reg.
ss.1.704-1(b)(2)(iv)(i)) shall be subtracted;
(c) In the event any Company Property is revalued pursuant to P. 3.07, the
amount of such adjustment shall be taken into account in determining gain or
loss from the disposition of such Property;
(d) Any items which are specially allocated pursuant to P. 4.02 or 4.03
shall not be taken into account in computing Profits or Losses;
(e) Gain or loss resulting from any disposition of Company Property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Carrying Value of the Property disposed
of, notwithstanding that the adjusted tax basis of such Property differs from
its Carrying Value; and
(f) In the case of Company Property having a Book-Tax Disparity, in lieu
of depreciation, amortization or other cost recovery deductions allowable under
the Code ("Tax Depreciation"), there shall be taken into account for each
Property a depreciation allowance which bears the same ratio to its initial
Agreed Value (or, with respect to Revalued Property, its initial Carrying Value)
as the Tax Depreciation for such year bears to its beginning adjusted tax basis.
"Representative" shall mean the legally appointed guardian of a mentally
incapacitated Member, the conservator of a mentally incapacitated Member's
assets or the legally appointed and qualified executor or personal
representative of the estate of a deceased Member. In the event no such
guardian, executor or personal representative is appointed, then the
Representative shall mean the spouse of such incapacitated or deceased Member,
or if such Member does not have a spouse or the spouse is not then living or is
unable ro unwilling to act, such Member's then living lineal descendants who are
willing and capable of acting, one at a time in descending order of age but in
no event younger than 21 years of age or, if none, such Member's then-living
lineal ancestors who are willing and capable of acting, one at a time and in
ascending order of age.
"Revalued Property" shall mean any Property the Carrying Value of which has been
adjusted in accordance with P. 3.07(a) or (b). If a Revalued Property is deemed
distributed by, and recontributed to, the Company for federal income tax
purposes upon a termination of the Company pursuant to Code ss.708, such
Property shall constitute a Contributed Property until the Carrying Value of
such Property is subsequently adjusted (if at all) pursuant to P. 3.07(a) or
(b).
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"Sharing Ratio" shall mean the ratio in which the Members share in all Profits,
Losses and distributions to the Members. The Sharing Ratio for each Member shall
be the same percentage that such Member's Units bear to all outstanding Units.
"Transfer" means, with respect to an Interest, a sale, assignment, gift or any
other disposition by a Member, whether voluntary, involuntary or by operation of
law.
"Transferor" means a Member who proposes to make a voluntary Transfer of its
Interest, a Withdrawing Member, or the Representative of a Withdrawing Member.
"Treasury Regulations", Treas. Reg. or "Reg.") means the income tax regulations
promulgated under the Code as amended from time to time (including corresponding
provisions of succeeding regulations).
"Unit" means an Interest representing a Capital Contribution $10,000 to the
Company.
"Unrealized Gain" attributable to any item of Company Property means, as of any
date of determination, the excess, if any, of (a) the fair market value of such
Property (as determined under P. 3.07 hereof) as of such date, over (b) the
Carrying Value of such Property as of such date (prior to any adjustment to be
made pursuant to P. 3.07) as of such date.
"Unrealized Loss" attributable to any item of Company Property means, as of any
date of determination, the excess, if any, of (a) the Carrying Value of such
Property as of such date (prior to any adjustment to be made pursuant to P. 3.07
as of such date), over (b) the fair market value of such Property (as determined
under P. 3.07) as of such date.
"Withdrawing Member" has the meaning given that term in P. 5.03(b).
ARTICLE 2
ORGANIZATION
P. 2.01. Formation. The Company has been organized as a Delaware limited
liability company under and pursuant to the Act and a certificate of formation
for the Company has been filed with the Secretary of State of Delaware. The
rights and obligations of the Members shall be as set forth in the Act except as
this Agreement expressly provides otherwise.
P. 2.02. Name. The name of the Company is "Iron Mountain Records Management of
Missouri LLC" and all Company business shall be conducted in that name or such
other name as the Members may select from time to time and which is in
compliance with all applicable laws.
P. 2.03. Registered Office and Registered Agent and Principal Office. The
registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Certificate of Formation or such other office as the Members may designate
from time to time in the manner provided by law. The registered agent
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of the Company in the State of Delaware shall be the initial registered agent
named in the Articles or such other Person or Persons as the Members may
designate from time to time. The principal office of the Company shall be at
such place as the Members may designate from time to time, and the Company shall
maintain records there as required by the Act.
P. 2.04. Purposes. The purposes of the Company shall be to provide records
management and storage services and to undertake all such other activities and
businesses as may be undertaken by a limited liability company under the Act.
P. 2.05. Foreign Qualification. The Company shall not engage in any business
outside the State of Delaware unless and until the Company has complied with the
requirements necessary to qualify the Company as a foreign limited liability
company in the other jurisdiction.
P. 2.06. Term. The Company commenced on the date of issuance of its certificate
of formation and shall continue in existence until December 31, 2025 or such
earlier time as may be determined in accordance with the terms of the Agreement.
P. 2.07. Recapitalization, Acquisitions, Restructuring and Mergers. The Company
may participate in or be a party to any recapitalization, acquisition,
restructuring or merger in accordance with and as allowed by the Act or the
Corporation Act.
P. 2.08. Entity Declaration. The Company shall not be a general partnership, a
limited partnership or a joint venture, and no Member shall be considered a
partner or joint venturer of or with any other Member, for any purposes other
than for federal and state tax purposes, and this Agreement shall not be
construed otherwise.
ARTICLE 3
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
P. 3.01. Initial Contributions. The Members shall make Capital Contributions to
the Company in cash in the amount set forth in attached and incorporated Exhibit
"A."
P. 3.02. Subsequent Contributions. No Member shall be obligated to make any
Capital Contributions to the Company other than those set forth on Exhibit "A."
P. 3.03. Return of Capital Contributions. Each Member agrees not to withdraw as
a member of the Company and, except as expressly provided herein, no Member
shall be entitled to the return of any part of its Capital Contributions or to
be paid interest in respect to either its Capital Account or its Capital
Contributions. An unpaid Capital Contribution is not a liability of the Company
or of any Member.
P. 3.04. Loans by Members. Any Member may, but is not obligated to, loan to the
Company such sums as the Members determine to be appropriate for the conduct of
the Company's business. Any such loans shall bear interest at one percent (1%)
above the prime rate of interest
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charged from time to time by The Chase Manhattan Bank (National Association) and
shall be on such other terms as the Members may agree. All loans shall be repaid
in full before any distributions are made to the Members.
P. 3.05. Capital Accounts. A separate Capital Account shall be maintained for
each Member in accordance with Treas. Reg. ss.1.704-1(b)(2)(iv). Subject to the
requirements of Treas. Reg. ss.704-1(b)(2)(iv), each Capital Account:
(a) shall be credited with: (i) all cash contributions of such Members to
the Company; (ii) the Net Agreed Value of Contributed Property, (iii) such
Member's share of the Company's Profits; (iv) the amount of any liabilities of
the Company assumed by such Member (other than liabilities included in the
netting process of Subparagraph (b)(ii) below or increases in the Member's share
of the Company's liabilities determined in accordance with the provisions of
Code ss.752); and (v) the amount of any basis increase in Company Property
attributable to investment credit recapture allocated to such Member; and
(b) shall be debited for: (i) distributions of cash to such Member; (ii)
the Net Agreed Value of Company Property distributed to such Member, (iii) such
Member's share of the Company's Losses (including expenditures which can neither
be capitalized nor deducted for tax purposes, organization and syndication
expenses not subject to amortization, and loss on sale or disposition of Company
Property, whether or not disallowed under the rules of Code ss.ss.267 or 707,
but excluding losses or deductions described in Treas. Reg. ss.1.704-1(b)(4)(i)
or (iii)); (iv) the amount of any liabilities of such Member assumed by the
Company (other than liabilities already included in the netting process of
Subparagraph (a)(ii) above or decreases in the Member's share of the Company's
liabilities determined in accordance with the provisions of Code ss.752); and
(v) the amount of any basis decrease in Company Property attributable to
investment credit recapture allocated to such Member.
P. 3.06. Capital Accounts Upon Sale or Exchange of Membership Interests. Upon
the sale or exchange of an Interest, the following shall apply: (i) if such sale
or exchange causes a termination of the Company in accordance with Code
ss.708(b)(1)(B), the Company's Property shall be deemed to have been distributed
to the Members in a liquidation of the Company and to have been recontributed to
a new Company, and the Capital Accounts of the Members shall be redetermined in
accordance with P. 3.07, or (ii) if such sale or exchange does not cause a
termination of the Company in accordance with Code ss.708(b)(1)(B), the Capital
Account of the selling or exchanging Member will be transferred to the
transferee on a pro rata basis.
P. 3.07. Revaluation of Capital Accounts Upon Occurrence of Certain Events.
(a) Contributions. In accordance with the provisions of Treas. Reg.
ss.1.704- 1(b)(2)(iv)(f), if after the initial capital is contributed pursuant
to P. 3.01, money or property in other than a de minimis amount is contributed
to the Company in exchange for an Interest, the Capital Accounts of the Members
and Carrying Values of all the Company's Property (determined immediately prior
to such issuance) shall be adjusted to reflect the Unrealized Gain or Unrealized
Loss attributable to each such Company Property as if such Unrealized Gain or
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Unrealized Loss had been recognized on a sale of each such item of Company
Property immediately prior to such issuance and had been allocated to the
Members in accordance with Article 4. In determining the Unrealized Gain or
Unrealized Loss, the fair market value of Company Property shall be as
determined by the Members.
(b) Distributions. In accordance with the provisions of Treas. Reg.
ss.1.704- 1(b)(2)(iv)(f), if money or Company Property in other than a de
minimis amount is distributed (including any deemed distribution under P.
3.06(i)) to a Member in exchange for or part of an Interest, the Capital
Accounts of the Members and the Carrying Values of all the Company's Property
(determined immediately prior to such distribution) shall be adjusted to reflect
the Unrealized Gain or Unrealized Loss attributable to each item of Company
Property as if such Unrealized Gain or Unrealized Loss had been recognized on a
sale of each such item of Company Property immediately prior to such
distribution and had been allocated to the Members in accordance with Article 4.
In determining the Unrealized Gain or Unrealized Loss, the fair market value of
the distributed Property shall be as determined by the Members.
ARTICLE 4
ALLOCATIONS AND DISTRIBUTIONS
P. 4.01. Allocation of Profits and Losses. After giving effect to the special
allocations set forth in P. P. 4.02 and 4.03, Profits and Losses for each fiscal
year shall be allocated among the Members in accordance with the Sharing Ratio.
P. 4.02. Special Allocations. Items of income, gain, loss and deduction shall be
allocated in accordance with the provisions of this P. 4.02 without regard to
the allocation provision contained in P. 4.01 in the following order:
(a) Qualified Income Offset. If any Member's Capital Account is
unexpectedly adjusted for, or such Member is unexpectedly allocated or there is
unexpectedly distributed to such Member, any item described in Treas. Reg.
ss.1.704-1(b)(2)(ii)(d)(4)-(6), and such treatment creates or increases a
Member's Adjusted Capital Account Deficit, then without regard to the
allocations provided in P. 4.01, the Company shall allocate to such member items
of Company income and gain (consisting of a pro rata portion of each item of
Company income, including gross income, and gain for such year) in an amount and
manner sufficient to eliminate such Adjusted Capital Account Deficit as quickly
as possible.
(b) Gross Income Allocation. In the event that a Member has a deficit
Capital Account at the end of any Company fiscal year which is in excess of the
sum of (i) the amount the Member is obligated to restore pursuant to any
provision of this Agreement, and (ii) the amount the Member is deemed to be
obligated to restore pursuant to Treas. Reg. ss.1.704-2(g) and (i)(5), the
Member shall be specially allocated items of Company income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this paragraph shall be made if and to the extent that the Member
would have a deficit Capital Account in excess of
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such sum after all other allocations provided for in this P. 4.02 have been
tentatively made as if this P. 4.02(b) were not in this Agreement.
P. 4.03. Curative Allocations. The allocations set forth in P. 4.02 ("Regulatory
Allocations") are intended to comply with certain requirements of Treas. Reg.
ss.1.704-1(b). Notwithstanding any other provision of Article 4 (other than
Regulatory Allocations), the Regulatory Allocations shall be taken into account
in allocating other profits, losses and items of income, gain, loss and
deduction among the Members so that, to the extent possible, the net amount of
such allocations of other profits, losses and other items and the Regulatory
Allocations to each member shall be equal to the amount that would have been
allocated if the Regulatory Allocations had not occurred.
P. 4.04. Code Sections 704(c) Allocations. In accordance with Code ss.704(c),
income, gain, loss and deduction concerning any Contributed Property shall,
solely for tax purposes, be allocated among the Members to take account of any
variation between the adjusted tax basis of such property and the Agreed Value
of such property upon contribution. If the value of any Company Property is
adjusted under P. 3.07 of this Agreement, subsequent allocations of income,
gain, loss and deduction with respect to such asset shall take account of any
variation between the adjusted tax basis of such asset for federal income tax
purposes and its Carrying Value in the same manner as under Code ss.704(c).
Allocations under this P. 4.04 are solely for purposes of federal income taxes
and shall not affect or be taken into account in computing any Member's Capital
Account.
P. 4.05. Allocations Concerning Transferred Interests. Unless the Code requires
otherwise, any Profits or Losses allocable to an interest which has been
transferred during any year shall be allocated among the Persons who were
holders of such Interest during such year by taking into account their varying
interests during such taxable year in accordance with Code ss.706(d) and using
any convention selected by the Members.
P. 4.06. Distributions of Net Cash Receipts. Except as otherwise provided in P.
10.03, Net Cash Receipts, if any, shall be distributed to the Members within
thirty (30) days after the end of each fiscal year, in the following order and
priority:
(a) First, pro rata to the Members in proportion to their Units, an amount
equal to their Adjusted Capital Contributions, and
(b) The balance to the Members in accordance with the Sharing Ratio.
ARTICLE 5
MEMBERSHIP; DISPOSITIONS OF INTERESTS
P. 5.01. Initial Members. The initial members of the Company are the Persons
executing this Agreement as Members as of the date of this Agreement, each of
which is admitted to the
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Company as a Member effective contemporaneously with the execution by such
Person of this Agreement.
P. 5.02. Representations and Warranties. Each Member hereby represents and
warrants to the Company and to each other Member that (a) if that Member is a
corporation, it is duly organized, validly existing, and in good standing under
the law of the state of its incorporation and is duly qualified and in good
standing as a foreign corporation in the jurisdiction of its principal place of
business (if not incorporated therein); (b) if that Member is a limited
liability company, it is duly organized, validly existing, and (if applicable)
in good standing under the law of the state of its organization and is duly
qualified and (if applicable) in good standing as a foreign limited liability
company in the jurisdiction of its principal place of business (if not organized
therein); (c) if that Member is a partnership, trust, or other entity, it is
duly formed, validly existing, and (if applicable) in good standing under the
law of the state of its formation, and if required by law is duly qualified to
do business and (if applicable) in good standing in the jurisdiction of its
principal place of business (if not formed therein), and the representations and
warranties in clauses (a)-(c), as applicable, are true and correct with respect
to each partner (other than limited partners), trustee, or other member thereof;
(d) the Member has full corporate, limited liability company, partnership,
trust, or other applicable power and authority to execute and agree to this
Agreement and to perform its obligations hereunder and all necessary actions by
the board of directors, shareholders, members, partners, trustees,
beneficiaries, or other Persons necessary for the due authorization, execution,
delivery, and performance of this Agreement by that Member have been duly taken;
(e) the Member has duly executed and delivered this Agreement; (f) the Member's
authorization, execution, delivery, and performance of this Agreement does not
conflict with (i) any law, rule or court order applicable to that Member, (ii)
that Member's articles of incorporation, bylaws, partnership agreement,
Agreement or articles of organization, or (iii) any other agreement or
arrangement to which that Member is a party or by which it is bound.
P. 5.03. Restrictions on Transfer of Membership Interests.
(a) Voluntary Transfer. If a Member intends to Transfer any Membership
Interests it owns to any Person other than the Company, it shall give written
notice to the Company and the nonselling Member ("Remaining Member") of its
intention to do so ("Transfer Notice"). The Transfer Notice, in addition to
stating the Member's intention to Transfer its Membership Interests, shall
state: (i) the number of Units it desires to Transfer; (ii) the name, business
and residence address of the proposed transferee; and (iii) whether or not the
Transfer is made at arm's length for full and valuable consideration and, if so,
the amount of the consideration and the other terms of the sale. For sixty (60)
days following the Company's receipt of the Transfer Notice (the "Company Option
Period"), the Company shall have the option to purchase all or any portion of
the Membership Interests which are proposed to be transferred, for the price and
upon the terms set form in P. 5.03(i), and if the Company does not exercise its
option to purchase all, but not less than all, of such Membership Interests
within said sixty (60)-day period, the Remaining Member for a period of fifteen
(15) days after the expiration of the Company Option Period shall have an option
to purchase all of the membership Interests which have not been purchased by the
Company, at the price and upon the terms set forth in P. 5.03(i).
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(b) Involuntary Transfers. In the event of the death, incompetency,
bankruptcy, withdrawal or dissolution of a Member (a "Withdrawing Member"), (i)
for a period of ninety (90) days after the Company receives actual notice
thereof, the Company shall have the option to purchase all or any portion of the
Withdrawing Member's Interest, for the price and upon the terms set forth in P.
5.03(i). If the Company does not exercise its option to purchase all of the
Withdrawing Member's Interest, for a period ending fifteen (15) days after the
close of the Company's 90-day option period, the Remaining Member shall have an
option to purchase all, but not less than all, of such Withdrawing Member's
Interest at the price set forth in P. 5.03(i)(i)(2) and upon the same terms as
provided for an option regarding a voluntary transfer in P. 5.03(a) of this
Agreement. Notwithstanding the foregoing, neither the Company nor the Remaining
Member may exercise this option unless the Remaining Member has agreed pursuant
to P. 10.01(f) to continue the Company's business with a new Member. If the
Company and the Remaining Member do not exercise their options, the provisions
of P. 5.03(e) and (g) shall apply to the Withdrawing Member.
(c) Exercise of Options.
(i) Means of Exercise. The Company and the Remaining Member who
exercises any option granted by this Article 5 shall do so by giving written
notice ("Exercise Notice") of the exercise of their respective options within
the time periods provided in this Article 5 to the Member and, in the case of an
option upon involuntary transfer, to the Withdrawing Member's Representative.
(ii) Voting to Exercise. A Transferor, in its capacity as a Member,
shall not be entitled to vote in the Company's determination of whether to
exercise any purchase option granted by this Agreement or with respect to any
decisions or actions involving the purchase option or the consummation of the
exercise thereof.
(d) Nonexercise of Options. If the Remaining Member and the Company fail
to exercise their purchase options to acquire all of the membership Interests
which are proposed to be transferred in compliance with P. 5.03(a) of this
Agreement, the Transferor may, within thirty (3) days following their expiration
of the option period for the Remaining Member, transfer the Interests to the
transferee named in the Transfer Notice, subject to the terms of this Agreement;
provided, however, that such Transfer must be upon the terms and for the
consideration specified in said Transfer Notice. If the Transfer is not upon the
terms or is not to the transferee stated in the Transfer Notice, or is not made
within said thirty (30)-days period, or if the Transferor, after the Transfer,
reacquires all or any portion of the transferred Units, the initial Transfer
shall be void and without legal or other effect.
(e) Requirements for Transfer. Subject to any restrictions on
transferability required by law (including the Securities Act of 1933, any state
securities or "Blue Sky" law, and the rules promulgated thereunder), and subject
to the provisions of P. 5.03(a) and (b), each Member shall have the right to
Transfer (but not to substitute the assignee as a substitute Member in its
place, except in accordance with P. 5.03(g) hereof), by a written instrument,
the whole or any part
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of its Interest, provided that: (i) the transferee is a citizen and resident of
the United States, and otherwise not a tax-exempt entity under Section 168(h) of
the Code; (ii) the Transferor delivers to the Company and the Remaining Member
an unqualified opinion of counsel in form and substance satisfactory to counsel
designated by the Remaining Member that neither the Transfer nor any offering in
connection therewith violates any provision of any federal or state securities
law; (iii) the transferee executes a statement that it is acquiring such
Interest or such part thereof for its own account for investment and not with a
view to distribution, fractionalization or resale thereof; and (iv) the Company
receives a favorable opinion of the Company's legal counsel or such other
counsel selected by the Remaining Member that such Transfer would not result in
the termination of the Company (within the meaning of Section 708(b) of the
Code) or the termination of its status as a partnership under the Code;
provided, further, that the Remaining Member may elect to waive the requirement
of the opinions of counsel set forth in P. 5.03(e)(ii) and (iv) above should it,
in its sole discretion, determine that the cost or time delays involved in
procuring such opinions may impede the Company's ability to effect the
contemplated Transfer.
(f) Effectiveness of Assignment. No Transfer shall be effective unless and
until the requirements of P. 5.03(e) are satisfied. The Transfer by a Member of
all or part of its Interest shall become effective on the first day of the
calendar month immediately succeeding the month in which all of the requirements
of this P. 5.03 have been met, and the Company has received from the Transferor
a transfer fee sufficient to cover all expenses of the Company connected with
such transfer; provided, however, that the Remaining Member may elect to waive
this fee in its sole discretion. All distributions prior to the effective date
shall be made to the Transferor and all distributions made thereafter shall be
made to the transferee.
(g) Requirements for Admission. No transferee of the whole or a portion of
a Member's Interest shall have the right to become a Member unless and until all
of the following conditions are satisfied:
(i) a duly executed and acknowledged written instrument of transfer
approved by the Remaining Member has been filed with the Company setting forth
(A) the intention of the transferee to be admitted as a Member, (B) the notice
address of the transferee, and (C) the number of Units transferred by the
Transferor to the transferee;
(ii) the opinions of counsel described in P. 5.03(e) above are
delivered to the Company and the Remaining Member, subject to the Remaining
Member's right to waive the delivery of these opinions in its sole discretion;
the Transferor and transferee execute and acknowledge, and cause such other
Persons to execute and acknowledge, such other instruments and provide such
other evidence as the Remaining Member may reasonably deem necessary or
desirable to effect such admission, including without limitation: (A) the
written acceptance and adoption by the transferee of the provisions of this
Agreement including a representation and warranty that the representations and
warranties in P. 5.02 are true and correct with respect to the transferee; (B)
the transferee's completion of a purchaser qualification questionnaire which
will enable counsel for the Company to determine whether such proposed
substitution is consistent with the requirements of a private placement
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exemption from registration under the Securities Act of 1933 and relevant state
law; and (C) the transferee's completion, if applicable, of acknowledgment of
the use of a purchaser representative, and such representative's completion of a
purchaser representative questionnaire which will enable counsel for the Company
to determine whether such proposed substitution is consistent with the
requirements of a private placement exemption from registration under the
Securities Act of 1933 and relevant state law;
(iii) the admission is approved by the Remaining Member, the
granting or denial of which shall be within the sole and absolute discretion of
the Remaining Member; and
(iv) a transfer fee has been paid to the Company by the Transferor
sufficient to cover all expenses in connection with the transfer and admission,
including but not limited to attorney's fees for the legal opinions referred to
in P. 5.03(e) and (g), subject to the Remaining Member's right to waive the
payment of this fee in its sole discretion.
(h) Rights of Mere Assignees. If a transferee of an Interest is not
admitted as a Member, it shall not be entitled to inspect the Company's books
and records, receive an accounting of Company financial affairs, exercise the
voting rights of a member, or otherwise take part in the Company's business or
exercise the rights of a Member under this Agreement.
(i) Purchase Price and Terms.
(i) Purchase Price. If the Company or the Remaining Member exercises
its option (the "Optionor"), the purchase price which Optionor shall pay for the
Transferor's Membership Interest following the exercise of an option to purchase
under P. 5.03(a) or (b) shall be an amount equal to: (1) the purchase price as
stated in the Transfer Notice where (a) the proposed transfer is for full and
adequate consideration and (b) the transferee identified in the Transfer Notice
is not a member of the Transferor's family or an Affiliate of the Transferor;
and (2) in all other cases, the value of the Transferor's Membership Interest as
mutually agreed upon by the Members. If the parties cannot agree within ten (10)
days after the date of the final Exercise Notice, the Purchase price shall be
the amount which the Transferor would receive if all the Company Property were
sold at its appraised fair market value and the proceeds were applied in
accordance with P. 10.03. An independent appraiser ("Qualified Appraiser")
experienced in conducting appraisals of assets similar to the Company Property
shall conduct an appraisal of all of the Company Property to determine its fair
market value ("First Appraisal"). The Optionor shall select a Qualified
appraiser to perform the First Appraisal and shall assume the cost of the First
Appraisal. If, within five (5) days after receipt of the First Appraisal, the
Transferor disputes the value determined by the First Appraisal, the Transferor
may obtain, at its own cost, a second appraisal ("Second Appraisal") of the fair
market value of the Company Property by a Qualified Appraiser of its choice. If
the parties agree, the Second Appraisal shall be used to determine the value of
the Company Property. If the two appraisals are performed and the parties cannot
agree within ten (10) days which of the appraisals accurately reflects the value
of the Company Property, then the two appraisers selected under this
subparagraph shall select a Qualified Appraiser to conduct a third appraisal
("Third Appraisal") of the fair market value of the Company Property. The fair
market value of the Company Property established by the Third
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Appraisal shall be final and binding in all respects on all parties. The
Optionor and the Transferor shall each pay fifty percent (50%) of the costs of
the Third Appraisal.
(ii) Payment of Purchase Price and Closing. The closing of any sale
and purchase of the Transferor's Membership Interest in the Company shall be
within thirty (30) days from the later of (1) the date of the final Exercise
Notice, or (2) delivery of the final appraisal performed pursuant to P.
5.03(i)(i). The Optionor shall pay the purchase price (1) at the time and in
accordance with the terms and conditions as stated in the Transfer Notice, where
the purchase price is determined pursuant to P. 5.03(i)(1), or (2) at the
closing in all other cases, unless the parties agree on different terms. The
Transferor shall deliver documents satisfactory to the Optionor conveying its
Membership Interest free and clear of all liens, claims and encumbrances, any of
which may be paid out of the purchase price, with the remainder, if any, paid to
the Transferor. If the purchase price is insufficient to satisfy any such liens,
the Transferor shall discharge the balance.
P. 5.04. Additional Members. Additional Persons may be admitted to the Company
as Members and Membership Interests may be created and issued to those Persons
and to existing Members upon the approval of all of the Members on such terms
and conditions as they may determine at the time of admission. The terms of
admission or issuance must specify the Sharing Ratios applicable thereto and may
provide for the creation of different classes or groups of Interests having
different rights, powers and duties. The creation of any new class or group
shall be reflected in an amendment to this Agreement indicating the different
rights, powers and duties. The provisions of this P. 5.04 shall not apply to
Transfers of Membership Interests.
P. 5.05. Interests in Member. A Member that is not a natural person may not
cause or permit an ownership interest, direct or indirect, in itself to be
disposed of such that, after the disposition: (a) the Company would be
considered to have terminated within the meaning of Code ss.708; or (b) without
the written consent of the other Member, that Member shall cease to be
controlled by substantially the same Persons who control it as of the date of
the Member's admission to the Company. For a period of 120 days after notice to
the Company of any Member's breach of the provisions of clause (b) of the
immediately preceding sentence, the Company shall have the option to buy, and on
exercise of that option the breaching Member shall sell, the breaching Member's
Membership Interest, at the price determined in accordance with P.
5.03(i)(i)(2). The breaching Member shall deliver documents satisfactory to the
Company conveying its Membership Interest free and clear of all liens, claims
and encumbrances, any of which may be paid out of the purchase price, with the
remainder, if any, paid to the selling Member. If the purchase price is
insufficient to satisfy any such liens, the selling Member shall discharge the
balance.
P. 5.06. Information.
(a) In addition to the other rights specifically set forth in this
Agreement, each Member is entitled to all information to which that Member is
entitled to have access pursuant to the Act under the circumstances and subject
to the conditions therein stated.
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(b) The Members acknowledge that, from time to time, they may receive
information from or regarding the Company in the nature of trade secrets or that
otherwise is confidential, the release of which may be damaging to the Company
or Persons with which it does business. Each Member shall hold in strict
confidence any information it receives regarding the Company that is identified
as being confidential (and if that information is provided in writing, that is
so marked) and may not disclose it to any Person other than another Member,
except for disclosures: (i) compelled by law (but the Member must notify the
other Members promptly of any request for that information, before disclosing it
if practicable); (ii) to advisers or representatives of the Member or Persons to
which that Member's Membership Interest may be transferred as permitted by this
Agreement, but only if the recipients have agreed to be bound by the provisions
of this P. 5.06(b); or (iii) of information that the Member also has received
from a source independent of the Company that the Member reasonably believes
obtained that information without breach of any obligation of confidentiality.
The Members acknowledge that breach of the provisions of this P. 5.06(b) may
cause irreparable injury to the Company for which monetary damages are
inadequate, difficult to compute, or both. Accordingly, the Members agree that
the provisions of this P. 5.06(b) may be enforced by specific performance
without posting bond.
P. 5.07. Liability to Third Parties. No Member shall, by virtue of its status as
a Member or its ownership of an Interest, be liable for the debts, obligations
or liabilities of the Company, including but not limited to a judgment decree or
order of a court.
P. 5.08. Withdrawal. A Member does not have the right or power to withdraw from
the Company as a Member.
P. 5.09. Lack of Authority. No Member has the authority or power to act for or
on behalf of the Company, to do any act that would be binding on the Company, or
to incur any expenditures on behalf of the Company, except to the extent that
such act or expenditure has been approved by a Majority Interest or such greater
interest required by the Agreement, the Articles or applicable law.
P. 5.10. Certificates of Interest. Interests shall be represented by
certificates of interests in the Company, which shall be in such form as may be
approved by the Managers.
ARTICLE 6
MANAGEMENT OF COMPANY AND MEETINGS OF MEMBERS
P. 6.01. Management.
(a) General. The business and affairs of the Company shall be managed by
its Managers. The Managers shall direct, manage, and control the business of the
Company to the best of their ability. Except for situations in which the
approval of the Members is expressly required by this Agreement or by
nonwaivable provisions of applicable law, the Managers shall have full and
complete authority, power, and discretion to manage and control the business,
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affairs, and properties of the Company, to make all decisions regarding those
matters and to perform any and all other acts or activities customary or
incident to the management of the Company's business. At any time when there is
more than one Manager, any one Manager may take any action permitted to be taken
by the Managers, unless the approval of more than one of the Managers is
expressly required pursuant to this Agreement or the Act.
(b) Number, Tenure, and Qualifications. The Company shall initially have
one Manager, which shall be Iron Mountain Records Management, Inc. The number of
Managers of the Company shall be fixed from time to time by the affirmative vote
of Members holding at least two-thirds of all Capital Interests in the Company's
capital, but in no instance shall there be less than one Manager. Each Manager
shall hold office until the next annual meeting of Members or until a successor
shall have been elected and qualified. Managers shall be elected by the
affirmative vote of Members holding at least a Majority Interest. Managers need
not be residents of the State of Delaware or Members of the Company.
(c) Certain Powers of Manager. Without limiting the generality of
ss.6.01(a) above, the Managers shall have the power and authority, on behalf of
the company:
(i) to acquire property from any Person as the Managers may
determine. The fact that a Manager or Member is directly or indirectly
affiliated or connected with any such Person shall not prohibit the Managers
from dealing with that Person;
(ii) to borrow money for the Company from banks, other lending
institutions, the Managers, Members, or affiliates of the Managers or Members on
such terms as the Managers deem appropriate, and in connection therewith, to
hypothecate, encumber, and grant security interests in the assets of the Company
to secure repayment of the borrowed sums. No debt shall be contracted or
liability incurred by or on behalf of the Company except by the Managers, or to
the extent permitted under the Act, by agents or employees of the Company
expressly authorized to contract such debt or incur such liability of the
Managers;
(iii) to hold and own any Company real and/or personal properties in
the name of the Company;
(iv) to purchase liability and other insurance to protect the
Company's property and business;
(v) to invest any Company funds temporarily (by way of example but
not limitation) in time deposits, short-term governmental obligations,
commercial paper, or other investments;
(vi) upon the affirmative vote of the Members holding at least
two-thirds of all Interests, to sell or otherwise dispose of all or
substantially all of the assets of the Company as part of a single transaction
or plan so long as that disposition is not in violation of or a cause of a
default under any other agreement to which the Company may be bound; provided,
however,
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that the affirmative vote of the Members shall not be required with respect to
any sale or disposition of the Company's assets in the ordinary course of the
Company's business;
(vii) to execute on behalf of the Company all instruments and
documents, including, without limitation: checks; drafts; notes and other
negotiable instruments; mortgages, or deeds of trust; security agreements;
financing statements; documents providing for the acquisition, mortgage or
disposition of the Company's property; assignments; bills of sale; leases;
partnership agreements; operating agreements of other limited liability
companies; and any other instruments or documents necessary, in the opinion of
the Managers, to the business of the Company;
(viii)to employ accountants, legal counsel, managing agents, or
other experts to perform services for the Company and to compensate them from
Company funds;
(ix) to enter into any and all other agreements on behalf of the
Company, with any other Person for any purpose, in such forms as the Managers
may approve; and
(x) to do and perform all other acts as any be necessary or
appropriate to the conduct of the Company's business.
Unless authorized to do so by this Agreement or by a Manager or Managers of the
Company, no attorney-in-fact, employee, or other agent of the Company shall have
any power or authority to bind the Company in any way, to pledge its credit or
to render it liable pecuniarily for any purpose. No Member shall have any power
or authority to bind the Company unless the Member has been authorized by the
Managers to act as an agent of the Company in accordance with the previous
sentence.
(d) Liability for Certain Acts. The Managers shall perform their
managerial duties in good faith, in a manner they reasonably believe to be in
the best interests of the Company, and with such care as an ordinarily prudent
person in a like position would use under similar circumstances. A Manager who
so performs the duties of Manager shall not have any liability by reason of
being or having been a Manager of the Company. A Manager does not, in any way,
guarantee the return of the Members' Capital Contributions or a profit for the
Members from the operations of the Company. A Manager shall not be liable to the
Company or to any Member for any loss or damage sustained by the Company or any
Member unless the loss or damage shall have been the result of fraud, deceit,
gross negligence, willful misconduct, or a wrongful taking by the Manager.
(e) Managers Have No Exclusive Duty to Company. The Managers shall not be
required to manage the Company as their sole and exclusive function and they may
have other business interests and may engage in other activities in addition to
those relating to the Company. Neither the Company nor any Member shall have any
right, by virtue of this Agreement, to share or participate in such other
investments or activities of the Managers or to the income or proceeds derived
therefrom. The Managers shall incur no liability to the Company or to any of the
Members as a result of engaging in any other business or venture.
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(f) Bank Accounts. The Managers may from time to time open bank accounts
in the name of the Company, and the Managers shall be the sole signatory
thereon, unless the Managers determine otherwise.
(g) Indemnity of the Managers, Employees, and Other Agents. To the maximum
extent permitted under the Act, the Company shall indemnify the Managers and
make advances for expenses. The Company shall indemnify its employees and other
agents who are not Managers to the fullest extent permitted by law, provided
that the indemnification in any given situation is approved by Members owning a
Majority Interest.
(h) Resignation. Any Manager of the Company may resign at any time by
giving written notice to the Members of the Company. The resignation of any
Manager shall take effect upon receipt of that notice or at such later time as
shall be specified in the notice; and, unless otherwise specified in the notice,
the acceptance of the resignation shall not be necessary to make it effective.
The resignation of a Manager who is also a Member shall not affect the Manager's
rights as a Member and shall not constitute a withdrawal of a Member.
(i) Removal. At a meeting called expressly for that purpose, all or any
lesser number of Managers may be removed at any time, with or without cause, by
the affirmative vote of Members holding a Majority Interest. The removal of a
Manager who is also a Member shall not affect the Manager's rights as a Member
and shall not constitute a withdrawal of a Member.
(j) Vacancies. Any vacancy occurring for any reason in the number of
Managers of the Company may be filled by the affirmative vote of a majority of
the remaining Managers then in office, provided that if there are no remaining
Managers, the vacancy(ies) shall be filled by the affirmative vote of Members
holding a Majority Interest.
(i) Any Manager's position to be filled by reason of an increase in
the number of Managers shall be filled by the affirmative vote of a majority of
the Managers then in office or by an election at an annual meeting or at a
special meeting of Members called for that purpose or by the Members' unanimous
written consent.
(ii) A Manager elected to fill a vacancy shall be elected for the
unexpired term of the Manager's predecessor in office and shall hold office
until the expiration of that term and until the Manager's successor shall be
elected and shall qualify or until the Manager's earlier death, resignation, or
removal.
(iii) A Manager chosen to fill a position resulting from an increase
in the number of Managers shall hold office until the next annual meeting of
Members and until a successor shall be elected and shall qualify, or until the
Manager's earlier death, resignation, or removal.
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(k) Compensation. The compensation of the Managers shall be fixed from
time to time by an affirmative vote of Members holding at least a Majority
Interest and no Manager shall be prevented from receiving compensation because
the Manager is also a Member.
P. 6.02. Meetings. Meetings of the Members may be called by Members holding not
less than twenty-five percent (25%) of the Units. The meeting shall be held at
the principal place of business of the Company or as designated in the notice or
waivers of notice of the meeting.
P. 6.03. Notice. Notice of any meeting of the Members shall be given no fewer
than ten days and no more than thirty days prior to the date of the meeting.
Notices shall be delivered in the manner set forth in P. 11.02 and shall specify
the purpose or purposes for which the meeting is called. The attendance of a
Member at any meeting shall constitute a waiver of notice of such meeting,
except where a Member attends a meeting for the express purpose of objecting to
the transaction of any business because the meeting is not lawfully called or
convened.
P. 6.04. Quorum. A Majority Interest, present in person or represented by proxy,
shall constitute a quorum for transaction of business at any meeting of the
Members, provided that if less than a Majority Interest are present at said
meeting, the holders of a majority of the Units present may adjourn the meeting
at any time without further notice.
P. 6.05. Manner of Acting. The act of a Majority Interest shall be the act of
the Members, unless the act of a greater number is required by this Agreement,
the Articles or applicable law.
P. 6.06. Action Without Meeting. Unless specifically prohibited by the Articles,
any action required to be taken at a meeting of the Members or any other action
which may be taken at a meeting of the Members, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of Units having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which the holders
of all of the Units were present and voting. Prompt notice of the taking of the
action without a meeting by less than unanimous consent shall be given in
writing to those Members who were entitled to vote but did not consent in
writing.
P. 6.07. Telephonic Meetings. The Members may participate in and act at any
meeting of Members through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such meeting shall constitute
attendance and presence in person at the meeting of the person or persons so
participating.
P. 6.08. Proxies. Each Member entitled to vote at a meeting of Members or to
express consent or dissent to action in writing without a meeting may authorize
another Person or Persons to act for him by proxy. Such proxy shall be deposited
at the principal offices of the Company not less than 48 hours before a meeting
is held or action is taken, but no proxy shall be valid after eleven months from
the date of its execution, unless otherwise provided in the proxy.
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P. 6.09. Voting of Interests. Each outstanding Unit shall be entitled to one
vote upon each matter submitted to a vote at a meeting of Members.
P. 6.10. Officers. The officers of the Company shall consist of a President, one
or more Vice Presidents, a Treasurer, Controller and a Secretary. The officers
shall be appointed by the Managers and shall exercise such powers and perform
such duties as are prescribed by the Managers. Any number of offices may be held
by the same person, as the Managers may determine, except that no person may
simultaneously hold the offices of President and Secretary.
P. 6.11. Term of Office. The officers shall hold office for the term for which
they were appointed and until their successors are elected and qualified;
provided, however, that any officer may be removed with or without cause by the
affirmative vote of a Majority Interest.
ARTICLE 7
INDEMNIFICATION
P. 7.01. Rights to Indemnification. Subject to the limitations and conditions
provided in this Article 7 and in the Act, each Person ("Indemnified Person")
who was or is made a party or is threatened to be made a party to or is involved
in any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative ("Proceeding"), or
any appeal in such a Proceeding or any inquiry or investigation that could lead
to such a Proceeding, by reason of the fact that he was or is a Member, Manager
or an officer of the Company or it was the legal representative of or a manager,
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of a Member, shall be indemnified by the Company against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable costs and expenses (including, without
limitation, attorneys' fees) actually incurred by such Indemnified Person in
connection with such Proceeding if such Indemnified Person acted in good faith
and in a manner if reasonably believed to be in, or not opposed to, the best
interest of the Company and, with respect to any criminal action or proceeding,
had no reasonable cause to believe its conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal action or proceeding
that the Indemnified Person had reasonable cause to believe that its conduct was
unlawful.
P. 7.02. Derivative Claims. Subject to the limitations and conditions provided
in this Article 7 and in the Act, the Company shall and does hereby indemnify
any Person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that such
Person is or was a Member, Manager or an officer of the Company, the legal
representative of a Member, Manager or officer, or a manager, director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of a Member against expenses (including
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attorneys' fees) actually and reasonably incurred by such Person in connection
with the defense or settlement of such action or suit, if such Person acted in
good faith and in a manner it reasonably believed to be in, or not opposed to,
the best interests of the Company, provided that no indemnification shall be
made in respect of any claim, issue or matter as to which such Person shall have
been adjudged to be liable for negligence or misconduct in the performance of
its duty to the Company unless and only to the extent that, the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability, but in view of all the circumstances of the case,
such Person is fairly and reasonably entitled to indemnify for such expenses as
the court shall deem proper.
P. 7.03. Success on Merits. To the extent that a Person has been successful, on
the merits or otherwise, in the defense of any action, suit or proceeding
referred to in P. P. 7.01 or 7.02, or in defense of any claim, issue or matter
therein, such Person shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such Person in connection therewith.
P. 7.04. Determinations. Any indemnification under P. P. 7.01 or 7.02 (unless
ordered by a court) shall be made by the Company only as authorized in the
specific case, upon a determination that indemnification is proper in the
circumstances because such person has met the applicable standard of conduct set
forth therein. Such determination shall be made (i) by the holders of a majority
of the Units held by Members who were not parties to such action, suit or
proceedings, or (ii) if such a quorum is not obtainable, or even if obtainable,
if a quorum of disinterested Members so directs, by the Company's independent
legal counsel in a written opinion.
P. 7.05. Survival. Indemnification under this Article 7 shall continue as to a
Person who has ceased to serve in the capacity which initially entitled such
Person to indemnity hereunder. The rights granted pursuant to this Article 7
shall be deemed contract rights, and no amendment, modification or repeal of
this Article 7 shall have the effect of limiting or denying any such rights with
respect to actions taken or Proceedings arising prior to any such amendment,
modification or repeal.
P. 7.06. Advance Payment. The right to indemnification conferred by this Article
7 shall include the right to be paid or reimbursed by the Company for the
reasonable expenses incurred in advance of the final disposition of the
Proceeding and without any determination as to the Person's ultimate entitlement
to indemnification, provided, however, that the payment of such expenses
incurred in advance of the final disposition of a Proceeding shall be made only
upon delivery to the Company of a written affirmation by such Person of its good
faith belief that it has met the standard of conduct necessary for
indemnification under this Article 7 and a written undertaking, by or on behalf
of such Person to repay all amounts so advanced if it shall ultimately be
determined that such Person is not entitled to be indemnified under this Article
7 or otherwise.
P. 7.07. Nonexclusivity of Rights. The right to indemnification and the
advancement and payment of expenses conferred by this Article 7 shall not be
exclusive of any other right which a
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Person may have or hereafter acquire under any law (common or statutory),
provision of the Act, the vote of Members or otherwise.
P. 7.08. Insurance. The Company may purchase and maintain insurance, at its
expense, to protect itself and any Indemnified Person against any expense,
liability or loss, whether or not the Company would have the power to indemnify
such Person against such expense, liability or loss under this Article 7.
P. 7.09. Savings Clause. If P. P. 7.01, 7.02 or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Indemnified Person
as to costs, charges and expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative to the full extent
permitted by any applicable portion of this Article 7 that shall not have been
invalidated and to the fullest extent permitted by applicable law.
ARTICLE 8
BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS
P. 8.01. Maintenance of Books and Records. The Company shall keep books and
records of accounts and shall keep minutes of the proceedings of its Members at
the registered office of the Company or its principal place of business. In
addition, the Company shall maintain the following at its registered office or
its principal place of business:
(a) A current list of the full name and last know business address of each
Member, separately identifying the Members in alphabetical order;
(b) A copy of the filed Articles and all amendments thereto, together with
executed copies of any powers of attorney pursuant to which any document has
been executed;
(c) Copies of the Company's federal, state and local income tax returns
and reports and financial statements, if any, for the three (3) most recent
years;
(d) Copies of this Agreement and any amendments thereto; and
(e) Unless contained in this Agreement, the Articles or in any amendments
hereto, a writing setting out:
(i) The amount of cash, a description and statement of the agreed
value of the other property or services contributed by each Member and which
each Member has agreed to contribute;
(ii) The items as to which or events on the happening of which any
additional contributions agreed to be made by each Member are to be made;
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(iii) Any right of a Member to receive, or of the Members to make,
distributions which include a return of all or any part of the Member's
contribution; and
(iv) Any events upon the happening of which the Company is to be
dissolved and its affairs wound up.
Records kept pursuant to this P. 8.01 are subject to inspection and copying at
the reasonable request, and at the expense, of any Member during ordinary
business hours.
P. 8.02. Reports. On or before the 90th day following the end of each fiscal
year during the term of the Company, the Company shall cause each Member to be
furnished with a federal (and, where applicable, state) income tax reporting
Form K-1 or its equivalent and a financial report for the preceding fiscal year
which shall include a balance sheet and a profit and loss statement prepared in
accordance with generally accepted accounting principles applied on a consistent
basis.
P. 8.03. Taxable Year and Accounting Method. The Company's taxable and fiscal
years shall be the calendar year. the Company shall initially use the accrual
method of accounting.
P. 8.04. Tax Elections. All elections required or permitted to be made by the
Company under the Code shall be made by the Members. In particular:
(i) The Company shall elect to deduct expenses incurred in
organizing the Company ratably over a 60-month period as provided in Section 709
of the Code.
(ii) In case of a Transfer of all or part of any Interest, the
Company may elect, in a timely manner pursuant to Section 754 of the Code and
pursuant to corresponding provisions of applicable state and local tax laws, to
adjust the basis of Company Property pursuant to Sections 734 and 743 of the
Code.
(iii) The Company shall elect to deduct start-up expenditures
ratably over a 60- month period as provided in Section 195 of the Code.
(iv) The Company shall not elect to be excluded from the application
of the provisions of Subchapter K of Chapter 1 of Subtitle A of the Code or
corresponding provisions of state or local law.
P. 8.05. Bank Accounts. All funds of the Company are to be deposited in the
Company's name in such bank accounts or investment accounts as may be designated
by the Managers and shall be withdrawn on the signature of a duly authorized
officer of the Managers, or such other Person or Persons as a Majority Interest
may authorize. The Company's funds may not be commingled with the funds of any
Member or officer of the Company.
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P. 8.06. "Tax Matters Partner." The Managers shall be the "tax matters partner"
of the Company pursuant to Code ss.6231(a)(7). Any one of the Managers is
authorized to take such actions as are permitted by Code ss.ss.6221 through
6233.
ARTICLE 9
PUT-CALL
P. 9.01. Put-Call Arrangement. In the event of an Impasse, each Member shall
have the right to make an optional "put-call" offer to the other Member to
purchase the other Member's entire Membership Interest. Notwithstanding the
above, neither Member may initiate a put-call when there is an outstanding Offer
(defined in P. 9.02(a) below) pending. The Member initiating a put-call shall be
referred to as the "Offeror" and the other Member shall be referred to as the
"Offeree".
P. 9.02. Terms of Offer.
(a) Written Offer. Upon the terms described in P. 9.01, the Offeror may
submit to the Offeree a written offer ("Offer") to purchase the Membership
Interest then owned by the Offeree.
(b) Aggregate Asset Price. The Offer shall state the aggregate price at
which the Offeror would be willing to purchase all the Company Property
("Aggregate Asset Price"); provided, however, that such Aggregate Asset Price
shall be at least equal to or greater than the amount necessary (i) to repay all
outstanding Company liabilities (including accrued interest), including but not
limited to all outstanding loans by Members to the Company and (ii) to return to
each Member its aggregate unreturned Adjusted Capital Contribution.
(c) Price. The "Price" for the Offeree's Membership Interest shall be the
amount which the Offeree would receive if all the Company Property were sold for
the Aggregate Asset Price and the proceeds were applied in accordance with P.
10.03.
(d) Release from Recourse Obligations. If, at the time an Offer is made,
the Offeree or any of its Affiliates are personally liable under any guaranties
or other financial undertakings for the repayment or performance of all or part
of any third-party loan made to the Company ("Offeree's Recourse Liability"),
then the Offer must include the Offeror's written agreement to use its best
efforts to obtain the release of Offeree's Recourse Liability and, if required
by the holders of the Offeree's Recourse Liability, to substitute acceptable
guaranties, letters of credit or other financial undertakings in exchange for
such release of Offeree's Recourse Liability. If any lender will not agree to
release the Offeree's Recourse Liability, then the Offeror shall protect,
defend, indemnify and hold such Offeree, its Affiliates, officers, directors,
agents, shareholders, partners, beneficiaries and trustees harmless from any
manner of loss, claim, damage or expense arising out of or relating to the
Offeree's Recourse Liability from and after the Closing Date (as defined in P.
9.04).
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<PAGE>
P. 9.03. Acceptance/Rejection of Offer. The Offeree shall either accept or
reject the Offer, which acceptance or rejection shall be in writing and
delivered to the Offeror on or before 10:00 a.m. on the thirtieth (30th)
calendar day after the offer is delivered. If the Offeree fails to either accept
or reject the Offer on a timely basis, it shall be deemed to have consented to
the unagreed action which precipitated the impasse.
(a) Acceptance. If the Offeree accepts the Offer, the Offeror shall be
deemed the "Buyer" and the Offeree shall be deemed the "Seller". The Put-Call
closing (as defined in P. 9.04) shall take place pursuant to P. 9.04 below.
Effective immediately upon the delivery to the Offeror of the Offeree's
acceptance of the Offer, the Offeror's obligations under the Offer and this
Article 9 shall become recourse, absolute, unconditional and irrevocable
obligations, and shall not be subject to any terms or conditions other than the
default of the Offeree under the Offer.
(b) Rejection of Offer. If the Offeree rejects the Offer, the Offeree
shall thereafter be deemed the "Buyer" and the Offeror shall be deemed the
"Seller". The closing of the transaction described in the Offer shall take place
on the Closing Date pursuant to P. 9.04 below. If the Offeree properly rejects
the Offer, it shall proceed to purchase form the Offeror, and the Offeror shall
sell to the Offeree, the entire Membership Interest owned by the Offeror for a
Price equal to the amount which the Offeror would receive if all the Company
Property were sold for the Aggregate Asset Price and the proceeds were applied
in accordance with P. 10.03.
P. 9.04. Put-Call Closing Procedures. The transaction described in the Offer
shall close on the earlier of (i) the sixtieth (60th) day after the date the
Offer is either accepted or rejected by the Offeree, or (ii) such earlier date
as Buyer may elect with ten (10) days prior written notice to Seller ("Put-Call
closing" or "Closing Date"). At the Put-Call closing, the following shall occur:
(a) The Buyer shall pay to the Seller, in immediately available funds, a
sum equal to the Price.
(b) The Seller shall deliver to the Buyer a complete and absolute
assignment of one hundred percent (100%) of the Seller's Membership Interest
("Assignment").
(c) The Buyer shall satisfy its obligation under P. 9.02(d) above.
(d) The Seller shall cause its Affiliates to terminate any agreements with
the Company as instructed by Buyer in its sole and absolute discretion,
effective from and after the Closing Date, provided that any such Affiliate
shall be paid in full on the Closing Date for all services rendered prior to
such termination.
(e) The buyer and the Seller shall each deliver to the other a release
("Mutual Release") of the other from all acts and conduct of the other relating
to the Company or its affairs, occurring or performed during the tem of this
Agreement, except that neither the buyer nor the Seller shall be released from
any actions (or failures to act) in violation of this Agreement or from any
grossly negligent, reckless or intentionally wrongful acts or omissions.
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<PAGE>
From and after delivery the Seller shall have no rights or obligations under
this Agreement with respect to the management and operation of the Company
Property, or otherwise.
P. 9.05. Failure To Perform.
(a) Buyer's Failure To Perform. If the Buyer fails to perform as required
under P. 9.04, then the Seller shall have the option, exercisable within sixty
(60) days after the original Closing Date, to (i) pursue Buyer for specific
performance of its obligations as Buyer; or (ii) continue the Company as if no
put-call procedure had been implemented except that the Buyer shall be deemed to
have consented to the unagreed action which precipitated the Impasse; or (iii)
become the Buyer under the defaulted Offer, subject to the same terms and
conditions set forth in the Offer with the exceptions that: (1) the Price shall
be eighty percent (80%) of the amount which the defaulting party would receive
if all the Company Property were sold for the Aggregate Asset Price and the
proceeds were applied in accordance with P. 10.03; and (2) the nondefaulting
party shall be entitled to select a new Closing Date up to one hundred eighty
(180) days after the original Closing Date.
(b) Seller's Failure To Perform. If the Seller fails to perform as
required under P. 9.04, then: (i) the Seller shall be liable to Buyer, as a
recourse obligation, for all actual and consequential damages caused by Seller
as a result of its breach, together with all expenses of litigation and
attorneys' fees, court costs and expenses; and (ii) the Buyer shall have the
option, exercisable within sixty (60) days after the original Closing Date, to
either: (1) pursue Seller for specific performance of its obligations as Seller
or (2) continue the Company as if no put-call procedure had been implemented
except that the Seller shall be deemed to have consented to the unagreed action
which precipitated the Impasse; provided, however, that in no event shall the
election of either option (or failure to elect) preclude Buyer from pursuing any
other remedy available to Buyer as a matter of law or equity, including, but not
limited to, the damages described in clause (i) above.
P. 9.06. No Withdrawal or Revocation. An Offer shall be irrevocable and shall
not be subject to withdrawal or revocation by the Offeror, except by the written
agreement of all of the Members.
P. 9.07. Decision-Making. Notwithstanding anything to the contrary in this
Agreement, at any time during the period after the acceptance or rejection of an
Offer and the earlier of (i) the termination of the Offer pursuant to P.
9.05(a)(ii) or (b)(ii)(2) above, as the case may be, or (ii) the Closing Date,
the Buyer shall have exclusive control of all decision-making on behalf of the
Company (other than any decisions which may have a substantial adverse impact on
the financial obligations of the Seller in the event that the Buyer defaults in
the purchase of the Seller's Membership Interest).
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<PAGE>
ARTICLE 10
DISSOLUTION, LIQUIDATION AND TERMINATION
P. 10.01. Events of Dissolution. The Company shall be dissolved and shall
commence winding up its affairs upon the first to occur of the following:
(a) December 31, 2025;
(b) The vote of Members holding two thirds of the Units;
(c) Any event which makes it unlawful or impossible to carry on the
Company's business;
(d) The sale, disposition or abandonment of all or substantially all of
the Company Property;
(e) The entry of a decree of judicial dissolution under the Act; or
(f) The death, incompetency, retirement, resignation, expulsion,
dissolution or bankruptcy of a Member, or any other event which terminates the
membership of a Member in the Company, unless within ninety (0) days after such
event the Remaining Member agrees to continue the business of the Company with
the Representative of the Withdrawing Member or with a new Member admitted to
the Company.
P. 10.02. Winding Up. Upon the dissolution of the Company, the Members shall
wind up the Company's affairs and satisfy the Company's liabilities. The Members
shall liquidate all of the Company Property as quickly as possible consistent
with obtaining the full fair market value of said Property. During this period,
the Company shall continue to operate Company Property and all of the provisions
of this Agreement shall remain in effect. The Company shall notice all known
creditors and claimants of the dissolution of the Company in accordance with the
Act.
P. 10.03. Final Distribution. The proceeds from the liquidation of the Company
Property shall be distributed as follows:
(a) First, to creditors, including Members who are creditors, until all of
the Company's debts and liabilities are paid and discharged (or provision is
made for payment thereof); and
(b) The balance, if any, to the Members, in proportion to their Capital
Accounts as of the date of such distribution, after giving effect to all
contributions, distributions, and allocations for all periods.
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<PAGE>
P. 10.04. Distributions in Kind. In connection with the termination and
liquidation of the Company, the Members shall attempt to sell all of the
Property. To the extent that Property is not sold, each Member will receive a
pro rata share of any distribution in kind. Any Property distributed in kind
upon liquidation of the Company shall be treated as though the Property were
sold and the cash proceeds distributed.
P. 10.05. No Recourse Against Members. The Members shall look solely to the
assets of the Company for the return of their investment, and if the Property
remaining after the payment or discharge of the debts and liabilities of the
Company is insufficient to return such investment, they shall have no recourse
against any other Member.
P. 10.06. Purchase by Member. A Member or an Affiliate of a Member may, if it so
desires, purchase an item of Property upon liquidation provided that (a) the
purchase price is at fair market value as determined by an independent appraiser
selected by the other Member, and (b) at least 15 days' advance notice of the
proposed sale has been given to the other Member.
P. 10.07. Deficit Capital Accounts. Notwithstanding anything to the contrary
contained in this Agreement, and notwithstanding any custom or rule of law to
the contrary, the deficit, if any, in the Capital Account of any Member upon
dissolution of the Company shall not be an asset of the Company and such Member
shall not be obligated to contribute such amount to the Company to bring the
balance of such Member's Capital Account to zero.
P. 10.08. Articles of Dissolution. On completion of the distribution of Company
assets as provided herein, the Company is terminated, and the Members (or such
other Person or Persons as the Act may require or permit) shall file articles of
dissolution with the Secretary of State, cancel any other filings made pursuant
to P. 2.05 and take such other actions as may be necessary to terminate the
Company.
ARTICLE 11
GENERAL PROVISIONS
P. 11.01. Entire Agreement; Amendments. This Agreement embodies the entire
understanding between the Members concerning the Company and their relationship
as Members and supersedes any and all prior negotiations, understandings or
agreements. This Agreement may be amended or modified from time to time only by
a written instrument adopted, executed and agreed to by all of the Members.
P. 11.02. Notices. All notices and demands required or permitted under this
Agreement shall be in writing, as follows: (i) by actual delivery of the notice
into the hands of the party entitled to receive it; (ii) by mailing such notice
by registered or certified mail, return receipt requested, in which case the
notice shall be deemed to be given on the date of its mailing; or (iii) by
Federal Express or any other overnight carrier, in which case the notice shall
be deemed to be given as of the date it is sent. All notices which concern this
as follows:
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<PAGE>
If to the Company or Managers:
c/o Iron Mountain Records Management, Inc.
745 Atlantic Avenue
Boston, Massachusetts 02111
Attn: Eugene B. Doggett, Executive Vice President
Copy to:
Iron Mountain Records Management, Inc.
745 Atlantic Avenue
Boston, Massachusetts 02111
Attn: General Counsel
If to the Members: To the address as shown from time to time on the records of
the Company. Any Member may specify a different address, which change shall
become effective upon receipt of such notice by the Company.
P. 11.03. Severability. If any provision of this Agreement or the application of
such provision to any Person or circumstance shall be held invalid, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those as to which it is held invalid, shall not be
affected.
P. 11.04. Parties Bound. This Agreement shall be binding upon the Members and
their respective successors, assigns, heirs, devisees, legal representatives,
executors and administrators.
P. 11.05. Applicable Law. The laws of the State of Delaware shall govern this
Agreement, excluding any conflict of laws rules. The Members irrevocably agree
that all actions or proceedings in any way, manner or respect, arising out of or
from or related to this Agreement shall be litigated only in courts having situs
within the State of Delaware. Each Member hereby consents and submits to the
jurisdiction of any local, state or federal court located within said county and
state and hereby waives any rights it may have to transfer or change the venue
of any such litigation. The prevailing party in any litigation in connection
with this Agreement shall be entitled to recover from the other party all costs
and expenses, including without limitation fees of attorneys and paralegals,
incurred by such party in connection with any such litigation. To the extent
permitted by applicable law, the provisions of this Agreement shall override the
provisions of the Act to the extent of any inconsistency or contradiction
between them.
P. 11.06. Partition. Each Member irrevocably waives any right that it may have
to maintain any action for partition with respect to Company Property.
P. 11.07. Strict Construction. It is the intent of the Members that this
Agreement shall be deemed to have been prepared by all of the parties to the end
that no Member shall be entitled to
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<PAGE>
the benefit of any favorable interpretation or construction of any term or
provision hereof under any rule or law.
P. 11.08. Headings. The headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provision.
P. 11.09. Counterparts. This Agreement may be executed in multiple counterparts
with separate pages, and each such counterpart shall be considered an original,
but all of which together shall constitute one and the same instrument.
P. 11.10. Pronouns. All pronouns shall be deemed to refer to the masculine,
feminine or neuter, singular or plural, as the identify of the person or persons
may require.
P. 11.11. Effect of Waiver or Consent. A waiver or consent, express or implied,
to or of any breach or default by any Person in the performance by that Person
of its obligations hereunder or with respect to the Company is not a consent or
waiver to or of any other breach or default in the performance by that Person of
the same or any other obligations of that Person. Failure on the part of a
Person to complain of any act or to declare any Person in default hereunder,
irrespective of how long that failure continues, does not constitute a waiver by
that Person of its rights with respect to that default.
P. 11.12. Further Assurances. Each Member shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and the transactions contemplated herein.
P. 11.13. Indemnification for Breach. To the fullest extent permitted by law,
each Member shall indemnify the Company and each other member and hold them
harmless from and against all losses, costs, liabilities, damages and expenses
(including, without limitation, costs of suit and attorneys' fees) they may
incur on account of any material breach by that Member of this Agreement.
P. 11.14. Disclosure and Wavier of Conflicts. In connection with the preparation
of this Agreement, the Members acknowledge and agree: (i) the attorney that
prepared this Agreement ("Attorney") acted as legal counsel to the Company; (ii)
the Members have been advised by the Attorney that the interests of the members
are opposed to each other and are opposed to the interests of the Company and,
accordingly, the Attorney's representation of the Company may not be in the best
interests of the Members; and (iii) each of the Members has been advised by the
Attorney to retain separate legal counsel. Notwithstanding the foregoing, the
Members (i) desire the Attorney to represent the Company; (ii) acknowledge that
they have been advised to retain separate counsel and have waived their right to
do so; and (iii) jointly and severally forever waive any claim that the
Attorney's representation of the Company constitutes a conflict of interest.
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<PAGE>
IN WITNESS WHEREOF, the Members have executed this Agreement as of the
date first set forth above.
MEMBERS:
Iron Mountain Records Management, Inc.
By: /s/ Eugene B. Doggett
Name: Eugene B. Doggett
Title: Executive Vice President
Date of Execution: April 24, 1996
Iron Mountain Records Management of
Maryland, Inc.
By: /s/ Eugene B. Doggett
Name: Eugene B. Doggett
Title: Executive Vice President
Date of Execution: April 24, 1996
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<PAGE>
EXHIBIT A
Name and Address of Each Member Capital Contribution Number of Units
- ------------------------------- -------------------- ---------------
Iron Mountain Records Management, $1,000.00 50
Inc.
745 Atlantic Avenue
Boston, MA 02111
Iron Mountain Records Management $1,000.00 50
of Maryland, Inc.
745 Atlantic Avenue
Boston, MA 02111
EXHIBIT 3.1N
The Commonwealth of Massachusetts
William Francis Galvin
Secretary of the Commonwealth
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF ORGANIZATION
(UNDER G.L. Ch. 156B)
ARTICLE I
The name of the corporation is:
IRON MOUNTAIN RECORDS MANAGEMENT OF BOSTON, INC.
ARTICLE II
The purpose of the corporation is to engage in the following
business activities:
To engage in any activity in which a corporation may lawfully participate under
Chapter 156B of the General Laws of Massachusetts, either alone or in a joint
venture or as a partner in a partnership, including the records management and
storage business.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch. Additions to more than one
article may be continued on a single sheet so long as each article requiring
each such addition is clearly indicated.
<PAGE>
ARTICLE III
The type and classes of stock and the total number of shares and par value, if
any, of each type and class of stock which the corporation is authorized to
issue is as follows:
<TABLE>
<CAPTION>
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
------------------------ ---------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
---- ---------------- ---- ---------------- ---------
<S> <C> <C> <C> <C>
COMMON: 0 COMMON:
1,000 $1.00
PREFERRED: PREFERRED:
0 0 0
</TABLE>
ARTICLE IV
If more than one type, class or series is authorized, a description of each
with, if any, the preferences, voting powers, qualifications, special or
relative rights or privileges as to each type and class thereof and any series
now established.
Not applicable
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon transfer
of shares of stock of any class are as follows:
None
Article VI
Other lawful provisions, if any, of the conduct and regulation of business and
affairs of the corporation, for its voluntary dissolution, or for limiting,
defining, or regulating the powers of the corporation, or of its directors or
stockholders, or of any class of stockholder: (if there are no provisions state
"NONE".)
See Additional Sheets VI A through VI C.
<PAGE>
Note: The preceding six (6) articles are considered to be permanent and may ONLY
be changed by filing appropriate Articles of Amendment. ARTICLE VII
The effective date of organization of the corporation shall be the date approved
and filed by the Secretary of the Commonwealth. If a later effective date is
desired, specify such date which shall not be more than thirty days after the
date of filing.
The information contained in ARTICLE VIII is NOT a PERMANENT part of the
Articles of Organization and may be changed ONLY by filing the appropriate form
provided therefor.
ARTICLE VIII
a. The street address of the corporation IN MASSACHUSETTS is: (post office boxes
are not acceptable)
745 Atlantic Avenue, 10th Floor, Boston, Massachusetts 02111
b. The name, residence and post office address (if different) of the directors
and officers of the corporation are as follows:
<TABLE>
<CAPTION>
NAME RESIDENCE POST OFFICE ADDRESS
<S> <C> <C> <C>
President: David S. Wendell 12 Mystic Avenue 745 Atlantic Avenue
Winchester, MA 01890 Boston, MA 02111
Treasurer: John P. Lawrence 587 Gay Street 745 Atlantic Avenue
Westwood, MA 02090 Boston, MA 02111
Clerk: Garry B. Watzke 9 Peter Circle 745 Atlantic Avenue
Marblehead, MA 01945 Boston, MA 02111
Director: C. Richard Reese 203 Hickory Road 745 Atlantic Avenue
Weston, MA 02193 Boston, MA 02111
</TABLE>
c. The fiscal year (i.e., tax year) of the corporation shall end on the last day
of the month of: December
d. The name and BUSINESS address of the RESIDENT AGENT of the corporation, if
any, is: NONE
ARTICLE IX
By-laws of the corporation have been duly adopted and the president, treasurer,
clerk and directors whose names are set forth above, have been duly elected.
IN WITNESS WHEREOF and under the pains and penalties of perjury, I/WE, whose
signature(s) appear below as incorporator(s) and whose names and business or
residential address(es) ARE CLEARLY TYPED OR PRINTED beneath each signature do
hereby associate with the intention of forming this corporation under the
provisions of General Laws Chapter 156B and do hereby sign these Articles of
Organization as incorporator(s) this 12th day of July, 1996.
/s/ Garry B. Watzke
Garry B. Watzke, Sole Incorporator
Note: If an already-existing corporation is acting an Incorporator, type in the
exact name of the corporation, the state or other jurisdiction where is was
incorporated, the name of the person signing on behalf of said corporation and
the title he/she holds or other authority by which such actions is taken.
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
-----------------------------------------------------------------------
I hereby certify that, upon an examination of these
articles of organization, duly submitted to me, it appears
that the provisions of the General Laws relative to the
organization of corporations have been complied with, and I
hereby approve said articles; and the filing fee in the amount
of $200.00 having been paid, said articles are deemed to have
been filed with me this 12th day of July, 1996.
Effective date:
/s/ William Francis Galvin
William Francis Galvin
Secretary of the Commonwealth
FILING FEE: 1/10 of 1% of the total amount of the authorized
capital stock, but not less than $200.00. For the purpose of
filing, shares of stock with a par value less than one dollar
or not par stock shall be deemed to have a par value of one
dollar per share.
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
Garry B. Watzke, Esq.
745 Atlantic Avenue, 10th Floor
Boston, MA 02111-2735
Telephone:_____________________________________
<PAGE>
CONTINUATION SHEET VI A
Other Lawful Provisions
6. The following additional provisions are hereby established for the
management, conduct and regulation of the business and affairs of the
Corporation, and for creating, limiting, defining, and regulating the powers of
the Corporation and of its Directors and stockholders:
(a) The Board of Directors is authorized and empowered from
time to time in its discretion to make, amend or repeal the By-laws in part or
in whole, except with respect to any provision thereof which by law or the
By-laws requires action by the stockholders.
(b) The Board of Directors shall have full power and authority
to determine the terms and manner of issue, including but not limited to the
consideration therefor, and to issue or cause the issue of all shares of capital
stock of the Corporation now or from time to time hereafter authorized.
(c) Meetings of the stockholders may be held outside The
Commonwealth of Massachusetts at such location within the United States as the
Board of Directors may determine. The books of the Corporation may be kept
(subject to any provision contained in the statutes) at such place or places
within The Commonwealth of Massachusetts as may be designated from time to time
by the Board of Directors or in the By-Laws of the Corporation. Elections of
Directors need not be by ballot unless the By-Laws of the Corporation shall so
provide.
(d) Any contract, transaction or act of the Board of Directors
purporting to be in behalf of the Corporation which shall be authorized,
approved or ratified by the holders of a majority of the outstanding shares of
the Corporation's stock at any special meeting duly called for that purpose, or
at any annual meeting at which a quorum is present or represented, or by their
consent in writing, shall be valid and binding as though authorized, approved
and ratified by every shareholder of the Corporation.
(e) No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director notwithstanding any provision of law imposing such liability;
provided, however, this provision shall not eliminate or limit the liability of
a director (i) for any breach of the Director's duty or loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section sixty-one or sixty-two of Chapter 156B or the General Laws, or (iv) for
any transaction from which the director derived an improper personal benefit.
Each person who shall be, or shall have been, a director or officer
of the Corporation, or who shall serve, or shall have served, at its request as
a director or officer of another corporation, or as trustee or officer of an
association or trust in which the
<PAGE>
CONTINUATION SHEET VI B
Corporation owns stock or shares, or of which the Corporation is a creditor,
shall be indemnified by the Corporation against all liabilities and expenses at
any time imposed upon or reasonably incurred by him in connection with, arising
out of or resulting from any action, suit or proceeding in which he may be
involved or with which he may be threatened, by reason of his then serving or
theretofore having served as such director, trustee or officer, or by reason of
any alleged act or omission by him in any such capacity (including, without
limitation, the making of loans to shareholders, if and to the extent performed
in conformity with the provisions of these Articles), whether or not he shall be
serving as such director, trustee or officer at the time any or all of such
liabilities or expenses shall be imposed upon or incurred by him. The matters
covered by the foregoing indemnity shall include any amounts paid by any such
person in compromise or settlement, if such compromise or settlement shall be
approved as in the best interests of the Corporation by resolution of a
disinterested majority of the Board of Directors, or by vote of disinterested
stockholders, holding a majority of the shares of stock entitled to vote,
present or represented at a meeting called for the purpose; but such matters
shall not include liabilities or expenses imposed or incurred in connection with
any matters as to which such person shall be finally adjudged in such action,
suit or proceeding not to have acted in good faith in the reasonable belief that
his action was in the best interests of the Corporation. The matters covered by
the foregoing indemnity shall also include payment by the Corporation of
expenses incurred in defending a civil or criminal action or proceeding in
advance of final disposition of such action or proceeding, provided, that the
Corporation shall have received an undertaking by the person indemnified to
repay such payment if he shall be adjudicated to be not entitled to
indemnification under Section 67 of Chapter 156B of the General Laws.
Each person who shall be or become a director, trustee or officer as
aforesaid shall be deemed to have accepted and to have continued to serve in
such office in reliance upon the indemnity herein provided. These indemnity
provisions shall be separable, and if any portion hereof shall be finally
adjudged to be invalid, such invalidity shall not affect any other portion which
can be given effect. These indemnity provisions shall not be exclusive of any
other right which any director, trustee or officer may have or hereafter
acquire, whether under any by-law, vote of stockholders, agreement, judgment,
decree, provision of law, or otherwise, and these indemnity provisions and all
other such rights shall be cumulative.
(f) No contract or other transaction between the Corporation
and any other person, firm or corporation shall, in the absence of fraud, in any
way be affected or invalidated, nor shall any officer or director be subject to
surcharge with respect to any such contract or transaction, by the fact that
such officer or director, or any firm of which any officer or director is a
shareholder, officer or director, is a party to, or may be pecuniarily or
otherwise interested in, such contract or transaction, provided, that the fact
that the individual or such firm or corporation is so interested shall be known
to the Board of Directors prior to or shall be disclosed to the Board of
Directors at the meeting at which, or prior to the directors' executing their
written consents by which, action to authorize, ratify, or approve such contract
or transaction shall be taken. Any director of the Corporation may
<PAGE>
CONTINUATION SHEET VI C
vote upon or give his written consent to any contract or other transaction
between the Corporation and any subsidiary or affiliated corporation without
regard to the fact that he is also a director or officer of such subsidiary or
affiliated corporation.
(g) Each director and officer of the Corporation shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account of the Corporation, reports made to the Corporation by any of
its officers or employees or by counsel, accountants, appraisers or other
experts or consultants selected with reasonable care by the directors or
officers of the Corporation, or upon other records of the Corporation.
(h) Except as may be otherwise provided herein, the
Corporation reserves the right to amend, alter, change or repeal any provision
contained in these Articles of Organization, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
(i) No stockholder shall have any right to examine any
property or any books, accounts or other writings of the Corporation if there is
reasonable ground for belief that such examination will for any reason be
adverse to the interests of the Corporation, and a vote of the directors
refusing permission to make such examination and setting forth that in the
opinion of the directors such examination would be adverse to the interest of
the Corporation shall be prima facie evidence that such examination would be
adverse to the interests of the Corporation. Every such examination shall be
subject to such reasonable regulations as the directors may establish in regard
thereto.
(j) The directors may specify the manner in which the accounts
of the Corporation shall be kept and may determine what constitutes net
earnings, profits and surplus, what amounts, if any, shall be reserved for any
corporate purpose, and what amounts, if any, shall be declared as dividends.
Unless the Board of Directors otherwise specifies, the excess of the
consideration received for any share of capital stock over its par value shall
be paid-in surplus. All surplus shall be available for any corporate purpose,
including the payment of dividends.
(k) The purchase or other acquisition or retention by the
Corporation of shares of its own capital stock shall not be deemed a reduction
of its capital. Upon any reduction of capital or capital stock, no stockholder
shall have any right to demand any distribution from the Corporation, except as
and to the extent that the stockholders shall so have provided at the time
authorizing such reduction.
(l) The Corporation shall have the power to be a partner in
any business enterprise which it would have power to conduct by itself.
EXHIBIT 3.1P
ARTICLES OF INCORPORATION
OF
DATA ARCHIVE SERVICES OF MIAMI, INC.
THE UNDERSIGNED subscriber to these Articles of Incorporation, being the
natural person competent to contract, hereby associate him to form a corporation
under the laws of the State of Florida.
ARTICLE I
NAME
The name of this corporation shall be DATA ARCHIVE SERVICES OF MIAMI, INC.
ARTICLE II
NATURE OF BUSINESS
This corporation may engage in any activity or business permitted under
the laws of the State of Florida. In addition, this corporation may engage in
any or all of the following business activities:
1. To sell, convey, mortgage, pledge, create a security interest in,
lease, exchange, transfer and otherwise dispose of all or any part of its
property, real or personal, and it assets.
2. In furtherance and not in limitation of the general powers conferred by
the laws of the State of Florida and of the objects and purposes hereinbefore
stated, it is expressly provided that the Corporation shall also have the
following powers, namely:
a. To hold, own, mortgage, pledge, bargain, transfer or assign or in
any manner dispose of, or to deal in trade goods, wares, merchandise and
property of any class or description in any part of the world, including real
and personal property.
b. To apply for, hold, purchase, acquire or otherwise deal in
letters patent, copyrights, trademarks, trade names, secret processes, formulas
or inventions, and to work, operate, develop the same, or to carry on any
business, manufacturing or otherwise which may directly or indirectly affect
those objects or any of them.
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c. To purchase, hold, sell, assign, transfer, pledge, mortgage or
otherwise acquire or dispose of the shares of capital stock or any bonds,
securities or other evidence of indebtedness created by any person or
corporation of this State or any other State, country, nation or government, and
while owner of said stock may exercise all of the rights, privileges of
ownership, including the right to vote thereon as natural persons might or could
do.
d. To loan money on real estate and personal property.
e. To enter into, make or perform contracts of any kind, with any
persons, associations, corporation, municipalities, body politic, country,
territory, state, government or colony or any dependency thereof.
f. Without limitation as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills, bills of exchange,
warrants, bonds, debentures, and all other negotiable or transferable
instruments and evidences of indebtedness, whether secured by mortgage, bond or
otherwise, as well as to secure the same by mortgage, bond or otherwise.
g. To buy and sell real estate, buy and sell equities of whatever
nature, to conduct a general brokerage business on all forms or kinds of
properties and securities and to act as agents in the buying and selling of
mortgages, equities, securities and other forms of negotiable instruments and
evidence of indebtedness, whenever secured by mortgage, bond or otherwise.
h. To purchase, own, sell, rent, lease, mortgage and to act as
agents in buying, selling, owning, renting, leasing and mortgaging properties,
whether real and/or personal; to dispose of real estate or personal properties,
equities and securities, of whatever nature for cash, credit or otherwise.
i. To loan money either for itself or to act as agents in loaning
and trying to borrow money and to secure the same in whatever manner in which
the Corporation might do and is permissible under the laws of the State of
Florida.
j. To do any or all of the things herein set forth to the same
extent as natural persons might or could do, and in any part of the world, as
principals, agents, contractors, subcontractors or otherwise, either along or
with any other person, firm,
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corporation or association; in general to carry on any other business not
specifically forbidden by the laws of the State of Florida.
ARTICLE III
CAPITAL STOCK
The aggregate number of shares of capital stock which the corporation has
authority to issue is 1,000,000 shares, all of which shall be common stock with
a par value of 1 (One) cent per share.
Shares of capital stock in this corporation shall be issued initially to
the following persons in the amounts set opposite their names:
P. Douglas McCraw 500,000 shares
William T. Saul 500,000 shares
ARTICLE IV
INITIAL CAPITAL
The amount of capital with which this corporation will begin business is
not less than $500.00.
ARTICLE V
The post office address of the principal office of this corporation shall
be: 888 South Andrews Avenue, Suite 301, Fort Lauderdale, Florida, or at such
other place as may hereafter be designated by the Board of Directors. The post
office address of the registered agent shall be 888 South Andrews Avenue, Suite
301, Fort Lauderdale, Florida 33316, or at such other place as may hereafter be
designated by the Board of Directors. The registered agent of this corporation
shall be John W. Carry, Esquire, whose business address is and will be identical
with the registered office of the corporation.
ARTICLE VI
This corporation shall have not less than one (1) director initially. The
number of directors may increase or decrease from time to time by Bylaws adopted
by the shareholders but shall never be less than one.
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ARTICLE VII
The names and post office addresses of the subscribers to these Articles
of Incorporation are as follows:
NAME ADDRESS
P. Douglas McCraw 5300 Powerline Road
Fort Lauderdale, Florida 33309
William T. Saul 5300 Powerline Road
Fort Lauderdale, Florida 33309
ARTICLE VIII
The names and post office address of the initial members of the first
Board of Directors are:
NAME ADDRESS
P. Douglas McCraw 5300 Powerline Road
Fort Lauderdale, Florida 33309
William T. Saul 5300 Powerline Road
Fort Lauderdale, Florida 33309
ARTICLE IX
CONTRACTUAL POWERS
In the absence of fraud, no contract or other transaction between this
corporation and any other person, firm, association, corporation or partnership,
shall be affected or invalidated by the fact than any director or officer of
this corporation is pecuniarily or otherwise interested in or is a director or
officer of any such firm, association, corporation or partnership, or is a party
or pecuniarily or otherwise interested in such contract or other transaction, or
is in any way connected with any person, firm, association, corporation or
partnership pecuniarily or otherwise interested therein. Any director may vote
and may be counted in determining the existence of a quorum at any meeting of
the Board of Directors of this corporation for the purposes of authorizing such
contract or transaction with like force and effect as if he were not so
interested or were not a director, member or officer of such firm, association,
corporation or partnership.
ARTICLE X
PRE-EMPTIVE RIGHTS
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Each shareholder of the corporation shall be entitled to full pre-emptive
rights to acquire his proportional part of any unissued or treasury shares of
the corporation, or securities of the corporation convertible into or carrying a
right to subscribe to or acquire such shares, which may be issued at any time by
the corporation.
ARTICLE XI
SPECIAL PROVISO
Any action taken by the directors of this corporation, which is in their
power, taken at a meeting of such directors, shall be valid for all intents and
purposes whether or not a lawful notice of said meeting shall have been given to
all directors as required by law or the Bylaws of this corporation, if at any
time prior to, during or subsequent to such meeting, all directors shall execute
a waiver of notice and call of such meeting in writing and providing a majority
of the directors shall have approved the action taken at such meeting.
Any action by the shareholders of this corporation which is within their
power, taken at a meeting of such shareholders, shall be valid for all intents
and purposes whether or not a lawful notice shall have been given to all
shareholders as required by law or the Bylaws of this corporation, if at any
time prior to, during or subsequent to such meeting, all shareholders shall
execute a waiver of notice and call of such meeting in writing and providing a
majority of the shareholders shall have approved or approve the action taken at
such meeting.
Nothing in this Article shall be construed to allow any act by the Board
of Directors to be approved by less than a majority of the directors, or
whenever a greater vote is required by law or by the Bylaws, by that vote.
Nothing in this Article shall be construed to allow any act of the
shareholders to be approved by less than a majority of the shareholders, or
whenever a greater vote is required by law or by the Bylaws, by that vote.
ARTICLE XII
FURTHER POWERS
This corporation shall have the further right and power to, from time to
time, determine whether and to what extent and at what times and places, and
under what conditions and regulations, the accounts and books of this
corporation (other than the stock book) or any of them, shall be open to
inspection of shareholders, and no shareholder shall
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have any right to inspect any account, book or document of this corporation,
except as conferred by statute, unless authorized by resolution of the
shareholders or by the Board of Directors.
The corporation may, in its Bylaws, confer powers upon its Board of
Directors or officers, in addition to the foregoing and in addition to the
powers authorized and expressly conferred by statute.
Both shareholders and directors shall have the power, if the Bylaws so
provide, to hold their respective meetings and to have one or more offices
within or without the State of Florida, and to keep the books of the corporation
(subject to the provisions of statute) outside the State of Florida, at such
places as may from time to time be designated by the Board of Directors.
The corporation reserves the rights to amend, alter, change or repeal any
provision contained in these Articles of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon shareholders
herein are granted subject to this reservation.
ARTICLE XIII
TERM OF EXISTENCE
This corporation shall have perpetual existence.
IN WITNESS WHEREOF, I have hereunto set my hand and seal at __________,
Florida, on this _____ day of _________, 1990.
/s/ John W. Carry
John W. Carry
STATE OF FLORIDA )
COUNTY OF _______ )
BEFORE ME, the undersigned authority, this day personally appeared John W.
Carry, to me well known to be the identical person described in and who executed
the attached Articles of Incorporation of Data Archive Services of Miami, Inc.,
and he acknowledged before me that he signed and executed the same for the
purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal at
______________, Florida, on this ____ day of ___________, 1996.
_______________________________
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Notary Public
State of Florida at Large
My Commission Expires:
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REGISTERED AGENT
HAVING BEEN NAMED to serve as Registered Agent for Data Archive Services
of Miami, Inc., at 20 N.E. 11th Street, Miami, Florida, I hereby agree to act in
this capacity and agree to comply with the provisions of Florida Statute
relative to keeping said office open.
/s/ John W Carry
John W. Carry
Exhibit 3.2A
IRON MOUNTAIN RECORDS MANAGEMENT, INC.
(a Delaware corporation)
BY - LAWS
ARTICLE I
Offices
SECTION 1. Registered Office. The registered office of the Corporation
shall be located in the City of Dover, County of Kent, State of Delaware, and
the name of the resident agent in charge thereof shall be The Prentice Hall
Corporation System, Inc.
SECTION 2. Other Offices. The Corporation may also have offices at such
other places, within or without the State of Delaware, as the Board of Directors
may from time to time appoint or the business of the Corporation may require.
ARTICLE II
Seal
The seal of the Corporation shall, subject to alteration by the
Board of Directors, consist of a flat-faced circular die with the word
"Delaware", together with the name of the Corporation and the year of
incorporation, cut or engraved thereon.
ARTICLE III
Meetings of Stockholders
SECTION 1. Place of Meeting. Meetings of the stockholders shall be held
either within or without the State of Delaware at such place as the Board of
Directors may fix.
SECTION 2. Annual Meetings. The annual meeting of stockholders shall be
held on the first day of May of each year, or if such day is a legal holiday,
then on the next business day following, at such time as the Board of Directors
may fix.
SECTION 3. Special Meetings. Special meetings of the stockholders for any
purpose or purposes may be called by the President, or by the directors (either
by written instrument signed by a majority or by resolution adopted by a vote of
the majority), and special meetings shall be called by the President or the
Secretary whenever stockholders owning a majority of the capital stock issued,
outstanding and entitled to vote so request in writing. Such request of
stockholders shall state the purpose or purposes of the proposed meeting.
SECTION 4. Notice. Written or printed notice of every meeting of
stockholders, annual or special, stating the hour, date and place thereof, and
the purpose or purposes in general terms
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for which the meeting is called shall, not less than ten (10) and not more than
sixty (60) days before such meeting, be served upon or mailed to each
stockholder entitled to vote thereat, at his address as it appears upon the
stock records of the Corporation or, if such stockholder shall have filed with
the Secretary of the Corporation a written request that notices intended for him
be mailed to some other address, then to the address designated in such request.
Notice of the hour, date, place and purpose of any meeting of
stockholders may be dispensed with if every stockholder entitled to vote thereat
shall attend either in person or by proxy and shall not object to the holding of
such meeting for lack of proper notice, or if every absent stockholder entitled
to such notice shall in writing, filed with the records of the meeting, either
before or after the holding thereof, waive such notice.
SECTION 5. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the presence in person or by proxy at any meeting
of stockholders of the holders of a majority of the shares of the capital stock
of the Corporation issued and outstanding and entitled to vote thereat, shall be
requisite and shall constitute a quorum. If two or more classes of stock are
entitled to vote as separate classes upon any question, then, in the case of
each such class, a quorum for the consideration of such question shall, except
as otherwise provided by law or by the Certificate of Incorporation, consist of
a majority in interest of all stock of that class issued, outstanding and
entitled to vote. If a majority or, where a larger quorum is required, such
quorum, shall not be represented at any meeting of the stockholders regularly
called, the holders of a majority of the shares present or represented and
entitled to vote thereat shall have power to adjourn the meeting to another
time, or to another time and place, without notice other than announcement of
adjournment at the meeting, and there may be successive adjournments for like
cause and in like manner until the requisite amount of shares entitled to vote
at such meeting shall be represented; provided, however, that if the adjournment
is for more than thirty (30) days, notice of the hour, date and place of the
adjourned meeting shall be given to each stockholder entitled to vote thereat.
Subject to the requirements of law and the Certificate of Incorporation, on any
issue on which two or more classes of stock are entitled to vote separately, no
adjournment shall be taken with respect to any class for which a quorum is
present unless the Chairman of the meeting otherwise directs. At any meeting
held to consider matters which were subject to adjournment for want of a quorum
at which the requisite amount of shares entitled to vote thereat shall be
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed.
SECTION 6. Votes; Proxies. At each meeting of stockholders, every
stockholder of record at the closing of the transfer books, if closed, or on the
date set by the Board of Directors for the determination of stockholders
entitled to vote at such meeting, shall have one vote for each share of stock
entitled to vote which is registered in his name on the books of the
Corporation, and, in the election of directors, may vote cumulatively to the
extent and in the manner authorized in the Certificate of Incorporation. At each
such meeting every stockholder shall be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder and bearing
a date not more than three (3) years prior to the meeting in question, unless
said instrument provides for a longer period during which it is to remain in
force.
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All elections of directors shall be held by ballot. If the Chairman
of the meeting shall so determine, a vote may be taken upon any other matter by
ballot and shall be so taken upon the request of any stockholder entitled to
vote on such matter.
At elections of directors, the Chairman shall appoint two judges of
election, who shall first take and subscribe an oath or affirmation faithfully
to execute the duties of judges at such meeting with strict impartiality and
according to the best of their ability. The judges so appointed shall take
charge of the polls and, after the balloting, shall make a certificate of the
result of the vote taken. No director or candidate for the office of director
shall be appointed as such judge.
At any meeting at which a quorum is present, a plurality of the
votes properly cast for election to fill any vacancy on the Board of Directors
shall be sufficient to elect a candidate to fill such vacancy, and a majority of
the votes properly cast upon any other question shall decide the question,
except in any case where a larger vote is required by law, the Certificate of
Incorporation, these By-laws, or otherwise.
SECTION 7. Organization. The Chairman of the Board, if there be one, or in
his absence the President, or in the absence of the Chairman and the President,
a Vice President, shall call meetings of the stockholders to order and shall act
as chairman thereof. The Secretary of the Corporation, if present, shall act as
secretary of all meetings of stockholders, and, in his absence, the presiding
officer may appoint a secretary.
ARTICLE IV
Directors
SECTION 1. Number. The business and property of the Corporation shall be
conducted and managed by a Board of Directors consisting of one or more
directors. Directors need not be a stockholder. The number of directors for the
ensuing year shall be fixed at each annual meeting of stockholders, but if the
number is not so fixed, the number shall remain as it stood immediately prior to
such meeting.
At any time during any year the whole number of directors may be
increased or reduced, in each case by vote of a majority of the stock
outstanding and entitled to vote for the election of directors or a majority of
the directors in office at the time of such increase or decrease, regardless of
whether such majority of directors constitutes a quorum.
SECTION 2. Term of Office. Each director shall hold office until the next
annual meeting of stockholders and until his successor is duly elected and
qualified or until his earlier death or resignation, subject to the right of the
stockholders at any time to remove any director or directors as provided in
Section 4 of this Article.
SECTION 3. Vacancies. If any vacancy shall occur among the directors, or
if the number of directors shall at any time be increased, the directors then in
office, although less than a quorum, by a majority vote may fill the vacancies
or newly-created directorships, or any such vacancies or newly-created
directorships may be filled by the stockholders at any meeting.
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SECTION 4. Removal by Stockholders. The holders of record of the capital
stock of the Corporation entitled to vote for the election of directors may in
their discretion at any meeting duly called for the purpose, by a majority vote,
remove any director or directors and elect a new director or directors in place
thereof.
SECTION 5. Meetings. Meetings of the Board of Directors shall be held at
such place, within or without the State of Delaware, as may from time to time be
fixed by resolution of the Board or by the President and as may be specified in
the notice or waiver of notice of any meeting. Meetings may be held at any time
upon the call of the Chairman of the Board or the President or any two (2) of
the directors in office by oral, telegraphic or written notice, duly served or
sent or mailed to each director not less than twenty-four (24) hours before such
meeting, except that, if mailed, not less than seventy-two (72) hours before
such meeting. Meetings may be held at any time and place without notice if all
the directors are present and do not object to the holding of such meeting for
lack of proper notice or if those not present shall, in writing or by telegram,
waive notice thereof. A regular meeting of the Board may be held without notice
immediately following the annual meeting of stockholders at the place where such
meeting is held. Regular meetings of the Board may also be held without notice
at such time and place as shall from time to time be determined by resolution of
the Board.
SECTION 6. Quorum. A majority of the directors shall constitute a quorum
for the transaction of business. If at any meeting of the Board there shall be
less than a quorum present, a majority of those present may adjourn the meeting
from time to time without notice other than announcement of the adjournment at
the meeting, and at such adjourned meeting at which a quorum is present any
business may be transacted which might have been transacted at the meeting as
originally noticed.
SECTION 7. Compensation. Directors shall receive compensation for their
services, as such, and for service on any Committee of the Board of Directors,
as fixed by resolution of the Board of Directors and for expenses of attendance
at each regular or special meeting of the Board or any Committee thereof.
Nothing in this Section shall be construed to preclude a director from serving
the Corporation in any other capacity and receiving compensation therefor.
ARTICLE V
Committees of Directors
SECTION 1. Executive Committee. The Board of Directors may, by resolution
passed by a majority of the whole Board, appoint an Executive Committee of two
(2) or more members, to serve during the pleasure of the Board, to consist of
such directors as the Board may from time to time designate. The Board of
Directors shall designate the Chairman of the Executive Committee.
(a) Procedure. The Executive Committee shall, by a vote of a
majority of its members, fix its own times and places of
meeting, determine the number of its members constituting a
quorum for the transaction of business, and prescribe its own
rules of procedure, no change in which shall be made save by a
majority vote of its members.
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(b) Responsibilities. During the intervals between the meetings of
the Board of Directors, except as otherwise provided by the
Board of Directors in establishing such Committee or
otherwise, the Executive Committee shall possess and may
exercise all the powers of the Board in the management and
direction of the business and affairs of the Corporation;
provided, however, that the Executive Committee shall not have
the power:
(i) to amend or authorize the amendment of the Certificate
of Incorporation or these By-Laws;
(ii) to authorize the issuance of stock;
(iii) to authorize the payment of any dividend;
(iv) to adopt an agreement of merger or consolidation of the
Corporation or to recommend to the stockholders the
sale, lease or exchange of all or substantially all the
property and business of the Corporation; or
(v) to recommend to the stockholders a dissolution of the
Corporation.
(c) Reports. The Executive Committee shall keep regular minutes of
its proceedings, and all action by the Executive Committee
shall be reported promptly to the Board of Directors. Such
action shall be subject to review, amendment and repeal by the
Board, provided that no rights of third parties shall be
adversely affected by such review, amendment or repeal.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Executive Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
SECTION 2. Audit Committee. The Board of Directors shall appoint an Audit
Committee of two (2) or more members who shall not be officers or employees of
the Corporation to serve during the pleasure of the Board. The Board of
Directors shall designate the Chairman of the Audit Committee.
(a) Procedure. The Audit Committee, by a vote of a majority of its
members, shall fix its own times and places of meeting, shall
determine the number of its members constituting a quorum for
the transaction of business, and shall prescribe its own rules
of procedure, no change in which shall be made save by a
majority vote of its members.
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(b) Responsibilities. The Audit Committee shall review the annual
financial statements of the Corporation prior to their
submission to the Board of Directors, shall consult with the
Corporation's independent auditors, and may examine and
consider such other matters in relation to the internal and
external audit of the Corporation's accounts and in relation
to the financial affairs of the Corporation and its accounts,
including the selection and retention of independent auditors,
as the Audit Committee may, in its discretion, determine to be
desirable.
(c) Reports. The Audit Committee shall keep regular minutes of its
proceedings, and all action by the Audit Committee shall, from
time to time, be reported to the Board of Directors as it
shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Audit Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
SECTION 3. Other Committees. The Board of Directors, by vote of a majority
of the directors then in office, may at any time appoint one or more other
committees from and outside of its own number. Every such committee must include
at least one member of the Board of Directors. The Board may from time to time
designate or alter, within the limits permitted by law, the Certificate of
Incorporation and this Article, if applicable, the duties, powers and number of
members of such other committees or change their membership, and may at any time
abolish such other committees or any of them.
(a) Procedure. Each committee appointed pursuant to this Section
shall, by a vote of a majority of its members, fix its own
times and places of meeting, determine the number of its
members constituting a quorum for the transaction of business,
and prescribe its own rules of procedure, no change in which
shall be made save by a majority vote of its members.
(b) Responsibilities. Each committee appointed pursuant to this
Section shall exercise the powers assigned to it by the Board
of Directors in its discretion.
(c) Reports. Each committee appointed pursuant to this Section
shall keep regular minutes of proceedings, and all action by
each such committee shall, from time to time, be reported to
the Board of Directors as it shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of each committee, appointed
pursuant to this Section, the member or members thereof
present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously
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appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member.
SECTION 4. Term of Office. Each member of a committee shall hold office
until the first meeting of the Board of Directors following the annual meeting
of stockholders (or until such other time as the Board of Directors may
determine, either in the vote establishing the committee or at the election of
such member or otherwise) and until his successor is elected and qualified, or
until he sooner dies, resigns, is removed, is replaced by change of membership
or becomes disqualified by ceasing to be a Director (where membership on the
Board is required), or until the committee is sooner abolished by the Board of
Directors.
ARTICLE VI
Officers
SECTION 1. Officers. The Board of Directors shall elect a President, a
Secretary and a Treasurer, and, in their discretion, may elect a Chairman of the
Board, one or more Executive Vice Presidents, Vice Presidents, Assistant
Secretaries and Assistant Treasurers as deemed necessary or appropriate. Such
officers shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of stockholders, and each shall hold office
for the term provided by the vote of the Board, except that each will be subject
to removal from office in the discretion of the Board as provided herein. The
powers and duties of more than one office may be exercised and performed by the
same person.
SECTION 2. Vacancies. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors, at any regular or
special meeting.
SECTION 3. Chairman of the Board. The Chairman of the Board of Directors,
if elected, shall be a member of the Board of Directors and shall preside at its
meetings. He shall advise and counsel with the President, and shall perform such
duties as from time to time may be assigned to him by the Board of Directors.
SECTION 4. President. The President shall be the chief executive officer
of the Corporation. Subject to the directions of the Board of Directors, he
shall have and exercise direct charge of and general supervision over the
business and affairs of the Corporation and shall perform all duties incident to
the office of the chief executive officer of a corporation and such other duties
as from time to time may be assigned to him by the Board of Directors. The
President may but need not be a member of the Board of Directors.
SECTION 5. Executive Vice Presidents and Vice Presidents. Each Executive
Vice President and Vice President shall have and exercise such powers and shall
perform such duties as from time to time may be assigned to him by the
President.
SECTION 6. Secretary. The Secretary shall keep the minutes of all meetings
of the stockholders and of the Board of Directors in books provided for the
purpose; he shall see that all notices are duly given in accordance with the
provisions of law and these By-laws; he shall be custodian of the records and of
the corporate seal or seals of the Corporation; he shall see
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that the corporate seal is affixed to all documents the execution of which, on
behalf of the Corporation under its seal, is duly authorized, and, when the seal
is so affixed, he may attest the same; he may sign, with the President, an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and, in general, he shall perform all duties incident to the office
of secretary of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 7. Assistant Secretaries. The Assistant Secretaries in order of
their seniority shall, in the absence or disability of the Secretary, perform
the duties and exercise the powers of the Secretary and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Secretary.
SECTION 8. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all monies or other valuable effects in such banks, trust companies
or other depositaries as shall, from time to time, be selected by the Board of
Directors; he may endorse for collection on behalf of the Corporation checks,
notes and other obligations; he may sign receipts and vouchers for payments made
to the Corporation; he may sign checks of the Corporation, singly or jointly
with another person as the Board of Directors may authorize, and pay out and
dispose of the proceeds under the direction of the Board; he shall render to the
President and to the Board of Directors, whenever requested, an account of the
financial condition of the Corporation; he may sign, with the President, or an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and in general, shall perform all the duties incident to the office
of treasurer of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 9. Assistant Treasurers. The Assistant Treasurers in order of
their seniority shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Treasurer.
SECTION 10. Subordinate Officers. The Board of Directors may appoint such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such duties as the Board
of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
SECTION 11. Compensation. The Board of Directors shall fix the
compensation of all officers of the Corporation. It may authorize any officer,
upon whom the power of appointing subordinate officers may have been conferred,
to fix the compensation of such subordinate officers.
SECTION 12. Removal. Any officer of the Corporation may be removed, with
or without cause, by action of the Board of Directors.
SECTION 13. Bonds. The Board of Directors may require any officer of the
Corporation to give a bond to the Corporation, conditional upon the faithful
performance of his
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duties, with one or more sureties and in such amount as may be satisfactory
to the Board of Directors.
ARTICLE VII
Certificates of Stock
SECTION 1. Form and Execution of Certificates. The interest of each
stockholder of the Corporation shall be evidenced by a certificate or
certificates for shares of stock in such form as the Board of Directors may from
time to time prescribe. The certificates of stock of each class shall be
consecutively numbered and signed by the President, an Executive Vice President
or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer
or an Assistant Treasurer of the Corporation, and may be countersigned and
registered in such manner as the Board of Directors may by resolution prescribe,
and shall bear the corporate seal or a printed or engraved facsimile thereof.
Where any such certificate is signed by a transfer agent or transfer clerk
acting on behalf of the Corporation, the signatures of any such President,
Executive Vice President, Vice President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary may be facsimiles, engraved or printed. In case
any officer or officers, who shall have signed, or whose facsimile signature or
signatures shall have been used on, any such certificate or certificates, shall
cease to be such officer or officers, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the Corporation, such certificate or certificates may nevertheless be issued and
delivered by the Corporation as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer or officers.
In case the corporate seal which has been affixed to, impressed on,
or reproduced in any such certificate or certificates shall cease to be the seal
of the Corporation before such certificate or certificates have been delivered
by the Corporation, such certificate or certificates may nevertheless be issued
and delivered by the Corporation as though the seal affixed thereto, impressed
thereon or reproduced therein had not ceased to be the seal of the Corporation.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Certificate of Incorporation, these
By-laws, or any agreement to which the Corporation is a party, shall have the
restriction noted conspicuously on the certificate, and shall also set forth, on
the face or back, either the full text of the restriction or a statement of the
existence of such restriction and (except if such restriction is imposed by law)
a statement that the Corporation will furnish a copy thereof to the holder of
such certificate upon written request and without charge.
Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized to
be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
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SECTION 2. Transfer of Shares. The shares of the stock of the Corporation
shall be transferred on the books of the Corporation by the holder thereof in
person or by his attorney lawfully constituted, upon surrender for cancellation
of certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof or
guaranty of the authenticity of the signature as the Corporation or its agents
may reasonably require. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person whether or not
it shall have express or other notice thereof, save as expressly provided by law
or by the Certificate of Incorporation. It shall be the duty of each stockholder
to notify the Corporation of his post office address.
SECTION 3. Closing of Transfer Books. The stock transfer books of the
Corporation may, if deemed appropriate by the Board of Directors, be closed for
such length of time not exceeding fifty (50) days as the Board may determine,
preceding the date of any meeting of stockholders or the date for the payment of
any dividend or the date for the allotment of rights or the date when any
issuance, change, conversion or exchange of capital stock shall go into effect,
during which time no transfer of stock on the books of the Corporation may be
made.
SECTION 4. Dates of Record. If deemed appropriate, the Board of Directors
may fix in advance a date for such length of time not exceeding sixty (60) days
(and, in the case of any meeting of stockholders, not less than ten (10) days)
as the Board may determine, preceding the date of any meeting of stockholders,
or the date for the payment of any dividend, or the date for the allotment of
rights or the date when any issuance, change, conversion or exchange of capital
stock shall go into effect, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting or entitled
to receive payment of any such dividend or to any such allotment of rights, or
to exercise the rights in respect of any such issuance, change, conversion or
exchange of capital stock, as the case may be, and in such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to receive payment
of such dividend, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any record date fixed as aforesaid. If no such
record date is so fixed, the record date shall be determined by applicable law.
SECTION 5. Lost or Destroyed Certificates. In case of the loss or
destruction of any certificate of stock, a new certificate may be issued under
the following conditions:
(a) The owner of said certificate shall file with the Secretary or
any Assistant Secretary of the Corporation an affidavit giving
the facts in relation to the ownership, and in relation to the
loss or destruction of said certificate, stating its number
and the number of shares represented thereby; such affidavit
shall be in such form and contain such statements as shall
satisfy the President, any Executive Vice President, Vice
President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer, that said certificate
has been accidentally destroyed or lost, and that a new
certificate ought to be issued in lieu thereof. Upon being so
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satisfied, any such officer shall require such owner to
furnish the Corporation a bond in such penal sum and in such
form as he may deem advisable, and with a surety or sureties
approved by him, to indemnify and save harmless the
Corporation from any claim, loss, damage or liability which
may be occasioned by the issuance of a new certificate in lieu
thereof. Upon such bond being so filed, a new certificate for
the same number of shares shall be issued to the owner of the
certificate so lost or destroyed; and the transfer agent and
registrar, if any, of stock shall countersign and register
such new certificate upon receipt of a written order signed by
any such officer, and thereupon the Corporation will save
harmless said transfer agent and registrar in the premises. In
case of the surrender of the original certificate, in lieu of
which a new certificate has been issued, or the surrender of
such new certificate, for cancellation, the bond of indemnity
given as a condition of the issue of such new certificate may
be surrendered; or
(b) The Board of Directors of the Corporation may by resolution
authorize and direct any transfer agent or registrar of stock
of the Corporation to issue and register respectively from
time to time without further action or approval by or on
behalf of the Corporation new certificates of stock to replace
certificates reported lost, stolen or destroyed upon receipt
of an affidavit of loss and bond of indemnity in form and
amount and with surety satisfactory to such transfer agent or
registrar in each instance or upon such terms and conditions
as the Board of Directors may determine.
ARTICLE VIII
Execution of Documents
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers, or agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors, which may in
its discretion authorize any such signatures to be facsimile.
SECTION 2. Execution of Contracts, Assignments, etc. Unless the Board of
Directors shall have otherwise provided generally or in a specific instance, all
contracts, agreements, endorsements, assignments, transfers, stock powers, or
other instruments shall be signed by the President, any Executive Vice
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer. The Board of Directors may, however, in
its discretion, require any or all such instruments to be signed by any two or
more of such officers, or may permit any or all of such instruments to be signed
by such other officer or officers, agent or agents, as it shall thereunto
authorize from time to time.
SECTION 3. Execution of Proxies. The President, any Executive Vice
President or any Vice President, and the Secretary, the Treasurer, any Assistant
Secretary or any Assistant Treasurer, or any other officer designated by the
Board of Directors, may sign on behalf of the
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Corporation proxies to vote upon shares of stock of other companies standing in
the name of the Corporation.
ARTICLE IX
Inspection of Books
The Board of Directors shall determine from time to time whether,
and if allowed, to what extent and at what time and places and under what
conditions and regulations, the accounts and books of the Corporation (except
such as may by law be specifically open to inspection) or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by the laws of the State of Delaware, unless and until authorized so
to do by resolution of the Board of Directors or of the stockholders of the
Corporation.
ARTICLE X
Fiscal Year
The fiscal year of the Corporation shall be determined from time to
time by vote of the Board of Directors.
ARTICLE XI
Amendments
These By-laws may be altered, amended, changed or repealed and new
By-laws adopted by the stockholders or by the Board of Directors, in either case
at any meeting called for that purpose at which a quorum shall be present. Any
by-law, whether made, altered, amended, changed or repealed by the stockholders
or the Board of Directors may be repealed, amended, changed, further amended,
changed, repealed or reinstated, as the case may be either by the stockholders
or by the Board of Directors, as herein provided; except that this Article may
be altered, amended, changed or repealed only by vote of the stockholders.
ARTICLE XII
Indemnification
SECTION 1. Indemnification. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of
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any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in this Section, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 2. Authorization. Any indemnification under Section 1 of this
Article (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 of this
Article. Such determination shall be made: (a) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceedings, or (b) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in written opinion, or (c) by the stockholders.
SECTION 3. Expense Advance. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the manner provided in Section 2 of this Article upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount, unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this Article.
SECTION 4. Nonexclusivity. The indemnification provided by this Article
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any by-
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law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 5. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
SECTION 6. "The Corporation". For the purposes of this Article, references
to "the Corporation" include all constituent corporations absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents as well as the resulting or surviving corporation so that any person
who is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this Article with respect to such a constituent corporation if
its separate existence had continued.
BY-LAWS
OF
METRO BUSINESS ARCHIVES, INC.
(a New York corporation)
------------------
ARTICLE 1
SHAREHOLDERS
1. CERTIFICATES REPRESENTING SHARES. Certificates representing shares
shall set forth thereon the statements prescribed by Section 508, and, where
applicable, by Sections 505, 616, 620, 709, and 1002, of the Business
Corporation Law and by any other applicable provision of law and shall be signed
by the Chairman or a Vice-Chairman of the Board of Directors, if any, or by the
President or a Vice-President and by the Secretary or an Assistant Secretary or
the Treasurer and Assistant Treasurer and may be sealed with the corporate seal
or a facsimile thereof. The signatures of the officers upon a certificate may be
facsimiles if the certificate is countersigned by a transfer agent or registered
by a registrar other than the corporation itself or it's employee. In case any
officer who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issue.
A certificate representing shares shall not be issued until the full
amount of consideration therefor has been paid except as Section 504 of the
Business Corporation Law may otherwise permit.
The corporation may issue a new certificate for shares in place of any
certificate theretofore issued by it, alleged to have been lost or destroyed,
and the Board of Directors may require the owner of any lost or destroyed
certificate, or his legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such certificate
or the issuance of any such new certificate.
2. FRACTIONAL SHARE INTERESTS. The corporation may issue certificates for
fractions of a share where necessary to effect transactions authorized by the
Business Corporation Law which shall entitle the holder, in proportion to his
fractional holdings, to exercise voting rights, receive dividends and
participate in liquidating distributions; or it may pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined; or it may issue scrip in registered or bearer form
over the manual or facsimile signature of an officer of the corporation or of
its agent, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a shareholder except as therein
provided.
<PAGE>
3. SHARE TRANSFERS. Upon compliance with provisions restricting the
transferability of shares, if any, transfers of shares of the corporation shall
be made only on the share record of the corporation by the registered holder
thereof, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation or with a transfer
agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares properly endorsed and the payment of all taxes cue
thereon.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action, the directors may fix, in advance, a date as the
record date for any such determination of shareholders. Such date shall not be
more than fifty days nor less than ten days before the date of such meeting, nor
more than fifty days prior to any other action. If no record date is fixed, the
record date for the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders shall be at the close of the business on the
day next preceding the day on which notice is given, or, if no notice is given,
the day on which the meeting is held; the record date for determining
shareholders for any purpose other than that specified in the preceding clause
shall be at the close of business on the day on which the resolution of the
directors relating thereto is adopted. When a determination of shareholders of
record entitled to notice of or to vote at any meeting of shareholders has been
made as provided in this paragraph, such determination shall apply to any
adjournment thereof, unless directors fix a new record date under this paragraph
f or the adjourned meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
notice of a meeting of shareholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "shareholder" or "shareholders"
refers to an outstanding share or shares and to a holder or holders of record of
outstanding shares when the corporation is authorized to issue only one class of
shares, and said reference is also intended to include any outstanding share or
shares and any holder or holders of record of outstanding shares of any class
upon which or upon whom the Certificate of Incorporation confers such rights
where there are two or more classes or series of shares or upon which or upon
whom the Business Corporation Law confers such rights notwithstanding that the
Certificate of Incorporation may provide for more than one class or series of
shares, one or more of which are limited or denied such rights thereunder.
6. SHAREHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date fixed, from
time to time, by the directors, provided, that the first annual meeting shall be
held on a date within thirteen months after the formation of the corporation,
and each successive annual meeting shall be held on a date within thirteen
months after the date of the preceding annual meeting. A special meeting shall
be held on the date fixed by the directors except when the Business Corporation
Law confers the right to fix the date upon shareholders.
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<PAGE>
- PLACE. Annual meetings and special meetings shall be held at such
place, within or without the State of New York, as the directors may, from time
to time, fix. Whenever the directors shall fail to fix such place, or, whenever
shareholders entitled to call a special meeting shall call the same, the meeting
shall be held at the office of the corporation in the State of New York.
- CALL. Annual meetings may be called by the directors or by any
officer instructed by the directors to call the meeting. Special meetings may be
called in like manner except when the directors are required by the Business
Corporation Law to call a meeting, or except when the shareholders are entitled
by said Law to demand the call of a meeting.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written
notice of all meetings shall be given, stating the place, date, and hour of the
meeting, and, unless it is an annual meeting, indicating that it is being issued
by or at the direction of the person or persons calling the meeting. The notice
of an annual meeting shall state that the meeting is called for the election of
directors and for the transaction of other business which may properly come
before the meeting, and shall, (if any other action which could be taken at a
special meeting is to be taken at such annual meeting) state the purpose or
purposes. The notice of a special meeting shall in all instances state the
purpose or purposes for which the meeting is called; and, at any such meeting,
only such business may be transacted which is related to the purpose or purposes
set forth in the notice. If the directors shall adopt, amend, or repeal a bylaw
regulating an impending election of directors, the notice of the next meeting
for election of directors shall contain the statements prescribed by Section
601(b) of the Business Corporation Law. If any action is proposed to be taken
which would, if taken, entitle shareholders to receive payment for their shares,
the notice shall include a statement of that purpose and to that effect and
shall be accompanied by a copy of Section 623 of the Business Corporation Law or
an outline of its material terms. A copy of the notice of any meeting shall be
given, personally or by first class mail, not less than ten days nor more than
fifty days before the date of the meeting, unless the lapse of the prescribed
period of time shall have been waived, to each shareholder at his record address
or at such other address which he may have furnished by request in writing to
the Secretary of the corporation. Notice by mail shall be deemed to be given
when deposited, with postage thereon prepaid, in a post office or official
depository under the exclusive care and custody of the United States post office
department. If a meeting is adjourned to another time or place, and, if any
announcement of the adjourned time or place is made at the meeting, it shall not
be necessary to give notice of the adjourned meeting unless the directors, after
adjournment, fix a new record date for the adjourned meeting. Notice of a
meeting need not be given to any shareholder who submits a signed waiver of
notice before or after the meeting. The attendance of a shareholder at a meeting
without protesting prior to the conclusion of the meeting the lack of notice of
such meeting shall constitute a waiver of notice by him.
- SHAREHOLDER LIST AND CHALLENGE. A list of shareholders as of the
record date, certified by the Secretary or other officer responsible for its
preparation or by the transfer agent, if any, shall be produced at any meeting
of shareholders upon the request thereat or prior thereto of any shareholder. If
the right to vote at any meeting is challenged, the inspectors of election, if
any, or the person presiding thereat, shall require such list of shareholders to
be produced as evidence of the right of the persons challenged to vote at such
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<PAGE>
meeting, and all persons who appear from such list to be shareholders entitled
to vote thereat may vote at such meeting.
- CONDUCT OF MEETING. Meetings of the shareholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a Chairman to be chosen by the shareholders.
The Secretary of the corporation, or in his absence, an Assistant Secretary,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present the Chairman of the meeting shall appoint a
secretary of the meeting.
- PROXY REPRESENTATION. Every shareholder may authorize another
person or persons to act for him by proxy in all matters in which a shareholder
is entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the shareholder or his attorney-in-fact. No proxy
shall be valid after the expiration of eleven months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable -at the
pleasure of the shareholder executing it, except as otherwise provided by the
Business Corporation Law.
- INSPECTORS - APPOINTMENT. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the person presiding at
the meeting or any shareholder, the inspector or inspectors, if any, shall make
a report in writing of any challenge, question or matter determined by his or
them and execute a certificate of any fact found by him or them.
- QUORUM. Except for a special election of directors pursuant to
Section 603(b) of the Business Corporation Law, and except as herein otherwise
provided, the holders of a majority of the outstanding shares shall constitute a
quorum at a meeting of shareholders for the transaction of any business. When a
quorum is once present to organize a meeting, it is not broken by the subsequent
withdrawal of any shareholders. The shareholders present may adjourn the meeting
despite the absence of a quorum.
- VOTING. Each share shall entitle the holder thereof to one vote.
In the election of directors, a plurality of the votes cast shall elect. Any
other action shall be authorized
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by a majority of the votes cast except where the Business Corporation Law
prescribes a different proportion of votes.
7. SHAREHOLDER ACTION WITHOUT MEETINGS. Whenever shareholders
are required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken, signed
by the holders of all shares.
ARTICLE 2
GOVERNING BOARD
1. FUNCTIONS AMD DEFINITIONS. The business of the corporation shall be
managed under the direction of a governing board, which is herein referred to as
the "Board of Directors" or "directors" notwithstanding that the members thereof
may otherwise bear the titles of trustees, managers, or governors or any other
designated title, and notwithstanding that only one director legally constitutes
the Board. The word "director" or "directors" likewise herein refers to a member
or to members of the governing board notwithstanding the designation of a
different official title or titles. The use of the phrase "entire board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be at least eighteen
years of age. A director need not be a shareholder, a citizen of the United
States, or a resident of the State of New York. The initial Board of Directors
shall consist of one person. Thereafter the number of directors constituting the
entire board shall be at least three, except that, where all the shares are
owned beneficially and of record by less than three shareholders, the number of
directors may be less than three but not less than the number of such
shareholders. Subject to the foregoing limitation and except for the first Board
of Directors, such number may be fixed from time to time by action of the
shareholders or of the directors, or, if the number is not so fixed, the number
shall be . The number of directors may be increased or decreased by action of
shareholders or of the directors, provided that any action of the directors to
effect such increase or decrease shall require the vote of a majority of the
entire Board. No decrease shall shorten the term of any incumbent director.
3. ELECTION AND TERM. The first Board of Directors shall be elected by the
incorporator or incorporators and shall hold office until the first annual
meeting of shareholders and until their successors have been elected and
qualified. Thereafter, directors who are elected at an annual meeting of
shareholders, and directors who are elected in the interim by the shareholders
to fill vacancies and newly created directorships, shall hold office until the
next annual meeting of shareholders and until their successors have been elected
and qualified; and directors who are elected in the interim by the directors to
fill vacancies and newly created directorships shall hold office until the next
meeting of shareholders at which the election of directors is in the regular
order of business and until their successors have been elected and qualified. In
the interim between annual meetings of shareholders or of special meetings of
shareholders called for the election of directors, newly created directorships
and any vacancies in the Board of Directors, including vacancies resulting from
the removal of directors for cause or without cause, may be filled by the vote
of the remaining directors then in office, although less than a quorum exists.
5
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4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the
State of New York as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, of the President, or of a
majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral, or any other mode of notice of the time and place shall be given
for special meetings in sufficient time for the convenient assembly of the
directors thereat. The notice of any meeting need not specify the purpose of the
meeting. Any requirement of furnishing a notice shall be waived by any director
who signs a waiver of notice before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to him.
- QUORUM AND ACTION. A majority of the entire Board shall constitute
a quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum, provided such
majority shall constitute at least one-third of the entire Board. A majority of
the directors present, whether or not a quorum is present, may adjourn a meeting
to another time and place. Except as herein otherwise provided, the act of the
Board shall be the act, at a meeting duly assembled, by vote of a majority of
the directors present at the time of the vote, a quorum being present at such
time.
Any one or more members of the Board of Directors or of any committee
thereof may participate in a meeting of said Board or of any such committee by
means of a conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time, and
participation by such means shall constitute presence in person at the meeting.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the President, if
present and acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Any or all of the directors may be removed
for cause or without cause by the shareholders. One or more of the directors
may be removed for cause by the Board of Directors.
6. COMMITTEES. Whenever the Board of Directors shall consist of more
than three members, the Board of Directors, by resolution adopted by a majority
of the entire Board of Directors, may designate from their number three or more
directors to constitute an Executive
6
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Committee and other committees, each of which, to the extent provided in the
resolution designating it, shall have the authority of the Board of Directors
with the exception of any authority the delegation of which is prohibited by
Section 712 of the Business Corporation Law.
7. WRITTEN ACTION. Any action required or permitted to be taken by the
Board of Directors or by any committee thereof may be taken without a meeting if
all of the members of the Board of Directors or of any committee thereof consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents thereto by the members of the Board of
Directors or of any such committee shall be filed with the minutes of the
proceeding of the Board of Directors or of any such committee.
ARTICLE 3
OFFICERS
The directors may elect or appoint a Chairman of the Board of Directors, a
President, one or more Vice-Presidents, a Secretary, one or more Assistant
Secretaries, a Treasurer, one or more Assistant Treasurers, and such other
officers as they may determine. The President may but need not be a director.
Any two or more offices may be held by the same person except the offices of
President and Secretary, or, when all of the issued and outstanding shares of
the corporation are owned by one person, such person may hold all or any
combination of offices.
Unless otherwise provided in the resolution of election or appointment,
each officer shall hold office until the meeting of the Board of Directors
following the next annual meeting of shareholders and until his successor has
been elected and qualified.
Officers shall have the powers and duties defined in the resolutions
appointing them.
The Board of Directors may remove any officer for cause or without cause.
ARTICLE 4
STATUTORY NOTICES TO SHAREHOLDERS
The directors may appoint the Treasurer or other fiscal officer and/or the
Secretary or any other officer to cause to be prepared and furnished to
shareholders entitled thereto any special financial notice and/or any financial
statement, as the case may be, which may be required by any provision of law,
and which, more specifically, may be required by Sections 510, 511, 515, 516,
517, 519, and 520 of the Business Corporation Law.
ARTICLE 5
BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of the shareholders, of the
Board of Directors, and/or any committee which the directors may appoint, and
shall keep at the office of the corporation in the
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State of New York or at the office of the transfer agent or registrar, if any,
in said state, a record containing the names and addresses of all shareholders,
the number and class of shares held by each, and the dates when they
respectively became the owners of record thereof. Any of the foregoing books,
minutes, or records may be in written form or in any other form capable of being
converted into written form within a reasonable time.
ARTICLE 6
CORPORATE SEAL
The corporate seal, if any, shall be in such form as the Board of
Directors shall prescribe.
ARTICLE 7
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change from time to time, by the Board of Directors.
ARTICLE 8
CONTROL OVER BY-LAWS
The shareholders entitled to vote in the election of directors or the
directors upon compliance with any statutory requisite may amend or repeal the
By-Laws and may adopt new By-Laws, except that the directors may not amend or
repeal any By-Law or adopt any new By-Law, the statutory control over which is
vested exclusively in the said shareholders or in the incorporators. By-Laws
adopted by the incorporators or directors may be amended or repealed by the said
shareholders.
* * * * * *
The undersigned incorporator certifies that he has examined the foregoing
By-Laws and has adopted the same as the first By-Laws of the corporation; that
said By-Laws contain specific and general provisions, which, in order to be
operative, must be adopted by the incorporator or incorporators or the
shareholders entitled to vote in the election of directors; and that he has
adopted each of said specific and general provisions in accordance with the
requirements of the Business Corporation Law.
8
Exhibit 3.2C
CRITERION ATLANTIC PROPERTY, INC.
(a Delaware corporation)
BY - LAWS
ARTICLE 1
Offices
1.1 Registered Office. The registered office of the Corporation shall be
located in the City of Dover, County of Kent, State of Delaware, and the name of
the resident agent in charge thereof shall be The Prentice Hall Corporation
System, Inc.
1.2 Other Offices. The Corporation may also have offices at such other
places, within or without the State of Delaware, as the Board of Directors may
from time to time appoint or the business of the Corporation may require.
ARTICLE 2
Seal
The seal of the Corporation shall, subject to alteration by the
Board of Directors, consist of a flat-faced circular die with the word
"Delaware", together with the name of the Corporation and the year of
incorporation, cut or engraved thereon.
ARTICLE 3
Meetings of Stockholders
3.1 Place of Meeting. Meetings of the stockholders shall be held either
within or without the State of Delaware at such place as the Board of Directors
may fix.
3.2 Annual Meetings. The annual meeting of stockholders shall be held on
the thirtieth day of April of each year, or if such day is a legal holiday, then
on the next business day following, at such time as the Board of Directors may
fix.
3.3 Special Meetings. Special meetings of the stockholders for any purpose
or purposes may be called by the President, or by the directors (either by
written instrument signed by a majority or by resolution adopted by a vote of
the majority), and special meetings shall be called by the President or the
Secretary whenever stockholders owning a majority of the capital stock issued,
outstanding and entitled to vote so request in writing. Such request of
stockholders shall state the purpose or purposes of the proposed meeting.
3.4 Notice. Written or printed notice of every meeting of stockholders,
annual or special, stating the hour, date and place thereof, and the purpose or
purposes in general terms
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for which the meeting is called shall, not less than ten (10) and not more than
sixty (60) days before such meeting, be served upon or mailed to each
stockholder entitled to vote thereat, at his address as it appears upon the
stock records of the Corporation or, if such stockholder shall have filed with
the Secretary of the Corporation a written request that notices intended for him
be mailed to some other address, then to the address designated in such request.
Notice of the hour, date, place and purpose of any meeting of
stockholders may be dispensed with if every stockholder entitled to vote thereat
shall attend either in person or by proxy and shall not object to the holding of
such meeting for lack of proper notice, or if every absent stockholder entitled
to such notice shall in writing, filed with the records of the meeting, either
before or after the holding thereof, waive such notice.
3.5 Quorum. Except as otherwise provided by law or by the Certificate of
Incorporation, the presence in person or by proxy at any meeting of stockholders
of the holders of a majority of the shares of the capital stock of the
Corporation issued and outstanding and entitled to vote thereat, shall be
requisite and shall constitute a quorum. If two or more classes of stock are
entitled to vote as separate classes upon any question, then, in the case of
each such class, a quorum for the consideration of such question shall, except
as otherwise provided by law or by the Certificate of Incorporation, consist of
a majority in interest of all stock of that class issued, outstanding and
entitled to vote. If a majority or, where a larger quorum is required, such
quorum, shall not be represented at any meeting of the stockholders regularly
called, the holders of a majority of the shares present or represented and
entitled to vote thereat shall have power to adjourn the meeting to another
time, or to another time and place, without notice other than announcement of
adjournment at the meeting, and there may be successive adjournments for like
cause and in like manner until the requisite amount of shares entitled to vote
at such meeting shall be represented; provided, however, that if the adjournment
is for more than thirty (30) days, notice of the hour, date and place of the
adjourned meeting shall be given to each stockholder entitled to vote thereat.
Subject to the requirements of law and the Certificate of Incorporation, on any
issue on which two or more classes of stock are entitled to vote separately, no
adjournment shall be taken with respect to any class for which a quorum is
present unless the Chairman of the meeting otherwise directs. At any meeting
held to consider matters which were subject to adjournment for want of a quorum
at which the requisite amount of shares entitled to vote thereat shall be
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed.
3.6 Votes; Proxies. At each meeting of stockholders, every stockholder of
record at the closing of the transfer books, if closed, or on the date set by
the Board of Directors for the determination of stockholders entitled to vote at
such meeting, shall have one vote for each share of stock entitled to vote which
is registered in his name on the books of the Corporation, and, in the election
of directors, may vote cumulatively to the extent and in the manner authorized
in the Certificate of Incorporation. At each such meeting every stockholder
shall be entitled to vote in person, or by proxy appointed by an instrument in
writing subscribed by such stockholder and bearing a date not more than three
(3) years prior to the meeting in question, unless said instrument provides for
a longer period during which it is to remain in force.
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All elections of directors shall be held by ballot. If the Chairman
of the meeting shall so determine, a vote may be taken upon any other matter by
ballot and shall be so taken upon the request of any stockholder entitled to
vote on such matter.
At elections of directors, the Chairman shall appoint two judges of
election, who shall first take and subscribe an oath or affirmation faithfully
to execute the duties of judges at such meeting with strict impartiality and
according to the best of their ability. The judges so appointed shall take
charge of the polls and, after the balloting, shall make a certificate of the
result of the vote taken. No director or candidate for the office of director
shall be appointed as such judge.
At any meeting at which a quorum is present, a plurality of the
votes properly cast for election to fill any vacancy on the Board of Directors
shall be sufficient to elect a candidate to fill such vacancy, and a majority of
the votes properly cast upon any other question shall decide the question,
except in any case where a larger vote is required by law, the Certificate of
Incorporation, these By-laws, or otherwise.
3.7 Organization. The Chairman of the Board, if there be one, or in his
absence the President, or in the absence of the Chairman and the President, a
Vice President, shall call meetings of the stockholders to order and shall act
as chairman thereof. The Secretary of the Corporation, if present, shall act as
secretary of all meetings of stockholders, and, in his absence, the presiding
officer may appoint a secretary.
ARTICLE 4
Directors
4.1 Number. The business and property of the Corporation shall be
conducted and managed by a Board of Directors consisting of one or more
directors. Directors need not be a stockholder. The number of directors for the
ensuing year shall be fixed at each annual meeting of stockholders, but if the
number is not so fixed, the number shall remain as it stood immediately prior to
such meeting.
At any time during any year the whole number of directors may be
increased or reduced, in each case by vote of a majority of the stock
outstanding and entitled to vote for the election of directors or a majority of
the directors in office at the time of such increase or decrease, regardless of
whether such majority of directors constitutes a quorum.
4.2 Term of Office. Each director shall hold office until the next annual
meeting of stockholders and until his successor is duly elected and qualified or
until his earlier death or resignation, subject to the right of the stockholders
at any time to remove any director or directors as provided in Section 4 of this
Article.
4.3 Vacancies. If any vacancy shall occur among the directors, or if the
number of directors shall at any time be increased, the directors then in
office, although less than a quorum, by a majority vote may fill the vacancies
or newly-created directorships, or any such vacancies or newly-created
directorships may be filled by the stockholders at any meeting.
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4.4 Removal by Stockholders. The holders of record of the capital stock of
the Corporation entitled to vote for the election of directors may in their
discretion at any meeting duly called for the purpose, by a majority vote,
remove any director or directors and elect a new director or directors in place
thereof.
4.5 Meetings. Meetings of the Board of Directors shall be held at such
place, within or without the State of Delaware, as may from time to time be
fixed by resolution of the Board or by the President and as may be specified in
the notice or waiver of notice of any meeting. Meetings may be held at any time
upon the call of the Chairman of the Board or the President or any two (2) of
the directors in office by oral, telegraphic or written notice, duly served or
sent or mailed to each director not less than twenty-four (24) hours before such
meeting, except that, if mailed, not less than seventy-two (72) hours before
such meeting. Meetings may be held at any time and place without notice if all
the directors are present and do not object to the holding of such meeting for
lack of proper notice or if those not present shall, in writing or by telegram,
waive notice thereof. A regular meeting of the Board may be held without notice
immediately following the annual meeting of stockholders at the place where such
meeting is held. Regular meetings of the Board may also be held without notice
at such time and place as shall from time to time be determined by resolution of
the Board.
4.6 Quorum. A majority of the directors shall constitute a quorum for the
transaction of business. If at any meeting of the Board there shall be less than
a quorum present, a majority of those present may adjourn the meeting from time
to time without notice other than announcement of the adjournment at the
meeting, and at such adjourned meeting at which a quorum is present any business
may be transacted which might have been transacted at the meeting as originally
noticed.
4.7 Compensation. Directors shall receive compensation for their services,
as such, and for service on any Committee of the Board of Directors, as fixed by
resolution of the Board of Directors and for expenses of attendance at each
regular or special meeting of the Board or any Committee thereof. Nothing in
this Section shall be construed to preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE 5
Committees of Directors
5.1 Executive Committee. The Board of Directors may, by resolution passed
by a majority of the whole Board, appoint an Executive Committee of two (2) or
more members, to serve during the pleasure of the Board, to consist of such
directors as the Board may from time to time designate. The Board of Directors
shall designate the Chairman of the Executive Committee.
(a) Procedure. The Executive Committee shall, by a vote of a
majority of its members, fix its own times and places of
meeting, determine the number of its members constituting a
quorum for the transaction of business, and prescribe its own
rules of procedure, no change in which shall be made save by a
majority vote of its members.
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(b) Responsibilities. During the intervals between the meetings of
the Board of Directors, except as otherwise provided by the
Board of Directors in establishing such Committee or
otherwise, the Executive Committee shall possess and may
exercise all the powers of the Board in the management and
direction of the business and affairs of the Corporation;
provided, however, that the Executive Committee shall not have
the power:
(i) to amend or authorize the amendment of the Certificate
of Incorporation or these By-Laws;
(ii) to authorize the issuance of stock;
(iii) to authorize the payment of any dividend;
(iv) to adopt an agreement of merger or consolidation of the
Corporation or to recommend to the stockholders the
sale, lease or exchange of all or substantially all the
property and business of the Corporation; or
(v) to recommend to the stockholders a dissolution of the
Corporation.
(c) Reports. The Executive Committee shall keep regular minutes of
its proceedings, and all action by the Executive Committee
shall be reported promptly to the Board of Directors. Such
action shall be subject to review, amendment and repeal by the
Board, provided that no rights of third parties shall be
adversely affected by such review, amendment or repeal.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Executive Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
5.2 Audit Committee. The Board of Directors shall appoint an Audit
Committee of two (2) or more members who shall not be officers or employees of
the Corporation to serve during the pleasure of the Board. The Board of
Directors shall designate the Chairman of the Audit Committee.
(a) Procedure. The Audit Committee, by a vote of a majority of its
members, shall fix its own times and places of meeting, shall
determine the number of its members constituting a quorum for
the transaction of business, and shall prescribe its own rules
of procedure, no change in which shall be made save by a
majority vote of its members.
<PAGE>
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(b) Responsibilities. The Audit Committee shall review the annual
financial statements of the Corporation prior to their
submission to the Board of Directors, shall consult with the
Corporation's independent auditors, and may examine and
consider such other matters in relation to the internal and
external audit of the Corporation's accounts and in relation
to the financial affairs of the Corporation and its accounts,
including the selection and retention of independent auditors,
as the Audit Committee may, in its discretion, determine to be
desirable.
(c) Reports. The Audit Committee shall keep regular minutes of its
proceedings, and all action by the Audit Committee shall, from
time to time, be reported to the Board of Directors as it
shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Audit Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
5.3 Other Committees. The Board of Directors, by vote of a majority of the
directors then in office, may at any time appoint one or more other committees
from and outside of its own number. Every such committee must include at least
one member of the Board of Directors. The Board may from time to time designate
or alter, within the limits permitted by law, the Certificate of Incorporation
and this Article, if applicable, the duties, powers and number of members of
such other committees or change their membership, and may at any time abolish
such other committees or any of them.
(a) Procedure. Each committee appointed pursuant to this Section
shall, by a vote of a majority of its members, fix its own
times and places of meeting, determine the number of its
members constituting a quorum for the transaction of business,
and prescribe its own rules of procedure, no change in which
shall be made save by a majority vote of its members.
(b) Responsibilities. Each committee appointed pursuant to this
Section shall exercise the powers assigned to it by the Board
of Directors in its discretion.
(c) Reports. Each committee appointed pursuant to this Section
shall keep regular minutes of proceedings, and all action by
each such committee shall, from time to time, be reported to
the Board of Directors as it shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of each committee, appointed
pursuant to this Section, the member or members thereof
present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously
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appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member.
5.4 Term of Office. Each member of a committee shall hold office until the
first meeting of the Board of Directors following the annual meeting of
stockholders (or until such other time as the Board of Directors may determine,
either in the vote establishing the committee or at the election of such member
or otherwise) and until his successor is elected and qualified, or until he
sooner dies, resigns, is removed, is replaced by change of membership or becomes
disqualified by ceasing to be a Director (where membership on the Board is
required), or until the committee is sooner abolished by the Board of Directors.
ARTICLE 6
Officers
6.1 Officers. The Board of Directors shall elect a President, a Secretary
and a Treasurer, and, in their discretion, may elect a Chairman of the Board,
one or more Executive Vice Presidents, Vice Presidents, Assistant Secretaries
and Assistant Treasurers as deemed necessary or appropriate. Such officers shall
be elected annually by the Board of Directors at its first meeting following the
annual meeting of stockholders, and each shall hold office for the term provided
by the vote of the Board, except that each will be subject to removal from
office in the discretion of the Board as provided herein. The powers and duties
of more than one office may be exercised and performed by the same person.
6.2 Vacancies. Any vacancy in any office may be filled for the unexpired
portion of the term by the Board of Directors, at any regular or special
meeting.
6.3 Chairman of the Board. The Chairman of the Board of Directors, if
elected, shall be a member of the Board of Directors and shall preside at its
meetings. He shall advise and counsel with the President, and shall perform such
duties as from time to time may be assigned to him by the Board of Directors.
6.4 President. The President shall be the chief executive officer of the
Corporation. Subject to the directions of the Board of Directors, he shall have
and exercise direct charge of and general supervision over the business and
affairs of the Corporation and shall perform all duties incident to the office
of the chief executive officer of a corporation and such other duties as from
time to time may be assigned to him by the Board of Directors. The President may
but need not be a member of the Board of Directors.
6.5 Executive Vice Presidents and Vice Presidents. Each Executive Vice
President and Vice President shall have and exercise such powers and shall
perform such duties as from time to time may be assigned to him by the
President.
6.6 Secretary. The Secretary shall keep the minutes of all meetings of the
stockholders and of the Board of Directors in books provided for the purpose; he
shall see that all notices are duly given in accordance with the provisions of
law and these By-laws; he shall be custodian of the records and of the corporate
seal or seals of the Corporation; he shall see
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that the corporate seal is affixed to all documents the execution of which, on
behalf of the Corporation under its seal, is duly authorized, and, when the seal
is so affixed, he may attest the same; he may sign, with the President, an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and, in general, he shall perform all duties incident to the office
of secretary of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
6.7 Assistant Secretaries. The Assistant Secretaries in order of their
seniority shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Secretary.
6.8 Treasurer. The Treasurer shall have charge of and be responsible for
all funds, securities, receipts and disbursements of the Corporation, and shall
deposit, or cause to be deposited, in the name of the Corporation, all monies or
other valuable effects in such banks, trust companies or other depositaries as
shall, from time to time, be selected by the Board of Directors; he may endorse
for collection on behalf of the Corporation checks, notes and other obligations;
he may sign receipts and vouchers for payments made to the Corporation; he may
sign checks of the Corporation, singly or jointly with another person as the
Board of Directors may authorize, and pay out and dispose of the proceeds under
the direction of the Board; he shall render to the President and to the Board of
Directors, whenever requested, an account of the financial condition of the
Corporation; he may sign, with the President, or an Executive Vice President or
a Vice President, certificates of stock of the Corporation; and in general,
shall perform all the duties incident to the office of treasurer of a
corporation, and such other duties as from time to time may be assigned to him
by the Board of Directors.
6.9 Assistant Treasurers. The Assistant Treasurers in order of their
seniority shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Treasurer.
6.10 Subordinate Officers. The Board of Directors may appoint such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such duties as the Board
of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
6.11 Compensation. The Board of Directors shall fix the compensation of
all officers of the Corporation. It may authorize any officer, upon whom the
power of appointing subordinate officers may have been conferred, to fix the
compensation of such subordinate officers.
6.12 Removal. Any officer of the Corporation may be removed, with or
without cause, by action of the Board of Directors.
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6.13 Bonds. The Board of Directors may require any officer of the
Corporation to give a bond to the Corporation, conditional upon the faithful
performance of his duties, with one or more sureties and in such amount as may
be satisfactory to the Board of
Directors.
ARTICLE 7
Certificates of Stock
7.1 Form and Execution of Certificates. The interest of each stockholder
of the Corporation shall be evidenced by a certificate or certificates for
shares of stock in such form as the Board of Directors may from time to time
prescribe. The certificates of stock of each class shall be consecutively
numbered and signed by the President, an Executive Vice President or a Vice
President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Corporation, and may be countersigned and registered
in such manner as the Board of Directors may by resolution prescribe, and shall
bear the corporate seal or a printed or engraved facsimile thereof. Where any
such certificate is signed by a transfer agent or transfer clerk acting on
behalf of the Corporation, the signatures of any such President, Executive Vice
President, Vice President, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary may be facsimiles, engraved or printed. In case any officer
or officers, who shall have signed, or whose facsimile signature or signatures
shall have been used on, any such certificate or certificates, shall cease to be
such officer or officers, whether because of death, resignation or otherwise,
before such certificate or certificates shall have been delivered by the
Corporation, such certificate or certificates may nevertheless be issued and
delivered by the Corporation as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer or officers.
In case the corporate seal which has been affixed to, impressed on,
or reproduced in any such certificate or certificates shall cease to be the seal
of the Corporation before such certificate or certificates have been delivered
by the Corporation, such certificate or certificates may nevertheless be issued
and delivered by the Corporation as though the seal affixed thereto, impressed
thereon or reproduced therein had not ceased to be the seal of the Corporation.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Certificate of Incorporation, these
By-laws, or any agreement to which the Corporation is a party, shall have the
restriction noted conspicuously on the certificate, and shall also set forth, on
the face or back, either the full text of the restriction or a statement of the
existence of such restriction and (except if such restriction is imposed by law)
a statement that the Corporation will furnish a copy thereof to the holder of
such certificate upon written request and without charge.
Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized to
be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
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7.2 Transfer of Shares. The shares of the stock of the Corporation shall
be transferred on the books of the Corporation by the holder thereof in person
or by his attorney lawfully constituted, upon surrender for cancellation of
certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof or
guaranty of the authenticity of the signature as the Corporation or its agents
may reasonably require. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person whether or not
it shall have express or other notice thereof, save as expressly provided by law
or by the Certificate of Incorporation. It shall be the duty of each stockholder
to notify the Corporation of his post office address.
7.3 Closing of Transfer Books. The stock transfer books of the Corporation
may, if deemed appropriate by the Board of Directors, be closed for such length
of time not exceeding fifty (50) days as the Board may determine, preceding the
date of any meeting of stockholders or the date for the payment of any dividend
or the date for the allotment of rights or the date when any issuance, change,
conversion or exchange of capital stock shall go into effect, during which time
no transfer of stock on the books of the Corporation may be made.
7.4 Dates of Record. If deemed appropriate, the Board of Directors may fix
in advance a date for such length of time not exceeding sixty (60) days (and, in
the case of any meeting of stockholders, not less than ten (10) days) as the
Board may determine, preceding the date of any meeting of stockholders, or the
date for the payment of any dividend, or the date for the allotment of rights or
the date when any issuance, change, conversion or exchange of capital stock
shall go into effect, as a record date for the determination of the stockholders
entitled to notice of, and to vote at, any such meeting or entitled to receive
payment of any such dividend or to any such allotment of rights, or to exercise
the rights in respect of any such issuance, change, conversion or exchange of
capital stock, as the case may be, and in such case only such stockholders as
shall be stockholders of record on the date so fixed shall be entitled to such
notice of, and to vote at, such meeting, or to receive payment of such dividend,
or to receive such allotment of rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any stock on the books of the
Corporation after any record date fixed as aforesaid. If no such record date is
so fixed, the record date shall be determined by applicable law.
7.5 Lost or Destroyed Certificates. In case of the loss or destruction
of any certificate of stock, a new certificate may be issued under the
following conditions:
(a) The owner of said certificate shall file with the Secretary or
any Assistant Secretary of the Corporation an affidavit giving
the facts in relation to the ownership, and in relation to the
loss or destruction of said certificate, stating its number
and the number of shares represented thereby; such affidavit
shall be in such form and contain such statements as shall
satisfy the President, any Executive Vice President, Vice
President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer, that said certificate
has been accidentally destroyed or lost, and that a new
certificate ought to be issued in lieu thereof. Upon being so
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satisfied, any such officer shall require such owner to
furnish the Corporation a bond in such penal sum and in such
form as he may deem advisable, and with a surety or sureties
approved by him, to indemnify and save harmless the
Corporation from any claim, loss, damage or liability which
may be occasioned by the issuance of a new certificate in lieu
thereof. Upon such bond being so filed, a new certificate for
the same number of shares shall be issued to the owner of the
certificate so lost or destroyed; and the transfer agent and
registrar, if any, of stock shall countersign and register
such new certificate upon receipt of a written order signed by
any such officer, and thereupon the Corporation will save
harmless said transfer agent and registrar in the premises. In
case of the surrender of the original certificate, in lieu of
which a new certificate has been issued, or the surrender of
such new certificate, for cancellation, the bond of indemnity
given as a condition of the issue of such new certificate may
be surrendered; or
(b) The Board of Directors of the Corporation may by resolution
authorize and direct any transfer agent or registrar of stock
of the Corporation to issue and register respectively from
time to time without further action or approval by or on
behalf of the Corporation new certificates of stock to replace
certificates reported lost, stolen or destroyed upon receipt
of an affidavit of loss and bond of indemnity in form and
amount and with surety satisfactory to such transfer agent or
registrar in each instance or upon such terms and conditions
as the Board of Directors may determine.
ARTICLE 8
Execution of Documents
8.1 Execution of Checks, Notes, etc. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers, or agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors, which may in
its discretion authorize any such signatures to be facsimile.
8.2 Execution of Contracts, Assignments, etc. Unless the Board of
Directors shall have otherwise provided generally or in a specific instance, all
contracts, agreements, endorsements, assignments, transfers, stock powers, or
other instruments shall be signed by the President, any Executive Vice
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer. The Board of Directors may, however, in
its discretion, require any or all such instruments to be signed by any two or
more of such officers, or may permit any or all of such instruments to be signed
by such other officer or officers, agent or agents, as it shall thereunto
authorize from time to time.
8.3 Execution of Proxies. The President, any Executive Vice President or
any Vice President, and the Secretary, the Treasurer, any Assistant Secretary or
any Assistant Treasurer, or any other officer designated by the Board of
Directors, may sign on behalf of the Corporation proxies to vote upon shares of
stock of other companies standing in the name of the Corporation.
<PAGE>
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ARTICLE 9
Inspection of Books
The Board of Directors shall determine from time to time whether,
and if allowed, to what extent and at what time and places and under what
conditions and regulations, the accounts and books of the Corporation (except
such as may by law be specifically open to inspection) or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by the laws of the State of Delaware, unless and until authorized so
to do by resolution of the Board of Directors or of the stockholders of the
Corporation.
ARTICLE 10
Fiscal Year
The fiscal year of the Corporation shall be determined from time to
time by vote of the Board of Directors.
ARTICLE 11
Amendments
These By-laws may be altered, amended, changed or repealed and new
By-laws adopted by the stockholders or by the Board of Directors, in either case
at any meeting called for that purpose at which a quorum shall be present. Any
by-law, whether made, altered, amended, changed or repealed by the stockholders
or the Board of Directors may be repealed, amended, changed, further amended,
changed, repealed or reinstated, as the case may be either by the stockholders
or by the Board of Directors, as herein provided; except that this Article may
be altered, amended, changed or repealed only by vote of the stockholders.
ARTICLE 12
Indemnification
12.1 Indemnification. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
<PAGE>
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interest of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in this Section, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
12.2 Authorization. Any indemnification under Section 1 of this Article
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 1 of this Article. Such
determination shall be made: (a) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceedings, or (b) if such a quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent legal counsel in
written opinion, or (c) by the stockholders.
12.3 Expense Advance. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the manner provided in Section 2 of this Article upon receipt of
an undertaking by or on behalf of the director, officer, employee or agent to
repay such amount, unless it shall ultimately be determined that he is entitled
to be indemnified by the Corporation as authorized in this Article.
12.4 Nonexclusivity. The indemnification provided by this Article shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue
<PAGE>
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as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
12.5 Insurance. The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article.
12.6 "The Corporation". For the purposes of this Article, references to
"the Corporation" include all constituent corporations absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents as well as the resulting or surviving corporation so that any person
who is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this Article with respect to such a constituent corporation if
its separate existence had continued.
Exhibit 3.2D
CRITERION PROPERTY, INC.
(a Delaware corporation)
BY - LAWS
ARTICLE I
Offices
SECTION 1. Registered Office. The registered office of the Corporation
shall be located in the City of Dover, County of Kent, State of Delaware, and
the name of the resident agent in charge thereof shall be The Prentice Hall
Corporation System, Inc.
SECTION 2. Other Offices. The Corporation may also have offices at such
other places, within or without the State of Delaware, as the Board of Directors
may from time to time appoint or the business of the Corporation may require.
ARTICLE II
Seal
The seal of the Corporation shall, subject to alteration by the
Board of Directors, consist of a flat-faced circular die with the word
"Delaware", together with the name of the Corporation and the year of
incorporation, cut or engraved thereon.
ARTICLE III
Meetings of Stockholders
SECTION 1. Place of Meeting. Meetings of the stockholders shall be held
either within or without the State of Delaware at such place as the Board of
Directors may fix.
SECTION 2. Annual Meetings. The annual meeting of stockholders shall be
held on the first day of May of each year, or if such day is a legal holiday,
then on the next business day following, at such time as the Board of Directors
may fix.
SECTION 3. Special Meetings. Special meetings of the stockholders for any
purpose or purposes may be called by the President, or by the directors (either
by written instrument signed by a majority or by resolution adopted by a vote of
the majority), and special meetings shall be called by the President or the
Secretary whenever stockholders owning a majority of the capital stock issued,
outstanding and entitled to vote so request in writing.
Such request of
stockholders shall state the purpose or purposes of the proposed meeting.
SECTION 4. Notice. Written or printed notice of every meeting of
stockholders, annual or special, stating the hour, date and place thereof, and
the purpose or purposes in general terms
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for which the meeting is called shall, not less than ten (10) and not more than
sixty (60) days before such meeting, be served upon or mailed to each
stockholder entitled to vote thereat, at his address as it appears upon the
stock records of the Corporation or, if such stockholder shall have filed with
the Secretary of the Corporation a written request that notices intended for him
be mailed to some other address, then to the address designated in such request.
Notice of the hour, date, place and purpose of any meeting of
stockholders may be dispensed with if every stockholder entitled to vote thereat
shall attend either in person or by proxy and shall not object to the holding of
such meeting for lack of proper notice, or if every absent stockholder entitled
to such notice shall in writing, filed with the records of the meeting, either
before or after the holding thereof, waive such notice.
SECTION 5. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the presence in person or by proxy at any meeting
of stockholders of the holders of a majority of the shares of the capital stock
of the Corporation issued and outstanding and entitled to vote thereat, shall be
requisite and shall constitute a quorum. If two or more classes of stock are
entitled to vote as separate classes upon any question, then, in the case of
each such class, a quorum for the consideration of such question shall, except
as otherwise provided by law or by the Certificate of Incorporation, consist of
a majority in interest of all stock of that class issued, outstanding and
entitled to vote. If a majority or, where a larger quorum is required, such
quorum, shall not be represented at any meeting of the stockholders regularly
called, the holders of a majority of the shares present or represented and
entitled to vote thereat shall have power to adjourn the meeting to another
time, or to another time and place, without notice other than announcement of
adjournment at the meeting, and there may be successive adjournments for like
cause and in like manner until the requisite amount of shares entitled to vote
at such meeting shall be represented; provided, however, that if the adjournment
is for more than thirty (30) days, notice of the hour, date and place of the
adjourned meeting shall be given to each stockholder entitled to vote thereat.
Subject to the requirements of law and the Certificate of Incorporation, on any
issue on which two or more classes of stock are entitled to vote separately, no
adjournment shall be taken with respect to any class for which a quorum is
present unless the Chairman of the meeting otherwise directs. At any meeting
held to consider matters which were subject to adjournment for want of a quorum
at which the requisite amount of shares entitled to vote thereat shall be
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed.
SECTION 6. Votes; Proxies. At each meeting of stockholders, every
stockholder of record at the closing of the transfer books, if closed, or on the
date set by the Board of Directors for the determination of stockholders
entitled to vote at such meeting, shall have one vote for each share of stock
entitled to vote which is registered in his name on the books of the
Corporation, and, in the election of directors, may vote cumulatively to the
extent and in the manner authorized in the Certificate of Incorporation. At each
such meeting every stockholder shall be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder and bearing
a date not more than three (3) years prior to the meeting in question, unless
said instrument provides for a longer period during which it is to remain in
force.
<PAGE>
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All elections of directors shall be held by ballot. If the Chairman
of the meeting shall so determine, a vote may be taken upon any other matter by
ballot and shall be so taken upon the request of any stockholder entitled to
vote on such matter.
At elections of directors, the Chairman shall appoint two judges of
election, who shall first take and subscribe an oath or affirmation faithfully
to execute the duties of judges at such meeting with strict impartiality and
according to the best of their ability. The judges so appointed shall take
charge of the polls and, after the balloting, shall make a certificate of the
result of the vote taken. No director or candidate for the office of director
shall be appointed as such judge.
At any meeting at which a quorum is present, a plurality of the
votes properly cast for election to fill any vacancy on the Board of Directors
shall be sufficient to elect a candidate to fill such vacancy, and a majority of
the votes properly cast upon any other question shall decide the question,
except in any case where a larger vote is required by law, the Certificate of
Incorporation, these By-laws, or otherwise.
SECTION 7. Organization. The Chairman of the Board, if there be one, or in
his absence the President, or in the absence of the Chairman and the President,
a Vice President, shall call meetings of the stockholders to order and shall act
as chairman thereof. The Secretary of the Corporation, if present, shall act as
secretary of all meetings of stockholders, and, in his absence, the presiding
officer may appoint a secretary.
ARTICLE IV
Directors
SECTION 1. Number. The business and property of the Corporation shall be
conducted and managed by a Board of Directors consisting of one or more
directors. Directors need not be a stockholder. The number of directors for the
ensuing year shall be fixed at each annual meeting of stockholders, but if the
number is not so fixed, the number shall remain as it stood immediately prior to
such meeting.
At any time during any year the whole number of directors may be
increased or reduced, in each case by vote of a majority of the stock
outstanding and entitled to vote for the election of directors or a majority of
the directors in office at the time of such increase or decrease, regardless of
whether such majority of directors constitutes a quorum.
SECTION 2. Term of Office. Each director shall hold office until the next
annual meeting of stockholders and until his successor is duly elected and
qualified or until his earlier death or resignation, subject to the right of the
stockholders at any time to remove any director or directors as provided in
Section 4 of this Article.
SECTION 3. Vacancies. If any vacancy shall occur among the directors, or
if the number of directors shall at any time be increased, the directors then in
office, although less than a quorum, by a majority vote may fill the vacancies
or newly-created directorships, or any such vacancies or newly-created
directorships may be filled by the stockholders at any meeting.
<PAGE>
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SECTION 4. Removal by Stockholders. The holders of record of the capital
stock of the Corporation entitled to vote for the election of directors may in
their discretion at any meeting duly called for the purpose, by a majority vote,
remove any director or directors and elect a new director or directors in place
thereof.
SECTION 5. Meetings. Meetings of the Board of Directors shall be held at
such place, within or without the State of Delaware, as may from time to time be
fixed by resolution of the Board or by the President and as may be specified in
the notice or waiver of notice of any meeting. Meetings may be held at any time
upon the call of the Chairman of the Board or the President or any two (2) of
the directors in office by oral, telegraphic or written notice, duly served or
sent or mailed to each director not less than twenty-four (24) hours before such
meeting, except that, if mailed, not less than seventy-two (72) hours before
such meeting. Meetings may be held at any time and place without notice if all
the directors are present and do not object to the holding of such meeting for
lack of proper notice or if those not present shall, in writing or by telegram,
waive notice thereof. A regular meeting of the Board may be held without notice
immediately following the annual meeting of stockholders at the place where such
meeting is held. Regular meetings of the Board may also be held without notice
at such time and place as shall from time to time be determined by resolution of
the Board.
SECTION 6. Quorum. A majority of the directors shall constitute a quorum
for the transaction of business. If at any meeting of the Board there shall be
less than a quorum present, a majority of those present may adjourn the meeting
from time to time without notice other than announcement of the adjournment at
the meeting, and at such adjourned meeting at which a quorum is present any
business may be transacted which might have been transacted at the meeting as
originally noticed.
SECTION 7. Compensation. Directors shall receive compensation for their
services, as such, and for service on any Committee of the Board of Directors,
as fixed by resolution of the Board of Directors and for expenses of attendance
at each regular or special meeting of the Board or any Committee thereof.
Nothing in this Section shall be construed to preclude a director from serving
the Corporation in any other capacity and receiving compensation therefor.
ARTICLE V
Committees of Directors
SECTION 1. Executive Committee. The Board of Directors may, by resolution
passed by a majority of the whole Board, appoint an Executive Committee of two
(2) or more members, to serve during the pleasure of the Board, to consist of
such directors as the Board may from time to time designate. The Board of
Directors shall designate the Chairman of the Executive Committee.
(a) Procedure. The Executive Committee shall, by a vote of a
majority of its members, fix its own times and places of
meeting, determine the number of its members constituting a
quorum for the transaction of business, and prescribe its own
rules of procedure, no change in which shall be made save by a
majority vote of its members.
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(b) Responsibilities. During the intervals between the meetings of
the Board of Directors, except as otherwise provided by the
Board of Directors in establishing such Committee or
otherwise, the Executive Committee shall possess and may
exercise all the powers of the Board in the management and
direction of the business and affairs of the Corporation;
provided, however, that the Executive Committee shall not have
the power:
(i) to amend or authorize the amendment of the Certificate
of Incorporation or these By-Laws;
(ii) to authorize the issuance of stock;
(iii) to authorize the payment of any dividend;
(iv) to adopt an agreement of merger or consolidation of the
Corporation or to recommend to the stockholders the
sale, lease or exchange of all or substantially all the
property and business of the Corporation; or
(v) to recommend to the stockholders a dissolution of the
Corporation.
(c) Reports. The Executive Committee shall keep regular minutes of
its proceedings, and all action by the Executive Committee
shall be reported promptly to the Board of Directors. Such
action shall be subject to review, amendment and repeal by the
Board, provided that no rights of third parties shall be
adversely affected by such review, amendment or repeal.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Executive Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
SECTION 2. Audit Committee. The Board of Directors shall appoint an Audit
Committee of two (2) or more members who shall not be officers or employees of
the Corporation to serve during the pleasure of the Board. The Board of
Directors shall designate the Chairman of the Audit Committee.
(a) Procedure. The Audit Committee, by a vote of a majority of its
members, shall fix its own times and places of meeting, shall
determine the number of its members constituting a quorum for
the transaction of business, and shall prescribe its own rules
of procedure, no change in which shall be made save by a
majority vote of its members.
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(b) Responsibilities. The Audit Committee shall review the annual
financial statements of the Corporation prior to their
submission to the Board of Directors, shall consult with the
Corporation's independent auditors, and may examine and
consider such other matters in relation to the internal and
external audit of the Corporation's accounts and in relation
to the financial affairs of the Corporation and its accounts,
including the selection and retention of independent auditors,
as the Audit Committee may, in its discretion, determine to be
desirable.
(c) Reports. The Audit Committee shall keep regular minutes of its
proceedings, and all action by the Audit Committee shall, from
time to time, be reported to the Board of Directors as it
shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Audit Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
SECTION 3. Other Committees. The Board of Directors, by vote of a majority
of the directors then in office, may at any time appoint one or more other
committees from and outside of its own number. Every such committee must include
at least one member of the Board of Directors. The Board may from time to time
designate or alter, within the limits permitted by law, the Certificate of
Incorporation and this Article, if applicable, the duties, powers and number of
members of such other committees or change their membership, and may at any time
abolish such other committees or any of them.
(a) Procedure. Each committee appointed pursuant to this Section
shall, by a vote of a majority of its members, fix its own
times and places of meeting, determine the number of its
members constituting a quorum for the transaction of business,
and prescribe its own rules of procedure, no change in which
shall be made save by a majority vote of its members.
(b) Responsibilities. Each committee appointed pursuant to this
Section shall exercise the powers assigned to it by the Board
of Directors in its discretion.
(c) Reports. Each committee appointed pursuant to this Section
shall keep regular minutes of proceedings, and all action by
each such committee shall, from time to time, be reported to
the Board of Directors as it shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of each committee, appointed
pursuant to this Section, the member or members thereof
present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously
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appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member.
SECTION 4. Term of Office. Each member of a committee shall hold office
until the first meeting of the Board of Directors following the annual meeting
of stockholders (or until such other time as the Board of Directors may
determine, either in the vote establishing the committee or at the election of
such member or otherwise) and until his successor is elected and qualified, or
until he sooner dies, resigns, is removed, is replaced by change of membership
or becomes disqualified by ceasing to be a Director (where membership on the
Board is required), or until the committee is sooner abolished by the Board of
Directors.
ARTICLE VI
Officers
SECTION 1. Officers. The Board of Directors shall elect a President, a
Secretary and a Treasurer, and, in their discretion, may elect a Chairman of the
Board, one or more Executive Vice Presidents, Vice Presidents, Assistant
Secretaries and Assistant Treasurers as deemed necessary or appropriate. Such
officers shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of stockholders, and each shall hold office
for the term provided by the vote of the Board, except that each will be subject
to removal from office in the discretion of the Board as provided herein. The
powers and duties of more than one office may be exercised and performed by the
same person.
SECTION 2. Vacancies. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors, at any regular or
special meeting.
SECTION 3. Chairman of the Board. The Chairman of the Board of Directors,
if elected, shall be a member of the Board of Directors and shall preside at its
meetings. He shall advise and counsel with the President, and shall perform such
duties as from time to time may be assigned to him by the Board of Directors.
SECTION 4. President. The President shall be the chief executive officer
of the Corporation. Subject to the directions of the Board of Directors, he
shall have and exercise direct charge of and general supervision over the
business and affairs of the Corporation and shall perform all duties incident to
the office of the chief executive officer of a corporation and such other duties
as from time to time may be assigned to him by the Board of Directors. The
President may but need not be a member of the Board of Directors.
SECTION 5. Executive Vice Presidents and Vice Presidents. Each Executive
Vice President and Vice President shall have and exercise such powers and shall
perform such duties as from time to time may be assigned to him by the
President.
SECTION 6. Secretary. The Secretary shall keep the minutes of all meetings
of the stockholders and of the Board of Directors in books provided for the
purpose; he shall see that all notices are duly given in accordance with the
provisions of law and these By-laws; he shall be custodian of the records and of
the corporate seal or seals of the Corporation; he shall see
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that the corporate seal is affixed to all documents the execution of which, on
behalf of the Corporation under its seal, is duly authorized, and, when the seal
is so affixed, he may attest the same; he may sign, with the President, an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and, in general, he shall perform all duties incident to the office
of secretary of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 7. Assistant Secretaries. The Assistant Secretaries in order of
their seniority shall, in the absence or disability of the Secretary, perform
the duties and exercise the powers of the Secretary and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Secretary.
SECTION 8. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all monies or other valuable effects in such banks, trust companies
or other depositaries as shall, from time to time, be selected by the Board of
Directors; he may endorse for collection on behalf of the Corporation checks,
notes and other obligations; he may sign receipts and vouchers for payments made
to the Corporation; he may sign checks of the Corporation, singly or jointly
with another person as the Board of Directors may authorize, and pay out and
dispose of the proceeds under the direction of the Board; he shall render to the
President and to the Board of Directors, whenever requested, an account of the
financial condition of the Corporation; he may sign, with the President, or an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and in general, shall perform all the duties incident to the office
of treasurer of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 9. Assistant Treasurers. The Assistant Treasurers in order of
their seniority shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Treasurer.
SECTION 10. Subordinate Officers. The Board of Directors may appoint such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such duties as the Board
of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
SECTION 11. Compensation. The Board of Directors shall fix the
compensation of all officers of the Corporation. It may authorize any officer,
upon whom the power of appointing subordinate officers may have been conferred,
to fix the compensation of such subordinate officers.
SECTION 12. Removal. Any officer of the Corporation may be removed, with
or without cause, by action of the Board of Directors.
SECTION 13. Bonds. The Board of Directors may require any officer of the
Corporation to give a bond to the Corporation, conditional upon the faithful
performance of his
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duties, with one or more sureties and in such amount as may be satisfactory to
the Board of Directors.
ARTICLE VII
Certificates of Stock
SECTION 1. Form and Execution of Certificates. The interest of each
stockholder of the Corporation shall be evidenced by a certificate or
certificates for shares of stock in such form as the Board of Directors may from
time to time prescribe. The certificates of stock of each class shall be
consecutively numbered and signed by the President, an Executive Vice President
or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer
or an Assistant Treasurer of the Corporation, and may be countersigned and
registered in such manner as the Board of Directors may by resolution prescribe,
and shall bear the corporate seal or a printed or engraved facsimile thereof.
Where any such certificate is signed by a transfer agent or transfer clerk
acting on behalf of the Corporation, the signatures of any such President,
Executive Vice President, Vice President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary may be facsimiles, engraved or printed. In case
any officer or officers, who shall have signed, or whose facsimile signature or
signatures shall have been used on, any such certificate or certificates, shall
cease to be such officer or officers, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the Corporation, such certificate or certificates may nevertheless be issued and
delivered by the Corporation as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer or officers.
In case the corporate seal which has been affixed to, impressed on,
or reproduced in any such certificate or certificates shall cease to be the seal
of the Corporation before such certificate or certificates have been delivered
by the Corporation, such certificate or certificates may nevertheless be issued
and delivered by the Corporation as though the seal affixed thereto, impressed
thereon or reproduced therein had not ceased to be the seal of the Corporation.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Certificate of Incorporation, these
By-laws, or any agreement to which the Corporation is a party, shall have the
restriction noted conspicuously on the certificate, and shall also set forth, on
the face or back, either the full text of the restriction or a statement of the
existence of such restriction and (except if such restriction is imposed by law)
a statement that the Corporation will furnish a copy thereof to the holder of
such certificate upon written request and without charge.
Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized to
be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
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SECTION 2. Transfer of Shares. The shares of the stock of the Corporation
shall be transferred on the books of the Corporation by the holder thereof in
person or by his attorney lawfully constituted, upon surrender for cancellation
of certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof or
guaranty of the authenticity of the signature as the Corporation or its agents
may reasonably require. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person whether or not
it shall have express or other notice thereof, save as expressly provided by law
or by the Certificate of Incorporation. It shall be the duty of each stockholder
to notify the Corporation of his post office address.
SECTION 3. Closing of Transfer Books. The stock transfer books of the
Corporation may, if deemed appropriate by the Board of Directors, be closed for
such length of time not exceeding fifty (50) days as the Board may determine,
preceding the date of any meeting of stockholders or the date for the payment of
any dividend or the date for the allotment of rights or the date when any
issuance, change, conversion or exchange of capital stock shall go into effect,
during which time no transfer of stock on the books of the Corporation may be
made.
SECTION 4. Dates of Record. If deemed appropriate, the Board of Directors
may fix in advance a date for such length of time not exceeding sixty (60) days
(and, in the case of any meeting of stockholders, not less than ten (10) days)
as the Board may determine, preceding the date of any meeting of stockholders,
or the date for the payment of any dividend, or the date for the allotment of
rights or the date when any issuance, change, conversion or exchange of capital
stock shall go into effect, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting or entitled
to receive payment of any such dividend or to any such allotment of rights, or
to exercise the rights in respect of any such issuance, change, conversion or
exchange of capital stock, as the case may be, and in such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to receive payment
of such dividend, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any record date fixed as aforesaid. If no such
record date is so fixed, the record date shall be determined by applicable law.
SECTION 5. Lost or Destroyed Certificates. In case of the loss or
destruction of any certificate of stock, a new certificate may be issued under
the following conditions:
(a) The owner of said certificate shall file with the Secretary or
any Assistant Secretary of the Corporation an affidavit giving
the facts in relation to the ownership, and in relation to the
loss or destruction of said certificate, stating its number
and the number of shares represented thereby; such affidavit
shall be in such form and contain such statements as shall
satisfy the President, any Executive Vice President, Vice
President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer, that said certificate
has been accidentally destroyed or lost, and that a new
certificate ought to be issued in lieu thereof. Upon being so
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satisfied, any such officer shall require such owner to
furnish the Corporation a bond in such penal sum and in such
form as he may deem advisable, and with a surety or sureties
approved by him, to indemnify and save harmless the
Corporation from any claim, loss, damage or liability which
may be occasioned by the issuance of a new certificate in lieu
thereof. Upon such bond being so filed, a new certificate for
the same number of shares shall be issued to the owner of the
certificate so lost or destroyed; and the transfer agent and
registrar, if any, of stock shall countersign and register
such new certificate upon receipt of a written order signed by
any such officer, and thereupon the Corporation will save
harmless said transfer agent and registrar in the premises. In
case of the surrender of the original certificate, in lieu of
which a new certificate has been issued, or the surrender of
such new certificate, for cancellation, the bond of indemnity
given as a condition of the issue of such new certificate may
be surrendered; or
(b) The Board of Directors of the Corporation may by resolution
authorize and direct any transfer agent or registrar of stock
of the Corporation to issue and register respectively from
time to time without further action or approval by or on
behalf of the Corporation new certificates of stock to replace
certificates reported lost, stolen or destroyed upon receipt
of an affidavit of loss and bond of indemnity in form and
amount and with surety satisfactory to such transfer agent or
registrar in each instance or upon such terms and conditions
as the Board of Directors may determine.
ARTICLE VIII
Execution of Documents
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers, or agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors, which may in
its discretion authorize any such signatures to be facsimile.
SECTION 2. Execution of Contracts, Assignments, etc. Unless the Board of
Directors shall have otherwise provided generally or in a specific instance, all
contracts, agreements, endorsements, assignments, transfers, stock powers, or
other instruments shall be signed by the President, any Executive Vice
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer. The Board of Directors may, however, in
its discretion, require any or all such instruments to be signed by any two or
more of such officers, or may permit any or all of such instruments to be signed
by such other officer or officers, agent or agents, as it shall thereunto
authorize from time to time.
SECTION 3. Execution of Proxies. The President, any Executive Vice
President or any Vice President, and the Secretary, the Treasurer, any Assistant
Secretary or any Assistant Treasurer, or any other officer designated by the
Board of Directors, may sign on behalf of the
<PAGE>
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Corporation proxies to vote upon shares of stock of other companies standing in
the name of the Corporation.
ARTICLE IX
Inspection of Books
The Board of Directors shall determine from time to time whether,
and if allowed, to what extent and at what time and places and under what
conditions and regulations, the accounts and books of the Corporation (except
such as may by law be specifically open to inspection) or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by the laws of the State of Delaware, unless and until authorized so
to do by resolution of the Board of Directors or of the stockholders of the
Corporation.
ARTICLE X
Fiscal Year
The fiscal year of the Corporation shall be determined from time to
time by vote of the Board of Directors.
ARTICLE XI
Amendments
These By-laws may be altered, amended, changed or repealed and new
By-laws adopted by the stockholders or by the Board of Directors, in either case
at any meeting called for that purpose at which a quorum shall be present. Any
by-law, whether made, altered, amended, changed or repealed by the stockholders
or the Board of Directors may be repealed, amended, changed, further amended,
changed, repealed or reinstated, as the case may be either by the stockholders
or by the Board of Directors, as herein provided; except that this Article may
be altered, amended, changed or repealed only by vote of the stockholders.
ARTICLE XII
Indemnification
SECTION 1. Indemnification. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of
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any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in this Section, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 2. Authorization. Any indemnification under Section 1 of this
Article (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 of this
Article. Such determination shall be made: (a) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceedings, or (b) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in written opinion, or (c) by the stockholders.
SECTION 3. Expense Advance. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the manner provided in Section 2 of this Article upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount, unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this Article.
SECTION 4. Nonexclusivity. The indemnification provided by this Article
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any by-
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law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 5. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
SECTION 6. "The Corporation". For the purposes of this Article, references
to "the Corporation" include all constituent corporations absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents as well as the resulting or surviving corporation so that any person
who is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this Article with respect to such a constituent corporation if
its separate existence had continued.
Exhibit 3.2E
BYLAWS
OF
HOLLYWOOD PROPERTY, INC.
ARTICLE I
Applicability
Section 1. Applicability of Bylaws. These Bylaws govern, except as
otherwise provided by statute or its Articles of Incorporation, the management
of the business and the conduct of the affairs of the Corporation.
ARTICLE II
Offices
Section 1. Principal Executive Office. The location of the principal
executive office of the Corporation is 99 Bedford Street, Boston, Massachusetts
02111.
Section 2. Other Offices. The Board of Directors may establish other
offices at any place or places within or without the State of California.
Section 3. Change in Location or Number of Offices. The Board of Directors
may change any office from one location to another or eliminate any office or
offices.
ARTICLE III
Meetings of Shareholders
Section 1. Place of Meetings. Meetings of the shareholders shall be held
at any place within or without the State of California designated by the Board
of Directors, or, in the absence of such designation, at the principal executive
office of the Corporation.
Section 2. Annual Meetings. An annual meeting of the shareholders shall be
held within 180 days following the end of the fiscal year of the Corporation at
a date and time designated by the Board of Directors. Directors shall be elected
at each annual meeting and any other proper business may be transacted thereat.
Section 3. Special Meetings.
<PAGE>
(a) Special meetings of the shareholders may be called by a majority
of the Board of Directors, the Chairman of the Board, the President or the
holders of shares entitled to cast not less than 10% of the votes at such
meeting.
(b) Any request for the calling of a special meeting of the
shareholders shall (1) be in writing, (2) specify the date and time thereof
which date shall be not less than 35 nor more than 60 days after receipt of the
request, (3) specify the general nature of the business to be transacted thereat
and (4) be given either personally or by first-class mail, postage prepaid, or
other means of written communication to the Chairman of the Board, President,
any Vice President or Secretary of the Corporation. The officer receiving a
proper request to call a special meeting of the shareholders shall cause notice
to be given pursuant to the provisions of Section 4 of this article to the
shareholders entitled to vote thereat that a meeting will be held at the date
and time specified by the person or persons calling the meeting.
(c) No business may be transacted at a special meeting unless the
general nature thereof was stated in the notice of such meeting.
Section 4. Notice of Annual, Special or Adjourned Meetings.
(a) Whenever any meeting of the shareholders is to be held, a
written notice of such meeting shall be given in the manner described in
subdivision (d) of this section not less than 10 nor more than 60 days before
the date thereof to each shareholder entitled to vote thereat. The notice shall
state the place, date and hour of the meeting and (1) in the case of a special
meeting, the general nature of the business to be transacted or (2) in the case
of the annual meeting, those matters which the Board of Directors, at the time
of the giving of the notice, intend to present for action by the shareholders
including, whenever directors are to be elected at a meeting, the names of
nominees intended at the time of giving of the notice to be presented by
management for election.
(b) Any proper matter may be presented at an annual meeting for
action, except as is provided in subdivision (f) of Section 601 of the
Corporations Code of the State of California.
(c) Notice need not be given of an adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken,
except that if the adjournment is for more than 45 days or if after the
adjournment a new record date is provided for the adjourned meeting, a notice of
the adjourned meeting shall be given to each shareholder of record entitled to
vote thereat.
(d) Notice of any meeting of the shareholders or any report shall be
given either personally or by firstclass mail, postage prepaid, or other means
of written communication,
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<PAGE>
addressed to the shareholder at his address appearing on the books of the
Corporation or given by him to the Corporation for the purpose of notice; or if
no such address appears or is given, at the place where the principal executive
office of the Corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. The notice or report shall be deemed to have been given at
the time when delivered personally to the recipient or deposited in the mail or
sent by other means of written communication. An affidavit of mailing of any
notice or report in accordance with the provisions of these Bylaws or the
General Corporation Law of the State of California, executed by the secretary,
assistant secretary or any transfer agent of the Corporation, shall be prima
facie evidence of the giving of the notice or report.
(e) If any notice or report addressed to the shareholder at his
address appearing on the books of the Corporation is returned to the Corporation
by the United States Postal Service marked to indicate that the United States
Postal Service is unable to deliver the notice or report to the shareholder at
such address, all future notices or reports shall be deemed to have been duly
given without further mailing if the same shall be available for the shareholder
upon his written demand at the principal executive office of the Corporation for
a period of one year from the date of the giving of the notice or report to all
other shareholders.
Section 5. Record Date.
(a) The Board of Directors may fix a time in the future as a record
date for the determination of the shareholders (1) entitled to notice of any
meeting or to vote thereat, (2) entitled to receive payment of any dividend or
other distribution or allotment of any rights or (3) entitled to exercise any
rights in respect of any other lawful action. The record date so fixed shall be
not more than 60 nor less than 10 days prior to the date of any meeting of the
shareholders nor more than 60 days prior to any other action.
(b) In the event no record date is fixed:
(1) The record date for determining the shareholders entitled
to notice of or to vote at a meeting of shareholders shall be at the close
of business on the business day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the business
day next preceding the day on which the meeting is held.
(2) The record date for determining shareholders entitled to
give consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors has been taken, shall be the day on
which the first written consent is given.
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<PAGE>
(3) The record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto, or the 60th day prior to
the date of such other action, whichever is later.
(c) Only shareholders of record at the close of business on the
record date are entitled to notice and to vote or to receive a dividend,
distribution or allotment of rights or to exercise the rights, as the case may
be, notwithstanding any transfer of any shares on the books of the Corporation
after the record date.
(d) A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board of Directors fixes a new record date for the adjourned
meeting, but the Board shall fix a new record date if the meeting is adjourned
for more than 45 days from the date set for the original meeting.
Section 6. Quorum; Action at Meetings.
(a) A majority of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of the shareholders.
(b) Except as provided in subdivision (c) of this section, the
affirmative vote of a majority of the shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number is required by Law or the
Articles of Incorporation.
(c) The shareholders present at a duly called or held meeting at
which a quorum is present may continue to transact business until adjournment
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum, if any action taken (other than adjournment) is approved by at least a
majority of the shares required to constitute a quorum.
Section 7. Adjournment. Any meeting of the shareholders may be adjourned
from time to time whether or not a quorum is present by the vote of a majority
of the shares represented thereat either in person or by proxy. At the adjourned
meeting the Corporation may transact any business which might have been
transacted at the original meeting.
Section 8. Validation of Defectively Called, Noticed or Held Meetings.
(a) The transactions of any meeting of the shareholders, however
called and noticed, and wherever held, are as valid as though had at a meeting
duly held after regular call
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and notice, if a quorum is present either in person or by proxy, and if, either
before or after the meeting, each of the persons entitled to vote thereat, not
present in person or by proxy, signs a written waiver of notice or a consent to
the holding of the meeting or an approval of the minutes thereof. All such
waivers, consents and approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
(b) Attendance of a person at a meeting shall constitute a waiver of
notice of, and presence at, such meeting, except (1) when the person objects, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened and (2) that attendance at a meeting
is not a waiver of any right to object to the consideration of any matter
required by the General Corporation Law of the State of California to be
included in the notice but not so included, if such objection is expressly made
at the meeting.
(c) Any written waiver of notice shall comply with subdivision (f)
of Section 601 of the Corporations Code of the State of California.
Section 9. Voting for Election of Directors.
(a) Every shareholder complying with subdivision (b) of this section
and entitled to vote at any election of directors may cumulate his votes and
give one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which his shares are normally
entitled, or distribute his votes on the same principle among as many candidates
as he thinks fit.
(b) No shareholder shall be entitled to cumulate his votes (i.e.,
cast for any one candidate a number of votes greater than the number of votes
which such shareholder normally is entitled to cast) unless such candidate's or
candidates' names have been placed in nomination prior to the voting and the
shareholder has given notice at the meeting, prior to the voting, of his
intention to cumulate his votes. If any one shareholder has given such notice,
all shareholders may cumulate their votes for candidates in nomination.
(c) Elections for directors may be by voice vote or by ballot unless
any shareholder entitled to vote demands election by ballot at the meeting prior
to the voting, in which case the vote shall be by ballot.
(d) In any election of directors, the candidates receiving the
highest number of votes of the shares entitled to be voted for them up to the
number of directors to be elected by such shares are elected as directors.
Section 10. Proxies.
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(a) Every person entitled to vote shares may authorize another
person or persons to act with respect to such shares by a written proxy signed
by him or his attorney-in-fact and filed with the Secretary of the Corporation.
A proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission or
otherwise) by him or his attorney-in-fact.
(b) Any duly executed proxy shall continue in full force and effect
until the expiration of the term specified therein or upon its earlier
revocation by the person executing it prior to the vote pursuant thereto (1) by
a writing delivered to the Corporation stating that it is revoked, (2) by a
subsequent proxy executed by the person executing the proxy or (3) by the
attendance at the meeting and voting in person by the person executing the
proxy. No proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. The date contained on the form
of proxy shall be deemed to be the date of its execution.
(c) A proxy which states that it is irrevocable is irrevocable for
the period specified therein subject to the provisions of subdivisions (e) and
(f) of Section 705 of the Corporations Code of the State of California.
Section 11. Inspectors of Election.
(a) In advance of any meeting of the shareholders, the Board of
Directors may appoint either one or three persons (other than nominees for the
office of director) as inspectors of election to act at such meeting or any
adjournments thereof. If inspectors of election are not so appointed, or if any
person so appointed fails to appear or refuses to act, the chairman of any such
meeting may, and on the request of any shareholder or his proxy shall, appoint
inspectors of election (or persons to replace those who so fail or refuse to
act) at the meeting. If appointed at a meeting on the request of one or more
shareholders or the proxies thereof, the majority of shares represented in
person or by proxy shall determine whether one or three inspectors are to be
appointed.
(b) The duties of inspectors of election and the manner of
performance thereof shall be as prescribed in Section 707 of the Corporations
Code of the State of California
Section 12. Action by Written Consent.
(a) Subject to subdivisions (b) and (c) of this section, any action
which may be taken at any annual or special meeting of the shareholders may be
taken without a meeting, without a vote and without prior notice, if a consent
in writing, setting forth the action so taken, is signed by the holders of
outstanding shares having not less than the minimum number of votes which would
be necessary to authorize or take such action at a meeting in which all shares
entitled to vote thereon were
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present and voted. All such consents shall be filed with the Secretary of the
Corporation and maintained with the corporate records.
(b) Except for the election of a director by written consent to fill
a vacancy (other than a vacancy created by removal), directors may be elected by
written consent only by the unanimous written consent of all shares entitled to
vote for the election of directors. In the case of an election of a director
by written consent to fill a vacancy (other than a vacancy created by removal),
any such election requires the consent of a majority of the outstanding shares
entitled to vote.
(c) Unless the consents of all shareholders entitled to vote have
been solicited in writing, notice of any shareholder approval without a meeting
by less than unanimous written consent shall be given as provided in subdivision
(b) of Section 603 of the Corporations Code of the State of California.
(d) Any shareholder giving a written consent, or his proxyholders,
or a personal representative of the shareholder or their respective
proxyholders, may revoke the consent by a writing received by the Corporation
prior to the time that written consents of the number of shares required to
authorize the proposed action have been filed with the Secretary of the
Corporation, but may not do so thereafter. Such revocation is effective upon its
receipt by the Secretary of the Corporation.
ARTICLE IV
Directors
Section 1. Number of Directors.
(a) The authorized number of directors shall be one.
Section 2. Election of Directors. Directors shall be elected at each
annual meeting of the shareholders.
Section 3. Term of Office. Each director, including a director elected to
fill a vacancy, shall hold office until the expiration of the term for which he
is elected and until a successor has been elected.
Section 4. Vacancies.
(a) A vacancy in the Board of Directors exists whenever any
authorized position of director is not then filled by a duly elected director,
whether caused by death, resignation, removal, change in the authorized number
of directors or otherwise.
(b) Except for a vacancy created by the removal of a director,
vacancies on the Board of Directors may be filled by a
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majority of the directors then in office, whether or not less than a quorum, or
by a sole remaining director. A vacancy created by the removal of a director
shall be filled only by shareholders.
(c) The shareholders may elect a director at any time to fill any
vacancy not filled by the directors.
Section 5. Removal.
(a) The Board of Directors may declare vacant the office of a
director who has been declared of unsound mind by an order of court or convicted
of a felony.
(b) Any or all of the directors may be removed without cause if such
removal is approved by a majority of the outstanding shares entitled to vote;
provided, however, that no director may be removed (unless the entire Board of
Directors is removed) if whenever the votes cast against removal, or not
consenting in writing to such removal, would be sufficient to elect such
director if voted cumulatively at an election at which the same total number of
votes were cast (or, if such action is taken by written consent, all shares
entitled to vote were voted) and the entire number of directors authorized at
the time of his most recent election were then being elected.
(c) Any reduction of the authorized number of directors does not
remove any director prior to the expiration of his term of office.
Section 6. Resignation. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board of Directors of the Corporation, unless the notice specifies a later time
for the effectiveness of such resignation. If the resignation is effective at a
future time, a successor may be elected to take office when the resignation
becomes effective.
Section 7. Fees and Compensation. Directors may be paid for their services
in such capacity a sum in such amount, at such times and upon such conditions as
may be determined from time to time by resolution of the Board of Directors, and
may be reimbursed for their expenses, if any, incurred in such capacity,
including (without limitation) expenses of attendance at any meeting of the
Board. No such payments shall preclude any director from serving the Corporation
in any other capacity and receiving compensation in any manner therefor.
ARTICLE V
Committees of the Board of Directors
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Section 1. Designation of Committees. The Board of Directors may, by
resolution adopted by a majority of the authorized number of directors,
designate (1) one or more committees, each consisting of one or more directors
and (2) one or more directors as alternate members of any committee, who may
replace any absent member at any meeting thereof. Any member or alternate member
of a committee shall serve at the pleasure of the Board.
Section 2. Powers of Committees. Any committee, to the extent provided in
the resolution of the Board of Directors designating such committee, shall have
all the authority of the Board, except with respect to:
(a) The approval of any action for which the General Corporation Law
of the State of California also requires any action by the shareholders;
(b) The filling of vacancies on the Board or in any committee
thereof;
(c) The fixing of compensation of the directors for serving on the
Board or on any committee thereof;
(d) The amendment or repeal of these Bylaws or the adoption of new
bylaws
(e) The amendment or repeal of any resolution of the Board which by
its express terms is not so amendable or repealable.
(f) A distribution to the shareholders of the Corporation, except at
a rate or in a periodic amount or within a price range determined by the Board
of Directors; or
(g) The designation of other committees of the Board or the
appointment of members or alternate members thereof.
ARTICLE VI
Meetings of the Board of Directors
and Committees Thereof
Section 1. Place of Meetings. Regular meetings of the Board of Directors
shall be held at any place within or without the State of California which has
been designated from time to time by the Board, or in the absence of such
designation, at the principal executive office of the Corporation. Special
meetings of the Board shall be held either at any place within or without the
State of California which has been designated in the notice of the meeting or,
if not stated in the notice or if there is no notice, at the principal executive
office of the Corporation.
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Section 2. Organization Meeting. An organization meeting shall be held
each year immediately following the annual shareholders meeting. Notice of any
such meeting is not required.
Section 3. Other Regular Meetings. Other regular meetings of the Board of
Directors shall be held without call at such time as shall be designated from
time to time by the Board. Notice of any such meeting is not required.
Section 4. Special Meetings. Special meetings of the Board of Directors
may be called at any time for any purpose or purposes by the Chairman of the
Board or the President or any vice president or the Secretary or any two
directors. Notice shall be given of any special meeting of the Board.
Section 5. Notice of Special Meetings.
(a) Notice of the time and place of special meetings of the Board of
Directors shall be delivered personally or by telephone to each director or sent
to each director by first-class mail or telegraph, charges prepaid. Such notice
shall be given four days prior to the holding of the special meeting if sent by
mail or 48 hours prior to the holding thereof if delivered personally or given
by telephone or telegraph. The notice or report shall be deemed to have been
given at the time when delivered personally to the recipient or deposited in the
mail or sent by other means of written communication.
(b) Notice of any special meeting of the Board of Directors need not
specify the purpose thereof and need not be given to any director who signs a
waiver of notice, whether before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to him.
Section 6. Validation of Defectively Held Meetings. The transactions of
any meeting of the Board of Directors, however called and noticed or wherever
held, are as valid as though had at a meeting duly held after regular call and
notice if a quorum is present and if, either before or after the meeting, each
of the directors not present signs a written waiver of notice, a consent to
holding the meeting or an approval of the minutes thereof. Such waivers,
consents and approvals (1) need not specify the purpose of any meeting of the
Board of Directors and (2) shall be filed with the corporate records or made a
part of the minutes of the meeting.
Section 7. Quorum; Action at Meetings; Telephone Meetings.
(a) A majority of the authorized number of directors shall
constitute a quorum for the transaction of business. Every act or decision done
or made by a majority of the directors present at a meeting duly held at which a
quorum is present is the act of the Board of Directors, unless action by a
greater
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proportion of the directors is required by law or the Articles of Incorporation.
(b) A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for such
meeting.
(c) Members of the Board of Directors may participate in a meeting
through use of conference telephone or similar communications equipment so long
as all members participating in such meeting can hear one another.
Section 8. Adjournment. A majority of the directors present, whether or
not a quorum is present, may adjourn any meeting to another time and place. If
the meeting is adjourned for more than 24 hours, notice of any adjournment to
another time or place shall be given prior to the time of the adjourned meeting
to the directors who were not present at the time of the adjournment.
Section 9. Action Without a Meeting. Any action required or permitted to
be taken by the Board of Directors may be taken without a meeting, if all
members of the Board individually or collectively consent in writing to such
action. Such written consent or consents shall be filed with the minutes of the
proceedings of the Board. Such action by written consent shall have the same
force and effect as a unanimous vote of such directors.
Section 10. Meetings of and Action by Committees. The provisions of this
Article apply to committees of the Board of Directors and action by such
committees with such changes in the language of those provisions as are
necessary to substitute the committee and its members for the Board and its
members.
ARTICLE VII
Officers
Section 1. Officers. The Corporation shall have as officers, a President,
a Secretary and a Treasurer. The Treasurer is the chief financial officer of the
Corporation unless the Board of Directors has by resolution designated a vice
president or other officer to be the chief financial officer. The Corporation
may also have at the discretion of the Board, a Chairman of the Board, a Vice
Chairman of the Board, one or more vice presidents, one or more assistant
secretaries, one or more assistant treasurers and such other officers as may be
appointed in accordance with the provisions of Section 3 of this Article.
One person may hold two or more offices.
Section 2. Election of Officers. The officers of the Corporation, except
such officers as may be appointed in
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accordance with the provisions of Section 3 or Section 5 of this Article, shall
be chosen by the Board of Directors.
Section 3. Subordinate Officers. Etc. The Board of Directors may appoint
by resolution, and may empower the Chairman of the Board, if there be such an
officer, or the President, to appoint such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are determined from time to time by
resolution of the Board or, in the absence of any such determination, as are
provided in these Bylaws. Any appointment of an officer shall be evidenced by a
written instrument filed with the Secretary of the Corporation and maintained
with the corporate records.
Section 4. Removal and Resignation.
(a) Any officer may be removed, either with or without cause, by the
Board of Directors or, except in case of any officer chosen by the Board, by any
officer upon whom such power of removal may be conferred by resolution of the
Board.
(b) Any officer may resign at any time effective upon giving written
notice to the Chairman of the Board, President, any vice president or Secretary
of the Corporation, unless the notice specifies a later time for the
effectiveness of such resignation.
Section 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular appointments to such office.
Section 6. Chairman of the Board. If there is a Chairman of the Board, he
shall, if present, preside at all meetings of the Board of Directors, exercise
and perform such other powers and duties as may be from time to time assigned to
him by resolution of the Board and, if there is no President, the Chairman of
the Board shall be the chief executive officer of the Corporation and have the
power and duties set forth in Section 7 of this Article.
Section 7. President. Subject to such supervisory powers, if any, as may
be given by the Board of Directors to the Chairman of the Board, if there be
such an officer, the President shall be the chief executive officer and general
manager of the Corporation and shall, subject to the control of the Board, have
general supervision, direction and control of the business and affairs of the
Corporation. He shall preside at all meetings of the shareholders and, in the
absence of the Chairman of the Board, or if there be none, at all meetings of
the Board. He shall have the general powers and duties of management usually
vested in the office of president of a corporation, and shall have such other
powers and duties as may be prescribed from time to time by resolution of the
Board.
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Section 8. Vice President. In the absence or disability of the President,
the vice presidents in order of their rank as fixed by the Board of Directors
or, if not ranked, the Vice President designated by the Board, shall perform all
the duties of the President, and when so acting shall have all the powers of,
and be subject to all the restrictions upon, the President. The vice presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board or as the President may
from time to time designate.
Section 9. Secretary.
(a) The Secretary shall keep or cause to be kept (1) the minute
book, (2) the share register and (3) the seal, if any, of the corporation.
(b) The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the Board of Directors required by these
Bylaws or by law to be given, and shall have such other powers and perform such
other duties as may be prescribed from time to time by the Board.
Section 10. Treasurer.
(a) The Treasurer shall keep, or cause to be kept, the books and
records of account of the Corporation.
(b) The Treasurer shall deposit all monies and other valuables in
the name and to the credit of the Corporation with such depositories as may be
designated from time to time by resolution of the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the Board of
Directors, shall render to the President and the Board, whenever they request
it, an account of all his transactions as Treasurer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed from time to time by the Board or as the
President may from time to time delegate.
ARTICLE VIII
Records and Reports
Section 1. Minute Book - Maintenance and Inspection. The Corporation shall
keep or cause to be kept in written form at its principal executive office or
such other place as the Board of Directors may order, a minute book which shall
contain a record of all actions by its shareholders, Board or committees of the
Board including the time, date and place of each meeting; whether a meeting is
regular or special and, if special, how called; the manner of giving notice of
each meeting and a copy thereof; the names of those present at each meeting of
the Board or committees
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thereof; the number of shares present or represented at each meeting of the
shareholders; the proceedings of all meetings; any written waivers of notice,
consents to the holding of a meeting or approvals of the minutes thereof; and
written consents for action without a meeting.
Section 2. Share Register - Maintenance and Inspection. The Corporation
shall keep or cause to be kept at its principal executive office or, if so
provided by resolution of the Board of Directors, at the Corporation's transfer
agent or registrar, a share register, or a duplicate share register, which shall
contain the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same and the number and date of cancellation of every certificate
surrendered for cancellation.
Section 3. Books and Records of Account - Maintenance and Inspection. The
Corporation shall keep or cause to be kept at its principal executive office or
such other place as the Board of Directors may order, adequate and correct books
and records of account.
Section 4. Bylaws - Maintenance and Inspection. The Corporation shall keep
at its principal executive office or, in the absence of such office in the State
of California, at its principal business office in that state, the original or a
copy of the Bylaws as amended to date.
Section 5. Annual Report to Shareholders. The annual report to the
shareholders described in Section 1501 of the Corporations Code of the State of
California is expressly dispensed with, but nothing herein shall be interpreted
as prohibiting the Board of Directors from issuing annual or other periodic
reports to the shareholders of the Corporation as they see fit.
ARTICLE IX
Indemnification of
Officers, Directors, Employees and Agents
Section 1. Right to Indemnification. Each person which was or is a party
or is threatened to be made a party to or is involved (as a party, witness or
otherwise) in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereafter a
"Proceeding"), by reason of the fact that he, or a person of whom he is the
legal representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or was a director,
officer, employee or agent of a foreign or domestic corporation that was a
predecessor corporation of the Corporation or of
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another enterprise at the request of such predecessor corporation, including
service with respect to employee benefit plans, whether the basis of the
Proceeding is alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a director, officer,
employee or agent (hereafter an "Agent"), shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by statutory and decisional
law, as the same exists or may hereafter be interpreted or amended (but, in the
case of any such amendment or interpretation, only to the extent that such
amendment or interpretation permits the Corporation to provide broader
indemnification rights than were permitted prior thereto) against all expenses,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes and penalties, amounts paid or to be paid in settlement, any interest,
assessments or other charges imposed thereon, and any federal, state, local or
foreign taxes imposed on any Agent as a result of the actual or deemed receipt
of any payments under this Article) incurred or suffered by such person in
connection with investigating, defending, being a witness in, or participating
in (including on appeal), or preparing for any of the foregoing in, any
Proceeding (hereafter "Expenses"). The right to indemnification conferred in
this Article shall be a contract right. It is the Corporation's intention that
these Bylaws provide indemnification in excess of that expressly permitted by
Section 317 of the California General Corporation Law, as authorized by the
Corporation's Articles of Incorporation.
Section 2. Authority to Advance Expenses. Expenses incurred by an officer
or director (acting in his capacity as such) in defending a Proceeding shall be
paid by the Corporation in advance of the final disposition of such Proceeding,
provided, however, that if required by the California General Corporation Law,
as amended, such Expenses shall be advanced only upon delivery to the
Corporation of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Corporation as authorized in this Article or otherwise.
Expenses incurred by other Agents of the Corporation (or by the directors or
officers not acting in their capacity as such, including service with respect to
employee benefit plans) may be advanced upon the receipt of a similar
undertaking, if required by law, and upon such other terms and conditions as the
Board of Directors deems appropriate. Any obligation to reimburse the
Corporation for Expense advances shall be unsecured and no interest shall be
charged thereon.
Section 3. Right of Claimant to Bring Suit. If a claim under Section 1 or
2 of this Article is not paid in full by the Corporation within thirty (30) days
after a written claim has been received by the Corporation, the claimant may at
any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the claimant shall
be entitled to be paid also the expense (including attorneys' fees) of
prosecuting such claim. It shall
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be a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending a Proceeding in advance of its final
disposition where the required undertaking has been tendered to the Corporation)
that the claimant has not met the standards of conduct that make it permissible
under the California General Corporation Law for the Corporation to indemnify
the claimant for the amount claimed. The burden of proving such a defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel or its stockholders) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper under the circumstances because he has met the applicable
standard of conduct set forth in the California General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant has not met the applicable standard of conduct.
Section 4. Provisions Nonexclusive. The rights conferred on any person by
this Article shall not be exclusive of any other rights that such person may
have or hereafter acquire under any statute, provision of the Articles of
Incorporation, agreement, vote of stockholders or disinterested directors, or
otherwise, both as to action in an official capacity and as to action in
another capacity while holding such office. To the extent that any provision of
the Articles, agreement or vote of the stockholders or disinterested directors
is inconsistent with these Bylaws, the provision, agreement or vote shall take
precedence.
Section 5. Authority to Insure. The Corporation may purchase and maintain
insurance to protect itself and any Agent against any Expense asserted against
or incurred by such person, whether or not the Corporation would have the power
to indemnify the Agent against such Expense under applicable law or the
provisions of this Article, all as set forth in Section 317 of the California
General Corporation Law, as amended.
Section 6. Survival of Rights. The rights provided by this Article shall
continue as to a person who has ceased to be an Agent and shall inure to the
benefit of the heirs, executors and administrators of such person.
Section 7. Settlement of Claims. The Corporation shall not be liable to
indemnify any Agent under this Article (a) for any amounts paid in settlement of
any action or claim effected without the Corporation's written consent, which
consent shall not be unreasonably withheld; or (b) for any judicial award, if
the Corporation was not given a reasonable and timely opportunity, at its
expense, to participate in the defense of such action.
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Section 8. Effect of Amendment. Any amendment, repeal or modification of
this Article shall not adversely affect any right or protection of any Agent
existing at the time of such amendment, repeal or modification.
Section 9. Subrogation. In the event of payment under this Article, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the Agent, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Corporation effectively to
bring suit to enforce such rights.
Section 10. No Duplication of Payments. The Corporation shall not be
liable under this Article to make any payment in connection with any claim made
against the Agent to the extent the Agent has otherwise actually received
payment (under any insurance policy, agreement, vote, or otherwise) of the
amounts otherwise indemnifiable hereunder.
ARTICLE X
Miscellaneous
Section 1. Checks, Drafts, Etc. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, and any assignment
or endorsement thereof, issued in the name of or payable to the Corporation,
shall be signed or endorsed by such person or persons and in such manner as,
from time to time, shall be determined by resolution of the Board of Directors.
Section 2. Contracts, Etc. - How Executed. The Board of Directors, except
as otherwise provided in these Bylaws, may authorize any officer or officers,
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the Corporation, and such authority may be general or
confined to specific instances; and, unless so authorized or ratified by the
Board, no officer, employee or other agent shall have any power or authority to
bind the Corporation by any contract or engagement or to pledge its credit or to
render it liable for any purpose or to any amount.
Section 3. Certificates of Stock. All certificates shall be signed in the
name of the Corporation by the Chairman of the Board or the President or a vice
president and by the Treasurer or an assistant treasurer or the Secretary or an
assistant secretary, certifying the number of shares and the class or series
thereof owned by the shareholder. Any or all of the signatures on a certificate
may be by facsimile signature. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were an
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officer, transfer agent or registrar at the date of issue.
Section 4. Lost Certificates. Except as provided in this section, no new
certificate for shares shall be issued in lieu of an old certificate unless the
latter is surrendered to the Corporation and cancelled at the same time. The
Board of Directors may, in case any share certificate or certificate for any
other security is lost, stolen or destroyed, authorize the issuance of a new
certificate in lieu thereof, upon such terms and conditions as the Board may
require, including provision for indemnification of the Corporation secured by a
bond or other adequate security sufficient to protect the Corporation against
any claim that may be made against it, including any expense or liability, on
account of the alleged loss, theft or destruction of such certificate or the
issuance of such new certificate.
Section 5. Representation of Shares of Other Corporations. Any person
designated by resolution of the Board of Directors or, in the absence of such
designation, the Chairman of the Board, the President or any vice president or
the Secretary, or any other person authorized by any of the foregoing, is
authorized to vote on behalf of the Corporation any and all shares of any other
corporation or corporations, foreign or domestic, owned by the Corporation.
Section 6. Construction and Definitions. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the Corporations Code of the State of California shall govern the
construction of these Bylaws.
ARTICLE XI
Amendments
Section 1. Amendments. New bylaws may be adopted or these Bylaws may be
amended or repealed by the affirmative vote of a majority of the outstanding
shares entitled to vote. Subject to the next preceding sentence, bylaws (other
than a bylaw or amendment thereof specifying or changing a fixed number of
directors or the maximum or minimum number, or changing from a fixed to a
variable board or vice versa) may be adopted, amended or repealed by the Board
of Directors.
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Exhibit 3.2F
IM SAN DIEGO, INC.
(a Delaware corporation)
BY - LAWS
ARTICLE 1
Offices
1.1 Registered Office. The registered office of the Corporation shall be
located in the City of Dover, County of Kent, State of Delaware, and the name of
the resident agent in charge thereof shall be The Prentice Hall Corporation
System, Inc.
1.2 Other Offices. The Corporation may also have offices at such other
places, within or without the State of Delaware, as the Board of Directors may
from time to time appoint or the business of the Corporation may require.
ARTICLE 2
Seal
The seal of the Corporation shall, subject to alteration by the
Board of Directors, consist of a flat-faced circular die with the word
"Delaware", together with the name of the Corporation and the year of
incorporation, cut or engraved thereon.
ARTICLE 3
Meetings of Stockholders
3.1 Place of Meeting. Meetings of the stockholders shall be held either
within or without the State of Delaware at such place as the Board of Directors
may fix.
3.2 Annual Meetings. The annual meeting of stockholders shall be held on
the thirtieth day of April of each year, or if such day is a legal holiday, then
on the next business day following, at such time as the Board of Directors may
fix.
3.3 Special Meetings. Special meetings of the stockholders for any purpose
or purposes may be called by the President, or by the directors (either by
written instrument signed by a majority or by resolution adopted by a vote of
the majority), and special meetings shall be called by the President or the
Secretary whenever stockholders owning a majority of the capital stock issued,
outstanding and entitled to vote so request in writing. Such request of
stockholders shall state the purpose or purposes of the proposed meeting.
3.4 Notice. Written or printed notice of every meeting of stockholders,
annual or special, stating the hour, date and place thereof, and the purpose or
purposes in general terms
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for which the meeting is called shall, not less than ten (10) and not more than
sixty (60) days before such meeting, be served upon or mailed to each
stockholder entitled to vote thereat, at his address as it appears upon the
stock records of the Corporation or, if such stockholder shall have filed with
the Secretary of the Corporation a written request that notices intended for him
be mailed to some other address, then to the address designated in such request.
Notice of the hour, date, place and purpose of any meeting of
stockholders may be dispensed with if every stockholder entitled to vote thereat
shall attend either in person or by proxy and shall not object to the holding of
such meeting for lack of proper notice, or if every absent stockholder entitled
to such notice shall in writing, filed with the records of the meeting, either
before or after the holding thereof, waive such notice.
3.5 Quorum. Except as otherwise provided by law or by the Certificate of
Incorporation, the presence in person or by proxy at any meeting of stockholders
of the holders of a majority of the shares of the capital stock of the
Corporation issued and outstanding and entitled to vote thereat, shall be
requisite and shall constitute a quorum. If two or more classes of stock are
entitled to vote as separate classes upon any question, then, in the case of
each such class, a quorum for the consideration of such question shall, except
as otherwise provided by law or by the Certificate of Incorporation, consist of
a majority in interest of all stock of that class issued, outstanding and
entitled to vote. If a majority or, where a larger quorum is required, such
quorum, shall not be represented at any meeting of the stockholders regularly
called, the holders of a majority of the shares present or represented and
entitled to vote thereat shall have power to adjourn the meeting to another
time, or to another time and place, without notice other than announcement of
adjournment at the meeting, and there may be successive adjournments for like
cause and in like manner until the requisite amount of shares entitled to vote
at such meeting shall be represented; provided, however, that if the adjournment
is for more than thirty (30) days, notice of the hour, date and place of the
adjourned meeting shall be given to each stockholder entitled to vote thereat.
Subject to the requirements of law and the Certificate of Incorporation, on any
issue on which two or more classes of stock are entitled to vote separately, no
adjournment shall be taken with respect to any class for which a quorum is
present unless the Chairman of the meeting otherwise directs. At any meeting
held to consider matters which were subject to adjournment for want of a quorum
at which the requisite amount of shares entitled to vote thereat shall be
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed.
3.6 Votes; Proxies. At each meeting of stockholders, every stockholder of
record at the closing of the transfer books, if closed, or on the date set by
the Board of Directors for the determination of stockholders entitled to vote at
such meeting, shall have one vote for each share of stock entitled to vote which
is registered in his name on the books of the Corporation, and, in the election
of directors, may vote cumulatively to the extent and in the manner authorized
in the Certificate of Incorporation. At each such meeting every stockholder
shall be entitled to vote in person, or by proxy appointed by an instrument in
writing subscribed by such stockholder and bearing a date not more than three
(3) years prior to the meeting in question, unless said instrument provides for
a longer period during which it is to remain in force.
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All elections of directors shall be held by ballot. If the Chairman
of the meeting shall so determine, a vote may be taken upon any other matter by
ballot and shall be so taken upon the request of any stockholder entitled to
vote on such matter.
At elections of directors, the Chairman shall appoint two judges of
election, who shall first take and subscribe an oath or affirmation faithfully
to execute the duties of judges at such meeting with strict impartiality and
according to the best of their ability. The judges so appointed shall take
charge of the polls and, after the balloting, shall make a certificate of the
result of the vote taken. No director or candidate for the office of director
shall be appointed as such judge.
At any meeting at which a quorum is present, a plurality of the
votes properly cast for election to fill any vacancy on the Board of Directors
shall be sufficient to elect a candidate to fill such vacancy, and a majority of
the votes properly cast upon any other question shall decide the question,
except in any case where a larger vote is required by law, the Certificate of
Incorporation, these By-laws, or otherwise.
3.7 Organization. The Chairman of the Board, if there be one, or in his
absence the President, or in the absence of the Chairman and the President, a
Vice President, shall call meetings of the stockholders to order and shall act
as chairman thereof. The Secretary of the Corporation, if present, shall act as
secretary of all meetings of stockholders, and, in his absence, the presiding
officer may appoint a secretary.
ARTICLE 4
Directors
4.1 Number. The business and property of the Corporation shall be
conducted and managed by a Board of Directors consisting of one or more
directors. Directors need not be a stockholder. The number of directors for the
ensuing year shall be fixed at each annual meeting of stockholders, but if the
number is not so fixed, the number shall remain as it stood immediately prior to
such meeting.
At any time during any year the whole number of directors may be
increased or reduced, in each case by vote of a majority of the stock
outstanding and entitled to vote for the election of directors or a majority of
the directors in office at the time of such increase or decrease, regardless of
whether such majority of directors constitutes a quorum.
4.2 Term of Office. Each director shall hold office until the next annual
meeting of stockholders and until his successor is duly elected and qualified or
until his earlier death or resignation, subject to the right of the stockholders
at any time to remove any director or directors as provided in Section 4 of this
Article.
4.3 Vacancies. If any vacancy shall occur among the directors, or if the
number of directors shall at any time be increased, the directors then in
office, although less than a quorum, by a majority vote may fill the vacancies
or newly-created directorships, or any such vacancies or newly-created
directorships may be filled by the stockholders at any meeting.
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4.4 Removal by Stockholders. The holders of record of the capital stock of
the Corporation entitled to vote for the election of directors may in their
discretion at any meeting duly called for the purpose, by a majority vote,
remove any director or directors and elect a new director or directors in place
thereof.
4.5 Meetings. Meetings of the Board of Directors shall be held at such
place, within or without the State of Delaware, as may from time to time be
fixed by resolution of the Board or by the President and as may be specified in
the notice or waiver of notice of any meeting. Meetings may be held at any time
upon the call of the Chairman of the Board or the President or any two (2) of
the directors in office by oral, telegraphic or written notice, duly served or
sent or mailed to each director not less than twenty-four (24) hours before such
meeting, except that, if mailed, not less than seventy-two (72) hours before
such meeting. Meetings may be held at any time and place without notice if all
the directors are present and do not object to the holding of such meeting for
lack of proper notice or if those not present shall, in writing or by telegram,
waive notice thereof. A regular meeting of the Board may be held without notice
immediately following the annual meeting of stockholders at the place where such
meeting is held. Regular meetings of the Board may also be held without notice
at such time and place as shall from time to time be determined by resolution of
the Board.
4.6 Quorum. A majority of the directors shall constitute a quorum for the
transaction of business. If at any meeting of the Board there shall be less than
a quorum present, a majority of those present may adjourn the meeting from time
to time without notice other than announcement of the adjournment at the
meeting, and at such adjourned meeting at which a quorum is present any business
may be transacted which might have been transacted at the meeting as originally
noticed.
4.7 Compensation. Directors shall receive compensation for their services,
as such, and for service on any Committee of the Board of Directors, as fixed by
resolution of the Board of Directors and for expenses of attendance at each
regular or special meeting of the Board or any Committee thereof. Nothing in
this Section shall be construed to preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE 5
Committees of Directors
5.1 Executive Committee. The Board of Directors may, by resolution passed
by a majority of the whole Board, appoint an Executive Committee of two (2) or
more members, to serve during the pleasure of the Board, to consist of such
directors as the Board may from time to time designate. The Board of Directors
shall designate the Chairman of the Executive Committee.
(a) Procedure. The Executive Committee shall, by a vote of a
majority of its members, fix its own times and places of
meeting, determine the number of its members constituting a
quorum for the transaction of business, and prescribe its own
rules of procedure, no change in which shall be made save by a
majority vote of its members.
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(b) Responsibilities. During the intervals between the meetings of
the Board of Directors, except as otherwise provided by the
Board of Directors in establishing such Committee or
otherwise, the Executive Committee shall possess and may
exercise all the powers of the Board in the management and
direction of the business and affairs of the Corporation;
provided, however, that the Executive Committee shall not have
the power:
(i) to amend or authorize the amendment of the Certificate
of Incorporation or these By-Laws;
(ii) to authorize the issuance of stock;
(iii) to authorize the payment of any dividend;
(iv) to adopt an agreement of merger or consolidation of the
Corporation or to recommend to the stockholders the
sale, lease or exchange of all or substantially all the
property and business of the Corporation; or
(v) to recommend to the stockholders a dissolution of the
Corporation.
(c) Reports. The Executive Committee shall keep regular minutes of
its proceedings, and all action by the Executive Committee
shall be reported promptly to the Board of Directors. Such
action shall be subject to review, amendment and repeal by the
Board, provided that no rights of third parties shall be
adversely affected by such review, amendment or repeal.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Executive Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
5.2 Audit Committee. The Board of Directors shall appoint an Audit
Committee of two (2) or more members who shall not be officers or employees of
the Corporation to serve during the pleasure of the Board. The Board of
Directors shall designate the Chairman of the Audit Committee.
(a) Procedure. The Audit Committee, by a vote of a majority of its
members, shall fix its own times and places of meeting, shall
determine the number of its members constituting a quorum for
the transaction of business, and shall prescribe its own rules
of procedure, no change in which shall be made save by a
majority vote of its members.
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(b) Responsibilities. The Audit Committee shall review the annual
financial statements of the Corporation prior to their
submission to the Board of Directors, shall consult with the
Corporation's independent auditors, and may examine and
consider such other matters in relation to the internal and
external audit of the Corporation's accounts and in relation
to the financial affairs of the Corporation and its accounts,
including the selection and retention of independent auditors,
as the Audit Committee may, in its discretion, determine to be
desirable.
(c) Reports. The Audit Committee shall keep regular minutes of its
proceedings, and all action by the Audit Committee shall, from
time to time, be reported to the Board of Directors as it
shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Audit Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
5.3 Other Committees. The Board of Directors, by vote of a majority of the
directors then in office, may at any time appoint one or more other committees
from and outside of its own number. Every such committee must include at least
one member of the Board of Directors. The Board may from time to time designate
or alter, within the limits permitted by law, the Certificate of Incorporation
and this Article, if applicable, the duties, powers and number of members of
such other committees or change their membership, and may at any time abolish
such other committees or any of them.
(a) Procedure. Each committee appointed pursuant to this Section
shall, by a vote of a majority of its members, fix its own
times and places of meeting, determine the number of its
members constituting a quorum for the transaction of business,
and prescribe its own rules of procedure, no change in which
shall be made save by a majority vote of its members.
(b) Responsibilities. Each committee appointed pursuant to this
Section shall exercise the powers assigned to it by the Board
of Directors in its discretion.
(c) Reports. Each committee appointed pursuant to this Section
shall keep regular minutes of proceedings, and all action by
each such committee shall, from time to time, be reported to
the Board of Directors as it shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of each committee, appointed
pursuant to this Section, the member or members thereof
present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously
<PAGE>
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appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member.
5.4 Term of Office. Each member of a committee shall hold office until the
first meeting of the Board of Directors following the annual meeting of
stockholders (or until such other time as the Board of Directors may determine,
either in the vote establishing the committee or at the election of such member
or otherwise) and until his successor is elected and qualified, or until he
sooner dies, resigns, is removed, is replaced by change of membership or becomes
disqualified by ceasing to be a Director (where membership on the Board is
required), or until the committee is sooner abolished by the Board of Directors.
ARTICLE 6
Officers
6.1 Officers. The Board of Directors shall elect a President, a Secretary
and a Treasurer, and, in their discretion, may elect a Chairman of the Board,
one or more Executive Vice Presidents, Vice Presidents, Assistant Secretaries
and Assistant Treasurers as deemed necessary or appropriate. Such officers shall
be elected annually by the Board of Directors at its first meeting following the
annual meeting of stockholders, and each shall hold office for the term provided
by the vote of the Board, except that each will be subject to removal from
office in the discretion of the Board as provided herein. The powers and duties
of more than one office may be exercised and performed by the same person.
6.2 Vacancies. Any vacancy in any office may be filled for the unexpired
portion of the term by the Board of Directors, at any regular or special
meeting.
6.3 Chairman of the Board. The Chairman of the Board of Directors, if
elected, shall be a member of the Board of Directors and shall preside at its
meetings. He shall advise and counsel with the President, and shall perform such
duties as from time to time may be assigned to him by the Board of Directors.
6.4 President. The President shall be the chief executive officer of the
Corporation. Subject to the directions of the Board of Directors, he shall have
and exercise direct charge of and general supervision over the business and
affairs of the Corporation and shall perform all duties incident to the office
of the chief executive officer of a corporation and such other duties as from
time to time may be assigned to him by the Board of Directors. The President may
but need not be a member of the Board of Directors.
6.5 Executive Vice Presidents and Vice Presidents. Each Executive Vice
President and Vice President shall have and exercise such powers and shall
perform such duties as from time to time may be assigned to him by the
President.
6.6 Secretary. The Secretary shall keep the minutes of all meetings of the
stockholders and of the Board of Directors in books provided for the purpose; he
shall see that all notices are duly given in accordance with the provisions of
law and these By-laws; he shall be custodian of the records and of the corporate
seal or seals of the Corporation; he shall see
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that the corporate seal is affixed to all documents the execution of which, on
behalf of the Corporation under its seal, is duly authorized, and, when the seal
is so affixed, he may attest the same; he may sign, with the President, an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and, in general, he shall perform all duties incident to the office
of secretary of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
6.7 Assistant Secretaries. The Assistant Secretaries in order of their
seniority shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Secretary.
6.8 Treasurer. The Treasurer shall have charge of and be responsible for
all funds, securities, receipts and disbursements of the Corporation, and shall
deposit, or cause to be deposited, in the name of the Corporation, all monies or
other valuable effects in such banks, trust companies or other depositaries as
shall, from time to time, be selected by the Board of Directors; he may endorse
for collection on behalf of the Corporation checks, notes and other obligations;
he may sign receipts and vouchers for payments made to the Corporation; he may
sign checks of the Corporation, singly or jointly with another person as the
Board of Directors may authorize, and pay out and dispose of the proceeds under
the direction of the Board; he shall render to the President and to the Board of
Directors, whenever requested, an account of the financial condition of the
Corporation; he may sign, with the President, or an Executive Vice President or
a Vice President, certificates of stock of the Corporation; and in general,
shall perform all the duties incident to the office of treasurer of a
corporation, and such other duties as from time to time may be assigned to him
by the Board of Directors.
6.9 Assistant Treasurers. The Assistant Treasurers in order of their
seniority shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Treasurer.
6.10 Subordinate Officers. The Board of Directors may appoint such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such duties as the Board
of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
6.11 Compensation. The Board of Directors shall fix the compensation of
all officers of the Corporation. It may authorize any officer, upon whom the
power of appointing subordinate officers may have been conferred, to fix the
compensation of such subordinate officers.
6.12 Removal. Any officer of the Corporation may be removed, with or
without cause, by action of the Board of Directors.
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6.13 Bonds. The Board of Directors may require any officer of the
Corporation to give a bond to the Corporation, conditional upon the faithful
performance of his duties, with one or more sureties and in such amount as may
be satisfactory to the Board of Directors.
ARTICLE 7
Certificates of Stock
7.1 Form and Execution of Certificates. The interest of each stockholder
of the Corporation shall be evidenced by a certificate or certificates for
shares of stock in such form as the Board of Directors may from time to time
prescribe. The certificates of stock of each class shall be consecutively
numbered and signed by the President, an Executive Vice President or a Vice
President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Corporation, and may be countersigned and registered
in such manner as the Board of Directors may by resolution prescribe, and shall
bear the corporate seal or a printed or engraved facsimile thereof. Where any
such certificate is signed by a transfer agent or transfer clerk acting on
behalf of the Corporation, the signatures of any such President, Executive Vice
President, Vice President, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary may be facsimiles, engraved or printed. In case any officer
or officers, who shall have signed, or whose facsimile signature or signatures
shall have been used on, any such certificate or certificates, shall cease to be
such officer or officers, whether because of death, resignation or otherwise,
before such certificate or certificates shall have been delivered by the
Corporation, such certificate or certificates may nevertheless be issued and
delivered by the Corporation as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer or officers.
In case the corporate seal which has been affixed to, impressed on,
or reproduced in any such certificate or certificates shall cease to be the seal
of the Corporation before such certificate or certificates have been delivered
by the Corporation, such certificate or certificates may nevertheless be issued
and delivered by the Corporation as though the seal affixed thereto, impressed
thereon or reproduced therein had not ceased to be the seal of the Corporation.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Certificate of Incorporation, these
By-laws, or any agreement to which the Corporation is a party, shall have the
restriction noted conspicuously on the certificate, and shall also set forth, on
the face or back, either the full text of the restriction or a statement of the
existence of such restriction and (except if such restriction is imposed by law)
a statement that the Corporation will furnish a copy thereof to the holder of
such certificate upon written request and without charge.
Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized to
be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
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7.2 Transfer of Shares. The shares of the stock of the Corporation shall
be transferred on the books of the Corporation by the holder thereof in person
or by his attorney lawfully constituted, upon surrender for cancellation of
certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof or
guaranty of the authenticity of the signature as the Corporation or its agents
may reasonably require. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person whether or not
it shall have express or other notice thereof, save as expressly provided by law
or by the Certificate of Incorporation. It shall be the duty of each stockholder
to notify the Corporation of his post office address.
7.3 Closing of Transfer Books. The stock transfer books of the Corporation
may, if deemed appropriate by the Board of Directors, be closed for such length
of time not exceeding fifty (50) days as the Board may determine, preceding the
date of any meeting of stockholders or the date for the payment of any dividend
or the date for the allotment of rights or the date when any issuance, change,
conversion or exchange of capital stock shall go into effect, during which time
no transfer of stock on the books of the Corporation may be made.
7.4 Dates of Record. If deemed appropriate, the Board of Directors may fix
in advance a date for such length of time not exceeding sixty (60) days (and, in
the case of any meeting of stockholders, not less than ten (10) days) as the
Board may determine, preceding the date of any meeting of stockholders, or the
date for the payment of any dividend, or the date for the allotment of rights or
the date when any issuance, change, conversion or exchange of capital stock
shall go into effect, as a record date for the determination of the stockholders
entitled to notice of, and to vote at, any such meeting or entitled to receive
payment of any such dividend or to any such allotment of rights, or to exercise
the rights in respect of any such issuance, change, conversion or exchange of
capital stock, as the case may be, and in such case only such stockholders as
shall be stockholders of record on the date so fixed shall be entitled to such
notice of, and to vote at, such meeting, or to receive payment of such dividend,
or to receive such allotment of rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any stock on the books of the
Corporation after any record date fixed as aforesaid. If no such record date is
so fixed, the record date shall be determined by applicable law.
7.5 Lost or Destroyed Certificates. In case of the loss or destruction of
any certificate of stock, a new certificate may be issued under the following
conditions:
(a) The owner of said certificate shall file with the Secretary or
any Assistant Secretary of the Corporation an affidavit giving
the facts in relation to the ownership, and in relation to the
loss or destruction of said certificate, stating its number
and the number of shares represented thereby; such affidavit
shall be in such form and contain such statements as shall
satisfy the President, any Executive Vice President, Vice
President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer, that said certificate
has been accidentally destroyed or lost, and that a new
certificate ought to be issued in lieu thereof. Upon being so
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satisfied, any such officer shall require such owner to
furnish the Corporation a bond in such penal sum and in such
form as he may deem advisable, and with a surety or sureties
approved by him, to indemnify and save harmless the
Corporation from any claim, loss, damage or liability which
may be occasioned by the issuance of a new certificate in lieu
thereof. Upon such bond being so filed, a new certificate for
the same number of shares shall be issued to the owner of the
certificate so lost or destroyed; and the transfer agent and
registrar, if any, of stock shall countersign and register
such new certificate upon receipt of a written order signed by
any such officer, and thereupon the Corporation will save
harmless said transfer agent and registrar in the premises. In
case of the surrender of the original certificate, in lieu of
which a new certificate has been issued, or the surrender of
such new certificate, for cancellation, the bond of indemnity
given as a condition of the issue of such new certificate may
be surrendered; or
(b) The Board of Directors of the Corporation may by resolution
authorize and direct any transfer agent or registrar of stock
of the Corporation to issue and register respectively from
time to time without further action or approval by or on
behalf of the Corporation new certificates of stock to replace
certificates reported lost, stolen or destroyed upon receipt
of an affidavit of loss and bond of indemnity in form and
amount and with surety satisfactory to such transfer agent or
registrar in each instance or upon such terms and conditions
as the Board of Directors may determine.
ARTICLE 8
Execution of Documents
8.1 Execution of Checks, Notes, etc. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers, or agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors, which may in
its discretion authorize any such signatures to be facsimile.
8.2 Execution of Contracts, Assignments, etc. Unless the Board of
Directors shall have otherwise provided generally or in a specific instance, all
contracts, agreements, endorsements, assignments, transfers, stock powers, or
other instruments shall be signed by the President, any Executive Vice
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer. The Board of Directors may, however, in
its discretion, require any or all such instruments to be signed by any two or
more of such officers, or may permit any or all of such instruments to be signed
by such other officer or officers, agent or agents, as it shall thereunto
authorize from time to time.
8.3 Execution of Proxies. The President, any Executive Vice President or
any Vice President, and the Secretary, the Treasurer, any Assistant Secretary or
any Assistant Treasurer, or any other officer designated by the Board of
Directors, may sign on behalf of the Corporation proxies to vote upon shares of
stock of other companies standing in the name of the Corporation.
<PAGE>
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ARTICLE 9
Inspection of Books
The Board of Directors shall determine from time to time whether,
and if allowed, to what extent and at what time and places and under what
conditions and regulations, the accounts and books of the Corporation (except
such as may by law be specifically open to inspection) or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by the laws of the State of Delaware, unless and until authorized so
to do by resolution of the Board of Directors or of the stockholders of the
Corporation.
ARTICLE 10
Fiscal Year
The fiscal year of the Corporation shall be determined from time to
time by vote of the Board of Directors.
ARTICLE 11
Amendments
These By-laws may be altered, amended, changed or repealed and new
By-laws adopted by the stockholders or by the Board of Directors, in either case
at any meeting called for that purpose at which a quorum shall be present. Any
by-law, whether made, altered, amended, changed or repealed by the stockholders
or the Board of Directors may be repealed, amended, changed, further amended,
changed, repealed or reinstated, as the case may be either by the stockholders
or by the Board of Directors, as herein provided; except that this Article may
be altered, amended, changed or repealed only by vote of the stockholders.
ARTICLE 12
Indemnification
12.1 Indemnification. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
<PAGE>
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interest of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in this Section, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
12.2 Authorization. Any indemnification under Section 1 of this Article
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 1 of this Article. Such
determination shall be made: (a) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceedings, or (b) if such a quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent legal counsel in
written opinion, or (c) by the stockholders.
12.3 Expense Advance. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the manner provided in Section 2 of this Article upon receipt of
an undertaking by or on behalf of the director, officer, employee or agent to
repay such amount, unless it shall ultimately be determined that he is entitled
to be indemnified by the Corporation as authorized in this Article.
12.4 Nonexclusivity. The indemnification provided by this Article shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue
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as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
12.5 Insurance. The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article.
12.6 "The Corporation". For the purposes of this Article, references to
"the Corporation" include all constituent corporations absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents as well as the resulting or surviving corporation so that any person
who is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this Article with respect to such a constituent corporation if
its separate existence had continued.
Exhibit 3.2G
IRON MOUNTAIN INFORMATION PARTNERS, INC.
(a Delaware corporation)
BY - LAWS
ARTICLE I
Offices
SECTION 1. Registered Office. The registered office of the Corporation
shall be located in the City of Dover, County of Kent, State of Delaware, and
the name of the resident agent in charge thereof shall be The Prentice Hall
Corporation System, Inc.
SECTION 2. Other Offices. The Corporation may also have offices at such
other places, within or without the State of Delaware, as the Board of Directors
may from time to time appoint or the business of the Corporation may require.
ARTICLE II
Seal
The seal of the Corporation shall, subject to alteration by the
Board of Directors, consist of a flat-faced circular die with the word
"Delaware", together with the name of the Corporation and the year of
incorporation, cut or engraved thereon.
ARTICLE III
Meetings of Stockholders
SECTION 1. Place of Meeting. Meetings of the stockholders shall be held
either within or without the State of Delaware at such place as the Board of
Directors may fix.
SECTION 2. Annual Meetings. The annual meeting of stockholders shall be
held on the first day of May of each year, or if such day is a legal holiday,
then on the next business day following, at such time as the Board of Directors
may fix.
SECTION 3. Special Meetings. Special meetings of the stockholders for any
purpose or purposes may be called by the President, or by the directors (either
by written instrument signed by a majority or by resolution adopted by a vote of
the majority), and special meetings shall be called by the President or the
Secretary whenever stockholders owning a majority of the capital stock issued,
outstanding and entitled to vote so request in writing. Such request of
stockholders shall state the purpose or purposes of the proposed meeting.
SECTION 4. Notice. Written or printed notice of every meeting of
stockholders, annual or special, stating the hour, date and place thereof, and
the purpose or purposes in general terms
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for which the meeting is called shall, not less than ten (10) and not more than
sixty (60) days before such meeting, be served upon or mailed to each
stockholder entitled to vote thereat, at his address as it appears upon the
stock records of the Corporation or, if such stockholder shall have filed with
the Secretary of the Corporation a written request that notices intended for him
be mailed to some other address, then to the address designated in such request.
Notice of the hour, date, place and purpose of any meeting of
stockholders may be dispensed with if every stockholder entitled to vote thereat
shall attend either in person or by proxy and shall not object to the holding of
such meeting for lack of proper notice, or if every absent stockholder entitled
to such notice shall in writing, filed with the records of the meeting, either
before or after the holding thereof, waive such notice.
SECTION 5. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the presence in person or by proxy at any meeting
of stockholders of the holders of a majority of the shares of the capital stock
of the Corporation issued and outstanding and entitled to vote thereat, shall be
requisite and shall constitute a quorum. If two or more classes of stock are
entitled to vote as separate classes upon any question, then, in the case of
each such class, a quorum for the consideration of such question shall, except
as otherwise provided by law or by the Certificate of Incorporation, consist of
a majority in interest of all stock of that class issued, outstanding and
entitled to vote. If a majority or, where a larger quorum is required, such
quorum, shall not be represented at any meeting of the stockholders regularly
called, the holders of a majority of the shares present or represented and
entitled to vote thereat shall have power to adjourn the meeting to another
time, or to another time and place, without notice other than announcement of
adjournment at the meeting, and there may be successive adjournments for like
cause and in like manner until the requisite amount of shares entitled to vote
at such meeting shall be represented; provided, however, that if the adjournment
is for more than thirty (30) days, notice of the hour, date and place of the
adjourned meeting shall be given to each stockholder entitled to vote thereat.
Subject to the requirements of law and the Certificate of Incorporation, on any
issue on which two or more classes of stock are entitled to vote separately, no
adjournment shall be taken with respect to any class for which a quorum is
present unless the Chairman of the meeting otherwise directs. At any meeting
held to consider matters which were subject to adjournment for want of a quorum
at which the requisite amount of shares entitled to vote thereat shall be
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed.
SECTION 6. Votes; Proxies. At each meeting of stockholders, every
stockholder of record at the closing of the transfer books, if closed, or on the
date set by the Board of Directors for the determination of stockholders
entitled to vote at such meeting, shall have one vote for each share of stock
entitled to vote which is registered in his name on the books of the
Corporation, and, in the election of directors, may vote cumulatively to the
extent and in the manner authorized in the Certificate of Incorporation. At each
such meeting every stockholder shall be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder and bearing
a date not more than three (3) years prior to the meeting in question, unless
said instrument provides for a longer period during which it is to remain in
force.
<PAGE>
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All elections of directors shall be held by ballot. If the Chairman
of the meeting shall so determine, a vote may be taken upon any other matter by
ballot and shall be so taken upon the request of any stockholder entitled to
vote on such matter.
At elections of directors, the Chairman shall appoint two judges of
election, who shall first take and subscribe an oath or affirmation faithfully
to execute the duties of judges at such meeting with strict impartiality and
according to the best of their ability. The judges so appointed shall take
charge of the polls and, after the balloting, shall make a certificate of the
result of the vote taken. No director or candidate for the office of director
shall be appointed as such judge.
At any meeting at which a quorum is present, a plurality of the
votes properly cast for election to fill any vacancy on the Board of Directors
shall be sufficient to elect a candidate to fill such vacancy, and a majority of
the votes properly cast upon any other question shall decide the question,
except in any case where a larger vote is required by law, the Certificate of
Incorporation, these By-laws, or otherwise.
SECTION 7. Organization. The Chairman of the Board, if there be one, or in
his absence the President, or in the absence of the Chairman and the President,
a Vice President, shall call meetings of the stockholders to order and shall act
as chairman thereof. The Secretary of the Corporation, if present, shall act as
secretary of all meetings of stockholders, and, in his absence, the presiding
officer may appoint a secretary.
ARTICLE IV
Directors
SECTION 1. Number. The business and property of the Corporation shall be
conducted and managed by a Board of Directors consisting of one or more
directors. Directors need not be a stockholder. The number of directors for the
ensuing year shall be fixed at each annual meeting of stockholders, but if the
number is not so fixed, the number shall remain as it stood immediately prior to
such meeting.
At any time during any year the whole number of directors may be
increased or reduced, in each case by vote of a majority of the stock
outstanding and entitled to vote for the election of directors or a majority of
the directors in office at the time of such increase or decrease, regardless of
whether such majority of directors constitutes a quorum.
SECTION 2. Term of Office. Each director shall hold office until the next
annual meeting of stockholders and until his successor is duly elected and
qualified or until his earlier death or resignation, subject to the right of the
stockholders at any time to remove any director or directors as provided in
Section 4 of this Article.
SECTION 3. Vacancies. If any vacancy shall occur among the directors, or
if the number of directors shall at any time be increased, the directors then in
office, although less than a quorum, by a majority vote may fill the vacancies
or newly-created directorships, or any such vacancies or newly-created
directorships may be filled by the stockholders at any meeting.
<PAGE>
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SECTION 4. Removal by Stockholders. The holders of record of the capital
stock of the Corporation entitled to vote for the election of directors may in
their discretion at any meeting duly called for the purpose, by a majority vote,
remove any director or directors and elect a new director or directors in place
thereof.
SECTION 5. Meetings. Meetings of the Board of Directors shall be held at
such place, within or without the State of Delaware, as may from time to time be
fixed by resolution of the Board or by the President and as may be specified in
the notice or waiver of notice of any meeting. Meetings may be held at any time
upon the call of the Chairman of the Board or the President or any two (2) of
the directors in office by oral, telegraphic or written notice, duly served or
sent or mailed to each director not less than twenty-four (24) hours before such
meeting, except that, if mailed, not less than seventy-two (72) hours before
such meeting. Meetings may be held at any time and place without notice if all
the directors are present and do not object to the holding of such meeting for
lack of proper notice or if those not present shall, in writing or by telegram,
waive notice thereof. A regular meeting of the Board may be held without notice
immediately following the annual meeting of stockholders at the place where such
meeting is held. Regular meetings of the Board may also be held without notice
at such time and place as shall from time to time be determined by resolution of
the Board.
SECTION 6. Quorum. A majority of the directors shall constitute a quorum
for the transaction of business. If at any meeting of the Board there shall be
less than a quorum present, a majority of those present may adjourn the meeting
from time to time without notice other than announcement of the adjournment at
the meeting, and at such adjourned meeting at which a quorum is present any
business may be transacted which might have been transacted at the meeting as
originally noticed.
SECTION 7. Compensation. Directors shall receive compensation for their
services, as such, and for service on any Committee of the Board of Directors,
as fixed by resolution of the Board of Directors and for expenses of attendance
at each regular or special meeting of the Board or any Committee thereof.
Nothing in this Section shall be construed to preclude a director from serving
the Corporation in any other capacity and receiving compensation therefor.
ARTICLE V
Committees of Directors
SECTION 1. Executive Committee. The Board of Directors may, by resolution
passed by a majority of the whole Board, appoint an Executive Committee of two
(2) or more members, to serve during the pleasure of the Board, to consist of
such directors as the Board may from time to time designate. The Board of
Directors shall designate the Chairman of the Executive Committee.
(a) Procedure. The Executive Committee shall, by a vote of a
majority of its members, fix its own times and places of
meeting, determine the number of its members constituting a
quorum for the transaction of business, and prescribe its own
rules of procedure, no change in which shall be made save by a
majority vote of its members.
<PAGE>
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(b) Responsibilities. During the intervals between the meetings of
the Board of Directors, except as otherwise provided by the
Board of Directors in establishing such Committee or
otherwise, the Executive Committee shall possess and may
exercise all the powers of the Board in the management and
direction of the business and affairs of the Corporation;
provided, however, that the Executive Committee shall not have
the power:
(i) to amend or authorize the amendment of the Certificate
of Incorporation or these By-Laws;
(ii) to authorize the issuance of stock;
(iii) to authorize the payment of any dividend;
(iv) to adopt an agreement of merger or consolidation of the
Corporation or to recommend to the stockholders the
sale, lease or exchange of all or substantially all the
property and business of the Corporation; or
(v) to recommend to the stockholders a dissolution of the
Corporation.
(c) Reports. The Executive Committee shall keep regular minutes of
its proceedings, and all action by the Executive Committee
shall be reported promptly to the Board of Directors. Such
action shall be subject to review, amendment and repeal by the
Board, provided that no rights of third parties shall be
adversely affected by such review, amendment or repeal.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Executive Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
SECTION 2. Audit Committee. The Board of Directors shall appoint an Audit
Committee of two (2) or more members who shall not be officers or employees of
the Corporation to serve during the pleasure of the Board. The Board of
Directors shall designate the Chairman of the Audit Committee.
(a) Procedure. The Audit Committee, by a vote of a majority of its
members, shall fix its own times and places of meeting, shall
determine the number of its members constituting a quorum for
the transaction of business, and shall prescribe its own rules
of procedure, no change in which shall be made save by a
majority vote of its members.
<PAGE>
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(b) Responsibilities. The Audit Committee shall review the annual
financial statements of the Corporation prior to their
submission to the Board of Directors, shall consult with the
Corporation's independent auditors, and may examine and
consider such other matters in relation to the internal and
external audit of the Corporation's accounts and in relation
to the financial affairs of the Corporation and its accounts,
including the selection and retention of independent auditors,
as the Audit Committee may, in its discretion, determine to be
desirable.
(c) Reports. The Audit Committee shall keep regular minutes of its
proceedings, and all action by the Audit Committee shall, from
time to time, be reported to the Board of Directors as it
shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Audit Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
SECTION 3. Other Committees. The Board of Directors, by vote of a majority
of the directors then in office, may at any time appoint one or more other
committees from and outside of its own number. Every such committee must include
at least one member of the Board of Directors. The Board may from time to time
designate or alter, within the limits permitted by law, the Certificate of
Incorporation and this Article, if applicable, the duties, powers and number of
members of such other committees or change their membership, and may at any time
abolish such other committees or any of them.
(a) Procedure. Each committee appointed pursuant to this Section
shall, by a vote of a majority of its members, fix its own
times and places of meeting, determine the number of its
members constituting a quorum for the transaction of business,
and prescribe its own rules of procedure, no change in which
shall be made save by a majority vote of its members.
(b) Responsibilities. Each committee appointed pursuant to this
Section shall exercise the powers assigned to it by the Board
of Directors in its discretion.
(c) Reports. Each committee appointed pursuant to this Section
shall keep regular minutes of proceedings, and all action by
each such committee shall, from time to time, be reported to
the Board of Directors as it shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of each committee, appointed
pursuant to this Section, the member or members thereof
present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously
<PAGE>
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appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member.
SECTION 4. Term of Office. Each member of a committee shall hold office
until the first meeting of the Board of Directors following the annual meeting
of stockholders (or until such other time as the Board of Directors may
determine, either in the vote establishing the committee or at the election of
such member or otherwise) and until his successor is elected and qualified, or
until he sooner dies, resigns, is removed, is replaced by change of membership
or becomes disqualified by ceasing to be a Director (where membership on the
Board is required), or until the committee is sooner abolished by the Board of
Directors.
ARTICLE VI
Officers
SECTION 1. Officers. The Board of Directors shall elect a President, a
Secretary and a Treasurer, and, in their discretion, may elect a Chairman of the
Board, one or more Executive Vice Presidents, Vice Presidents, Assistant
Secretaries and Assistant Treasurers as deemed necessary or appropriate. Such
officers shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of stockholders, and each shall hold office
for the term provided by the vote of the Board, except that each will be subject
to removal from office in the discretion of the Board as provided herein. The
powers and duties of more than one office may be exercised and performed by the
same person.
SECTION 2. Vacancies. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors, at any regular or
special meeting.
SECTION 3. Chairman of the Board. The Chairman of the Board of Directors,
if elected, shall be a member of the Board of Directors and shall preside at its
meetings. He shall advise and counsel with the President, and shall perform such
duties as from time to time may be assigned to him by the Board of Directors.
SECTION 4. President. The President shall be the chief executive officer
of the Corporation. Subject to the directions of the Board of Directors, he
shall have and exercise direct charge of and general supervision over the
business and affairs of the Corporation and shall perform all duties incident to
the office of the chief executive officer of a corporation and such other duties
as from time to time may be assigned to him by the Board of Directors. The
President may but need not be a member of the Board of Directors.
SECTION 5. Executive Vice Presidents and Vice Presidents. Each Executive
Vice President and Vice President shall have and exercise such powers and shall
perform such duties as from time to time may be assigned to him by the
President.
SECTION 6. Secretary. The Secretary shall keep the minutes of all meetings
of the stockholders and of the Board of Directors in books provided for the
purpose; he shall see that all notices are duly given in accordance with the
provisions of law and these By-laws; he shall be custodian of the records and of
the corporate seal or seals of the Corporation; he shall see
<PAGE>
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that the corporate seal is affixed to all documents the execution of which, on
behalf of the Corporation under its seal, is duly authorized, and, when the seal
is so affixed, he may attest the same; he may sign, with the President, an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and, in general, he shall perform all duties incident to the office
of secretary of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 7. Assistant Secretaries. The Assistant Secretaries in order of
their seniority shall, in the absence or disability of the Secretary, perform
the duties and exercise the powers of the Secretary and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Secretary.
SECTION 8. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all monies or other valuable effects in such banks, trust companies
or other depositaries as shall, from time to time, be selected by the Board of
Directors; he may endorse for collection on behalf of the Corporation checks,
notes and other obligations; he may sign receipts and vouchers for payments made
to the Corporation; he may sign checks of the Corporation, singly or jointly
with another person as the Board of Directors may authorize, and pay out and
dispose of the proceeds under the direction of the Board; he shall render to the
President and to the Board of Directors, whenever requested, an account of the
financial condition of the Corporation; he may sign, with the President, or an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and in general, shall perform all the duties incident to the office
of treasurer of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 9. Assistant Treasurers. The Assistant Treasurers in order of
their seniority shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Treasurer.
SECTION 10. Subordinate Officers. The Board of Directors may appoint such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such duties as the Board
of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
SECTION 11. Compensation. The Board of Directors shall fix the
compensation of all officers of the Corporation. It may authorize any officer,
upon whom the power of appointing subordinate officers may have been conferred,
to fix the compensation of such subordinate officers.
SECTION 12. Removal. Any officer of the Corporation may be removed, with
or without cause, by action of the Board of Directors.
SECTION 13. Bonds. The Board of Directors may require any officer of the
Corporation to give a bond to the Corporation, conditional upon the faithful
performance of his
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duties, with one or more sureties and in such amount as may be satisfactory
to the Board of Directors.
ARTICLE VII
Certificates of Stock
SECTION 1. Form and Execution of Certificates. The interest of each
stockholder of the Corporation shall be evidenced by a certificate or
certificates for shares of stock in such form as the Board of Directors may from
time to time prescribe. The certificates of stock of each class shall be
consecutively numbered and signed by the President, an Executive Vice President
or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer
or an Assistant Treasurer of the Corporation, and may be countersigned and
registered in such manner as the Board of Directors may by resolution prescribe,
and shall bear the corporate seal or a printed or engraved facsimile thereof.
Where any such certificate is signed by a transfer agent or transfer clerk
acting on behalf of the Corporation, the signatures of any such President,
Executive Vice President, Vice President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary may be facsimiles, engraved or printed. In case
any officer or officers, who shall have signed, or whose facsimile signature or
signatures shall have been used on, any such certificate or certificates, shall
cease to be such officer or officers, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the Corporation, such certificate or certificates may nevertheless be issued and
delivered by the Corporation as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer or officers.
In case the corporate seal which has been affixed to, impressed on,
or reproduced in any such certificate or certificates shall cease to be the seal
of the Corporation before such certificate or certificates have been delivered
by the Corporation, such certificate or certificates may nevertheless be issued
and delivered by the Corporation as though the seal affixed thereto, impressed
thereon or reproduced therein had not ceased to be the seal of the Corporation.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Certificate of Incorporation, these
By-laws, or any agreement to which the Corporation is a party, shall have the
restriction noted conspicuously on the certificate, and shall also set forth, on
the face or back, either the full text of the restriction or a statement of the
existence of such restriction and (except if such restriction is imposed by law)
a statement that the Corporation will furnish a copy thereof to the holder of
such certificate upon written request and without charge.
Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized to
be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
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SECTION 2. Transfer of Shares. The shares of the stock of the Corporation
shall be transferred on the books of the Corporation by the holder thereof in
person or by his attorney lawfully constituted, upon surrender for cancellation
of certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof or
guaranty of the authenticity of the signature as the Corporation or its agents
may reasonably require. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person whether or not
it shall have express or other notice thereof, save as expressly provided by law
or by the Certificate of Incorporation. It shall be the duty of each stockholder
to notify the Corporation of his post office address.
SECTION 3. Closing of Transfer Books. The stock transfer books of the
Corporation may, if deemed appropriate by the Board of Directors, be closed for
such length of time not exceeding fifty (50) days as the Board may determine,
preceding the date of any meeting of stockholders or the date for the payment of
any dividend or the date for the allotment of rights or the date when any
issuance, change, conversion or exchange of capital stock shall go into effect,
during which time no transfer of stock on the books of the Corporation may be
made.
SECTION 4. Dates of Record. If deemed appropriate, the Board of Directors
may fix in advance a date for such length of time not exceeding sixty (60) days
(and, in the case of any meeting of stockholders, not less than ten (10) days)
as the Board may determine, preceding the date of any meeting of stockholders,
or the date for the payment of any dividend, or the date for the allotment of
rights or the date when any issuance, change, conversion or exchange of capital
stock shall go into effect, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting or entitled
to receive payment of any such dividend or to any such allotment of rights, or
to exercise the rights in respect of any such issuance, change, conversion or
exchange of capital stock, as the case may be, and in such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to receive payment
of such dividend, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any record date fixed as aforesaid. If no such
record date is so fixed, the record date shall be determined by applicable law.
SECTION 5. Lost or Destroyed Certificates. In case of the loss or
destruction of any certificate of stock, a new certificate may be issued under
the following conditions:
(a) The owner of said certificate shall file with the Secretary or
any Assistant Secretary of the Corporation an affidavit giving
the facts in relation to the ownership, and in relation to the
loss or destruction of said certificate, stating its number
and the number of shares represented thereby; such affidavit
shall be in such form and contain such statements as shall
satisfy the President, any Executive Vice President, Vice
President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer, that said certificate
has been accidentally destroyed or lost, and that a new
certificate ought to be issued in lieu thereof. Upon being so
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satisfied, any such officer shall require such owner to
furnish the Corporation a bond in such penal sum and in such
form as he may deem advisable, and with a surety or sureties
approved by him, to indemnify and save harmless the
Corporation from any claim, loss, damage or liability which
may be occasioned by the issuance of a new certificate in lieu
thereof. Upon such bond being so filed, a new certificate for
the same number of shares shall be issued to the owner of the
certificate so lost or destroyed; and the transfer agent and
registrar, if any, of stock shall countersign and register
such new certificate upon receipt of a written order signed by
any such officer, and thereupon the Corporation will save
harmless said transfer agent and registrar in the premises. In
case of the surrender of the original certificate, in lieu of
which a new certificate has been issued, or the surrender of
such new certificate, for cancellation, the bond of indemnity
given as a condition of the issue of such new certificate may
be surrendered; or
(b) The Board of Directors of the Corporation may by resolution
authorize and direct any transfer agent or registrar of stock
of the Corporation to issue and register respectively from
time to time without further action or approval by or on
behalf of the Corporation new certificates of stock to replace
certificates reported lost, stolen or destroyed upon receipt
of an affidavit of loss and bond of indemnity in form and
amount and with surety satisfactory to such transfer agent or
registrar in each instance or upon such terms and conditions
as the Board of Directors may determine.
ARTICLE VIII
Execution of Documents
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers, or agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors, which may in
its discretion authorize any such signatures to be facsimile.
SECTION 2. Execution of Contracts, Assignments, etc. Unless the Board of
Directors shall have otherwise provided generally or in a specific instance, all
contracts, agreements, endorsements, assignments, transfers, stock powers, or
other instruments shall be signed by the President, any Executive Vice
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer. The Board of Directors may, however, in
its discretion, require any or all such instruments to be signed by any two or
more of such officers, or may permit any or all of such instruments to be signed
by such other officer or officers, agent or agents, as it shall thereunto
authorize from time to time.
SECTION 3. Execution of Proxies. The President, any Executive Vice
President or any Vice President, and the Secretary, the Treasurer, any Assistant
Secretary or any Assistant Treasurer, or any other officer designated by the
Board of Directors, may sign on behalf of the
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Corporation proxies to vote upon shares of stock of other companies standing in
the name of the Corporation.
ARTICLE IX
Inspection of Books
The Board of Directors shall determine from time to time whether,
and if allowed, to what extent and at what time and places and under what
conditions and regulations, the accounts and books of the Corporation (except
such as may by law be specifically open to inspection) or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by the laws of the State of Delaware, unless and until authorized so
to do by resolution of the Board of Directors or of the stockholders of the
Corporation.
ARTICLE X
Fiscal Year
The fiscal year of the Corporation shall be determined from time to
time by vote of the Board of Directors.
ARTICLE XI
Amendments
These By-laws may be altered, amended, changed or repealed and new
By-laws adopted by the stockholders or by the Board of Directors, in either case
at any meeting called for that purpose at which a quorum shall be present. Any
by-law, whether made, altered, amended, changed or repealed by the stockholders
or the Board of Directors may be repealed, amended, changed, further amended,
changed, repealed or reinstated, as the case may be either by the stockholders
or by the Board of Directors, as herein provided; except that this Article may
be altered, amended, changed or repealed only by vote of the stockholders.
ARTICLE XII
Indemnification
SECTION 1. Indemnification. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of
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any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in this Section, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 2. Authorization. Any indemnification under Section 1 of this
Article (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 of this
Article. Such determination shall be made: (a) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceedings, or (b) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in written opinion, or (c) by the stockholders.
SECTION 3. Expense Advance. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the manner provided in Section 2 of this Article upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount, unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this Article.
SECTION 4. Nonexclusivity. The indemnification provided by this Article
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any by-
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law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 5. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
SECTION 6. "The Corporation". For the purposes of this Article, references
to "the Corporation" include all constituent corporations absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents as well as the resulting or surviving corporation so that any person
who is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this Article with respect to such a constituent corporation if
its separate existence had continued.
BY-LAWS
of
Iron Mountain Data Protection Services, Inc.
ARTICLE I
Articles of Organization
The name and purposes of the Corporation shall be as set forth in the
Articles of Organization. These By-Laws, the powers of the Corporation and of
its Directors and stockholders, and all matters concerning the conduct and
regulation of the business of the Corporation shall be subject to such
provisions in regard thereto, if any, as are set forth in the Articles of
Organization; and the Articles of Organization, as from time to time amended,
are hereby made a part of these By-Laws. All references in these By-Laws to the
Articles of Organization shall be construed to mean the Articles of Organization
of the Corporation as from time to time amended.
ARTICLE II
Annual Meeting of Stockholders
The annual meeting of stockholders shall be held on the second Thursday in
May of each year at such other hour as may be fixed by vote of the Board of
Directors or, if the Board shall not fix such hour, as may be determined by the
President and set forth in the notice thereof, unless that day be a legal
holiday at the site of the meeting, in which case the meeting shall be held at
the same hour on the next succeeding business day at the site of the meeting.
Purposes for which an annual meeting is to be held, in addition to those
prescribed by law, by the Articles of Organization and by these By-Laws, may be
specified by the President, or by a vote of a majority of the Directors then in
office, or by one or more stockholders who are entitled to vote and who hold in
the aggregate at least ten per cent (10%) of the capital stock entitled to vote
at the meeting.
If such annual meeting is omitted on the day herein provided therefor, a
special meeting of stockholders may be held in place thereof and any business
transacted or elections held at such special meeting shall have the same effect
as if transacted or held at the annual meeting, and, in such case, all
references in these By-Laws, except in this Article II and in Article IV, to the
annual meeting of stockholders shall be deemed to refer to such special meeting.
Any such special meeting shall be called, and the purposes thereof shall be
specified in the notice thereof, as provided in Article III.
<PAGE>
ARTICLE III
Special Meetings of Stockholders
A special meeting of stockholders may be called at any time by the
President or by a majority of the Directors then in office. A special meeting of
stockholders shall be called by the Clerk, or in the case of the death, absence,
incapacity or refusal of the Clerk, by any other officer, upon written
application of one or more stockholders who hold in the aggregate at least ten
percent (10%) of the capital stock entitled to vote at the meeting. Such call
shall state the time, place and purpose of the meeting.
ARTICLE IV
Place of Stockholders' Meetings
The annual meeting of stockholders and any special meeting of
stockholders, by whomever called, shall be held at the principal office of the
Corporation in Massachusetts, or at such other place in Massachusetts or within
the continental limits of the United States of America as may be determined by
the Board of Directors (or, in the event such meeting shall have been called
upon the application of stockholders, by such stockholders) and stated in the
notice thereof. Any adjourned session of any annual or special meeting of
stockholders shall be held within the continental limits of the United States at
such place as is designated in the vote of adjournment.
ARTICLE V
Notice of Stockholders' Meetings
A written notice of each annual or special meeting of stockholders,
stating the place, date and hour thereof, and the purpose or purposes for which
the meeting is to be held, shall be given at least seven (7) days before the
meeting to each stockholder entitled to vote thereat, and to each stockholder
who, under the Articles of Organization or these By-Laws, is entitled to such
notice, by leaving such notice with him or at his residence, or usual place of
business, or by mailing it, postage prepaid, addressed to such stockholder at
his address as it appears in the records of the Corporation. Such notice shall
be given by the Clerk, by any other officer, or by a person designated either by
the Clerk or by the person or persons calling the meeting, or by the Board of
Directors. No notice of the time, place or purposes of any annual or special
meeting of stockholders shall be required to be given to a stockholder if a
written waiver of such notice is executed before or after the meeting by such
stockholder, or by his attorney thereunto authorized, and filed with the records
of the meeting.
<PAGE>
ARTICLE VI
Quorum of Stockholders
At any meeting of stockholders, a quorum for the election of any Director
or officer, or for the consideration of any question, shall consist of a
majority in interest of all stock issued, outstanding and entitled to vote at
such election, or upon such question, respectively; except that if two or more
classes of stock are entitled to vote as separate classes upon any question,
then, in the case of each such class, a quorum for the consideration of such
question shall consist of a majority in interest of all stock of that class
issued, outstanding and entitled to vote; and except in any case where a larger
quorum is required by law, by the Articles of Organization or by these By-laws.
Stock owned by the Corporation, if any, shall not be deemed outstanding for this
purpose. In any case, any meeting may be adjourned from time to time by a
majority of the votes properly cast upon the question, whether or not a quorum
is present, and the meeting may be held as adjourned without further notice.
When a quorum is present at any meeting, a plurality of the votes properly
cast for any office shall elect to such office, except where a larger vote is
required by law, by the Articles of Organization or by these By-Laws, and a
majority of the votes properly cast upon any other question (or if two or more
classes of stock are entitled to vote as separate classes upon such question,
then, in the case of each such class, a majority of the votes of such class
properly cast upon the question), except in any case where a larger vote is
required by law, by the Articles of Organization or by these By-Laws, shall
decide the matter.
ARTICLE VII
Proxies and Voting
Except as may be provided in the Articles of Organization, with respect to
two or more classes or series of stock, stockholders entitled to vote shall have
one vote for each share of stock entitled to vote owned by them and a
proportionate vote for each fractional share. No ballot shall be required for
such election unless requested by a stockholder present or represented at the
meeting and entitled to vote in the election. The Corporation shall not,
directly or indirectly, vote upon any share of its own stock.
Stockholders entitled to vote may vote either in person or by proxy in
writing dated not more than six (6) months before the meeting named therein,
which proxies shall be filed with the Clerk of the meeting, or any adjournment
thereof, before being voted. Such proxies shall entitle the holders thereof to
vote at any adjournment of such meeting, but shall not be valid after the final
adjournment of such meeting.
<PAGE>
Any action to be taken by stockholders may be taken without a meeting if
all stockholders entitled to vote on the matter consent to the action by a
writing or writings filed with the records of the meetings of stockholders. Such
consent shall be treated for all purposes as a vote at a meeting.
The Chairman of the Board, if there be one, or in his absence the
President, or in absence of both the Chairman of the Board and the President a
vice-president, shall call meetings of the stockholders to order and shall act
as chairman thereof. The Clerk of the corporation, if present, shall record the
proceedings of all meetings of stockholders and, in his absence, the presiding
officer may appoint a clerk pro tempore of the meeting.
ARTICLE VIII
Board of Directors
A Board of not fewer than one, nor more than five, Directors shall be
elected annually (by ballot if so requested by any stockholder entitled to vote)
at the annual meeting of stockholders by such stockholders as have the right to
vote at such election; provided that, at any time when the Corporation shall
have two or more stockholders, the Board of Directors shall consist of not fewer
than two person, and at any time when the Corporation has three or more
stockholders, the Board of Directors shall consist of not fewer than three
persons. The number of Directors for each corporate year shall initially be
fixed by vote at the meeting at which they are elected.
Any action which may by law, the Articles of Organization or these By-Laws
be taken by a majority of the Board of Directors then in office may be taken by
the sole Director when and if the Corporation has only one Director.
At any time during any year the number of the Board of Directors may be
increased by vote of a majority of the Directors then in office. At any time
during any year, the whole number of Directors may be increased or reduced by
the stockholders at a meeting called for the purpose and, in the case of a
reduction, the particular directorships which shall terminate shall be
determined by the stockholders, in each case by vote of a majority of the stock
outstanding and entitled to vote for the election of Directors, or, in the case
of a reduction which involves the termination of the directorship of an
incumbent Director, by such larger vote, if any, as would be required to remove
such incumbent from office.
Each newly-created directorship resulting from any increase in the number
of Directors may be filled in the manner provided in Article XIX.
No Director need be a stockholder except as may be otherwise provided by
law, by the Articles of Organization or these By-laws. Each Director shall hold
office until the next annual
<PAGE>
meeting of stockholders and until his successor is elected and qualified, or
until he sooner dies, resigns or is removed.
ARTICLE IX
Powers of Directors
The business, property and affairs of the Corporation shall be managed by,
and be under the control and direction of, the Board of Directors, which shall
have and may exercise all the powers of the Corporation except such as are
conferred upon the stockholders or other officers by law, by the Articles of
Organization or by these By-Laws.
Except as may be otherwise specifically provided by law or by vote of the
stockholders, the Board of Directors is expressly authorized to issue, from time
to time, all or any portion or portions of the capital stock of the Corporation
of any class which may have been authorized but not issued or otherwise reserved
for issue, to such person or persons and for such consideration (but not less
than the par value thereof in case of stock having par value), whether cash,
tangible or intangible property, good will, services or expenses, as they may
deem best, without first offering (for subscription or sale) such authorized but
unissued stock to any present or future stockholders of the Corporation, and
generally in their absolute discretion to determine the terms and manner of any
disposition of such authorized but unissued stock.
The Board of Directors may delegate from time to time to any committee,
officer or agent such powers and authority as the law, the Articles of
Organization and these By-Laws may permit. The Board of Directors in its
discretion may appoint and remove and determine the compensation and duties in
addition to those fixed by law, the Articles of Organization and these By-Laws,
of all the officers, representatives, agents, employees, and servants of the
Corporation. The Board of Directors shall have power to fix a reasonable
compensation or fee for the attendance of their members at meetings of the
Board. The Board of Directors shall have the power, from time to time, to fix
and determine and to vary the amount of working capital of the Corporation and
to direct and determine the use and disposition of any surplus or net profits of
the Corporation over and above the amount contributed as, or constituting,
paid-in capital. The Board of Directors, in its discretion, shall, from time to
time, declare what, if any, dividends shall be paid on the stock of the
Corporation out of the remaining surplus or net profits, and any dividend so
declared shall be payable at such time or times as the Board shall determine.
<PAGE>
ARTICLE X
Committees of Directors
The Board of Directors, by vote of a majority of the Directors then in
office, may at any time elect from its own number an executive committee and/or
one or more other committees, to consist of not fewer than three members, and
may from time to time designate or alter, within the limits permitted by this
Article X, the duties and powers of such committees or change their membership,
and may at any time abolish such committees or any of them.
Any committee shall be vested with such powers of the Board of Directors
as the Board may determine in the vote establishing such committee or in a
subsequent vote of a majority of directors then in office, provided, however,
that no such committee shall have any power prohibited by law, or the Articles
of Organization, or the power
(a) to change the principal office of the Corporation;
(b) to amend or authorize the amendment of the
Articles of Organization or these By-Laws;
(c) to issue stock;
(d) to establish and designate series of stock, or fix
and determine the relative rights and preferences
of any series of stock;
(e) to elect officers required by law, the Articles of
Organization or these By-Laws to be elected by stockholders or
Directors, or to fill vacancies in any such office;
(f) to change the number of the Board of Directors or
to fill vacancies in the Board of Directors;
(g) to remove officers or Directors from office;
(h) to authorize the payment of any dividend or
distribution to stockholders;
(i) to authorize the reacquisition for value of stock
of the Corporation;
(j) to authorize a merger or consolidation of the
Corporation or a sale or other disposition of all
or substantially all the property and business of
the Corporation; or
(k) to authorize the liquidation or dissolution of the
Corporation;
and provided further, that the fact that a particular power appears in the
foregoing enumeration of powers denied to
<PAGE>
committees of the Board of Directors shall not be construed to over-ride by
implication any other provision of the Articles of Organization or these By-Laws
limiting or denying to the Board of Directors the right to exercise such power.
Each member of a committee shall hold office until the first meeting of
the Board of Directors following the next annual meeting of stockholders (or
until such other time as the Board of Directors may determine, either in the
vote establishing the committee or at the election of such member) and until his
successor is elected and qualified, or until he sooner dies, resigns, is
removed, is replaced by change of membership or becomes disqualified by ceasing
to be a Director, or until the committee is sooner abolished by the Board of
Directors.
A majority of the members of any committee then in office, but not fewer
than two, shall constitute a quorum for the transaction of business, but any
meeting may be adjourned from time to time by a majority of the votes cast upon
the question, whether or not a quorum is present, and the meeting may be held as
adjourned without further notice. Each committee may make rules not inconsistent
herewith for the holding and conduct of its meetings, but unless otherwise
provided in such rules its meetings shall be held and conducted in the same
manner, as nearly as may be, as is provided in these By-Laws for meetings of the
Board of Directors. The Board of Directors shall have the power to rescind any
vote or resolution of any committee; provided, however, that no rights of third
parties shall be impaired by such rescission.
ARTICLE XI
Meetings of the Board of Directors;
Action without a Meeting
Regular meetings of the Board of Directors may be held without call or
notice at such places and at such times as the Board may from time to time
determine; provided, however, that reasonable notice of such determination and
of any changes therein is given to each member of the Board then in office. A
regular meeting of the Board of Directors for the purpose of electing officers
and agents may be held without call or notice immediately after and at the same
place as the annual meeting of stockholders, and, if held upon due call or
notice, for such other and further purposes as may be specified in such call or
notice.
Special meetings of the Board of Directors may be held at any time and at
any place when called by the President, the Treasurer, the Chairman of the
Board, if there be one, or two or more Directors, reasonable notice thereof
being given to each Director by the Secretary, or, if there be no Secretary, by
the Clerk, or, in the case of death, absence, incapacity or refusal of the
Secretary (or the Clerk, as the case may be), by the officer or Directors
calling the meeting. In any case, it shall be deemed sufficient notice to a
Director to send notice by mail
<PAGE>
at least forty-eight (48) hours, or by telegram at least twenty-four (24) hours,
before the meeting, addressed to him at his usual or last known business or
residence address; or to give notice to him in person, either by telephone or by
handing him a written notice, at least twenty-four (24) hours before the
meeting.
Notwithstanding the foregoing, notice of a meeting need not be given to
any Director if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any Director who
attends the meeting without protesting prior thereto, or at its commencement,
the lack of notice to him.
Any action required or permitted to be taken at any meeting of the
Directors may be taken without a meeting if a written consent thereto is signed
by all the Directors and such written consent is filed with the records of the
meetings of the Directors. Such consent shall be treated as a vote at a meeting
for all purposes. Such consents may be executed in one or more counterparts and
not every Director need sign the same counterpart.
ARTICLE XII
Quorum of Directors
At any meeting of the Board of Directors, a quorum for any election, or
for the consideration of any question, shall consist of a majority of the
Directors then in office, but any meeting may be adjourned from time to time by
a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice. When a
quorum is present at any meeting, the votes of a majority of the Directors
present shall be requisite and sufficient for election to any office, and a
majority of the Directors present shall decide any question brought before such
meeting except in any case where a larger vote is required by law, by the
Articles of Organization or by these By-Laws.
ARTICLE XIII
Officers and Agents
The officers of the Corporation shall be a President, a Treasurer, a
Clerk, and such other officers, which may include a Chairman of the Board, a
Secretary, a Controller, one or more Vice Presidents, Assistant Treasurers,
Assistant Clerks, or Assistant Controllers, as the Board of Directors may, in
its discretion, elect or appoint. The Corporation may also have such agents, if
any, as the Board of Directors may, in its discretion, appoint. The President
need not be a Director. The Clerk shall be a resident of Massachusetts unless
the Corporation has a resident agent appointed for the purpose of receiving
service of
<PAGE>
process. So far as is permitted by law, any two or more offices may be held by
the same person.
Subject to law, to the Articles of Organization and the other provisions
of these By-Laws, each officer shall have, in addition to the duties and powers
herein set forth, such duties and powers as are commonly incident to his office
and as the Board of Directors may from time to time designate.
The President, Treasurer, and Clerk (and the Secretary and Chairman of the
Board, if, as the case may be, there be one) shall be elected annually by the
Board of Directors at its first meeting following the annual meeting of
stockholders, by vote of a majority of the full Board of Directors. Such other
officers of the Corporation as may be created in accordance with these By-laws
may be filled at such meeting by vote of a majority of the full Board of
Directors or any other time by vote of a majority of the Directors then in
office.
Each officer shall (subject to Article XVIII of these By-laws) hold office
until the first meeting of the Board of Directors following the next annual
meeting of stockholders and until his successor is elected or appointed and
qualified, or until he sooner dies, resigns, is removed, or becomes
disqualified. Each agent shall retain his authority at the pleasure of the Board
of Directors.
Any officer, employee, or agent of the Corporation may be required, as and
if determined by the Board of Directors, to give bond for the faithful
performance of his duties.
ARTICLE XIV
President and Vice Presidents; Chairman of the Board
The President shall be the chief executive officer of the Corporation and
shall have general charge and supervision of the business, property and affairs
of the Corporation and such other powers and duties as the Board of Directors
may prescribe, subject to the control of the Board of Directors, unless
otherwise provided by law, the Articles of Organization, these By-Laws or by
specific vote of the Board of Directors. Unless a Chairman of the Board shall
have been elected, the President shall preside at all meetings of stockholders
and of the Board of Directors at which he is present except as otherwise voted
by the Board of Directors.
Any Vice President shall have such duties and powers as shall be
designated from time to time by the Board of Directors or by the President, and,
in any case, shall be responsible to and shall report to the President. In the
absence or disability of the President, the Vice President or, if there be more
than one, the Vice Presidents in the order of their seniority or as otherwise
designated by the Board of Directors, shall have the powers and duties of the
President.
<PAGE>
The Chairman of the Board, if there be one, shall be a member of the Board
of Directors and shall preside at its meetings and at the meetings of the
stockholders. He shall keep himself informed of the administration of the
affairs of the Corporation, shall advise and counsel with the President, and, in
the President's absence, with other officers of the Corporation, and shall
perform such other duties as may from time to time be assigned to him by the
Board of Directors.
ARTICLE XV
Treasurer and Assistant Treasurer
The Treasurer shall be the chief financial officer of the Corporation and
shall be in charge of its funds and the disbursements thereof, subject to the
President and the Board of Directors, and shall have such duties and powers as
are commonly incident to the office of a corporate treasurer and such other
duties and powers as may be prescribed from time to time by the Board of
Directors or by the President. If no Controller is elected, the Treasurer shall
also have the duties and powers of the Controller as provided in these By-Laws.
The Treasurer shall be responsible to and shall report to the Board of
Directors, but in the ordinary conduct of the Corporation's business, shall be
under supervision of the President.
Any Assistant Treasurer shall have such duties and powers as shall be
prescribed from time to time by the Board of Directors or by the Treasurer, and
shall be responsible to and shall report to the Treasurer. In the absence or
disability of the Treasurer, the Assistant Treasurer or, if there be more than
one, the Assistant Treasurers in their order of seniority or as otherwise
designated by the Board of Directors shall have the powers and duties of the
Treasurer.
ARTICLE XVI
Controller
If a Controller is elected, he shall be the chief accounting officer of
the Corporation and shall be in charge of its books of account and accounting
records and of its accounting procedures, and shall have such duties and powers
as are commonly incident to the office of a corporate controller and such other
duties and powers as may be prescribed from time to time by the Board of
Directors or by the President. The Controller shall be responsible to and shall
report to the Board of Directors, but in the ordinary conduct of the
Corporation's business, shall be under the supervision of the President.
Any Assistant Controller shall have duties and powers as shall be
prescribed from time to time by the Board of Directors or by the Controller, and
shall be responsible to and shall report to the Controller. If the absence or
disability of the Controller, the Assistant Controller or, if there be more than
<PAGE>
one, Assistant Controllers in their order of seniority or as otherwise
designated by the Board of Directors, shall have the powers and duties of the
Controller.
ARTICLE XVII
Clerk; Secretary; Assistant Clerk and Assistant Secretary
The Clerk shall record all proceedings of the stockholders in books to be
kept therefor, and shall have custody of the Corporation's records, documents
and valuable papers. In the absence of the Clerk from any such meeting, the
Secretary, if any, may act as temporary clerk, and shall record the proceedings
thereof in the aforesaid books, or a temporary clerk may be chosen by vote of
the meeting.
The Clerk shall also keep, or cause to be kept, the stock transfer records
of the Corporation which shall contain a complete list of the names and
addresses of all stockholders and the amount of stock held by each.
Unless the Board of Directors shall otherwise designate, the Clerk or, in
his absence, the Assistant Clerk, if any, shall have custody of the corporate
seal and be responsible for affixing it to such documents as may be required to
be sealed.
The Clerk shall have such other duties and powers as are commonly incident
to the office of a corporate clerk, and such other duties and powers as may be
prescribed from time to time by the Board of Directors or by the President.
If no Secretary is elected, the Clerk shall also record all proceedings of
the Board of Directors and of any meetings of any committees of the Board, and,
in his absence from any such meeting, a temporary clerk shall be chosen who
shall record the proceedings thereof.
The Secretary shall attend all meetings of the Board of Directors and
shall record the proceedings thereat in books provided for that purpose which
shall be open during business hours to the inspection of any Director. He shall
notify the Directors of the meetings in accordance with these By-Laws and shall
have and may exercise such other powers and duties as the Board of Directors may
prescribe. In the absence of the Secretary at a meeting of the Board of
Directors, a temporary secretary shall be chosen.
Any Assistant Clerk and any Assistant Secretary shall have such duties and
powers as shall from time to time be designated by the Board of Directors or the
Clerk or the Secretary, respectively, and shall be responsible to and shall
report to the Clerk and the Secretary, respectively.
ARTICLE XVIII
<PAGE>
Resignations and Removals
Any Director or officer may resign at any time by delivering his
resignation in writing to the President, the Clerk or the Secretary, or to a
meeting of the Board of Directors. The stockholders may, by vote of a majority
in interest of the stock issued and outstanding and entitled to vote at an
election of Directors, remove any Director or Directors from office with or
without cause; provided, however, that the Directors of a class elected by a
particular class of stockholders may be removed only by the vote of the holders
of a majority of the shares of such class. The Board of Directors may, by vote
of the majority of the Directors in office, remove any Director from office with
cause, or remove any officer from office, with or without cause. The Board of
Directors may, at any time, by vote of a majority of the Directors present and
voting, terminate or modify the authority of any agent. No Director or officer
resigning and (except where a right to receive compensation for a definite
future period shall be expressly provided in a written agreement with the
Corporation, duly approved by the Board of Directors) no Director or officer
removed shall have any right to any compensation as such Director or officer for
any period following his resignation or removal, or any right to damages on
account of such removal, whether his compensation be by the month, by the year
or otherwise. Any Director or officer may be removed for cause only after
reasonable notice and opportunity to be heard before the body proposing to
remove him.
ARTICLE XIX
Vacancies
Any vacancy in the Board of Directors, however occurring, including a
vacancy resulting from the enlargement of the Board, and any vacancy in any
other office, may be filled by the stockholders or, in the absence of
stockholder action, by a majority of the Directors then in office.
If the office of any member of any committee or of any other office
becomes vacant, the Board of Directors may elect or appoint a successor or
successors by vote of a majority of the Directors then in office.
Each successor as a Director or officer shall hold office for the
unexpired term and until his successor shall be elected or appointed and
qualified, or until he sooner dies, resigns, is removed or becomes disqualified.
The Board of Directors shall have and may exercise all its powers,
notwithstanding the existence of one or more vacancies in its number as fixed by
either the stockholders or the Directors.
<PAGE>
ARTICLE XX
Capital Stock
The authorized amount of the capital stock and the par value, if any, of
the shares shall be as fixed in the Articles of Organization. At all times when
there are two or more classes of stock, the several classes of stock shall
conform to the description and terms, and have the respective preferences,
voting powers, restrictions and qualifications set forth in the Articles of
Organization.
ARTICLE XXI
Certificate of Stock
Each stockholder shall be entitled to a certificate of the capital stock
of the Corporation owned by him, in such form as shall, in conformity to law, be
prescribed from time to time by the Board of Directors. Such certificate shall
be signed by either the President or a Vice President, and by either the
Treasurer or an Assistant Treasurer, and may, but need not be, sealed with the
corporate seal; but when any such certificate is signed by a transfer agent or
by a registrar other than a Director, officer, or employee of the Corporation,
the signature of the President or a Vice President and of the Treasurer or an
Assistant Treasurer of the Corporation, or either or both such signatures and
such seal upon such certificate, may be facsimile. If any officer who has
signed, or whose facsimile signature has been placed on, any such certificate
shall have ceased to be such officer before such certificate is issued, the
certificate may be issued by the Corporation with the same effect as if he were
such officer at the time of issue.
Every certificate for shares of stock which are subject to any restriction
on transfer pursuant to law, the Articles of Organization, these By-Laws, or any
agreement to which the Corporation is a party, shall have the restriction noted
conspicuously on the certificate, and shall also set forth, on the face or back,
either the full text of the restriction or a statement of the existence of such
restriction and (except if such restriction is imposed by law) a statement that
the Corporation will furnish a copy thereof to the holder of such certificate
upon written request and without charge. Every certificate issued when the
Corporation is authorized to issue more than one class or series of stock shall
set forth on its face or back either the full text of the preferences, voting
powers, qualifications, and special and relative rights of the shares of each
class and series authorized to be issued, or a statement of the existence of
such preferences, powers, qualifications and rights, and a statement that the
Corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
<PAGE>
ARTICLE XXII
Transfer of Shares of Stock
Subject to the restrictions, if any, stated or noted on the stock
certificates, shares of stock may be transferred on the books of the Corporation
only by surrender to the Corporation, or its transfer agent, of the certificate
therefor, properly endorsed or accompanied by a written assignment or power of
attorney properly executed, with all requisite stock transfer stamps affixed,
and with such proof of the authenticity and effectiveness of the signature as
the Corporation or its transfer agent shall reasonably require. Except as may be
otherwise required by law, the Articles of Organization or these By-Laws, the
Corporation shall have the right to treat the person registered on the stock
transfer books as the owner of any shares of the Corporation's stock as the
owner-in-fact thereof for all purposes, including the payment of dividends,
liability for assessments, the right to vote with respect thereto and otherwise,
and accordingly shall not be bound to recognize any attempted transfer, pledge
or other disposition thereof, or any equitable or other claim with respect
thereto, whether or not it shall have actual or other notice thereof, until such
shares shall have been transferred on the Corporation's books in accordance with
these By-Laws. It shall be the duty of each stockholder to notify the
Corporation of his post office address.
ARTICLE XXIII
Transfer Agents and Registrars; Further Regulations
The Board of Directors may appoint one or more banks, trust companies or
corporations doing a corporate trust business, in good standing under the laws
of the United States or any state therein, to act as the Corporation's transfer
agent and/or registrar for shares of capital stock, and the Board may make such
other and further regulations, not inconsistent with applicable law, as it may
deem expedient concerning the issue, transfer and registration of capital stock
and stock certificates of the Corporation.
ARTICLE XXIV
Loss of Certificates
In the case of the alleged loss, destruction, or wrongful taking of a
certificate of stock, a duplicate certificate may be issued in place thereof
upon receipt by the Corporation of such evidence of loss and such indemnity
bond, with or without surety, as shall be satisfactory to the President and the
Treasurer, or otherwise upon such terms, consistent with law, as the Board of
Directors may prescribe.
<PAGE>
ARTICLE XXV
Record Date
The Directors may fix in advance a time, which shall not be more than
sixty days before the date of any meeting of stockholders or the date for the
payment of any dividend or the making of any distribution to stockholders, or
the last day on which the consent or dissent of stockholders may be effectively
expressed for any purpose, as the record date for determining the stockholders
having the right to notice of and to vote at, such meeting and any adjournment
thereof, or the right to receive such dividend or distribution, or the right to
give such consent or dissent, and in such case, only stockholders of record on
such record date shall have such right, notwithstanding any transfer of stock on
the books of the Corporation after the record date; or, without fixing such
record date, the Directors may, for any such purposes, close the transfer books
for all or any part of such period.
ARTICLE XXVI
Seal
The seal of the Corporation shall, subject to alteration by the Board of
Directors, consist of a flat-faced circular die with the word "Massachusetts",
together with the name of the Corporation and the year of incorporation, cut or
engraved thereon. An impression of the seal impressed upon the original copy of
these By-Laws shall be deemed conclusively to be the seal adopted by the Board
of Directors.
ARTICLE XXVII
Execution of Papers
Except as the Board of Directors may generally or in particular cases
otherwise authorize or direct, all deeds, leases, transfers, contracts,
proposals, bonds, notes, checks, drafts and other obligations made, accepted or
endorsed by the Corporation shall be signed or endorsed on behalf of the
Corporation by its President or by one of its Vice Presidents or by its
Treasurer.
ARTICLE XXVIII
Fiscal Year
Except as from time to time provided by the Board of Directors, the fiscal
year of the Corporation shall end on the December 31 of each year.
<PAGE>
ARTICLE XXIX
Voting Stock in Other Corporations
Unless otherwise ordered by the Board of Directors, the President or, in
the case of his absence or failure to act, the Treasurer, shall have full power
and authority on behalf of the Corporation to attend and to act and to vote at
any meetings of stockholders of any corporation in which this Corporation may
hold stock, and at any such meeting shall possess and may exercise any and all
rights and powers incident to the ownership of such stock and which, as the
owner thereof, the Corporation might have possessed and exercised if present.
The Board of Directors, by resolution from time to time, or, in the absence
thereof, the President, may confer like powers upon any other person or persons
as attorneys and proxies of the Corporation.
ARTICLE XXX
Corporate Records
The original or attested copies of the Articles of Organization, By-Laws,
and records of all meetings of the incorporators and stockholders, and the stock
and transfer records which shall contain the names of all stockholders and the
record address and the amount of stock held by each, shall be kept in
Massachusetts either at the principal office of the Corporation or at an office
of its transfer agent or of the Clerk. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times for
inspection by any stockholder for any proper purpose, but not to secure a list
of the stockholders for the purpose of selling said list, or copies thereof, or
of using the same for a purpose other than in the present interest of the
applicant, as a stockholder, relative to the affairs of the Corporation.
ARTICLE XXXI
Amendments
These By-Laws may be altered, amended or repealed, in whole or in part at
any time by vote of the stockholders. The Board of Directors, by a majority vote
of Directors at the time in office, may alter, amend or repeal these By-Laws in
whole or in part, except with respect to any provision hereof which by law, the
Articles of Organization or these By-Laws requires action by the stockholders;
provided that not later than the time of giving notice of the meeting of
stockholders next following the alteration, amendment or repeal of these
By-Laws, in whole or in part, notice thereof, stating the substance of such
action shall be given to all stockholders entitled to vote on amending these
By-Laws. By-Laws adopted by the Directors may be amended by the stockholders.
BYLAWS
OF
IRON MOUNTAIN RECORDS MANAGEMENT
OF MARYLAND, INC.
(a Maryland corporation)
ARTICLE 1
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing shares of
stock shall set forth thereon the statements prescribed by Sections 2-207 and
2-211 of the Maryland General Corporation Law and by any other applicable
provision of law and shall be signed by the President or the Chairman of the
Board, if any, or a Vice-President and countersigned by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer and may be sealed
with the corporate seal or a facsimile of it or in any other form. The
signatures of any such officers may be either manual or facsimile signatures. In
case any such officer who has signed manually or by facsimile any such
certificate ceases to be such officer before the certificate is issued, it may
nevertheless be issued by the corporation with the same effect as if the officer
had not ceased to be such officer as of the date of its issue.
No certificate representing shares of stock shall be issued for any share
of stock until such share is fully paid, except as otherwise authorized by the
provisions of Section 2-210 of the Maryland General Corporation Law.
The corporation may issue a new certificate of stock in place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or
destroyed, and the Board of Directors may, in its discretion, require the owner
of any such certificate to give bond, with sufficient surety, to the corporation
to indemnify it against any loss or claim that may arise by reason of the
issuance of a new certificate.
Upon compliance with the provisions of Section 2-514 of the Maryland
General Corporation Law, the Board of Directors of the corporation may adopt by
resolution a procedure by which a stockholder of the corporation may certify in
writing to the corporation that any shares registered in the name of the
stockholder are held for the account of a specified person other than the
stockholder.
2. FRACTIONAL SHARE INTERESTS OR SCRIP. The corporation may, but shall
not be obliged to, issue fractional shares of stock, eliminate a fractional
interest by rounding off to a full share of stock, arrange for the disposition
of a fractional interest by the person entitled to it, pay cash for the fair
value of a fractional share of stock determined as of the time when the person
entitled to receive it is determined, or issue scrip or other evidence of
ownership, and which shall entitle its holder to exchange such scrip or other
evidence of ownership aggregating a full share for a certificate which
represents the share, but such scrip or other evidence of
<PAGE>
ownership shall not, unless otherwise provided, entitle the holder to exercise
any voting right, or to receive dividends thereon or to participate in any of
the assets of the corporation in the event of liquidation. The Board of
Directors may impose any reasonable condition on the issuance of scrip or other
evidence of ownership, and may cause such scrip or evidence of ownership to be
issued subject to the condition that it shall become void if not exchanged for a
certificate representing a full share of stock before a specified date or
subject to the condition that the shares for which such scrip or evidence of
ownership is exchangeable may be sold by the corporation and the proceeds
thereof distributed to the holders of such scrip or evidence of ownership, or
subject to a provision for forfeiture of such proceeds to the corporation if not
claimed within a period of not less than three years from the date the scrip or
other evidence of ownership was originally issued.
3. SHARE TRANSFERS. Upon compliance with provisions restricting the
transferability of shares of stock, if any, transfers of shares of stock of the
corporation shall be made only on the stock transfer books of the corporation by
the record holder thereof, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the corporation or with a
transfer agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares of stock properly endorsed and the payment of all
taxes due thereon, if any.
4. RECORD DATE FOR STOCKHOLDERS. The Board of Directors may set a
record date or direct that the stock transfer books be closed for a stated
period for the purpose of making any proper determination with respect to
stockholders, including which stockholders are entitled to notice of a meeting,
to vote at a meeting, to receive a dividend, or to be allotted other rights;
provided, that, except as may be otherwise provided herein, any such record date
shall be not more than ninety days before the date on which the action requiring
the determination will be taken, that any such closing of the transfer books may
not be for a period longer than twenty days, and that, in the case of a meeting
of stockholders, any such record date or any such closing of the transfer books
shall be at least ten days before the date of the meeting. If a record date is
not set, and, if the stock transfer books are not closed, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be the later of either the close of business on the day on
which notice of the meeting is mailed or the thirtieth day before the meeting,
and the record date for determining stockholders entitled to receive payment of
a dividend or an allotment of any rights shall be the close of business on the
day on which the resolution of the Board of Directors declaring the dividend or
allotment of rights is adopted, but any such payment of a dividend or allotment
of rights shall not be made more than sixty days after the date on which the
resolution is adopted; and a meeting of stockholders convened on the date for
which it was called may be adjourned from time to time without further notice to
a date not more than one hundred and twenty days after the original record date.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share of stock" or "shares of stock" or "stockholder" or
"stockholders" refers to an outstanding share or shares of stock and to a holder
or holders of record of outstanding shares of stock when the corporation is
authorized to issue only one class of shares of stock, and said reference is
also intended to include any outstanding share or shares of stock and any holder
or holders of record of
2
<PAGE>
outstanding shares of stock of any class or series upon which or upon whom the
Articles of Incorporation confer such rights where there are two or more classes
or series of shares or upon which or upon whom the provisions of the Maryland
General Corporation Law may confer such rights or the right of dissent
notwithstanding that &e Articles of Incorporation may provide for more than one
class or series of shares of stock, one or more of which are limited or denied
such rights thereunder.
6. STOCKHOLDER MEETINGS.
- TIME. The annual meeting of stockholders shall be held on the date
fixed, from time to time, by the directors, within the thirty day period
commencing with the day of , for the election of directors and the transaction
of any business within the powers of the corporation.
A special meeting shall be held on the date fixed by the directors
- PLACE. Annual meetings and special meetings shall be held at such
place, either within the State of Maryland or at such other place within the
United States, as the directors may, from time to time, set. Whenever the
directors shall fail to set such place, or, whenever stockholders entitled to
call a special meeting shall call the same, and a place of meeting is not set,
the meeting shall be held at the principal office of the corporation in the
State of Maryland.
- CALL. Annual meetings may be called by the directors or the
President or by any officer instructed by the directors or the President to call
the meeting. Except as may be otherwise provided by the provisions of the
Maryland General Corporation Law, special meetings may be called in like manner
and shall be called by the Secretary whenever the holders of shares entitled to
at least twenty-five per cent of all the votes entitled to be cast at such
meeting shall make a duly authorized request that such meeting be called.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written
notice of all meetings shall be given by the Secretary and shall state the time
and place of the meeting. The notice of an annual meeting shall state that the
meeting is called for the election of directors and for the transaction of other
business which may properly come before the meeting, and shall (if any other
action which could be taken at a special meeting is to be taken at such annual
meeting) contain any additional statements required in a notice of a special
meeting, and shall include a copy of any requisite statements or provisions
prescribed by the provisions of the Maryland General Corporation Law; provided,
however, that any business of the corporation may be transacted at any annual
meeting without being specially noticed unless the provisions of the Maryland
General Corporation Law provide otherwise. The notice of a special meeting shall
in all instances state the purpose or purposes for which the meeting is called
and shall include a copy of any requisite statements or provisions prescribed by
the provisions of the Maryland General Corporation Law. Written notice of any
meeting shall be given to each stockholder either by mail or personally
delivered to him or by leaving it at his residence or usual place of business
not less than ten days and not more than ninety days before the date of the
meeting. unless any provisions of the Maryland General Corporation Law shall
prescribe a different elapsed period of time. to each stockholder at his address
appearing on the books of the corporation or the address supplied by him for the
purpose of notice. If mailed, notice shall be deemed to be given when deposited
in the United States mail addressed to the stockholder at his
3
<PAGE>
address as it appears on the records of the corporation with postage thereon
prepaid. Whenever any notice of the time, place or purpose of any meeting of
stockholders is required to be given under the provisions of the Articles of
Incorporation, these Bylaws or of the provisions of the Maryland General
Corporation Law, a waiver thereof in writing, signed by the stockholder and
filed with the records of the meeting, whether before or after the holding
thereof, or his presence in person or by proxy at the meeting shall be deemed
equivalent to the giving of such notice to such stockholder. The foregoing
requirements of notice shall also apply, whenever the corporation shall have any
class of stock which is not entitled to vote, to holders of stock who are not
entitled to vote at the meeting, but who are entitled to notice thereof and to
dissent from any action taken thereat.
- STATEMENT OF AFFAIRS. The President of the corporation, or, if the
Board of Directors shall determine otherwise, some other executive officer
thereof, shall prepare or cause to be prepared annually a full and correct
statement of the affairs of the corporation, including a balance sheet and a
financial statement of operations for the preceding fiscal year, which shall be
submitted at the Annual Meeting and placed on file within twenty days thereafter
at the principal office of the corporation in the State of Maryland.
- CONDUCT OF MEETINGS. Meetings of the stockholders shall be
presided over by one of the following officers in the order of seniority and if
present and acting - the Chairman of the Board, if any, the Vice-Chairman of the
Board, if any, the President, a Vice-President, or, if none of the foregoing is
in office and present and acting, by a chairman to be chosen by the
shareholders. The Secretary of the corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present the Chairman of the meeting shall appoint
a secretary of the meeting.
- PROXY REPRESENTATION. Every stockholder may authorize another
person or persons to act for him by proxy in all matters in which a stockholder
is entitled to participate, whether for the purposes of determining his presence
at a meeting, or whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting,
or otherwise. The authorization shall be effected as prescribed by the
provisions of Section 2-507 of the Maryland General Corporation Law.
- INSPECTORS OF ELECTION. The directors, in advance of any meeting,
may, but need not, appoint one or more inspectors to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed. the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares outstanding and the voting power of each,
the shares represented at the meeting, the existence of a quorum, the validity
and effect of proxies, and shall receive voles, ballots or consents, hear and
determine all challenges and questions arising in connection with the right to
vote, count and tabulate all votes, ballots or consents, determine the result,
and do such acts as are proper to conduct the election or vote with fairness to
all stockholders. On request of the person presiding at the meeting or any
stockholder,
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the inspector or inspectors, if any, shall make a report in writing of any
challenge, question or matter determined by him or them and execute a
certificate of any fact found by him or them.
- QUORUM. Except as may otherwise be required by the provisions of
the Maryland General Corporation Law, the Articles of Incorporation, or these
Bylaws, the presence in person or by proxy at a meeting of the stockholders
entitled to cast at least a majority of the votes entitled to be cast at the
meeting shall constitute a quorum.
- VOTING. Each share of stock shall entitle the holder thereof to
one vote except in the election of directors, at which each said vote may be
cast for as many persons as there are directors to be elected. Except as may
otherwise be provided in the provisions of the Maryland General Corporation Law.
The Articles of Incorporation or these Bylaws, a majority of all the votes cast
at a meeting of stockholders at which a quorum is present shall be sufficient to
approve any matter which may properly come before the meeting. A plurality of
all the votes cast at a meeting of stockholders at which a quorum is present is
sufficient to elect a director.
7. INFORMAL ACTION. Any action required or permitted to be taken at any
meeting of stockholders may be taken without a meeting if the following are
filed with the records of the meeting: an unanimous written consent which sets
forth the action and is signed by each stockholder entitled to vote on the
matter, and, as applicable, a written waiver of any right to dissent signed by
each stockholder entitled to notice of the meeting but not entitled to vote at
it.
ARTICLE 2
BOARD OF DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and the affairs of the
corporation shall be managed by or under the direction of its Board of
Directors. All powers of the corporation may be exercised by or under authority
of said Board of Directors. The use of the phrase "entire board" herein refers
to the total number of directors which the corporation would have if there were
no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be a natural person of
full age. A director need not be a stockholder. a citizen of the United States,
or a resident of the State of Maryland. The initial Board of Directors shall
consist of persons, which is the number set forth in the Articles of
Incorporation. Thereafter the number of directors constituting the entire board
shall be at least three, except that when the number of stockholders is fewer
than three, the number of directors may be the same as the number of said
stockholders. Except for the first Board of Directors, such number may be set
from time to time by action of the stockholders or of a majority of the entire
Board of Directors or, if the number is not so set, the number shall be . The
number of directors may be increased or decreased by an amendment to these
Bylaws, provided, however, that the tenure of office of a director shall not be
affected by any decrease in the number of directors.
3. ELECTION AND TERM. The first Board of Directors shall consist of the
directors named in the Articles of Incorporation and shall hold office until the
first annual
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meeting of stockholders or until their successors have been elected and
qualified. Thereafter, directors who are elected at an annual meeting of
stockholders, and directors who are elected in the interim to fill vacancies and
newly created directorships, shall hold office until the next annual meeting of
stockholders and until their successors have been elected and qualified. In the
interim between annual meetings of stockholders or of special meetings of
stockholders called for the election of directors newly created directorships
and any vacancies in the Board of Directors, including vacancies resulting from
the removal of directors by the stockholders which have not been filled by said
stockholders, may be filled by the Board of Directors. Newly created
directorships filled by the Board of Directors shall be by action of a majority
of the entire Board of Directors. All other vacancies to be filled by the Board
of Directors may be filled by a majority of the remaining members of the Board
of Directors, whether or not sufficient to constitute a quorum.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall set,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the
State of Maryland as shall be set by the Board.
- CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, of the President, or of a
majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral, or any other mode of notice of the time and place shall be given
for special meetings in sufficient time for the convenient assembly of the
directors thereat. The notice of any meeting need not specify the business to be
transacted or the purpose of the meeting. Whenever any notice of the time,
place. or purpose of any meeting of directors or any committee thereof is
required to be given under the provisions of the Maryland General Corporation
Law or of these Bylaws, a waiver thereof in writing, signed by the director or
committee member entitled to such notice and filed with the records of the
meeting. whether before or after the meeting, or presence at the meeting, shall
be deemed equivalent to the giving of such notice to such director or such
committee member.
- QUORUM AND ACTION. A majority sf the entire Board of Directors
shall constitute a quorum except when a vacancy or vacancies prevents such
majority, whereupon a majority of the directors in office shall constitute a
quorum, provided such majority shall constitute at least one-third of the entire
Board and, in no event, less than two directors provided, that whenever the
entire Board of Directors consists of one director, that one director shall
constitute a quorum. Except as in the Articles of Incorporation and herein
otherwise provided and, except as in provisions of The Maryland General
Corporation Law otherwise provided, the action of the directors present at a
meeting at which a quorum is present shall be the action of the Board of
Directors. Members of the Board of Directors or of a committee thereof may
participate
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in a meeting by means of a conference telephone or similar communications
equipment if all persons participating in the meeting can hear each other at the
same time; and participation by such means shall constitute presence in person
at a meeting.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the President, if
present and acting, or any other director chosen by the Board. shall preside.
5. REMOVAL OF DIRECTORS. Any or all of the directors may be removed,
with or without cause, pursuant to the provisions of Section 2-406 of the
Maryland General Corporation Law.
6. COMMITTEES. The Board of Directors may appoint from among its members
an Executive Committee and other committees composed of two or more directors,
and may delegate to such committee or committees any of the powers of the Board
of Directors except such powers as may not be delegated under the provisions of
the Maryland General Corporation Law. In the absence of any member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a member of the Board of Directors to act in
the place of such absent member.
7. INFORMAL ACTION. Any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if a written consent to such action is signed by all members
of the Board of Directors or any such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or any
such committee.
ARTICLE 3
OFFICERS
The corporation shall have a President, a Secretary, and a Treasurer and
may have a Chairman of the Board. a Vice-Chairman of the Board and one or more
Vice-Presidents, who shall be elected by the Board of Directors, and may also
have such other officers, assistant officers, and agents as the Board of
Directors shall authorize from time to time, each of whom shall be elected or
appointed in the manner prescribed by the Board of Directors. Any two or more
offices, except those of President and Vice-President, may be held by the same
person, but no person shall execute, acknowledge or verify any instrument in
more than one capacity, if such instrument is required by law to be executed,
acknowledged or verified by more than one officer. Unless otherwise provided in
the resolution of election or appointment, each officer shall hold office until
the meeting of the Board of Directors following the next annual meeting of
stockholders and until his successor has been elected or appointed and
qualified.
The officers and agents of the corporation shall have the authority and
perform the duties in the management of the corporation as determined by the
resolution electing or appointing them.
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Any officer or agent may be removed by the Board of Directors whenever, in
its judgment, the best interests of the corporation will be served thereby.
ARTICLE 4
PRINCIPAL OFFICE - RESIDENT AGENT - STOCK LEDGER
The address of the initial principal office of the corporation in the
State of Maryland and the name and the address of the initial resident agent of
the corporation in the State of Maryland are set forth in the Articles of
Incorporation.
The corporation shall maintain, at its principal office in the State of
Maryland or at a business office or an agency of the corporation an original or
duplicate stock ledger containing the name and address of each stockholder and
the number of shares of each class held by each stockholder. Such stock ledger
may be in written form or any other form capable of being converted into written
form within a reasonable time for visual inspection.
The corporation shall keep at its principal office in the State of
Maryland the original or a certified copy of the Bylaws, including all
amendments thereto, and shall duly file thereat the annual statement of affairs
of the corporation.
ARTICLE 5
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and shall be in such form and contain such other words and/or
figures as the Board of Directors shall determine or the law require.
ARTICLE 6
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
ARTICLE 7
CONTROL OVER BYLAWS
The power to adopt, alter, amend, and repeal the Bylaws is vested in the
Board of Directors of the corporation.
I HEREBY CERTIFY that the foregoing is a full, true and correct copy of
the Bylaws of ________________, a Maryland corporation, as in effect on the date
hereof.
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WITNESS my hand and the seal of the corporation.
Dated:
------------------------------
Secretary of
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WAIVER OF NOTICE
OF
ORGANIZATION MEETING OF DIRECTORS
OF
WE, THE UNDERSIGNED, being all of the directors named in the Articles of
Incorporation of the above-named corporation, do hereby severally waive notice l
] of the time and place of the organization meeting 2] of directors of said
corporation, and consent that the meeting be held at
on the _____ day of ______, 19__, at __.M., for the purpose of adopting Bylaws
and electing officers and for the transaction of such other business as may come
before the meeting.
Dated:
-------------------------
-------------------------
-------------------------
1] In lieu of a waiver, at least 3 days' written notice must be given. [2-109]
2] In lieu of a meeting, all of the directors may act in writing. [2-408]
REGULATIONS
OF
IRON MOUNTAIN RECORDS MANAGEMENT OF OHIO, INC.
(an Ohio corporation)
ARTICLE I
SHAREHOLDERS
1. CERTIFICATES REPRESENTING SHARES. Certificates representing shares
shall be signed by the Chairman of the Board, if any, or the President or a
Vice-President and by the Secretary, an Assistant Secretary, the Treasurer, or
an Assistant Treasurer of the corporation, shall certify the number and class of
shares represented thereby, and shall set forth the statements prescribed by
Section 1701.25 of the Revised Code of Ohio ("General Corporation Law"). When
any such certificate is countersigned by an incorporated transfer agent or
registrar, the signature of any of said officers of the corporation may be
facsimile, engraved, stamped, or printed. Although any officer of the
corporation whose manual or facsimile signature is affixed to such a certificate
ceases to be such officer before the certificate is delivered, such certificate
nevertheless shall be effective in all respects when delivered.
A certificate representing shares shall not be executed or delivered until
the share or shares represented thereby are fully paid.
The corporation may issue a new certificate for shares in place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or
destroyed, and the Board of Directors may require the owner of any lost, stolen,
or destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss, theft, or destruction of any such
certificate or the issuance of any such new certificate.
2. FRACTIONAL SHARE INTERESTS. The corporation may but need not execute
and deliver a certificate for or including a fraction of a share; or, in lieu
thereof, may pay to the person otherwise entitled to become a holder of a
fraction of a share an amount in cash specified as the value thereof in a
resolution of the Directors, or other agreement or instrument pursuant to which
such fraction of a share would otherwise be issued, or, if not so specified,
then the amount determined for such purpose by the Directors or the amount
realized upon sale of such fraction of a share; or provide reasonable means to
afford to such person the opportunity, on specified terms and conditions, to
purchase or sell fractional interests in shares, to the exclusion of all rights
he might otherwise have; or execute and deliver registered or bearer scrip over
the manual or facsimile signature of an officer of the corporation or of its
agent for that purpose, exchangeable as therein provided for full shares, but
such scrip shall not entitle the holder to any rights as a shareholder except as
therein provided. The scrip may provide that it shall become
<PAGE>
void unless the rights of the holders are exercised within a specified period
and may contain any other provisions that the corporation deems advisable.
Whenever any such scrip ceases to be exchangeable for full shares, the shares
that would otherwise have been issuable as therein provided shall be deemed to
be treasury shares unless the scrip contains other provision for their
disposition.
3. SHARE TRANSFERS. Upon compliance with provisions restricting the
transferability of shares, if any, transfers of shares of the corporation shall
be made only on the books of the corporation by the registered holder thereof,
or by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with an incorporated transfer
agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares properly endorsed and the payment of all taxes due
thereon, if any.
4. RECORD DATE FOR SHAREHOLDERS. For any lawful purpose, including,
without limitation, the determination of the shareholders who are entitled to:
(1) receive notice of or to vote at a meeting of shareholders; (2) receive
payment of any dividend or distribution; (3) receive or exercise rights of
purchase of or subscription for, or exchange or conversion of, shares or other
securities, subject to contract rights with respect thereto; or (4) participate
in the execution of written consents, waivers, or releases, the Board of
Directors may fix a record date which shall not be a date earlier than the date
on which the record date is fixed and, in the cases provided for in clauses (1),
(2), and (3) above, shall not be more than sixty days, preceding the date of the
meeting of the shareholders, or the date fixed for the payment of any dividend
or distribution, or the date fixed for the receipt or the exercise of rights, as
the case may be. The record date for the purpose of clause (1) above, shall
continue to be the record date for all adjournments of such meeting unless the
Directors shall fix another date, and, in case a new record date is so fixed,
notice thereof and of the date to which the meeting shall have been adjourned
shall be given to the shareholders of record as of said date in accordance with
the same requirements as those applying to a meeting newly called.
5. MEANING OF CERTAIN TERMS. As used in these Regulations in respect of
the right to notice of a meeting of shareholders or a waiver thereof or to
participate or vote thereat or to execute a consent, waiver, or release, or to
register dissent, as the case may be, the term "share" or "shares" or
"shareholder" or "shareholders" refers to an outstanding share or shares and to
a holder or holders of record of outstanding shares when the corporation is
authorized to issue only one class of shares and said reference is also intended
to include any outstanding share or shares and any holder or holders of record
of outstanding shares of any class upon which or upon whom the Articles of
Incorporation confer such rights where there are two or more classes or series
of shares or upon which or upon whom the General Corporation Law confers such
rights notwithstanding that the Articles of Incorporation may provide for
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<PAGE>
more than one class or series of shares, one or more of which are limited or
denied such rights thereunder. Except for subscriptions received by the
incorporators, and except as the contract of subscription may otherwise provide,
a subscriber for shares for which the subscription price has not been fully paid
shall not be deemed to be a shareholder and the shares so subscribed shall not
be deemed to be outstanding shares.
6. SHAREHOLDER MEETINGS.
- TIME. The annual meeting for the election of directors, the
consideration of reports to be laid before the meeting, and for such other
purposes as shall be stated in the notice of the meeting, shall be held on a
date designated by the Board of Directors. In the absence of such designation,
the annual meeting shall be held on the first Monday of the fourth month fol
lowing the close of the fiscal year of the corporation. A special meeting shall
be held on the date designated by the directors.
- PLACE. Annual meetings and special meetings shall be held at such
place within or without the State of Ohio as the Board of Directors shall fix,
or, if the Board of Directors shall fail to fix such place, then at the
principal office of the corporation in Ohio.
- CALL. Annual and special meetings may be called by the directors,
by the Chairman of the Board, if any, the President, a Vice-President if the
President is unable to act, the Secretary, by any officer instructed by the
directors to call the meeting, or by the holders of not less than fifty per cent
of the shares.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written
notice stating the time, place, and purposes of each meeting, shall be delivered
not less than seven days (or not less than any such other minimum period of days
as may be prescribed by the General Corporation Law) nor more than sixty days
before the date of the meeting, either personally or by mail by or at the
direction of the directors, the Chairman of the Board, if any, the President,
the Secretary or the officer or persons calling the meeting, to each
shareholder. If mailed, such notice shall be addressed to the shareholder at his
address as it appears on the records of the corporation, with postage prepaid.
The notice of any annual or special meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Notice of the time, place, and purposes of any
meeting of shareholders may be waived in writing, either before or after the
holding of such meeting, by any shareholder. The attendance of any shareholder
at any such meeting without protesting, prior to or at the commencement of the
meeting, the lack of proper notice shall be deemed to be a waiver by him of
notice of such meeting. Notice of adjournment of a meeting need not be given if
the time and place to which it is adjourned are fixed and announced at such
meeting.
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<PAGE>
- ANNUAL FINANCIAL STATEMENT. At the annual meeting of
shareholders, or the meeting held in lieu thereof, the corporation shall lay
before the shareholders the financial statement prescribed by Section 1701.38 of
the General Corporation Law.
- VOTING LIST. Upon request of any shareholder at any meeting of
shareholders, there shall be produced at such meeting an alphabetically arranged
list, or classified lists, of shareholders of record as of the applicable record
date, who are entitled to vote, showing their respective addresses and the
number and class of shares held by each. Such list or lists when certified by
the officer or agent in charge of the transfer of shares shall be prima-facie
evidence of the facts shown therein. -
- CONDUCT OF MEETING. Meetings of the shareholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the shareholders.
The Secretary of the corporation, or in his absence, an Assistant Secretary,
shall act as secretary of every meeting, but, if neither the Secretary nor an
Assistant Secretary is present and acting, the Chairman of the meeting shall
appoint a secretary of the meeting.
- PROXY REPRESENTATION. A person who is entitled to attend a
shareholders' meeting, to vote thereat, or to execute consents, waivers, or
releases, may be represented at such meeting or vote thereat, and execute
consents, waivers, and releases, and exercise any of his other rights, by proxy
or proxies appointed by a writing signed by such person. A telegram or cablegram
appearing to have been transmitted by such person, or a photographic,
photostatic, or equivalent reproduction of a writing, appointing a proxy is a
sufficient writing. No appointment of a proxy shall be valid after the
expiration of eleven months after it is made unless the writing specifies the
date on which it is to expire or the length of time it is to continue in force.
Every proxy shall be revocable at the pleasure of the person executing it except
as otherwise provided by the General Corporation Law.
- INSPECTORS OF ELECTION. The directors, in advance of any meeting
of shareholders, may appoint inspectors of election to act at such meeting or
any adjournment thereof. If inspectors are not so appointed, the officer acting
as Chairman of any such meeting may make such appointment. In case any person
who may be appointed as inspector fails to appear or to act, the vacancy may be
filled by appointment made by the directors in advance of the meeting, or at the
meeting by the officer acting as Chairman. If inspectors are appointed and, if
there are three or more inspectors, the decision, act, or certificate of a
majority of them shall be effective in all respects as the decision, act, or
certificate of all. The inspectors, if any, shall determine the number of shares
outstanding, the voting rights with respect to each, the shares represented at
the meeting, the existence of a quorum, and the authenticity, validity, and
effect of proxies; receive votes, ballots, if any, consents, waivers, or
releases; hear and determine all challenges and questions arising in connection
with the vote; count and tabulate all votes, consents, waivers, and releases;
determine and announce the result; and to do such acts as are proper to conduct
the election or vote with fairness to all shareholders. On request, the
inspectors, if any, shall make a report in writing of any challenge, question,
or matter determined by them and execute a certificate of any fact found by
them.
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<PAGE>
- QUORUM. The holders of a majority of the outstanding shares shall
constitute a quorum at a meeting of shareholders for the transaction of any
business. The holders of a majority of the shares represented at a meeting,
whether or not a quorum is present, may adjourn such meeting from time to time.
- VOTING. Unless and until the Articles of Incorporation are amended
as permitted by division (B)(10) of Section 1701.69 of the General Corporation
Law, shareholders shall be entitled to cumulate their votes in the election of
directors upon compliance with the provisions of Section 1701.55 of the General
Corporation Law. Except in the case of such cumulative voting, each share shall
entitle the holder thereof to one vote.
In the election of directors, the candidates receiving the greatest number
of votes at a meeting at which a quorum is present shall be elected.
Any action which would otherwise require for its authorization, under the
General Corporation Law, more than a majority, but less than all, of the voting
power of shareholders or more than a majority, but less than all, of the
shareholders entitled to vote, as the case may be, shall be authorized, pursuant
to the provisions of the Articles of Incorporation as authorized by Section
1701.52 of the General Corporation Law, by at least a majority of the voting
power of the shareholders or by at least a majority of the shareholders entitled
to vote, as the case may be.
Any action for which the General Corporation Law does not prescribe the
proportion of voting power required to authorize the same shall be authorized by
at least a majority of the voting power represented at a meeting at which a
quorum is present.
All other actions shall be authorized by the proportion of voting power or
by the proportion of votes of shareholders entitled to vote, as the case may be,
in the manner prescribed by the General Corporation Law, the Articles of
Incorporation, or these Regulations.
7. WRITTEN ACTION. Any action which may be authorized or taken at a
meeting of the shareholders may be authorized or taken without a meeting with
the affirmative vote or approval of, and in a writing or writings signed by, all
the shareholders who would be entitled to notice of a meeting of the
shareholders held for such purpose, which writing or writings shall be filed
with or entered upon the records of the corporation.
ARTICLE II
DIRECTORS
1. FUNCTIONS, DEFINITION, AND COMPENSATION. The business and affairs of
the corporation shall be managed by a Board of Directors. The use of the phrase
full Board in these Regulations refers to the whole authorized number of
directors fixed in these Regulations.
The directors, by the affirmative vote of a majority of those in office,
and irrespective of any financial or personal interest of any of them, shall
have authority to establish reasonable compensation, which may include pension,
disability, and death benefits for services to the corporation by directors and
officers, or to delegate such authority to one or more officers or directors.
2. QUALIFICATIONS AND NUMBER. A director need not be a shareholder, a
United States citizen, or a resident of the State of Ohio. The initial Board of
Directors shall consist of = = persons = = . Thereafter the number of directors
constituting the full board shall be at least three, except that, where all the
shares are owned of record by less than three shareholders, the number of
directors may be less than three but not less than the number of such
shareholders. Subject to the foregoing limitation, such number may be changed by
an increase or decrease thereof from time to time. Any change in such fixed
number may be effected by action of shareholders by an amendment to these
Regulations or by the vote of the holders of at least a majority of the shares
which are represented at a meeting called for the purpose of electing
5
<PAGE>
directors, at which a quorum is present. Except as may otherwise be provided by
the Articles of Incorporation, the number of directors may also be changed by
action of the directors. No reduction in the number of directors shall have the
effect of shortening the term of any incumbent director. Until sooner changed,
the number of persons constituting each succeeding Board of Directors shall be =
=.
3. ELECTION AND TERM. The initial Board of Directors shall consist of the
person or persons elected at the first meeting of shareholders of the
corporation and shall hold office until the first annual meeting of shareholders
and until his or their successors have been elected and qualified, or until his
or their earlier resignation, removal from office, or death. Thereafter,
directors who are elected at an annual meeting of shareholders, and directors
who are elected in the interim to fill vacancies and newly created
directorships, shall hold office until the next annual meeting of shareholders
and until their successors have been elected and qualified, or until his or
their earlier resignation, removal from office, or death. In the interim between
annual meetings of shareholders or of special meetings of shareholders called
for the election of directors, newly created directorships and any vacancies in
the Board of Directors, including vacancies resulting from the removal of
directors which are not filled at the meeting of shareholders at which any such
removal has been effected, may be filled by the affirmative vote of a majority
of the remaining directors, though less than a majority of the full Board of
Directors.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the
State of Ohio as shall be fixed by the Board.
- CALL. Meetings may be called by the Chairman of the Board if any,
by the President, by any Vice-President, or by any two directors if the Board
consists of three or more directors.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Except for regular
meetings for which the time has been fixed, written notice of the time and place
of each meeting of directors shall be given to each director either by personal
delivery or by mail, telegram, or cablegram at least two days before the
meeting. Such notice may but need not specify the purposes of the meeting.
Notice of adjournment of a meeting need not be given if the time and place to
which it is adjourned are fixed and announced at such meeting. Notice of the
time, place, and purposes of any meeting of directors may be waived in writing,
either before or after the holding of such meeting, by any director. Whenever
any notice of the time, place, and purposes of a meeting is required to be given
to any director, a waiver thereof in writing signed by any such director,
whether before or after the holding of such meeting, shall be equivalent to the
giving of such notice. The attendance of any director at any such meeting
without protesting, prior to or at the commencement of the meeting, the lack of
proper notice shall be deemed to be a waiver by him of notice of such meeting.
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<PAGE>
- QUORUM AND ACTION. A majority of the full Board of Directors shall
constitute a quorum. A majority of the directors present, whether or not a
quorum exists, may adjourn a meeting to another time and place. Notice of any
such adjourned meeting shall be given to the directors who were not present at
the time of the adjournment, and, unless the time and place of the adjourned
meeting are announced at the time of the adjournment, to the other directors.
Except as in these Regulations or in any Directors' Bylaws otherwise provided,
the act of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board.
Meetings of the directors or of any committee thereof may be held through
any communications equipment if all the persons participating can hear each
other; and participation in a meeting through such communications equipment
shall constitute presence at any such meeting.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the President, if
present and acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. All directors, or all the directors of a
particular class, if any, or any individual director may be removed from office,
without assigning any cause, in accordance with the provisions of Section
1701.58 of the General Corporation Law.
6. COMMITTEES. Whenever the number of directors shall be no more than
three, the Board of Directors may, in its discretion, by resolution, designate
three or more directors to constitute an Executive Committee or other
committees, which shall have and may exercise such powers of the Board of
Directors in the management of the corporation as shall be conferred or
authorized by the resolutions appointing them. Such committee or committees
shall act only during the intervals between meetings of the directors and shall
not have the power to fill vacancies among the directors or in any such
committee. A majority of such committee may determine its action and fix the
time and place of its meetings, unless the Board of Directors shall otherwise
provide. Any such committee may act by a majority of its members at a meeting or
by a writing or writings signed by all of its members. The Board of Directors
shall have power at any time to fill vacancies in, to change the membership of,
or to discharge such committee.
7. WRITTEN ACTION. Any action which may be authorized or taken at a
meeting of directors or of any committee thereof may be authorized or taken
without a meeting with the affirmative vote or approval of, and in a writing or
writings signed by all of the directors, or by all of the members of the
committee in the case of a committee.
ARTICLE III
OFFICERS
The Board of Directors, initially and as soon as may be after the election
thereof held in each year, shall elect a President, a Secretary, and a
Treasurer, and from time to time may elect a Chairman of the Boards a
Vice-Chairman of the Board, one or more Vice-Presidents, and such Assistant
Secretaries, Assistant Treasurers, and such other officers, agents, and
employees as it
7
<PAGE>
may deem proper. Any two or more offices may be held by the same person, but no
officer shall execute, acknowledge, or verify any instrument in more than one
capacity if such instrument is required by law or by the Articles of
Incorporation, the Regulations, or the Directors' Bylaws, if any, to be
executed, acknowledged, or verified by two or more officers. The Chairman of the
Board, if any, and the Vice-Chairman of the=Board, if any, shall be elected from
among the directors. Unless the resolution electing an officer otherwise
provides, no other officer need be a director in order to qualify.
The term of office of all officers shall be one year and until their
respective successors are elected and qualify, unless the resolution electing
them shall specify a shorter or longer term, but any officer may be removed from
office, either with or without cause, at any time by the Board of Directors.
Officers shall have the powers and duties defined in the resolutions
appointing them.
Any officer, or any agent elected or appointed by the Board of Directors,
may be removed by the Board whenever in its judgment the best interests of the
corporation will be served thereby.
ARTICLE IV
STATUTORY NOTICES TO SHAREHOLDERS
The directors may appoint the Treasurer or other fiscal officer and/or the
Secretary or any other officer to cause to be prepared and furnished to
shareholders entitled thereto any special financial notice and/or any financial
statement, as the case may be, which may be required by any provision of law,
and which, more specifically, may be required by Section 1701.33 of the General
Corporation Law.
ARTICLE V
PRINCIPAL OFFICE, STATUTORY AGENT, BOOKS AND RECORDS
The location of the principal office of the corporation in the State of
Ohio is set forth in the original Articles of Incorporation, and the name and
the address of the statutory agent of the corporation are set forth in the
initial Appointment of Statutory Agent filed with the original Articles of
Incorporation.
The corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of the shareholders, of the
Board of Directors, and of committees of the incorporators, of directors, if
any, and shall keep records of its shareholders, showing the names and addresses
of all shareholders and the number and class of shares issued or transferred of
record to or by them from time to time.
ARTICLE VI
CORPORATE SEAL
8
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The corporate seal shall be in such form as the Board of Directors shall
prescribe.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
ARTICLE VIII
CONTROL OVER REGULATIONS
The Regulations of the corporation shall be subject to alteration,
amendment or repeal, and new Regulations not inconsistent with any provision of
the Articles of Incorporation or the General Corporation Law may be made, either
by the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the corporation, at any annual or special
meeting of the shareholders, or, without such meeting, by the written consent of
the holders of shares entitling them to exercise a majority of the voting power.
If the Regulations are altered, amended, or repealed, or new Regulations are
adopted, without a meeting of the shareholders, the Secretary of the corporation
shall mail a copy of the alteration, amendment, or repeal of the new Regulations
to each shareholder who would have been entitled to vote thereon or consent
thereto, but who did not participate in such action.
ARTICLE IX
DIRECTORS' BYLAWS
For their own government, directors may adopt Bylaws not inconsistent with
the Articles of Incorporation or these Regulations.
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy of
the Regulations of ______, an Ohio corporation, as in effect on the date hereof.
WITNESS my hand and the seal of the corporation.
Dated:
------------------------------------------
Secretary of
Iron Mountain Records Management of Ohio, Inc.
(SEAL)
9
Exhibit 3.2K
IRON MOUNTAIN WILMINGTON, INC.
(a Delaware corporation)
BY - LAWS
ARTICLE I
Offices
SECTION 1. Registered Office. The registered office of the Corporation
shall be located in the City of Dover, County of Kent, State of Delaware, and
the name of the resident agent in charge thereof shall be The Prentice Hall
Corporation System, Inc.
SECTION 2. Other Offices. The Corporation may also have offices at such
other places, within or without the State of Delaware, as the Board of Directors
may from time to time appoint or the business of the Corporation may require.
ARTICLE II
Seal
The seal of the Corporation shall, subject to alteration by the
Board of Directors, consist of a flat-faced circular die with the word
"Delaware", together with the name of the Corporation and the year of
incorporation, cut or engraved thereon.
ARTICLE III
Meetings of Stockholders
SECTION 1. Place of Meeting. Meetings of the stockholders shall be held
either within or without the State of Delaware at such place as the Board of
Directors may fix.
SECTION 2. Annual Meetings. The annual meeting of stockholders shall be
held on the first day of May of each year, or if such day is a legal holiday,
then on the next business day following, at such time as the Board of Directors
may fix.
SECTION 3. Special Meetings. Special meetings of the stockholders for any
purpose or purposes may be called by the President, or by the directors (either
by written instrument signed by a majority or by resolution adopted by a vote of
the majority), and special meetings shall be called by the President or the
Secretary whenever stockholders owning a majority of the capital stock issued,
outstanding and entitled to vote so request in writing. Such request of
stockholders shall state the purpose or purposes of the proposed meeting.
SECTION 4. Notice. Written or printed notice of every meeting of
stockholders, annual or special, stating the hour, date and place thereof, and
the purpose or purposes in general terms
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for which the meeting is called shall, not less than ten (10) and not more than
sixty (60) days before such meeting, be served upon or mailed to each
stockholder entitled to vote thereat, at his address as it appears upon the
stock records of the Corporation or, if such stockholder shall have filed with
the Secretary of the Corporation a written request that notices intended for him
be mailed to some other address, then to the address designated in such request.
Notice of the hour, date, place and purpose of any meeting of
stockholders may be dispensed with if every stockholder entitled to vote thereat
shall attend either in person or by proxy and shall not object to the holding of
such meeting for lack of proper notice, or if every absent stockholder entitled
to such notice shall in writing, filed with the records of the meeting, either
before or after the holding thereof, waive such notice.
SECTION 5. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the presence in person or by proxy at any meeting
of stockholders of the holders of a majority of the shares of the capital stock
of the Corporation issued and outstanding and entitled to vote thereat, shall be
requisite and shall constitute a quorum. If two or more classes of stock are
entitled to vote as separate classes upon any question, then, in the case of
each such class, a quorum for the consideration of such question shall, except
as otherwise provided by law or by the Certificate of Incorporation, consist of
a majority in interest of all stock of that class issued, outstanding and
entitled to vote. If a majority or, where a larger quorum is required, such
quorum, shall not be represented at any meeting of the stockholders regularly
called, the holders of a majority of the shares present or represented and
entitled to vote thereat shall have power to adjourn the meeting to another
time, or to another time and place, without notice other than announcement of
adjournment at the meeting, and there may be successive adjournments for like
cause and in like manner until the requisite amount of shares entitled to vote
at such meeting shall be represented; provided, however, that if the adjournment
is for more than thirty (30) days, notice of the hour, date and place of the
adjourned meeting shall be given to each stockholder entitled to vote thereat.
Subject to the requirements of law and the Certificate of Incorporation, on any
issue on which two or more classes of stock are entitled to vote separately, no
adjournment shall be taken with respect to any class for which a quorum is
present unless the Chairman of the meeting otherwise directs. At any meeting
held to consider matters which were subject to adjournment for want of a quorum
at which the requisite amount of shares entitled to vote thereat shall be
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed.
SECTION 6. Votes; Proxies. At each meeting of stockholders, every
stockholder of record at the closing of the transfer books, if closed, or on the
date set by the Board of Directors for the determination of stockholders
entitled to vote at such meeting, shall have one vote for each share of stock
entitled to vote which is registered in his name on the books of the
Corporation, and, in the election of directors, may vote cumulatively to the
extent and in the manner authorized in the Certificate of Incorporation. At each
such meeting every stockholder shall be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder and bearing
a date not more than three (3) years prior to the meeting in question, unless
said instrument provides for a longer period during which it is to remain in
force.
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All elections of directors shall be held by ballot. If the Chairman
of the meeting shall so determine, a vote may be taken upon any other matter by
ballot and shall be so taken upon the request of any stockholder entitled to
vote on such matter.
At elections of directors, the Chairman shall appoint two judges of
election, who shall first take and subscribe an oath or affirmation faithfully
to execute the duties of judges at such meeting with strict impartiality and
according to the best of their ability. The judges so appointed shall take
charge of the polls and, after the balloting, shall make a certificate of the
result of the vote taken. No director or candidate for the office of director
shall be appointed as such judge.
At any meeting at which a quorum is present, a plurality of the
votes properly cast for election to fill any vacancy on the Board of Directors
shall be sufficient to elect a candidate to fill such vacancy, and a majority of
the votes properly cast upon any other question shall decide the question,
except in any case where a larger vote is required by law, the Certificate of
Incorporation, these By-laws, or otherwise.
SECTION 7. Organization. The Chairman of the Board, if there be one, or in
his absence the President, or in the absence of the Chairman and the President,
a Vice President, shall call meetings of the stockholders to order and shall act
as chairman thereof. The Secretary of the Corporation, if present, shall act as
secretary of all meetings of stockholders, and, in his absence, the presiding
officer may appoint a secretary.
ARTICLE IV
Directors
SECTION 1. Number. The business and property of the Corporation shall be
conducted and managed by a Board of Directors consisting of one or more
directors. Directors need not be a stockholder. The number of directors for the
ensuing year shall be fixed at each annual meeting of stockholders, but if the
number is not so fixed, the number shall remain as it stood immediately prior to
such meeting.
At any time during any year the whole number of directors may be
increased or reduced, in each case by vote of a majority of the stock
outstanding and entitled to vote for the election of directors or a majority of
the directors in office at the time of such increase or decrease, regardless of
whether such majority of directors constitutes a quorum.
SECTION 2. Term of Office. Each director shall hold office until the next
annual meeting of stockholders and until his successor is duly elected and
qualified or until his earlier death or resignation, subject to the right of the
stockholders at any time to remove any director or directors as provided in
Section 4 of this Article.
SECTION 3. Vacancies. If any vacancy shall occur among the directors, or
if the number of directors shall at any time be increased, the directors then in
office, although less than a quorum, by a majority vote may fill the vacancies
or newly-created directorships, or any such vacancies or newly-created
directorships may be filled by the stockholders at any meeting.
<PAGE>
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SECTION 4. Removal by Stockholders. The holders of record of the capital
stock of the Corporation entitled to vote for the election of directors may in
their discretion at any meeting duly called for the purpose, by a majority vote,
remove any director or directors and elect a new director or directors in place
thereof.
SECTION 5. Meetings. Meetings of the Board of Directors shall be held at
such place, within or without the State of Delaware, as may from time to time be
fixed by resolution of the Board or by the President and as may be specified in
the notice or waiver of notice of any meeting. Meetings may be held at any time
upon the call of the Chairman of the Board or the President or any two (2) of
the directors in office by oral, telegraphic or written notice, duly served or
sent or mailed to each director not less than twenty-four (24) hours before such
meeting, except that, if mailed, not less than seventy-two (72) hours before
such meeting. Meetings may be held at any time and place without notice if all
the directors are present and do not object to the holding of such meeting for
lack of proper notice or if those not present shall, in writing or by telegram,
waive notice thereof. A regular meeting of the Board may be held without notice
immediately following the annual meeting of stockholders at the place where such
meeting is held. Regular meetings of the Board may also be held without notice
at such time and place as shall from time to time be determined by resolution of
the Board.
SECTION 6. Quorum. A majority of the directors shall constitute a quorum
for the transaction of business. If at any meeting of the Board there shall be
less than a quorum present, a majority of those present may adjourn the meeting
from time to time without notice other than announcement of the adjournment at
the meeting, and at such adjourned meeting at which a quorum is present any
business may be transacted which might have been transacted at the meeting as
originally noticed.
SECTION 7. Compensation. Directors shall receive compensation for their
services, as such, and for service on any Committee of the Board of Directors,
as fixed by resolution of the Board of Directors and for expenses of attendance
at each regular or special meeting of the Board or any Committee thereof.
Nothing in this Section shall be construed to preclude a director from serving
the Corporation in any other capacity and receiving compensation therefor.
ARTICLE V
Committees of Directors
SECTION 1. Executive Committee. The Board of Directors may, by resolution
passed by a majority of the whole Board, appoint an Executive Committee of two
(2) or more members, to serve during the pleasure of the Board, to consist of
such directors as the Board may from time to time designate. The Board of
Directors shall designate the Chairman of the Executive Committee.
(a) Procedure. The Executive Committee shall, by a vote of a
majority of its members, fix its own times and places of
meeting, determine the number of its members constituting a
quorum for the transaction of business, and prescribe its own
rules of procedure, no change in which shall be made save by a
majority vote of its members.
<PAGE>
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(b) Responsibilities. During the intervals between the meetings of
the Board of Directors, except as otherwise provided by the
Board of Directors in establishing such Committee or
otherwise, the Executive Committee shall possess and may
exercise all the powers of the Board in the management and
direction of the business and affairs of the Corporation;
provided, however, that the Executive Committee shall not have
the power:
(i) to amend or authorize the amendment of the Certificate
of Incorporation or these By-Laws;
(ii) to authorize the issuance of stock;
(iii) to authorize the payment of any dividend;
(iv) to adopt an agreement of merger or consolidation of the
Corporation or to recommend to the stockholders the
sale, lease or exchange of all or substantially all the
property and business of the Corporation; or
(v) to recommend to the stockholders a dissolution of the
Corporation.
(c) Reports. The Executive Committee shall keep regular minutes of
its proceedings, and all action by the Executive Committee
shall be reported promptly to the Board of Directors. Such
action shall be subject to review, amendment and repeal by the
Board, provided that no rights of third parties shall be
adversely affected by such review, amendment or repeal.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Executive Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
SECTION 2. Audit Committee. The Board of Directors shall appoint an Audit
Committee of two (2) or more members who shall not be officers or employees of
the Corporation to serve during the pleasure of the Board. The Board of
Directors shall designate the Chairman of the Audit Committee.
(a) Procedure. The Audit Committee, by a vote of a majority of its
members, shall fix its own times and places of meeting, shall
determine the number of its members constituting a quorum for
the transaction of business, and shall prescribe its own rules
of procedure, no change in which shall be made save by a
majority vote of its members.
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(b) Responsibilities. The Audit Committee shall review the annual
financial statements of the Corporation prior to their
submission to the Board of Directors, shall consult with the
Corporation's independent auditors, and may examine and
consider such other matters in relation to the internal and
external audit of the Corporation's accounts and in relation
to the financial affairs of the Corporation and its accounts,
including the selection and retention of independent auditors,
as the Audit Committee may, in its discretion, determine to be
desirable.
(c) Reports. The Audit Committee shall keep regular minutes of its
proceedings, and all action by the Audit Committee shall, from
time to time, be reported to the Board of Directors as it
shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of the Audit Committee, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or
disqualified member.
SECTION 3. Other Committees. The Board of Directors, by vote of a majority
of the directors then in office, may at any time appoint one or more other
committees from and outside of its own number. Every such committee must include
at least one member of the Board of Directors. The Board may from time to time
designate or alter, within the limits permitted by law, the Certificate of
Incorporation and this Article, if applicable, the duties, powers and number of
members of such other committees or change their membership, and may at any time
abolish such other committees or any of them.
(a) Procedure. Each committee appointed pursuant to this Section
shall, by a vote of a majority of its members, fix its own
times and places of meeting, determine the number of its
members constituting a quorum for the transaction of business,
and prescribe its own rules of procedure, no change in which
shall be made save by a majority vote of its members.
(b) Responsibilities. Each committee appointed pursuant to this
Section shall exercise the powers assigned to it by the Board
of Directors in its discretion.
(c) Reports. Each committee appointed pursuant to this Section
shall keep regular minutes of proceedings, and all action by
each such committee shall, from time to time, be reported to
the Board of Directors as it shall direct.
(d) Appointment of Additional Members. In the absence or
disqualification of any member of each committee, appointed
pursuant to this Section, the member or members thereof
present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously
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appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member.
SECTION 4. Term of Office. Each member of a committee shall hold office
until the first meeting of the Board of Directors following the annual meeting
of stockholders (or until such other time as the Board of Directors may
determine, either in the vote establishing the committee or at the election of
such member or otherwise) and until his successor is elected and qualified, or
until he sooner dies, resigns, is removed, is replaced by change of membership
or becomes disqualified by ceasing to be a Director (where membership on the
Board is required), or until the committee is sooner abolished by the Board of
Directors.
ARTICLE VI
Officers
SECTION 1. Officers. The Board of Directors shall elect a President, a
Secretary and a Treasurer, and, in their discretion, may elect a Chairman of the
Board, one or more Executive Vice Presidents, Vice Presidents, Assistant
Secretaries and Assistant Treasurers as deemed necessary or appropriate. Such
officers shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of stockholders, and each shall hold office
for the term provided by the vote of the Board, except that each will be subject
to removal from office in the discretion of the Board as provided herein. The
powers and duties of more than one office may be exercised and performed by the
same person.
SECTION 2. Vacancies. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors, at any regular or
special meeting.
SECTION 3. Chairman of the Board. The Chairman of the Board of Directors,
if elected, shall be a member of the Board of Directors and shall preside at its
meetings. He shall advise and counsel with the President, and shall perform such
duties as from time to time may be assigned to him by the Board of Directors.
SECTION 4. President. The President shall be the chief executive officer
of the Corporation. Subject to the directions of the Board of Directors, he
shall have and exercise direct charge of and general supervision over the
business and affairs of the Corporation and shall perform all duties incident to
the office of the chief executive officer of a corporation and such other duties
as from time to time may be assigned to him by the Board of Directors. The
President may but need not be a member of the Board of Directors.
SECTION 5. Executive Vice Presidents and Vice Presidents. Each Executive
Vice President and Vice President shall have and exercise such powers and shall
perform such duties as from time to time may be assigned to him by the
President.
SECTION 6. Secretary. The Secretary shall keep the minutes of all meetings
of the stockholders and of the Board of Directors in books provided for the
purpose; he shall see that all notices are duly given in accordance with the
provisions of law and these By-laws; he shall be custodian of the records and of
the corporate seal or seals of the Corporation; he shall see
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that the corporate seal is affixed to all documents the execution of which, on
behalf of the Corporation under its seal, is duly authorized, and, when the seal
is so affixed, he may attest the same; he may sign, with the President, an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and, in general, he shall perform all duties incident to the office
of secretary of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 7. Assistant Secretaries. The Assistant Secretaries in order of
their seniority shall, in the absence or disability of the Secretary, perform
the duties and exercise the powers of the Secretary and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Secretary.
SECTION 8. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all monies or other valuable effects in such banks, trust companies
or other depositaries as shall, from time to time, be selected by the Board of
Directors; he may endorse for collection on behalf of the Corporation checks,
notes and other obligations; he may sign receipts and vouchers for payments made
to the Corporation; he may sign checks of the Corporation, singly or jointly
with another person as the Board of Directors may authorize, and pay out and
dispose of the proceeds under the direction of the Board; he shall render to the
President and to the Board of Directors, whenever requested, an account of the
financial condition of the Corporation; he may sign, with the President, or an
Executive Vice President or a Vice President, certificates of stock of the
Corporation; and in general, shall perform all the duties incident to the office
of treasurer of a corporation, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 9. Assistant Treasurers. The Assistant Treasurers in order of
their seniority shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Treasurer.
SECTION 10. Subordinate Officers. The Board of Directors may appoint such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such duties as the Board
of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
SECTION 11. Compensation. The Board of Directors shall fix the
compensation of all officers of the Corporation. It may authorize any officer,
upon whom the power of appointing subordinate officers may have been conferred,
to fix the compensation of such subordinate officers.
SECTION 12. Removal. Any officer of the Corporation may be removed, with
or without cause, by action of the Board of Directors.
SECTION 13. Bonds. The Board of Directors may require any officer of the
Corporation to give a bond to the Corporation, conditional upon the faithful
performance of his
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duties, with one or more sureties and in such amount as may be satisfactory to
the Board of Directors.
ARTICLE VII
Certificates of Stock
SECTION 1. Form and Execution of Certificates. The interest of each
stockholder of the Corporation shall be evidenced by a certificate or
certificates for shares of stock in such form as the Board of Directors may from
time to time prescribe. The certificates of stock of each class shall be
consecutively numbered and signed by the President, an Executive Vice President
or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer
or an Assistant Treasurer of the Corporation, and may be countersigned and
registered in such manner as the Board of Directors may by resolution prescribe,
and shall bear the corporate seal or a printed or engraved facsimile thereof.
Where any such certificate is signed by a transfer agent or transfer clerk
acting on behalf of the Corporation, the signatures of any such President,
Executive Vice President, Vice President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary may be facsimiles, engraved or printed. In case
any officer or officers, who shall have signed, or whose facsimile signature or
signatures shall have been used on, any such certificate or certificates, shall
cease to be such officer or officers, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the Corporation, such certificate or certificates may nevertheless be issued and
delivered by the Corporation as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer or officers.
In case the corporate seal which has been affixed to, impressed on,
or reproduced in any such certificate or certificates shall cease to be the seal
of the Corporation before such certificate or certificates have been delivered
by the Corporation, such certificate or certificates may nevertheless be issued
and delivered by the Corporation as though the seal affixed thereto, impressed
thereon or reproduced therein had not ceased to be the seal of the Corporation.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Certificate of Incorporation, these
By-laws, or any agreement to which the Corporation is a party, shall have the
restriction noted conspicuously on the certificate, and shall also set forth, on
the face or back, either the full text of the restriction or a statement of the
existence of such restriction and (except if such restriction is imposed by law)
a statement that the Corporation will furnish a copy thereof to the holder of
such certificate upon written request and without charge.
Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized to
be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
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SECTION 2. Transfer of Shares. The shares of the stock of the Corporation
shall be transferred on the books of the Corporation by the holder thereof in
person or by his attorney lawfully constituted, upon surrender for cancellation
of certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof or
guaranty of the authenticity of the signature as the Corporation or its agents
may reasonably require. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person whether or not
it shall have express or other notice thereof, save as expressly provided by law
or by the Certificate of Incorporation. It shall be the duty of each stockholder
to notify the Corporation of his post office address.
SECTION 3. Closing of Transfer Books. The stock transfer books of the
Corporation may, if deemed appropriate by the Board of Directors, be closed for
such length of time not exceeding fifty (50) days as the Board may determine,
preceding the date of any meeting of stockholders or the date for the payment of
any dividend or the date for the allotment of rights or the date when any
issuance, change, conversion or exchange of capital stock shall go into effect,
during which time no transfer of stock on the books of the Corporation may be
made.
SECTION 4. Dates of Record. If deemed appropriate, the Board of Directors
may fix in advance a date for such length of time not exceeding sixty (60) days
(and, in the case of any meeting of stockholders, not less than ten (10) days)
as the Board may determine, preceding the date of any meeting of stockholders,
or the date for the payment of any dividend, or the date for the allotment of
rights or the date when any issuance, change, conversion or exchange of capital
stock shall go into effect, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting or entitled
to receive payment of any such dividend or to any such allotment of rights, or
to exercise the rights in respect of any such issuance, change, conversion or
exchange of capital stock, as the case may be, and in such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to receive payment
of such dividend, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any record date fixed as aforesaid. If no such
record date is so fixed, the record date shall be determined by applicable law.
SECTION 5. Lost or Destroyed Certificates. In case of the loss or
destruction of any certificate of stock, a new certificate may be issued under
the following conditions:
(a) The owner of said certificate shall file with the Secretary or
any Assistant Secretary of the Corporation an affidavit giving
the facts in relation to the ownership, and in relation to the
loss or destruction of said certificate, stating its number
and the number of shares represented thereby; such affidavit
shall be in such form and contain such statements as shall
satisfy the President, any Executive Vice President, Vice
President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer, that said certificate
has been accidentally destroyed or lost, and that a new
certificate ought to be issued in lieu thereof. Upon being so
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satisfied, any such officer shall require such owner to
furnish the Corporation a bond in such penal sum and in such
form as he may deem advisable, and with a surety or sureties
approved by him, to indemnify and save harmless the
Corporation from any claim, loss, damage or liability which
may be occasioned by the issuance of a new certificate in lieu
thereof. Upon such bond being so filed, a new certificate for
the same number of shares shall be issued to the owner of the
certificate so lost or destroyed; and the transfer agent and
registrar, if any, of stock shall countersign and register
such new certificate upon receipt of a written order signed by
any such officer, and thereupon the Corporation will save
harmless said transfer agent and registrar in the premises. In
case of the surrender of the original certificate, in lieu of
which a new certificate has been issued, or the surrender of
such new certificate, for cancellation, the bond of indemnity
given as a condition of the issue of such new certificate may
be surrendered; or
(b) The Board of Directors of the Corporation may by resolution
authorize and direct any transfer agent or registrar of stock
of the Corporation to issue and register respectively from
time to time without further action or approval by or on
behalf of the Corporation new certificates of stock to replace
certificates reported lost, stolen or destroyed upon receipt
of an affidavit of loss and bond of indemnity in form and
amount and with surety satisfactory to such transfer agent or
registrar in each instance or upon such terms and conditions
as the Board of Directors may determine.
ARTICLE VIII
Execution of Documents
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers, or agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors, which may in
its discretion authorize any such signatures to be facsimile.
SECTION 2. Execution of Contracts, Assignments, etc. Unless the Board of
Directors shall have otherwise provided generally or in a specific instance, all
contracts, agreements, endorsements, assignments, transfers, stock powers, or
other instruments shall be signed by the President, any Executive Vice
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer. The Board of Directors may, however, in
its discretion, require any or all such instruments to be signed by any two or
more of such officers, or may permit any or all of such instruments to be signed
by such other officer or officers, agent or agents, as it shall thereunto
authorize from time to time.
SECTION 3. Execution of Proxies. The President, any Executive Vice
President or any Vice President, and the Secretary, the Treasurer, any Assistant
Secretary or any Assistant Treasurer, or any other officer designated by the
Board of Directors, may sign on behalf of the
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Corporation proxies to vote upon shares of stock of other companies standing in
the name of the Corporation.
ARTICLE IX
Inspection of Books
The Board of Directors shall determine from time to time whether,
and if allowed, to what extent and at what time and places and under what
conditions and regulations, the accounts and books of the Corporation (except
such as may by law be specifically open to inspection) or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by the laws of the State of Delaware, unless and until authorized so
to do by resolution of the Board of Directors or of the stockholders of the
Corporation.
ARTICLE X
Fiscal Year
The fiscal year of the Corporation shall be determined from time to
time by vote of the Board of Directors.
ARTICLE XI
Amendments
These By-laws may be altered, amended, changed or repealed and new
By-laws adopted by the stockholders or by the Board of Directors, in either case
at any meeting called for that purpose at which a quorum shall be present. Any
by-law, whether made, altered, amended, changed or repealed by the stockholders
or the Board of Directors may be repealed, amended, changed, further amended,
changed, repealed or reinstated, as the case may be either by the stockholders
or by the Board of Directors, as herein provided; except that this Article may
be altered, amended, changed or repealed only by vote of the stockholders.
ARTICLE XII
Indemnification
SECTION 1. Indemnification. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of
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any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in this Section, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 2. Authorization. Any indemnification under Section 1 of this
Article (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 of this
Article. Such determination shall be made: (a) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceedings, or (b) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in written opinion, or (c) by the stockholders.
SECTION 3. Expense Advance. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the manner provided in Section 2 of this Article upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount, unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this Article.
SECTION 4. Nonexclusivity. The indemnification provided by this Article
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any by-
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law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 5. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
SECTION 6. "The Corporation". For the purposes of this Article, references
to "the Corporation" include all constituent corporations absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents as well as the resulting or surviving corporation so that any person
who is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this Article with respect to such a constituent corporation if
its separate existence had continued.
Exhibit 3.2L
BYLAWS
OF
DATA STORAGE SYSTEMS, INC.
ARTICLE I
Applicability
Section 1. Applicability of Bylaws. These Bylaws govern, except as
otherwise provided by statute or its Articles of Incorporation, the management
of the business and the conduct of the affairs of the Corporation.
ARTICLE II
Offices
Section 1. Principal Executive Office. The location of the principal
executive office of the Corporation is 745 Atlantic Avenue, Boston,
Massachusetts 02111.
Section 2. Other Offices. The Board of Directors may establish other
offices at any place or places within or without the State of California.
Section 3. Change in Location or Number of Offices. The Board of Directors
may change any office from one location to another or eliminate any office or
offices.
ARTICLE III
Meetings of Shareholders
Section 1. Place of Meetings. Meetings of the shareholders shall be held
at any place within or without the State of California designated by the Board
of Directors, or, in the absence of such designation, at the principal executive
office of the Corporation.
Section 2. Annual Meetings. An annual meeting of the shareholders shall be
held within 180 days following the end of the fiscal year of the Corporation at
a date and time designated by the Board of Directors. Directors shall be elected
at each annual meeting and any other proper business may be transacted thereat.
Section 3. Special Meetings.
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(a) Special meetings of the shareholders may be called by a majority
of the Board of Directors, the Chairman of the Board, the President or the
holders of shares entitled to cast not less than 10% of the votes at such
meeting.
(b) Any request for the calling of a special meeting of the
shareholders shall (1) be in writing, (2) specify the date and time thereof
which date shall be not less than 35 nor more than 60 days after receipt of the
request, (3) specify the general nature of the business to be transacted thereat
and (4) be given either personally or by first-class mail, postage prepaid, or
other means of written communication to the Chairman of the Board, President,
any Vice President or Secretary of the Corporation. The officer receiving a
proper request to call a special meeting of the shareholders shall cause notice
to be given pursuant to the provisions of Section 4 of this article to the
shareholders entitled to vote thereat that a meeting will be held at the date
and time specified by the person or persons calling the meeting.
(c) No business may be transacted at a special meeting unless the
general nature thereof was stated in the notice of such meeting.
Section 4. Notice of Annual, Special or Adjourned Meetings.
(a) Whenever any meeting of the shareholders is to be held, a
written notice of such meeting shall be given in the manner described in
subdivision (d) of this section not less than 10 nor more than 60 days before
the date thereof to each shareholder entitled to vote thereat. The notice shall
state the place, date and hour of the meeting and (1) in the case of a special
meeting, the general nature of the business to be transacted or (2) in the case
of the annual meeting, those matters which the Board of Directors, at the time
of the giving of the notice, intend to present for action by the shareholders
including, whenever directors are to be elected at a meeting, the names of
nominees intended at the time of giving of the notice to be presented by
management for election.
(b) Any proper matter may be presented at an annual meeting for
action, except as is provided in subdivision (f) of Section 601 of the
Corporations Code of the State of California.
(c) Notice need not be given of an adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken,
except that if the adjournment is for more than 45 days or if after the
adjournment a new record date is provided for the adjourned meeting, a notice of
the adjourned meeting shall be given to each shareholder of record entitled to
vote thereat.
(d) Notice of any meeting of the shareholders or any report shall be
given either personally or by firstclass mail, postage prepaid, or other means
of written communication,
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<PAGE>
addressed to the shareholder at his address appearing on the books of the
Corporation or given by him to the Corporation for the purpose of notice; or if
no such address appears or is given, at the place where the principal executive
office of the Corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. The notice or report shall be deemed to have been given at
the time when delivered personally to the recipient or deposited in the mail or
sent by other means of written communication. An affidavit of mailing of any
notice or report in accordance with the provisions of these Bylaws or the
General Corporation Law of the State of California, executed by the secretary,
assistant secretary or any transfer agent of the Corporation, shall be prima
facie evidence of the giving of the notice or report.
(e) If any notice or report addressed to the shareholder at his
address appearing on the books of the Corporation is returned to the Corporation
by the United States Postal Service marked to indicate that the United States
Postal Service is unable to deliver the notice or report to the shareholder at
such address, all future notices or reports shall be deemed to have been duly
given without further mailing if the same shall be available for the shareholder
upon his written demand at the principal executive office of the Corporation for
a period of one year from the date of the giving of the notice or report to all
other shareholders.
Section 5. Record Date.
(a) The Board of Directors may fix a time in the future as a record
date for the determination of the shareholders (1) entitled to notice of any
meeting or to vote thereat, (2) entitled to receive payment of any dividend or
other distribution or allotment of any rights or (3) entitled to exercise any
rights in respect of any other lawful action. The record date so fixed shall be
not more than 60 nor less than 10 days prior to the date of any meeting of the
shareholders nor more than 60 days prior to any other action.
(b) In the event no record date is fixed:
(1) The record date for determining the shareholders entitled
to notice of or to vote at a meeting of shareholders shall be at the close
of business on the business day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the business
day next preceding the day on which the meeting is held.
(2) The record date for determining shareholders entitled to
give consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors has been taken, shall be the day on
which the first written consent is given.
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(3) The record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto, or the 60th day prior to
the date of such other action, whichever is later.
(c) Only shareholders of record at the close of business on the
record date are entitled to notice and to vote or to receive a dividend,
distribution or allotment of rights or to exercise the rights, as the case may
be, notwithstanding any transfer of any shares on the books of the Corporation
after the record date.
(d) A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting unless the Board of Directors fixes a new record date for the adjourned
meeting, but the Board shall fix a new record date if the meeting is adjourned
for more than 45 days from the date set for the original meeting.
Section 6. Quorum; Action at Meetings.
(a) A majority of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of the shareholders.
(b) Except as provided in subdivision (c) of this section, the
affirmative vote of a majority of the shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number is required by Law or the
Articles of Incorporation.
(c) The shareholders present at a duly called or held meeting at
which a quorum is present may continue to transact business until adjournment
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum, if any action taken (other than adjournment) is approved by at least a
majority of the shares required to constitute a quorum.
Section 7. Adjournment. Any meeting of the shareholders may be adjourned
from time to time whether or not a quorum is present by the vote of a majority
of the shares represented thereat either in person or by proxy. At the adjourned
meeting the Corporation may transact any business which might have been
transacted at the original meeting.
Section 8. Validation of Defectively Called, Noticed or
Held Meetings.
(a) The transactions of any meeting of the shareholders, however
called and noticed, and wherever held, are as valid as though had at a meeting
duly held after regular call
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and notice, if a quorum is present either in person or by proxy, and if, either
before or after the meeting, each of the persons entitled to vote thereat, not
present in person or by proxy, signs a written waiver of notice or a consent to
the holding of the meeting or an approval of the minutes thereof. All such
waivers, consents and approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
(b) Attendance of a person at a meeting shall constitute a waiver of
notice of, and presence at, such meeting, except (1) when the person objects, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened and (2) that attendance at a meeting
is not a waiver of any right to object to the consideration of any matter
required by the General Corporation Law of the State of California to be
included in the notice but not so included, if such objection is expressly made
at the meeting.
(c) Any written waiver of notice shall comply with subdivision (f)
of Section 601 of the Corporations Code of the State of California.
Section 9. Voting for Election of Directors.
(a) Every shareholder complying with subdivision (b) of this section
and entitled to vote at any election of directors may cumulate his votes and
give one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which his shares are normally
entitled, or distribute his votes on the same principle among as many candidates
as he thinks fit.
(b) No shareholder shall be entitled to cumulate his votes (i.e.,
cast for any one candidate a number of votes greater than the number of votes
which such shareholder normally is entitled to cast) unless such candidate's or
candidates' names have been placed in nomination prior to the voting and the
shareholder has given notice at the meeting, prior to the voting, of his
intention to cumulate his votes. If any one shareholder has given such notice,
all shareholders may cumulate their votes for candidates in nomination.
(c) Elections for directors may be by voice vote or by ballot unless
any shareholder entitled to vote demands election by ballot at the meeting prior
to the voting, in which case the vote shall be by ballot.
(d) In any election of directors, the candidates receiving the
highest number of votes of the shares entitled to be voted for them up to the
number of directors to be elected by such shares are elected as directors.
Section 10. Proxies.
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(a) Every person entitled to vote shares may authorize another
person or persons to act with respect to such shares by a written proxy signed
by him or his attorney-in-fact and filed with the Secretary of the Corporation.
A proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission or
otherwise) by him or his attorney-in-fact.
(b) Any duly executed proxy shall continue in full force and effect
until the expiration of the term specified therein or upon its earlier
revocation by the person executing it prior to the vote pursuant thereto (1) by
a writing delivered to the Corporation stating that it is revoked, (2) by a
subsequent proxy executed by the person executing the proxy or (3) by the
attendance at the meeting and voting in person by the person executing the
proxy. No proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. The date contained on the form
of proxy shall be deemed to be the date of its execution.
(c) A proxy which states that it is irrevocable is irrevocable for
the period specified therein subject to the provisions of subdivisions (e) and
(f) of Section 705 of the Corporations Code of the State of California.
Section 11. Inspectors of Election.
(a) In advance of any meeting of the shareholders, the Board of
Directors may appoint either one or three persons (other than nominees for the
office of director) as inspectors of election to act at such meeting or any
adjournments thereof. If inspectors of election are not so appointed, or if any
person so appointed fails to appear or refuses to act, the chairman of any such
meeting may, and on the request of any shareholder or his proxy shall, appoint
inspectors of election (or persons to replace those who so fail or refuse to
act) at the meeting. If appointed at a meeting on the request of one or more
shareholders or the proxies thereof, the majority of shares represented in
person or by proxy shall determine whether one or three inspectors are to be
appointed.
(b) The duties of inspectors of election and the manner of
performance thereof shall be as prescribed in Section 707 of the Corporations
Code of the State of California
Section 12. Action by Written Consent.
(a) Subject to subdivisions (b) and (c) of this section, any action
which may be taken at any annual or special meeting of the shareholders may be
taken without a meeting, without a vote and without prior notice, if a consent
in writing, setting forth the action so taken, is signed by the holders of
outstanding shares having not less than the minimum number of votes which would
be necessary to authorize or take such action at a meeting in which all shares
entitled to vote thereon were
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<PAGE>
present and voted. All such consents shall be filed with the Secretary of the
Corporation and maintained with the corporate records.
(b) Except for the election of a director by written consent to fill
a vacancy (other than a vacancy created by removal), directors may be elected by
written consent only by the unanimous written consent of all shares entitled to
vote for the election of directors. In the case of an election of a director
by written consent to fill a vacancy (other than a vacancy created by removal),
any such election requires the consent of a majority of the outstanding shares
entitled to vote.
(c) Unless the consents of all shareholders entitled to vote have
been solicited in writing, notice of any shareholder approval without a meeting
by less than unanimous written consent shall be given as provided in subdivision
(b) of Section 603 of the Corporations Code of the State of California.
(d) Any shareholder giving a written consent, or his proxyholders,
or a personal representative of the shareholder or their respective
proxyholders, may revoke the consent by a writing received by the Corporation
prior to the time that written consents of the number of shares required to
authorize the proposed action have been filed with the Secretary of the
Corporation, but may not do so thereafter. Such revocation is effective upon its
receipt by the Secretary of the Corporation.
ARTICLE IV
Directors
Section 1. Number of Directors.
(a) The authorized number of directors shall be one.
Section 2. Election of Directors. Directors shall be elected at each
annual meeting of the shareholders.
Section 3. Term of Office. Each director, including a director elected to
fill a vacancy, shall hold office until the expiration of the term for which he
is elected and until a successor has been elected.
Section 4. Vacancies.
(a) A vacancy in the Board of Directors exists whenever any
authorized position of director is not then filled by a duly elected director,
whether caused by death, resignation, removal, change in the authorized number
of directors or otherwise.
(b) Except for a vacancy created by the removal of a director,
vacancies on the Board of Directors may be filled by a
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majority of the directors then in office, whether or not less than a quorum, or
by a sole remaining director. A vacancy created by the removal of a director
shall be filled only by shareholders.
(c) The shareholders may elect a director at any time to fill any
vacancy not filled by the directors.
Section 5. Removal.
(a) The Board of Directors may declare vacant the office of a
director who has been declared of unsound mind by an order of court or convicted
of a felony.
(b) Any or all of the directors may be removed without cause if such
removal is approved by a majority of the outstanding shares entitled to vote;
provided, however, that no director may be removed (unless the entire Board of
Directors is removed) if whenever the votes cast against removal, or not
consenting in writing to such removal, would be sufficient to elect such
director if voted cumulatively at an election at which the same total number of
votes were cast (or, if such action is taken by written consent, all shares
entitled to vote were voted) and the entire number of directors authorized at
the time of his most recent election were then being elected.
(c) Any reduction of the authorized number of directors does not
remove any director prior to the expiration of his term of office.
Section 6. Resignation. Any director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board of Directors of the Corporation, unless the notice specifies a later time
for the effectiveness of such resignation. If the resignation is effective at a
future time, a successor may be elected to take office when the resignation
becomes effective.
Section 7. Fees and Compensation. Directors may be paid for their services
in such capacity a sum in such amount, at such times and upon such conditions as
may be determined from time to time by resolution of the Board of Directors, and
may be reimbursed for their expenses, if any, incurred in such capacity,
including (without limitation) expenses of attendance at any meeting of the
Board. No such payments shall preclude any director from serving the Corporation
in any other capacity and receiving compensation in any manner therefor.
ARTICLE V
Committees of the Board of Directors
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Section 1. Designation of Committees. The Board of Directors may, by
resolution adopted by a majority of the authorized number of directors,
designate (1) one or more committees, each consisting of one or more directors
and (2) one or more directors as alternate members of any committee, who may
replace any absent member at any meeting thereof. Any member or alternate member
of a committee shall serve at the pleasure of the Board.
Section 2. Powers of Committees. Any committee, to the extent provided in
the resolution of the Board of Directors designating such committee, shall have
all the authority of the Board, except with respect to:
(a) The approval of any action for which the General Corporation
Law of the State of California also requires any action by the shareholders;
(b) The filling of vacancies on the Board or in any committee
thereof;
(c) The fixing of compensation of the directors for serving on the
Board or on any committee thereof;
(d) The amendment or repeal of these Bylaws or the adoption of new
bylaws
(e) The amendment or repeal of any resolution of the Board which by
its express terms is not so amendable or repealable.
(f) A distribution to the shareholders of the Corporation, except at
a rate or in a periodic amount or within a price range determined by the Board
of Directors; or
(g) The designation of other committees of the Board or the
appointment of members or alternate members thereof.
ARTICLE VI
Meetings of the Board of Directors
and Committees Thereof
Section 1. Place of Meetings. Regular meetings of the Board of Directors
shall be held at any place within or without the State of California which has
been designated from time to time by the Board, or in the absence of such
designation, at the principal executive office of the Corporation. Special
meetings of the Board shall be held either at any place within or without the
State of California which has been designated in the notice of the meeting or,
if not stated in the notice or if there is no notice, at the principal executive
office of the Corporation.
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<PAGE>
Section 2. Organization Meeting. An organization meeting shall be held
each year immediately following the annual shareholders meeting. Notice of any
such meeting is not required.
Section 3. Other Regular Meetings. Other regular meetings of the Board of
Directors shall be held without call at such time as shall be designated from
time to time by the Board. Notice of any such meeting is not required.
Section 4. Special Meetings. Special meetings of the Board of Directors
may be called at any time for any purpose or purposes by the Chairman of the
Board or the President or any vice president or the Secretary or any two
directors. Notice shall be given of any special meeting of the Board.
Section 5. Notice of Special Meetings.
(a) Notice of the time and place of special meetings of the Board of
Directors shall be delivered personally or by telephone to each director or sent
to each director by first-class mail or telegraph, charges prepaid. Such notice
shall be given four days prior to the holding of the special meeting if sent by
mail or 48 hours prior to the holding thereof if delivered personally or given
by telephone or telegraph. The notice or report shall be deemed to have been
given at the time when delivered personally to the recipient or deposited in the
mail or sent by other means of written communication.
(b) Notice of any special meeting of the Board of Directors need not
specify the purpose thereof and need not be given to any director who signs a
waiver of notice, whether before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to him.
Section 6. Validation of Defectively Held Meetings. The transactions of
any meeting of the Board of Directors, however called and noticed or wherever
held, are as valid as though had at a meeting duly held after regular call and
notice if a quorum is present and if, either before or after the meeting, each
of the directors not present signs a written waiver of notice, a consent to
holding the meeting or an approval of the minutes thereof. Such waivers,
consents and approvals (1) need not specify the purpose of any meeting of the
Board of Directors and (2) shall be filed with the corporate records or made a
part of the minutes of the meeting.
Section 7. Quorum; Action at Meetings; Telephone Meetings.
(a) A majority of the authorized number of directors shall
constitute a quorum for the transaction of business. Every act or decision done
or made by a majority of the directors present at a meeting duly held at which a
quorum is present is the act of the Board of Directors, unless action by a
greater
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proportion of the directors is required by law or the Articles of Incorporation.
(b) A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for such
meeting.
(c) Members of the Board of Directors may participate in a meeting
through use of conference telephone or similar communications equipment so long
as all members participating in such meeting can hear one another.
Section 8. Adjournment. A majority of the directors present, whether or
not a quorum is present, may adjourn any meeting to another time and place. If
the meeting is adjourned for more than 24 hours, notice of any adjournment to
another time or place shall be given prior to the time of the adjourned meeting
to the directors who were not present at the time of the adjournment.
Section 9. Action Without a Meeting. Any action required or permitted to
be taken by the Board of Directors may be taken without a meeting, if all
members of the Board individually or collectively consent in writing to such
action. Such written consent or consents shall be filed with the minutes of the
proceedings of the Board. Such action by written consent shall have the same
force and effect as a unanimous vote of such directors.
Section 10. Meetings of and Action by Committees. The provisions of this
Article apply to committees of the Board of Directors and action by such
committees with such changes in the language of those provisions as are
necessary to substitute the committee and its members for the Board and its
members.
ARTICLE VII
Officers
Section 1. Officers. The Corporation shall have as officers, a President,
a Secretary and a Treasurer. The Treasurer is the chief financial officer of the
Corporation unless the Board of Directors has by resolution designated a vice
president or other officer to be the chief financial officer. The Corporation
may also have at the discretion of the Board, a Chairman of the Board, a Vice
Chairman of the Board, one or more vice presidents, one or more assistant
secretaries, one or more assistant treasurers and such other officers as may be
appointed in accordance with the provisions of Section 3 of this Article.
One person may hold two or more offices.
Section 2. Election of Officers. The officers of the Corporation, except
such officers as may be appointed in
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accordance with the provisions of Section 3 or Section 5 of this Article, shall
be chosen by the Board of Directors.
Section 3. Subordinate Officers. Etc. The Board of Directors may appoint
by resolution, and may empower the Chairman of the Board, if there be such an
officer, or the President, to appoint such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are determined from time to time by
resolution of the Board or, in the absence of any such determination, as are
provided in these Bylaws. Any appointment of an officer shall be evidenced by a
written instrument filed with the Secretary of the Corporation and maintained
with the corporate records.
Section 4. Removal and Resignation.
(a) Any officer may be removed, either with or without cause, by the
Board of Directors or, except in case of any officer chosen by the Board, by any
officer upon whom such power of removal may be conferred by resolution of the
Board.
(b) Any officer may resign at any time effective upon giving written
notice to the Chairman of the Board, President, any vice president or Secretary
of the Corporation, unless the notice specifies a later time for the
effectiveness of such resignation.
Section 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular appointments to such office.
Section 6. Chairman of the Board. If there is a Chairman of the Board, he
shall, if present, preside at all meetings of the Board of Directors, exercise
and perform such other powers and duties as may be from time to time assigned to
him by resolution of the Board and, if there is no President, the Chairman of
the Board shall be the chief executive officer of the Corporation and have the
power and duties set forth in Section 7 of this Article.
Section 7. President. Subject to such supervisory powers, if any, as may
be given by the Board of Directors to the Chairman of the Board, if there be
such an officer, the President shall be the chief executive officer and general
manager of the Corporation and shall, subject to the control of the Board, have
general supervision, direction and control of the business and affairs of the
Corporation. He shall preside at all meetings of the shareholders and, in the
absence of the Chairman of the Board, or if there be none, at all meetings of
the Board. He shall have the general powers and duties of management usually
vested in the office of president of a corporation, and shall have such other
powers and duties as may be prescribed from time to time by resolution of the
Board.
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<PAGE>
Section 8. Vice President. In the absence or disability of the President,
the vice presidents in order of their rank as fixed by the Board of Directors
or, if not ranked, the Vice President designated by the Board, shall perform all
the duties of the President, and when so acting shall have all the powers of,
and be subject to all the restrictions upon, the President. The vice presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board or as the President may
from time to time designate.
Section 9. Secretary.
(a) The Secretary shall keep or cause to be kept (1) the minute
book, (2) the share register and (3) the seal, if any, of the corporation.
(b) The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the Board of Directors required by these
Bylaws or by law to be given, and shall have such other powers and perform such
other duties as may be prescribed from time to time by the Board.
Section 10. Treasurer.
(a) The Treasurer shall keep, or cause to be kept, the books and
records of account of the Corporation.
(b) The Treasurer shall deposit all monies and other valuables in
the name and to the credit of the Corporation with such depositories as may be
designated from time to time by resolution of the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the Board of
Directors, shall render to the President and the Board, whenever they request
it, an account of all his transactions as Treasurer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed from time to time by the Board or as the
President may from time to time delegate.
ARTICLE VIII
Records and Reports
Section 1. Minute Book - Maintenance and Inspection. The Corporation shall
keep or cause to be kept in written form at its principal executive office or
such other place as the Board of Directors may order, a minute book which shall
contain a record of all actions by its shareholders, Board or committees of the
Board including the time, date and place of each meeting; whether a meeting is
regular or special and, if special, how called; the manner of giving notice of
each meeting and a copy thereof; the names of those present at each meeting of
the Board or committees
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<PAGE>
thereof; the number of shares present or represented at each meeting of the
shareholders; the proceedings of all meetings; any written waivers of notice,
consents to the holding of a meeting or approvals of the minutes thereof; and
written consents for action without a meeting.
Section 2. Share Register - Maintenance and Inspection. The Corporation
shall keep or cause to be kept at its principal executive office or, if so
provided by resolution of the Board of Directors, at the Corporation's transfer
agent or registrar, a share register, or a duplicate share register, which shall
contain the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same and the number and date of cancellation of every certificate
surrendered for cancellation.
Section 3. Books and Records of Account - Maintenance and Inspection. The
Corporation shall keep or cause to be kept at its principal executive office or
such other place as the Board of Directors may order, adequate and correct books
and records of account.
Section 4. Bylaws - Maintenance and Inspection. The Corporation shall keep
at its principal executive office or, in the absence of such office in the State
of California, at its principal business office in that state, the original or a
copy of the Bylaws as amended to date.
Section 5. Annual Report to Shareholders. The annual report to the
shareholders described in Section 1501 of the Corporations Code of the State of
California is expressly dispensed with, but nothing herein shall be interpreted
as prohibiting the Board of Directors from issuing annual or other periodic
reports to the shareholders of the Corporation as they see fit.
ARTICLE IX
Indemnification of
Officers, Directors, Employees and Agents
Section 1. Right to Indemnification. Each person which was or is a party
or is threatened to be made a party to or is involved (as a party, witness or
otherwise) in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereafter a
"Proceeding"), by reason of the fact that he, or a person of whom he is the
legal representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or was a director,
officer, employee or agent of a foreign or domestic corporation that was a
predecessor corporation of the Corporation or of
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another enterprise at the request of such predecessor corporation, including
service with respect to employee benefit plans, whether the basis of the
Proceeding is alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a director, officer,
employee or agent (hereafter an "Agent"), shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by statutory and decisional
law, as the same exists or may hereafter be interpreted or amended (but, in the
case of any such amendment or interpretation, only to the extent that such
amendment or interpretation permits the Corporation to provide broader
indemnification rights than were permitted prior thereto) against all expenses,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes and penalties, amounts paid or to be paid in settlement, any interest,
assessments or other charges imposed thereon, and any federal, state, local or
foreign taxes imposed on any Agent as a result of the actual or deemed receipt
of any payments under this Article) incurred or suffered by such person in
connection with investigating, defending, being a witness in, or participating
in (including on appeal), or preparing for any of the foregoing in, any
Proceeding (hereafter "Expenses"). The right to indemnification conferred in
this Article shall be a contract right. It is the Corporation's intention that
these Bylaws provide indemnification in excess of that expressly permitted by
Section 317 of the California General Corporation Law, as authorized by the
Corporation's Articles of Incorporation.
Section 2. Authority to Advance Expenses. Expenses incurred by an officer
or director (acting in his capacity as such) in defending a Proceeding shall be
paid by the Corporation in advance of the final disposition of such Proceeding,
provided, however, that if required by the California General Corporation Law,
as amended, such Expenses shall be advanced only upon delivery to the
Corporation of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Corporation as authorized in this Article or otherwise.
Expenses incurred by other Agents of the Corporation (or by the directors or
officers not acting in their capacity as such, including service with respect to
employee benefit plans) may be advanced upon the receipt of a similar
undertaking, if required by law, and upon such other terms and conditions as the
Board of Directors deems appropriate. Any obligation to reimburse the
Corporation for Expense advances shall be unsecured and no interest shall be
charged thereon.
Section 3. Right of Claimant to Bring Suit. If a claim under Section 1 or
2 of this Article is not paid in full by the Corporation within thirty (30) days
after a written claim has been received by the Corporation, the claimant may at
any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the claimant shall
be entitled to be paid also the expense (including attorneys' fees) of
prosecuting such claim. It shall
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be a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending a Proceeding in advance of its final
disposition where the required undertaking has been tendered to the Corporation)
that the claimant has not met the standards of conduct that make it permissible
under the California General Corporation Law for the Corporation to indemnify
the claimant for the amount claimed. The burden of proving such a defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel or its stockholders) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper under the circumstances because he has met the applicable
standard of conduct set forth in the California General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant has not met the applicable standard of conduct.
Section 4. Provisions Nonexclusive. The rights conferred on any person by
this Article shall not be exclusive of any other rights that such person may
have or hereafter acquire under any statute, provision of the Articles of
Incorporation, agreement, vote of stockholders or disinterested directors, or
otherwise, both as to action in an official capacity and as to action in
another capacity while holding such office. To the extent that any provision of
the Articles, agreement or vote of the stockholders or disinterested directors
is inconsistent with these Bylaws, the provision, agreement or vote shall take
precedence.
Section 5. Authority to Insure. The Corporation may purchase and maintain
insurance to protect itself and any Agent against any Expense asserted against
or incurred by such person, whether or not the Corporation would have the power
to indemnify the Agent against such Expense under applicable law or the
provisions of this Article, all as set forth in Section 317 of the California
General Corporation Law, as amended.
Section 6. Survival of Rights. The rights provided by this Article shall
continue as to a person who has ceased to be an Agent and shall inure to the
benefit of the heirs, executors and administrators of such person.
Section 7. Settlement of Claims. The Corporation shall not be liable to
indemnify any Agent under this Article (a) for any amounts paid in settlement of
any action or claim effected without the Corporation's written consent, which
consent shall not be unreasonably withheld; or (b) for any judicial award, if
the Corporation was not given a reasonable and timely opportunity, at its
expense, to participate in the defense of such action.
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Section 8. Effect of Amendment. Any amendment, repeal or modification of
this Article shall not adversely affect any right or protection of any Agent
existing at the time of such amendment, repeal or modification.
Section 9. Subrogation. In the event of payment under this Article, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the Agent, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Corporation effectively to
bring suit to enforce such rights.
Section 10. No Duplication of Payments. The Corporation shall not be
liable under this Article to make any payment in connection with any claim made
against the Agent to the extent the Agent has otherwise actually received
payment (under any insurance policy, agreement, vote, or otherwise) of the
amounts otherwise indemnifiable hereunder.
ARTICLE X
Miscellaneous
Section 1. Checks, Drafts, Etc. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, and any assignment
or endorsement thereof, issued in the name of or payable to the Corporation,
shall be signed or endorsed by such person or persons and in such manner as,
from
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time to time, shall be determined by resolution of the Board of Directors.
Section 2. Contracts, Etc. - How Executed. The Board of Directors, except
as otherwise provided in these Bylaws, may authorize any officer or officers,
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the Corporation, and such authority may be general or
confined to specific instances; and, unless so authorized or ratified by the
Board, no officer, employee or other agent shall have any power or authority to
bind the Corporation by any contract or engagement or to pledge its credit or to
render it liable for any purpose or to any amount.
Section 3. Certificates of Stock. All certificates shall be signed in the
name of the Corporation by the Chairman of the Board or the President or a vice
president and by the Treasurer or an assistant treasurer or the Secretary or an
assistant secretary, certifying the number of shares and the class or series
thereof owned by the shareholder. Any or all of the signatures on a certificate
may be by facsimile signature. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were an
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officer, transfer agent or registrar at the date of issue.
Section 4. Lost Certificates. Except as provided in this section, no new
certificate for shares shall be issued in lieu of an old certificate unless the
latter is surrendered to the Corporation and cancelled at the same time. The
Board of Directors may, in case any share certificate or certificate for any
other security is lost, stolen or destroyed, authorize the issuance of a new
certificate in lieu thereof, upon such terms and conditions as the Board may
require, including provision for indemnification of the Corporation secured by a
bond or other adequate security sufficient to protect the Corporation against
any claim that may be made against it, including any expense or liability, on
account of the alleged loss, theft or destruction of such certificate or the
issuance of such new certificate.
Section 5. Representation of Shares of Other Corporations. Any person
designated by resolution of the Board of Directors or, in the absence of such
designation, the Chairman of the Board, the President or any vice president or
the Secretary, or any other person authorized by any of the foregoing, is
authorized to vote on behalf of the Corporation any and all shares of any other
corporation or corporations, foreign or domestic, owned by the Corporation.
Section 6. Construction and Definitions. Unless the context otherwise
requires, the general provisions, rules of construction and definitions
contained in the Corporations Code of the State of California shall govern the
construction of these Bylaws.
ARTICLE XI
Amendments
Section 1. Amendments. New bylaws may be adopted or these Bylaws may be
amended or repealed by the affirmative vote of a majority of the outstanding
shares entitled to vote. Subject to the next preceding sentence, bylaws (other
than a bylaw or amendment thereof specifying or changing a fixed number of
directors or the maximum or minimum number, or changing from a fixed to a
variable board or vice versa) may be adopted, amended or repealed by the Board
of Directors.
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EXHIBIT 3.2M
LIMITED LIABILITY COMPANY AGREEMENT
OF
IRON MOUNTAIN RECORDS MANAGEMENT OF MISSOURI LLC
A Delaware Limited Liability Company
This Limited Liability Company Agreement of Iron Mountain Records
Management of Missouri LLC (this "Agreement"), dated as of April 24, 1996, is
adopted by and executed and agreed to by Iron Mountain Records Management, Inc.
and Iron Mountain Records Management of Maryland, Inc. (individually, a "Member"
and collectively referred to as the "Members").
ARTICLE 1
DEFINITIONS
P. 1.01. Definition. The following terms shall have the following meanings when
used in this Agreement:
"Act" means the Delaware Limited Liability Company Act and any successor
statute, as amended form time to time.
"Adjusted Capital Account Deficit" means the Capital Account maintained for each
Member as of the end of each fiscal year of the Company after giving effect to
the following adjustments:
(a) Increased by any amounts which the Member is obligated to restore
under the stands set forth in Treas. Reg. ss. 1.704-1(b)(2)(ii)(c) or is deemed
obligated to restore under Treas. Reg. ss. 1.704-2(g)(1) (relating to minimum
gains) and Treas. Reg. ss. 1.704-2(i))(5) (relating to member minimum gains);
and
(b) Decreased by:
(i) All losses and deductions that, as of the end of the applicable
fiscal year, are reasonably expected to be allocated to the Member in years
subsequent to the applicable fiscal year under Code ss.ss. 704(e)(2) and 706(d)
and under Treas. Reg. ss. 1.751-1(b)(ii); and
(ii) Distributions that are reasonably expected to be made to the
applicable Member to the extent that such distributions exceed offsetting
increases in the applicable Member's Capital Account that are reasonably
expected to occur during (or prior to) the year in which such distributions are
reasonably expected to be made. Notwithstanding anything to the contrary
contained herein, an Adjusted Capital Account Deficit shall be determined in
accordance with Treas. Reg. ss. 1.704-1(b)(2)(ii)(d).
"Adjusted Capital Contribution" means, as of any day, a Member's Capital
Contribution adjusted as follows:
<PAGE>
(a) Increased by the amount of any Company liabilities which, in
connection with distributions pursuant to P. P. 4.06 or 10.03, are assumed by
such Member or are secured by any Company Property distributed to such Member;
and
(b) Reduced by the amount of cash and the fair market value (as determined
by the Members) of any Company Property distributed to such Member pursuant to
P. P. 4.06 and 10.03 and the amount of any liabilities of such Member assumed by
the Company or which are secured by any Property contributed by such member to
the Company.
In the event any Person transfers all or any portion of its Interest, the
transferee shall succeed to the Adjusted Capital Contribution of the transferor
to the extent it relates to the transferred Interest.
"Affiliate" of another Person means: (a) any entity or individual that directly
or indirectly controls or holds the power to vote 10% or more of the outstanding
voting securities of the Person in question; (b) any Person 10% or more of whose
voting securities are directly or indirectly owned, controlled or held with
power to vote, by such other Person; (c) any Person directly or indirectly
controlling, controlled by, or under common control with such other Person; (d)
any officer, director or partner of such other Person; and (e) if such other
Person is an officer, director or partner, any company for which such Person
acts in any such capacity.
"Agreed Value" of any Contributed Property means the fair market value of the
property at the time of contribution as determined by the Members; provided,
however, that the Agreed Value of any Property deemed contributed to the Company
for federal income tax purposes upon termination and reconstitution thereof
pursuant to Code ss. 708 shall be determined in accordance with P. 3.06. Subject
to P. 3.06, in the event that more than a single item of Property is contributed
to the Company in a single or integrated transaction, the Members shall use such
method as they deem reasonable and appropriate to allocate the aggregate Agreed
Value of Contributed Properties among each separate property in proportion to
the respective fair market value of each item of such Property.
"Articles" means the Certificate of Formation filed for the Company in
accordance with the Act.
"Bankruptcy" means, with respect to any Member: (i) an assignment for the
benefit of creditors; (ii) a voluntary petition in bankruptcy; (iii)
adjudication as a bankrupt or insolvent; (iv) the filing of a petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation
or similar relief under any statute, regulation or law; (v) the filing of an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Member in any proceeding of this
nature; or (vi) seeking, consenting to, or acquiescing in the appointment of a
trustee, receiver, or liquidator of such Member's properties or of all or any
substantial part of the Member's properties.
"Book-Tax Disparity" shall mean with respect to any item of Contributed Property
or Revalued Property, as of the date of any determination, the difference
between the Carrying Value of such Contributed Property or Revalued Property and
the adjusted basis thereof for federal income tax
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purposes as of such date. A Member's share of the Company's Book-Tax Disparities
in all of its Contributed Property and Revalued Property will be reflected by
the difference between such Member's Capital Account balance, as maintained
pursuant to Article 3, and the balance of such Member's Capital Account computed
as if it had been maintained strictly in accordance with federal income tax
accounting principles.
"Capital Contributions" means the total amount of capital contributed by a
Member to the Company, as determined from time to time, which shall include the
Net Agreed Value of any Contributed Property.
"Carrying Value" means:
a) With respect to a Contributed property, the Agreed Value of such
Property reduced (but not below zero) by all depreciation, depletion
(computed as a separate item of deduction), amortization and cost recovery
deductions charged to the Members' Capital Accounts;
b) With respect to a Revalued Property, the fair market value of such
Property at the time of revaluation, as determined by the Members in
accordance with P. 3.07 hereof, reduced (but not below zero) by all
depreciation, depletion, amortization and cost recovery deductions charged
to the Members' Capital Accounts; and
c) With respect to any other Company Property, the adjusted basis of such
Property for federal income tax purposes, all as of the time of
determination.
The Carrying Value of any Property shall be adjusted from time to time in
accordance with P. 3.07 hereof.
"Code" means the Internal Revenue Code of 1986 and any successor statute, as
amended from time to time.
"Company" means Iron Mountain Records Management of Missouri LLC, a Delaware
limited liability company.
"Company Property" or "Property" means all properties, assets and rights of any
type owned by the Company.
"Contributed Property" means any property contributed to the Company at any time
or from time to time (or deemed contributed to the Company upon a termination
and reconstitution thereof under Code ss. 708). Once the Carrying Value of
Contributed Property has been adjusted pursuant to P. 3.07 hereof, such property
shall be deemed Revalued Property and shall no longer be deemed Contributed
Property.
"Corporation Act" means the Delaware General Corporation Law and any successor
statute, as amended from time to time.
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<PAGE>
"Impasse" means the failure of a Member to consent to or approve any of the
following actions, after any such action has been proposed by the other Member:
(i) to sell or exchange all or any substantial part of the Company Property;
(ii) to change the Company's purpose or the purpose for which the Company
Property is owned; (iii) to refinance any of the Company's indebtedness; (iv) to
incur more than Fifty Thousand Dollars ($50,000) of indebtedness in the
aggregate; or (v) to raise any additional capital for the Company and/or issue
any additional Membership Interests. An Impasse shall be considered to have
occurred if the Members are unable to agree with respect to any of the foregoing
actions within ten (10) days after any such action has been proposed.
"Limited Liability Company Agreement" means this Agreement as it may from time
to time be amended.
"Majority Interest" means one or more Members holding more than 50% of the
Units.
"Member" means each Person identified as such in the introductory paragraph and
each Person hereafter admitted to the Company as a Member as provided in this
Agreement. The Members' Interests are set forth on attached and incorporated
Exhibit "A".
"Membership Interest" or "Interest" means the membership interest or interest of
a member in the Company, including the right to any and all benefits to which
such member may be entitled in accordance with this Agreement, and the
obligations as provided in this Agreement and the Act.
"Net Agreed Value" means, as follows:
(a) In the case of any Contributed Property, the Agreed Value of such
property net of liabilities either assumed by the Company upon such contribution
or to which such property is subject when contributed to the Company, as
determined in accordance with Code ss.752; and
(b) In the case of any property distributed to a Member, the Company's
Carrying Value of such property at the time such property is distributed, net of
any indebtedness either assumed by such distributee Member upon such
distribution or to which such property is subject at the time of distribution
determined in accordance with Code ss.752.
"Net Cash Receipts" means the gross cash proceeds from the operation of the
Company's business less the portion thereof used to establish reserves for or to
pay Company expenses, debt payments and capital expenditures. "Net Cash
Receipts" shall include any net cash proceeds from the sale or disposition of
company Property and from the refinancing of indebtedness of the Company, shall
be increased by any reduction of reserves previously established by the Members,
and shall not be reduced by depreciation, cost recovery, amortization or similar
noncash deductions.
"Person" means any individual, corporation, trust, partnership, joint venture,
limited liability company or other entity.
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"Proceeding" has the meaning given that term in P. 7.01.
"Profits" and "Losses" mean, for each fiscal year, an amount equal to the
Company's taxable income or loss for such year, determined in accordance with
Code ss.703(a) (including all items required to be stated separately) with the
following adjustments:
(a) Any income exempt from federal income tax shall be included;
(b) Any expenditures of the Company described in Code ss.705(a)(2)(B)
(including expenditures treated as such pursuant to Treas. Reg.
ss.1.704-1(b)(2)(iv)(i)) shall be subtracted;
(c) In the event any Company Property is revalued pursuant to P. 3.07, the
amount of such adjustment shall be taken into account in determining gain or
loss from the disposition of such Property;
(d) Any items which are specially allocated pursuant to P. 4.02 or 4.03
shall not be taken into account in computing Profits or Losses;
(e) Gain or loss resulting from any disposition of Company Property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Carrying Value of the Property disposed
of, notwithstanding that the adjusted tax basis of such Property differs from
its Carrying Value; and
(f) In the case of Company Property having a Book-Tax Disparity, in lieu
of depreciation, amortization or other cost recovery deductions allowable under
the Code ("Tax Depreciation"), there shall be taken into account for each
Property a depreciation allowance which bears the same ratio to its initial
Agreed Value (or, with respect to Revalued Property, its initial Carrying Value)
as the Tax Depreciation for such year bears to its beginning adjusted tax basis.
"Representative" shall mean the legally appointed guardian of a mentally
incapacitated Member, the conservator of a mentally incapacitated Member's
assets or the legally appointed and qualified executor or personal
representative of the estate of a deceased Member. In the event no such
guardian, executor or personal representative is appointed, then the
Representative shall mean the spouse of such incapacitated or deceased Member,
or if such Member does not have a spouse or the spouse is not then living or is
unable ro unwilling to act, such Member's then living lineal descendants who are
willing and capable of acting, one at a time in descending order of age but in
no event younger than 21 years of age or, if none, such Member's then-living
lineal ancestors who are willing and capable of acting, one at a time and in
ascending order of age.
"Revalued Property" shall mean any Property the Carrying Value of which has been
adjusted in accordance with P. 3.07(a) or (b). If a Revalued Property is deemed
distributed by, and recontributed to, the Company for federal income tax
purposes upon a termination of the Company pursuant to Code ss.708, such
Property shall constitute a Contributed Property until the Carrying Value of
such Property is subsequently adjusted (if at all) pursuant to P. 3.07(a) or
(b).
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"Sharing Ratio" shall mean the ratio in which the Members share in all Profits,
Losses and distributions to the Members. The Sharing Ratio for each Member shall
be the same percentage that such Member's Units bear to all outstanding Units.
"Transfer" means, with respect to an Interest, a sale, assignment, gift or any
other disposition by a Member, whether voluntary, involuntary or by operation of
law.
"Transferor" means a Member who proposes to make a voluntary Transfer of its
Interest, a Withdrawing Member, or the Representative of a Withdrawing Member.
"Treasury Regulations", Treas. Reg. or "Reg.") means the income tax regulations
promulgated under the Code as amended from time to time (including corresponding
provisions of succeeding regulations).
"Unit" means an Interest representing a Capital Contribution $10,000 to the
Company.
"Unrealized Gain" attributable to any item of Company Property means, as of any
date of determination, the excess, if any, of (a) the fair market value of such
Property (as determined under P. 3.07 hereof) as of such date, over (b) the
Carrying Value of such Property as of such date (prior to any adjustment to be
made pursuant to P. 3.07) as of such date.
"Unrealized Loss" attributable to any item of Company Property means, as of any
date of determination, the excess, if any, of (a) the Carrying Value of such
Property as of such date (prior to any adjustment to be made pursuant to P. 3.07
as of such date), over (b) the fair market value of such Property (as determined
under P. 3.07) as of such date.
"Withdrawing Member" has the meaning given that term in P. 5.03(b).
ARTICLE 2
ORGANIZATION
P. 2.01. Formation. The Company has been organized as a Delaware limited
liability company under and pursuant to the Act and a certificate of formation
for the Company has been filed with the Secretary of State of Delaware. The
rights and obligations of the Members shall be as set forth in the Act except as
this Agreement expressly provides otherwise.
P. 2.02. Name. The name of the Company is "Iron Mountain Records Management of
Missouri LLC" and all Company business shall be conducted in that name or such
other name as the Members may select from time to time and which is in
compliance with all applicable laws.
P. 2.03. Registered Office and Registered Agent and Principal Office. The
registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Certificate of Formation or such other office as the Members may designate
from time to time in the manner provided by law. The registered agent
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of the Company in the State of Delaware shall be the initial registered agent
named in the Articles or such other Person or Persons as the Members may
designate from time to time. The principal office of the Company shall be at
such place as the Members may designate from time to time, and the Company shall
maintain records there as required by the Act.
P. 2.04. Purposes. The purposes of the Company shall be to provide records
management and storage services and to undertake all such other activities and
businesses as may be undertaken by a limited liability company under the Act.
P. 2.05. Foreign Qualification. The Company shall not engage in any business
outside the State of Delaware unless and until the Company has complied with the
requirements necessary to qualify the Company as a foreign limited liability
company in the other jurisdiction.
P. 2.06. Term. The Company commenced on the date of issuance of its certificate
of formation and shall continue in existence until December 31, 2025 or such
earlier time as may be determined in accordance with the terms of the Agreement.
P. 2.07. Recapitalization, Acquisitions, Restructuring and Mergers. The Company
may participate in or be a party to any recapitalization, acquisition,
restructuring or merger in accordance with and as allowed by the Act or the
Corporation Act.
P. 2.08. Entity Declaration. The Company shall not be a general partnership, a
limited partnership or a joint venture, and no Member shall be considered a
partner or joint venturer of or with any other Member, for any purposes other
than for federal and state tax purposes, and this Agreement shall not be
construed otherwise.
ARTICLE 3
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
P. 3.01. Initial Contributions. The Members shall make Capital Contributions to
the Company in cash in the amount set forth in attached and incorporated Exhibit
"A."
P. 3.02. Subsequent Contributions. No Member shall be obligated to make any
Capital Contributions to the Company other than those set forth on Exhibit "A."
P. 3.03. Return of Capital Contributions. Each Member agrees not to withdraw as
a member of the Company and, except as expressly provided herein, no Member
shall be entitled to the return of any part of its Capital Contributions or to
be paid interest in respect to either its Capital Account or its Capital
Contributions. An unpaid Capital Contribution is not a liability of the Company
or of any Member.
P. 3.04. Loans by Members. Any Member may, but is not obligated to, loan to the
Company such sums as the Members determine to be appropriate for the conduct of
the Company's business. Any such loans shall bear interest at one percent (1%)
above the prime rate of interest
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charged from time to time by The Chase Manhattan Bank (National Association) and
shall be on such other terms as the Members may agree. All loans shall be repaid
in full before any distributions are made to the Members.
P. 3.05. Capital Accounts. A separate Capital Account shall be maintained for
each Member in accordance with Treas. Reg. ss.1.704-1(b)(2)(iv). Subject to the
requirements of Treas. Reg. ss.704-1(b)(2)(iv), each Capital Account:
(a) shall be credited with: (i) all cash contributions of such Members to
the Company; (ii) the Net Agreed Value of Contributed Property, (iii) such
Member's share of the Company's Profits; (iv) the amount of any liabilities of
the Company assumed by such Member (other than liabilities included in the
netting process of Subparagraph (b)(ii) below or increases in the Member's share
of the Company's liabilities determined in accordance with the provisions of
Code ss.752); and (v) the amount of any basis increase in Company Property
attributable to investment credit recapture allocated to such Member; and
(b) shall be debited for: (i) distributions of cash to such Member; (ii)
the Net Agreed Value of Company Property distributed to such Member, (iii) such
Member's share of the Company's Losses (including expenditures which can neither
be capitalized nor deducted for tax purposes, organization and syndication
expenses not subject to amortization, and loss on sale or disposition of Company
Property, whether or not disallowed under the rules of Code ss.ss.267 or 707,
but excluding losses or deductions described in Treas. Reg. ss.1.704-1(b)(4)(i)
or (iii)); (iv) the amount of any liabilities of such Member assumed by the
Company (other than liabilities already included in the netting process of
Subparagraph (a)(ii) above or decreases in the Member's share of the Company's
liabilities determined in accordance with the provisions of Code ss.752); and
(v) the amount of any basis decrease in Company Property attributable to
investment credit recapture allocated to such Member.
P. 3.06. Capital Accounts Upon Sale or Exchange of Membership Interests. Upon
the sale or exchange of an Interest, the following shall apply: (i) if such sale
or exchange causes a termination of the Company in accordance with Code
ss.708(b)(1)(B), the Company's Property shall be deemed to have been distributed
to the Members in a liquidation of the Company and to have been recontributed to
a new Company, and the Capital Accounts of the Members shall be redetermined in
accordance with P. 3.07, or (ii) if such sale or exchange does not cause a
termination of the Company in accordance with Code ss.708(b)(1)(B), the Capital
Account of the selling or exchanging Member will be transferred to the
transferee on a pro rata basis.
P. 3.07. Revaluation of Capital Accounts Upon Occurrence of Certain Events.
(a) Contributions. In accordance with the provisions of Treas. Reg.
ss.1.704- 1(b)(2)(iv)(f), if after the initial capital is contributed pursuant
to P. 3.01, money or property in other than a de minimis amount is contributed
to the Company in exchange for an Interest, the Capital Accounts of the Members
and Carrying Values of all the Company's Property (determined immediately prior
to such issuance) shall be adjusted to reflect the Unrealized Gain or Unrealized
Loss attributable to each such Company Property as if such Unrealized Gain or
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Unrealized Loss had been recognized on a sale of each such item of Company
Property immediately prior to such issuance and had been allocated to the
Members in accordance with Article 4. In determining the Unrealized Gain or
Unrealized Loss, the fair market value of Company Property shall be as
determined by the Members.
(b) Distributions. In accordance with the provisions of Treas. Reg.
ss.1.704- 1(b)(2)(iv)(f), if money or Company Property in other than a de
minimis amount is distributed (including any deemed distribution under P.
3.06(i)) to a Member in exchange for or part of an Interest, the Capital
Accounts of the Members and the Carrying Values of all the Company's Property
(determined immediately prior to such distribution) shall be adjusted to reflect
the Unrealized Gain or Unrealized Loss attributable to each item of Company
Property as if such Unrealized Gain or Unrealized Loss had been recognized on a
sale of each such item of Company Property immediately prior to such
distribution and had been allocated to the Members in accordance with Article 4.
In determining the Unrealized Gain or Unrealized Loss, the fair market value of
the distributed Property shall be as determined by the Members.
ARTICLE 4
ALLOCATIONS AND DISTRIBUTIONS
P. 4.01. Allocation of Profits and Losses. After giving effect to the special
allocations set forth in P. P. 4.02 and 4.03, Profits and Losses for each fiscal
year shall be allocated among the Members in accordance with the Sharing Ratio.
P. 4.02. Special Allocations. Items of income, gain, loss and deduction shall be
allocated in accordance with the provisions of this P. 4.02 without regard to
the allocation provision contained in P. 4.01 in the following order:
(a) Qualified Income Offset. If any Member's Capital Account is
unexpectedly adjusted for, or such Member is unexpectedly allocated or there is
unexpectedly distributed to such Member, any item described in Treas. Reg.
ss.1.704-1(b)(2)(ii)(d)(4)-(6), and such treatment creates or increases a
Member's Adjusted Capital Account Deficit, then without regard to the
allocations provided in P. 4.01, the Company shall allocate to such member items
of Company income and gain (consisting of a pro rata portion of each item of
Company income, including gross income, and gain for such year) in an amount and
manner sufficient to eliminate such Adjusted Capital Account Deficit as quickly
as possible.
(b) Gross Income Allocation. In the event that a Member has a deficit
Capital Account at the end of any Company fiscal year which is in excess of the
sum of (i) the amount the Member is obligated to restore pursuant to any
provision of this Agreement, and (ii) the amount the Member is deemed to be
obligated to restore pursuant to Treas. Reg. ss.1.704-2(g) and (i)(5), the
Member shall be specially allocated items of Company income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this paragraph shall be made if and to the extent that the Member
would have a deficit Capital Account in excess of
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such sum after all other allocations provided for in this P. 4.02 have been
tentatively made as if this P. 4.02(b) were not in this Agreement.
P. 4.03. Curative Allocations. The allocations set forth in P. 4.02 ("Regulatory
Allocations") are intended to comply with certain requirements of Treas. Reg.
ss.1.704-1(b). Notwithstanding any other provision of Article 4 (other than
Regulatory Allocations), the Regulatory Allocations shall be taken into account
in allocating other profits, losses and items of income, gain, loss and
deduction among the Members so that, to the extent possible, the net amount of
such allocations of other profits, losses and other items and the Regulatory
Allocations to each member shall be equal to the amount that would have been
allocated if the Regulatory Allocations had not occurred.
P. 4.04. Code Sections 704(c) Allocations. In accordance with Code ss.704(c),
income, gain, loss and deduction concerning any Contributed Property shall,
solely for tax purposes, be allocated among the Members to take account of any
variation between the adjusted tax basis of such property and the Agreed Value
of such property upon contribution. If the value of any Company Property is
adjusted under P. 3.07 of this Agreement, subsequent allocations of income,
gain, loss and deduction with respect to such asset shall take account of any
variation between the adjusted tax basis of such asset for federal income tax
purposes and its Carrying Value in the same manner as under Code ss.704(c).
Allocations under this P. 4.04 are solely for purposes of federal income taxes
and shall not affect or be taken into account in computing any Member's Capital
Account.
P. 4.05. Allocations Concerning Transferred Interests. Unless the Code requires
otherwise, any Profits or Losses allocable to an interest which has been
transferred during any year shall be allocated among the Persons who were
holders of such Interest during such year by taking into account their varying
interests during such taxable year in accordance with Code ss.706(d) and using
any convention selected by the Members.
P. 4.06. Distributions of Net Cash Receipts. Except as otherwise provided in P.
10.03, Net Cash Receipts, if any, shall be distributed to the Members within
thirty (30) days after the end of each fiscal year, in the following order and
priority:
(a) First, pro rata to the Members in proportion to their Units, an amount
equal to their Adjusted Capital Contributions, and
(b) The balance to the Members in accordance with the Sharing Ratio.
ARTICLE 5
MEMBERSHIP; DISPOSITIONS OF INTERESTS
P. 5.01. Initial Members. The initial members of the Company are the Persons
executing this Agreement as Members as of the date of this Agreement, each of
which is admitted to the
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Company as a Member effective contemporaneously with the execution by such
Person of this Agreement.
P. 5.02. Representations and Warranties. Each Member hereby represents and
warrants to the Company and to each other Member that (a) if that Member is a
corporation, it is duly organized, validly existing, and in good standing under
the law of the state of its incorporation and is duly qualified and in good
standing as a foreign corporation in the jurisdiction of its principal place of
business (if not incorporated therein); (b) if that Member is a limited
liability company, it is duly organized, validly existing, and (if applicable)
in good standing under the law of the state of its organization and is duly
qualified and (if applicable) in good standing as a foreign limited liability
company in the jurisdiction of its principal place of business (if not organized
therein); (c) if that Member is a partnership, trust, or other entity, it is
duly formed, validly existing, and (if applicable) in good standing under the
law of the state of its formation, and if required by law is duly qualified to
do business and (if applicable) in good standing in the jurisdiction of its
principal place of business (if not formed therein), and the representations and
warranties in clauses (a)-(c), as applicable, are true and correct with respect
to each partner (other than limited partners), trustee, or other member thereof;
(d) the Member has full corporate, limited liability company, partnership,
trust, or other applicable power and authority to execute and agree to this
Agreement and to perform its obligations hereunder and all necessary actions by
the board of directors, shareholders, members, partners, trustees,
beneficiaries, or other Persons necessary for the due authorization, execution,
delivery, and performance of this Agreement by that Member have been duly taken;
(e) the Member has duly executed and delivered this Agreement; (f) the Member's
authorization, execution, delivery, and performance of this Agreement does not
conflict with (i) any law, rule or court order applicable to that Member, (ii)
that Member's articles of incorporation, bylaws, partnership agreement,
Agreement or articles of organization, or (iii) any other agreement or
arrangement to which that Member is a party or by which it is bound.
P. 5.03. Restrictions on Transfer of Membership Interests.
(a) Voluntary Transfer. If a Member intends to Transfer any Membership
Interests it owns to any Person other than the Company, it shall give written
notice to the Company and the nonselling Member ("Remaining Member") of its
intention to do so ("Transfer Notice"). The Transfer Notice, in addition to
stating the Member's intention to Transfer its Membership Interests, shall
state: (i) the number of Units it desires to Transfer; (ii) the name, business
and residence address of the proposed transferee; and (iii) whether or not the
Transfer is made at arm's length for full and valuable consideration and, if so,
the amount of the consideration and the other terms of the sale. For sixty (60)
days following the Company's receipt of the Transfer Notice (the "Company Option
Period"), the Company shall have the option to purchase all or any portion of
the Membership Interests which are proposed to be transferred, for the price and
upon the terms set form in P. 5.03(i), and if the Company does not exercise its
option to purchase all, but not less than all, of such Membership Interests
within said sixty (60)-day period, the Remaining Member for a period of fifteen
(15) days after the expiration of the Company Option Period shall have an option
to purchase all of the membership Interests which have not been purchased by the
Company, at the price and upon the terms set forth in P. 5.03(i).
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(b) Involuntary Transfers. In the event of the death, incompetency,
bankruptcy, withdrawal or dissolution of a Member (a "Withdrawing Member"), (i)
for a period of ninety (90) days after the Company receives actual notice
thereof, the Company shall have the option to purchase all or any portion of the
Withdrawing Member's Interest, for the price and upon the terms set forth in P.
5.03(i). If the Company does not exercise its option to purchase all of the
Withdrawing Member's Interest, for a period ending fifteen (15) days after the
close of the Company's 90-day option period, the Remaining Member shall have an
option to purchase all, but not less than all, of such Withdrawing Member's
Interest at the price set forth in P. 5.03(i)(i)(2) and upon the same terms as
provided for an option regarding a voluntary transfer in P. 5.03(a) of this
Agreement. Notwithstanding the foregoing, neither the Company nor the Remaining
Member may exercise this option unless the Remaining Member has agreed pursuant
to P. 10.01(f) to continue the Company's business with a new Member. If the
Company and the Remaining Member do not exercise their options, the provisions
of P. 5.03(e) and (g) shall apply to the Withdrawing Member.
(c) Exercise of Options.
(i) Means of Exercise. The Company and the Remaining Member who
exercises any option granted by this Article 5 shall do so by giving written
notice ("Exercise Notice") of the exercise of their respective options within
the time periods provided in this Article 5 to the Member and, in the case of an
option upon involuntary transfer, to the Withdrawing Member's Representative.
(ii) Voting to Exercise. A Transferor, in its capacity as a Member,
shall not be entitled to vote in the Company's determination of whether to
exercise any purchase option granted by this Agreement or with respect to any
decisions or actions involving the purchase option or the consummation of the
exercise thereof.
(d) Nonexercise of Options. If the Remaining Member and the Company fail
to exercise their purchase options to acquire all of the membership Interests
which are proposed to be transferred in compliance with P. 5.03(a) of this
Agreement, the Transferor may, within thirty (3) days following their expiration
of the option period for the Remaining Member, transfer the Interests to the
transferee named in the Transfer Notice, subject to the terms of this Agreement;
provided, however, that such Transfer must be upon the terms and for the
consideration specified in said Transfer Notice. If the Transfer is not upon the
terms or is not to the transferee stated in the Transfer Notice, or is not made
within said thirty (30)-days period, or if the Transferor, after the Transfer,
reacquires all or any portion of the transferred Units, the initial Transfer
shall be void and without legal or other effect.
(e) Requirements for Transfer. Subject to any restrictions on
transferability required by law (including the Securities Act of 1933, any state
securities or "Blue Sky" law, and the rules promulgated thereunder), and subject
to the provisions of P. 5.03(a) and (b), each Member shall have the right to
Transfer (but not to substitute the assignee as a substitute Member in its
place, except in accordance with P. 5.03(g) hereof), by a written instrument,
the whole or any part
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of its Interest, provided that: (i) the transferee is a citizen and resident of
the United States, and otherwise not a tax-exempt entity under Section 168(h) of
the Code; (ii) the Transferor delivers to the Company and the Remaining Member
an unqualified opinion of counsel in form and substance satisfactory to counsel
designated by the Remaining Member that neither the Transfer nor any offering in
connection therewith violates any provision of any federal or state securities
law; (iii) the transferee executes a statement that it is acquiring such
Interest or such part thereof for its own account for investment and not with a
view to distribution, fractionalization or resale thereof; and (iv) the Company
receives a favorable opinion of the Company's legal counsel or such other
counsel selected by the Remaining Member that such Transfer would not result in
the termination of the Company (within the meaning of Section 708(b) of the
Code) or the termination of its status as a partnership under the Code;
provided, further, that the Remaining Member may elect to waive the requirement
of the opinions of counsel set forth in P. 5.03(e)(ii) and (iv) above should it,
in its sole discretion, determine that the cost or time delays involved in
procuring such opinions may impede the Company's ability to effect the
contemplated Transfer.
(f) Effectiveness of Assignment. No Transfer shall be effective unless and
until the requirements of P. 5.03(e) are satisfied. The Transfer by a Member of
all or part of its Interest shall become effective on the first day of the
calendar month immediately succeeding the month in which all of the requirements
of this P. 5.03 have been met, and the Company has received from the Transferor
a transfer fee sufficient to cover all expenses of the Company connected with
such transfer; provided, however, that the Remaining Member may elect to waive
this fee in its sole discretion. All distributions prior to the effective date
shall be made to the Transferor and all distributions made thereafter shall be
made to the transferee.
(g) Requirements for Admission. No transferee of the whole or a portion of
a Member's Interest shall have the right to become a Member unless and until all
of the following conditions are satisfied:
(i) a duly executed and acknowledged written instrument of transfer
approved by the Remaining Member has been filed with the Company setting forth
(A) the intention of the transferee to be admitted as a Member, (B) the notice
address of the transferee, and (C) the number of Units transferred by the
Transferor to the transferee;
(ii) the opinions of counsel described in P. 5.03(e) above are
delivered to the Company and the Remaining Member, subject to the Remaining
Member's right to waive the delivery of these opinions in its sole discretion;
the Transferor and transferee execute and acknowledge, and cause such other
Persons to execute and acknowledge, such other instruments and provide such
other evidence as the Remaining Member may reasonably deem necessary or
desirable to effect such admission, including without limitation: (A) the
written acceptance and adoption by the transferee of the provisions of this
Agreement including a representation and warranty that the representations and
warranties in P. 5.02 are true and correct with respect to the transferee; (B)
the transferee's completion of a purchaser qualification questionnaire which
will enable counsel for the Company to determine whether such proposed
substitution is consistent with the requirements of a private placement
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exemption from registration under the Securities Act of 1933 and relevant state
law; and (C) the transferee's completion, if applicable, of acknowledgment of
the use of a purchaser representative, and such representative's completion of a
purchaser representative questionnaire which will enable counsel for the Company
to determine whether such proposed substitution is consistent with the
requirements of a private placement exemption from registration under the
Securities Act of 1933 and relevant state law;
(iii) the admission is approved by the Remaining Member, the
granting or denial of which shall be within the sole and absolute discretion of
the Remaining Member; and
(iv) a transfer fee has been paid to the Company by the Transferor
sufficient to cover all expenses in connection with the transfer and admission,
including but not limited to attorney's fees for the legal opinions referred to
in P. 5.03(e) and (g), subject to the Remaining Member's right to waive the
payment of this fee in its sole discretion.
(h) Rights of Mere Assignees. If a transferee of an Interest is not
admitted as a Member, it shall not be entitled to inspect the Company's books
and records, receive an accounting of Company financial affairs, exercise the
voting rights of a member, or otherwise take part in the Company's business or
exercise the rights of a Member under this Agreement.
(i) Purchase Price and Terms.
(i) Purchase Price. If the Company or the Remaining Member exercises
its option (the "Optionor"), the purchase price which Optionor shall pay for the
Transferor's Membership Interest following the exercise of an option to purchase
under P. 5.03(a) or (b) shall be an amount equal to: (1) the purchase price as
stated in the Transfer Notice where (a) the proposed transfer is for full and
adequate consideration and (b) the transferee identified in the Transfer Notice
is not a member of the Transferor's family or an Affiliate of the Transferor;
and (2) in all other cases, the value of the Transferor's Membership Interest as
mutually agreed upon by the Members. If the parties cannot agree within ten (10)
days after the date of the final Exercise Notice, the Purchase price shall be
the amount which the Transferor would receive if all the Company Property were
sold at its appraised fair market value and the proceeds were applied in
accordance with P. 10.03. An independent appraiser ("Qualified Appraiser")
experienced in conducting appraisals of assets similar to the Company Property
shall conduct an appraisal of all of the Company Property to determine its fair
market value ("First Appraisal"). The Optionor shall select a Qualified
appraiser to perform the First Appraisal and shall assume the cost of the First
Appraisal. If, within five (5) days after receipt of the First Appraisal, the
Transferor disputes the value determined by the First Appraisal, the Transferor
may obtain, at its own cost, a second appraisal ("Second Appraisal") of the fair
market value of the Company Property by a Qualified Appraiser of its choice. If
the parties agree, the Second Appraisal shall be used to determine the value of
the Company Property. If the two appraisals are performed and the parties cannot
agree within ten (10) days which of the appraisals accurately reflects the value
of the Company Property, then the two appraisers selected under this
subparagraph shall select a Qualified Appraiser to conduct a third appraisal
("Third Appraisal") of the fair market value of the Company Property. The fair
market value of the Company Property established by the Third
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Appraisal shall be final and binding in all respects on all parties. The
Optionor and the Transferor shall each pay fifty percent (50%) of the costs of
the Third Appraisal.
(ii) Payment of Purchase Price and Closing. The closing of any sale
and purchase of the Transferor's Membership Interest in the Company shall be
within thirty (30) days from the later of (1) the date of the final Exercise
Notice, or (2) delivery of the final appraisal performed pursuant to P.
5.03(i)(i). The Optionor shall pay the purchase price (1) at the time and in
accordance with the terms and conditions as stated in the Transfer Notice, where
the purchase price is determined pursuant to P. 5.03(i)(1), or (2) at the
closing in all other cases, unless the parties agree on different terms. The
Transferor shall deliver documents satisfactory to the Optionor conveying its
Membership Interest free and clear of all liens, claims and encumbrances, any of
which may be paid out of the purchase price, with the remainder, if any, paid to
the Transferor. If the purchase price is insufficient to satisfy any such liens,
the Transferor shall discharge the balance.
P. 5.04. Additional Members. Additional Persons may be admitted to the Company
as Members and Membership Interests may be created and issued to those Persons
and to existing Members upon the approval of all of the Members on such terms
and conditions as they may determine at the time of admission. The terms of
admission or issuance must specify the Sharing Ratios applicable thereto and may
provide for the creation of different classes or groups of Interests having
different rights, powers and duties. The creation of any new class or group
shall be reflected in an amendment to this Agreement indicating the different
rights, powers and duties. The provisions of this P. 5.04 shall not apply to
Transfers of Membership Interests.
P. 5.05. Interests in Member. A Member that is not a natural person may not
cause or permit an ownership interest, direct or indirect, in itself to be
disposed of such that, after the disposition: (a) the Company would be
considered to have terminated within the meaning of Code ss.708; or (b) without
the written consent of the other Member, that Member shall cease to be
controlled by substantially the same Persons who control it as of the date of
the Member's admission to the Company. For a period of 120 days after notice to
the Company of any Member's breach of the provisions of clause (b) of the
immediately preceding sentence, the Company shall have the option to buy, and on
exercise of that option the breaching Member shall sell, the breaching Member's
Membership Interest, at the price determined in accordance with P.
5.03(i)(i)(2). The breaching Member shall deliver documents satisfactory to the
Company conveying its Membership Interest free and clear of all liens, claims
and encumbrances, any of which may be paid out of the purchase price, with the
remainder, if any, paid to the selling Member. If the purchase price is
insufficient to satisfy any such liens, the selling Member shall discharge the
balance.
P. 5.06. Information.
(a) In addition to the other rights specifically set forth in this
Agreement, each Member is entitled to all information to which that Member is
entitled to have access pursuant to the Act under the circumstances and subject
to the conditions therein stated.
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(b) The Members acknowledge that, from time to time, they may receive
information from or regarding the Company in the nature of trade secrets or that
otherwise is confidential, the release of which may be damaging to the Company
or Persons with which it does business. Each Member shall hold in strict
confidence any information it receives regarding the Company that is identified
as being confidential (and if that information is provided in writing, that is
so marked) and may not disclose it to any Person other than another Member,
except for disclosures: (i) compelled by law (but the Member must notify the
other Members promptly of any request for that information, before disclosing it
if practicable); (ii) to advisers or representatives of the Member or Persons to
which that Member's Membership Interest may be transferred as permitted by this
Agreement, but only if the recipients have agreed to be bound by the provisions
of this P. 5.06(b); or (iii) of information that the Member also has received
from a source independent of the Company that the Member reasonably believes
obtained that information without breach of any obligation of confidentiality.
The Members acknowledge that breach of the provisions of this P. 5.06(b) may
cause irreparable injury to the Company for which monetary damages are
inadequate, difficult to compute, or both. Accordingly, the Members agree that
the provisions of this P. 5.06(b) may be enforced by specific performance
without posting bond.
P. 5.07. Liability to Third Parties. No Member shall, by virtue of its status as
a Member or its ownership of an Interest, be liable for the debts, obligations
or liabilities of the Company, including but not limited to a judgment decree or
order of a court.
P. 5.08. Withdrawal. A Member does not have the right or power to withdraw from
the Company as a Member.
P. 5.09. Lack of Authority. No Member has the authority or power to act for or
on behalf of the Company, to do any act that would be binding on the Company, or
to incur any expenditures on behalf of the Company, except to the extent that
such act or expenditure has been approved by a Majority Interest or such greater
interest required by the Agreement, the Articles or applicable law.
P. 5.10. Certificates of Interest. Interests shall be represented by
certificates of interests in the Company, which shall be in such form as may be
approved by the Managers.
ARTICLE 6
MANAGEMENT OF COMPANY AND MEETINGS OF MEMBERS
P. 6.01. Management.
(a) General. The business and affairs of the Company shall be managed by
its Managers. The Managers shall direct, manage, and control the business of the
Company to the best of their ability. Except for situations in which the
approval of the Members is expressly required by this Agreement or by
nonwaivable provisions of applicable law, the Managers shall have full and
complete authority, power, and discretion to manage and control the business,
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affairs, and properties of the Company, to make all decisions regarding those
matters and to perform any and all other acts or activities customary or
incident to the management of the Company's business. At any time when there is
more than one Manager, any one Manager may take any action permitted to be taken
by the Managers, unless the approval of more than one of the Managers is
expressly required pursuant to this Agreement or the Act.
(b) Number, Tenure, and Qualifications. The Company shall initially have
one Manager, which shall be Iron Mountain Records Management, Inc. The number of
Managers of the Company shall be fixed from time to time by the affirmative vote
of Members holding at least two-thirds of all Capital Interests in the Company's
capital, but in no instance shall there be less than one Manager. Each Manager
shall hold office until the next annual meeting of Members or until a successor
shall have been elected and qualified. Managers shall be elected by the
affirmative vote of Members holding at least a Majority Interest. Managers need
not be residents of the State of Delaware or Members of the Company.
(c) Certain Powers of Manager. Without limiting the generality of
ss.6.01(a) above, the Managers shall have the power and authority, on behalf of
the company:
(i) to acquire property from any Person as the Managers may
determine. The fact that a Manager or Member is directly or indirectly
affiliated or connected with any such Person shall not prohibit the Managers
from dealing with that Person;
(ii) to borrow money for the Company from banks, other lending
institutions, the Managers, Members, or affiliates of the Managers or Members on
such terms as the Managers deem appropriate, and in connection therewith, to
hypothecate, encumber, and grant security interests in the assets of the Company
to secure repayment of the borrowed sums. No debt shall be contracted or
liability incurred by or on behalf of the Company except by the Managers, or to
the extent permitted under the Act, by agents or employees of the Company
expressly authorized to contract such debt or incur such liability of the
Managers;
(iii) to hold and own any Company real and/or personal properties in
the name of the Company;
(iv) to purchase liability and other insurance to protect the
Company's property and business;
(v) to invest any Company funds temporarily (by way of example but
not limitation) in time deposits, short-term governmental obligations,
commercial paper, or other investments;
(vi) upon the affirmative vote of the Members holding at least
two-thirds of all Interests, to sell or otherwise dispose of all or
substantially all of the assets of the Company as part of a single transaction
or plan so long as that disposition is not in violation of or a cause of a
default under any other agreement to which the Company may be bound; provided,
however,
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that the affirmative vote of the Members shall not be required with respect to
any sale or disposition of the Company's assets in the ordinary course of the
Company's business;
(vii) to execute on behalf of the Company all instruments and
documents, including, without limitation: checks; drafts; notes and other
negotiable instruments; mortgages, or deeds of trust; security agreements;
financing statements; documents providing for the acquisition, mortgage or
disposition of the Company's property; assignments; bills of sale; leases;
partnership agreements; operating agreements of other limited liability
companies; and any other instruments or documents necessary, in the opinion of
the Managers, to the business of the Company;
(viii)to employ accountants, legal counsel, managing agents, or
other experts to perform services for the Company and to compensate them from
Company funds;
(ix) to enter into any and all other agreements on behalf of the
Company, with any other Person for any purpose, in such forms as the Managers
may approve; and
(x) to do and perform all other acts as any be necessary or
appropriate to the conduct of the Company's business.
Unless authorized to do so by this Agreement or by a Manager or Managers of the
Company, no attorney-in-fact, employee, or other agent of the Company shall have
any power or authority to bind the Company in any way, to pledge its credit or
to render it liable pecuniarily for any purpose. No Member shall have any power
or authority to bind the Company unless the Member has been authorized by the
Managers to act as an agent of the Company in accordance with the previous
sentence.
(d) Liability for Certain Acts. The Managers shall perform their
managerial duties in good faith, in a manner they reasonably believe to be in
the best interests of the Company, and with such care as an ordinarily prudent
person in a like position would use under similar circumstances. A Manager who
so performs the duties of Manager shall not have any liability by reason of
being or having been a Manager of the Company. A Manager does not, in any way,
guarantee the return of the Members' Capital Contributions or a profit for the
Members from the operations of the Company. A Manager shall not be liable to the
Company or to any Member for any loss or damage sustained by the Company or any
Member unless the loss or damage shall have been the result of fraud, deceit,
gross negligence, willful misconduct, or a wrongful taking by the Manager.
(e) Managers Have No Exclusive Duty to Company. The Managers shall not be
required to manage the Company as their sole and exclusive function and they may
have other business interests and may engage in other activities in addition to
those relating to the Company. Neither the Company nor any Member shall have any
right, by virtue of this Agreement, to share or participate in such other
investments or activities of the Managers or to the income or proceeds derived
therefrom. The Managers shall incur no liability to the Company or to any of the
Members as a result of engaging in any other business or venture.
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(f) Bank Accounts. The Managers may from time to time open bank accounts
in the name of the Company, and the Managers shall be the sole signatory
thereon, unless the Managers determine otherwise.
(g) Indemnity of the Managers, Employees, and Other Agents. To the maximum
extent permitted under the Act, the Company shall indemnify the Managers and
make advances for expenses. The Company shall indemnify its employees and other
agents who are not Managers to the fullest extent permitted by law, provided
that the indemnification in any given situation is approved by Members owning a
Majority Interest.
(h) Resignation. Any Manager of the Company may resign at any time by
giving written notice to the Members of the Company. The resignation of any
Manager shall take effect upon receipt of that notice or at such later time as
shall be specified in the notice; and, unless otherwise specified in the notice,
the acceptance of the resignation shall not be necessary to make it effective.
The resignation of a Manager who is also a Member shall not affect the Manager's
rights as a Member and shall not constitute a withdrawal of a Member.
(i) Removal. At a meeting called expressly for that purpose, all or any
lesser number of Managers may be removed at any time, with or without cause, by
the affirmative vote of Members holding a Majority Interest. The removal of a
Manager who is also a Member shall not affect the Manager's rights as a Member
and shall not constitute a withdrawal of a Member.
(j) Vacancies. Any vacancy occurring for any reason in the number of
Managers of the Company may be filled by the affirmative vote of a majority of
the remaining Managers then in office, provided that if there are no remaining
Managers, the vacancy(ies) shall be filled by the affirmative vote of Members
holding a Majority Interest.
(i) Any Manager's position to be filled by reason of an increase in
the number of Managers shall be filled by the affirmative vote of a majority of
the Managers then in office or by an election at an annual meeting or at a
special meeting of Members called for that purpose or by the Members' unanimous
written consent.
(ii) A Manager elected to fill a vacancy shall be elected for the
unexpired term of the Manager's predecessor in office and shall hold office
until the expiration of that term and until the Manager's successor shall be
elected and shall qualify or until the Manager's earlier death, resignation, or
removal.
(iii) A Manager chosen to fill a position resulting from an increase
in the number of Managers shall hold office until the next annual meeting of
Members and until a successor shall be elected and shall qualify, or until the
Manager's earlier death, resignation, or removal.
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(k) Compensation. The compensation of the Managers shall be fixed from
time to time by an affirmative vote of Members holding at least a Majority
Interest and no Manager shall be prevented from receiving compensation because
the Manager is also a Member.
P. 6.02. Meetings. Meetings of the Members may be called by Members holding not
less than twenty-five percent (25%) of the Units. The meeting shall be held at
the principal place of business of the Company or as designated in the notice or
waivers of notice of the meeting.
P. 6.03. Notice. Notice of any meeting of the Members shall be given no fewer
than ten days and no more than thirty days prior to the date of the meeting.
Notices shall be delivered in the manner set forth in P. 11.02 and shall specify
the purpose or purposes for which the meeting is called. The attendance of a
Member at any meeting shall constitute a waiver of notice of such meeting,
except where a Member attends a meeting for the express purpose of objecting to
the transaction of any business because the meeting is not lawfully called or
convened.
P. 6.04. Quorum. A Majority Interest, present in person or represented by proxy,
shall constitute a quorum for transaction of business at any meeting of the
Members, provided that if less than a Majority Interest are present at said
meeting, the holders of a majority of the Units present may adjourn the meeting
at any time without further notice.
P. 6.05. Manner of Acting. The act of a Majority Interest shall be the act of
the Members, unless the act of a greater number is required by this Agreement,
the Articles or applicable law.
P. 6.06. Action Without Meeting. Unless specifically prohibited by the Articles,
any action required to be taken at a meeting of the Members or any other action
which may be taken at a meeting of the Members, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of Units having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which the holders
of all of the Units were present and voting. Prompt notice of the taking of the
action without a meeting by less than unanimous consent shall be given in
writing to those Members who were entitled to vote but did not consent in
writing.
P. 6.07. Telephonic Meetings. The Members may participate in and act at any
meeting of Members through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such meeting shall constitute
attendance and presence in person at the meeting of the person or persons so
participating.
P. 6.08. Proxies. Each Member entitled to vote at a meeting of Members or to
express consent or dissent to action in writing without a meeting may authorize
another Person or Persons to act for him by proxy. Such proxy shall be deposited
at the principal offices of the Company not less than 48 hours before a meeting
is held or action is taken, but no proxy shall be valid after eleven months from
the date of its execution, unless otherwise provided in the proxy.
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P. 6.09. Voting of Interests. Each outstanding Unit shall be entitled to one
vote upon each matter submitted to a vote at a meeting of Members.
P. 6.10. Officers. The officers of the Company shall consist of a President, one
or more Vice Presidents, a Treasurer, Controller and a Secretary. The officers
shall be appointed by the Managers and shall exercise such powers and perform
such duties as are prescribed by the Managers. Any number of offices may be held
by the same person, as the Managers may determine, except that no person may
simultaneously hold the offices of President and Secretary.
P. 6.11. Term of Office. The officers shall hold office for the term for which
they were appointed and until their successors are elected and qualified;
provided, however, that any officer may be removed with or without cause by the
affirmative vote of a Majority Interest.
ARTICLE 7
INDEMNIFICATION
P. 7.01. Rights to Indemnification. Subject to the limitations and conditions
provided in this Article 7 and in the Act, each Person ("Indemnified Person")
who was or is made a party or is threatened to be made a party to or is involved
in any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative ("Proceeding"), or
any appeal in such a Proceeding or any inquiry or investigation that could lead
to such a Proceeding, by reason of the fact that he was or is a Member, Manager
or an officer of the Company or it was the legal representative of or a manager,
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of a Member, shall be indemnified by the Company against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable costs and expenses (including, without
limitation, attorneys' fees) actually incurred by such Indemnified Person in
connection with such Proceeding if such Indemnified Person acted in good faith
and in a manner if reasonably believed to be in, or not opposed to, the best
interest of the Company and, with respect to any criminal action or proceeding,
had no reasonable cause to believe its conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal action or proceeding
that the Indemnified Person had reasonable cause to believe that its conduct was
unlawful.
P. 7.02. Derivative Claims. Subject to the limitations and conditions provided
in this Article 7 and in the Act, the Company shall and does hereby indemnify
any Person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that such
Person is or was a Member, Manager or an officer of the Company, the legal
representative of a Member, Manager or officer, or a manager, director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of a Member against expenses (including
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attorneys' fees) actually and reasonably incurred by such Person in connection
with the defense or settlement of such action or suit, if such Person acted in
good faith and in a manner it reasonably believed to be in, or not opposed to,
the best interests of the Company, provided that no indemnification shall be
made in respect of any claim, issue or matter as to which such Person shall have
been adjudged to be liable for negligence or misconduct in the performance of
its duty to the Company unless and only to the extent that, the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability, but in view of all the circumstances of the case,
such Person is fairly and reasonably entitled to indemnify for such expenses as
the court shall deem proper.
P. 7.03. Success on Merits. To the extent that a Person has been successful, on
the merits or otherwise, in the defense of any action, suit or proceeding
referred to in P. P. 7.01 or 7.02, or in defense of any claim, issue or matter
therein, such Person shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such Person in connection therewith.
P. 7.04. Determinations. Any indemnification under P. P. 7.01 or 7.02 (unless
ordered by a court) shall be made by the Company only as authorized in the
specific case, upon a determination that indemnification is proper in the
circumstances because such person has met the applicable standard of conduct set
forth therein. Such determination shall be made (i) by the holders of a majority
of the Units held by Members who were not parties to such action, suit or
proceedings, or (ii) if such a quorum is not obtainable, or even if obtainable,
if a quorum of disinterested Members so directs, by the Company's independent
legal counsel in a written opinion.
P. 7.05. Survival. Indemnification under this Article 7 shall continue as to a
Person who has ceased to serve in the capacity which initially entitled such
Person to indemnity hereunder. The rights granted pursuant to this Article 7
shall be deemed contract rights, and no amendment, modification or repeal of
this Article 7 shall have the effect of limiting or denying any such rights with
respect to actions taken or Proceedings arising prior to any such amendment,
modification or repeal.
P. 7.06. Advance Payment. The right to indemnification conferred by this Article
7 shall include the right to be paid or reimbursed by the Company for the
reasonable expenses incurred in advance of the final disposition of the
Proceeding and without any determination as to the Person's ultimate entitlement
to indemnification, provided, however, that the payment of such expenses
incurred in advance of the final disposition of a Proceeding shall be made only
upon delivery to the Company of a written affirmation by such Person of its good
faith belief that it has met the standard of conduct necessary for
indemnification under this Article 7 and a written undertaking, by or on behalf
of such Person to repay all amounts so advanced if it shall ultimately be
determined that such Person is not entitled to be indemnified under this Article
7 or otherwise.
P. 7.07. Nonexclusivity of Rights. The right to indemnification and the
advancement and payment of expenses conferred by this Article 7 shall not be
exclusive of any other right which a
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Person may have or hereafter acquire under any law (common or statutory),
provision of the Act, the vote of Members or otherwise.
P. 7.08. Insurance. The Company may purchase and maintain insurance, at its
expense, to protect itself and any Indemnified Person against any expense,
liability or loss, whether or not the Company would have the power to indemnify
such Person against such expense, liability or loss under this Article 7.
P. 7.09. Savings Clause. If P. P. 7.01, 7.02 or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Indemnified Person
as to costs, charges and expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative to the full extent
permitted by any applicable portion of this Article 7 that shall not have been
invalidated and to the fullest extent permitted by applicable law.
ARTICLE 8
BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS
P. 8.01. Maintenance of Books and Records. The Company shall keep books and
records of accounts and shall keep minutes of the proceedings of its Members at
the registered office of the Company or its principal place of business. In
addition, the Company shall maintain the following at its registered office or
its principal place of business:
(a) A current list of the full name and last know business address of each
Member, separately identifying the Members in alphabetical order;
(b) A copy of the filed Articles and all amendments thereto, together with
executed copies of any powers of attorney pursuant to which any document has
been executed;
(c) Copies of the Company's federal, state and local income tax returns
and reports and financial statements, if any, for the three (3) most recent
years;
(d) Copies of this Agreement and any amendments thereto; and
(e) Unless contained in this Agreement, the Articles or in any amendments
hereto, a writing setting out:
(i) The amount of cash, a description and statement of the agreed
value of the other property or services contributed by each Member and which
each Member has agreed to contribute;
(ii) The items as to which or events on the happening of which any
additional contributions agreed to be made by each Member are to be made;
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(iii) Any right of a Member to receive, or of the Members to make,
distributions which include a return of all or any part of the Member's
contribution; and
(iv) Any events upon the happening of which the Company is to be
dissolved and its affairs wound up.
Records kept pursuant to this P. 8.01 are subject to inspection and copying at
the reasonable request, and at the expense, of any Member during ordinary
business hours.
P. 8.02. Reports. On or before the 90th day following the end of each fiscal
year during the term of the Company, the Company shall cause each Member to be
furnished with a federal (and, where applicable, state) income tax reporting
Form K-1 or its equivalent and a financial report for the preceding fiscal year
which shall include a balance sheet and a profit and loss statement prepared in
accordance with generally accepted accounting principles applied on a consistent
basis.
P. 8.03. Taxable Year and Accounting Method. The Company's taxable and fiscal
years shall be the calendar year. the Company shall initially use the accrual
method of accounting.
P. 8.04. Tax Elections. All elections required or permitted to be made by the
Company under the Code shall be made by the Members. In particular:
(i) The Company shall elect to deduct expenses incurred in
organizing the Company ratably over a 60-month period as provided in Section 709
of the Code.
(ii) In case of a Transfer of all or part of any Interest, the
Company may elect, in a timely manner pursuant to Section 754 of the Code and
pursuant to corresponding provisions of applicable state and local tax laws, to
adjust the basis of Company Property pursuant to Sections 734 and 743 of the
Code.
(iii) The Company shall elect to deduct start-up expenditures
ratably over a 60- month period as provided in Section 195 of the Code.
(iv) The Company shall not elect to be excluded from the application
of the provisions of Subchapter K of Chapter 1 of Subtitle A of the Code or
corresponding provisions of state or local law.
P. 8.05. Bank Accounts. All funds of the Company are to be deposited in the
Company's name in such bank accounts or investment accounts as may be designated
by the Managers and shall be withdrawn on the signature of a duly authorized
officer of the Managers, or such other Person or Persons as a Majority Interest
may authorize. The Company's funds may not be commingled with the funds of any
Member or officer of the Company.
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P. 8.06. "Tax Matters Partner." The Managers shall be the "tax matters partner"
of the Company pursuant to Code ss.6231(a)(7). Any one of the Managers is
authorized to take such actions as are permitted by Code ss.ss.6221 through
6233.
ARTICLE 9
PUT-CALL
P. 9.01. Put-Call Arrangement. In the event of an Impasse, each Member shall
have the right to make an optional "put-call" offer to the other Member to
purchase the other Member's entire Membership Interest. Notwithstanding the
above, neither Member may initiate a put-call when there is an outstanding Offer
(defined in P. 9.02(a) below) pending. The Member initiating a put-call shall be
referred to as the "Offeror" and the other Member shall be referred to as the
"Offeree".
P. 9.02. Terms of Offer.
(a) Written Offer. Upon the terms described in P. 9.01, the Offeror may
submit to the Offeree a written offer ("Offer") to purchase the Membership
Interest then owned by the Offeree.
(b) Aggregate Asset Price. The Offer shall state the aggregate price at
which the Offeror would be willing to purchase all the Company Property
("Aggregate Asset Price"); provided, however, that such Aggregate Asset Price
shall be at least equal to or greater than the amount necessary (i) to repay all
outstanding Company liabilities (including accrued interest), including but not
limited to all outstanding loans by Members to the Company and (ii) to return to
each Member its aggregate unreturned Adjusted Capital Contribution.
(c) Price. The "Price" for the Offeree's Membership Interest shall be the
amount which the Offeree would receive if all the Company Property were sold for
the Aggregate Asset Price and the proceeds were applied in accordance with P.
10.03.
(d) Release from Recourse Obligations. If, at the time an Offer is made,
the Offeree or any of its Affiliates are personally liable under any guaranties
or other financial undertakings for the repayment or performance of all or part
of any third-party loan made to the Company ("Offeree's Recourse Liability"),
then the Offer must include the Offeror's written agreement to use its best
efforts to obtain the release of Offeree's Recourse Liability and, if required
by the holders of the Offeree's Recourse Liability, to substitute acceptable
guaranties, letters of credit or other financial undertakings in exchange for
such release of Offeree's Recourse Liability. If any lender will not agree to
release the Offeree's Recourse Liability, then the Offeror shall protect,
defend, indemnify and hold such Offeree, its Affiliates, officers, directors,
agents, shareholders, partners, beneficiaries and trustees harmless from any
manner of loss, claim, damage or expense arising out of or relating to the
Offeree's Recourse Liability from and after the Closing Date (as defined in P.
9.04).
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P. 9.03. Acceptance/Rejection of Offer. The Offeree shall either accept or
reject the Offer, which acceptance or rejection shall be in writing and
delivered to the Offeror on or before 10:00 a.m. on the thirtieth (30th)
calendar day after the offer is delivered. If the Offeree fails to either accept
or reject the Offer on a timely basis, it shall be deemed to have consented to
the unagreed action which precipitated the impasse.
(a) Acceptance. If the Offeree accepts the Offer, the Offeror shall be
deemed the "Buyer" and the Offeree shall be deemed the "Seller". The Put-Call
closing (as defined in P. 9.04) shall take place pursuant to P. 9.04 below.
Effective immediately upon the delivery to the Offeror of the Offeree's
acceptance of the Offer, the Offeror's obligations under the Offer and this
Article 9 shall become recourse, absolute, unconditional and irrevocable
obligations, and shall not be subject to any terms or conditions other than the
default of the Offeree under the Offer.
(b) Rejection of Offer. If the Offeree rejects the Offer, the Offeree
shall thereafter be deemed the "Buyer" and the Offeror shall be deemed the
"Seller". The closing of the transaction described in the Offer shall take place
on the Closing Date pursuant to P. 9.04 below. If the Offeree properly rejects
the Offer, it shall proceed to purchase form the Offeror, and the Offeror shall
sell to the Offeree, the entire Membership Interest owned by the Offeror for a
Price equal to the amount which the Offeror would receive if all the Company
Property were sold for the Aggregate Asset Price and the proceeds were applied
in accordance with P. 10.03.
P. 9.04. Put-Call Closing Procedures. The transaction described in the Offer
shall close on the earlier of (i) the sixtieth (60th) day after the date the
Offer is either accepted or rejected by the Offeree, or (ii) such earlier date
as Buyer may elect with ten (10) days prior written notice to Seller ("Put-Call
closing" or "Closing Date"). At the Put-Call closing, the following shall occur:
(a) The Buyer shall pay to the Seller, in immediately available funds, a
sum equal to the Price.
(b) The Seller shall deliver to the Buyer a complete and absolute
assignment of one hundred percent (100%) of the Seller's Membership Interest
("Assignment").
(c) The Buyer shall satisfy its obligation under P. 9.02(d) above.
(d) The Seller shall cause its Affiliates to terminate any agreements with
the Company as instructed by Buyer in its sole and absolute discretion,
effective from and after the Closing Date, provided that any such Affiliate
shall be paid in full on the Closing Date for all services rendered prior to
such termination.
(e) The buyer and the Seller shall each deliver to the other a release
("Mutual Release") of the other from all acts and conduct of the other relating
to the Company or its affairs, occurring or performed during the tem of this
Agreement, except that neither the buyer nor the Seller shall be released from
any actions (or failures to act) in violation of this Agreement or from any
grossly negligent, reckless or intentionally wrongful acts or omissions.
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From and after delivery the Seller shall have no rights or obligations under
this Agreement with respect to the management and operation of the Company
Property, or otherwise.
P. 9.05. Failure To Perform.
(a) Buyer's Failure To Perform. If the Buyer fails to perform as required
under P. 9.04, then the Seller shall have the option, exercisable within sixty
(60) days after the original Closing Date, to (i) pursue Buyer for specific
performance of its obligations as Buyer; or (ii) continue the Company as if no
put-call procedure had been implemented except that the Buyer shall be deemed to
have consented to the unagreed action which precipitated the Impasse; or (iii)
become the Buyer under the defaulted Offer, subject to the same terms and
conditions set forth in the Offer with the exceptions that: (1) the Price shall
be eighty percent (80%) of the amount which the defaulting party would receive
if all the Company Property were sold for the Aggregate Asset Price and the
proceeds were applied in accordance with P. 10.03; and (2) the nondefaulting
party shall be entitled to select a new Closing Date up to one hundred eighty
(180) days after the original Closing Date.
(b) Seller's Failure To Perform. If the Seller fails to perform as
required under P. 9.04, then: (i) the Seller shall be liable to Buyer, as a
recourse obligation, for all actual and consequential damages caused by Seller
as a result of its breach, together with all expenses of litigation and
attorneys' fees, court costs and expenses; and (ii) the Buyer shall have the
option, exercisable within sixty (60) days after the original Closing Date, to
either: (1) pursue Seller for specific performance of its obligations as Seller
or (2) continue the Company as if no put-call procedure had been implemented
except that the Seller shall be deemed to have consented to the unagreed action
which precipitated the Impasse; provided, however, that in no event shall the
election of either option (or failure to elect) preclude Buyer from pursuing any
other remedy available to Buyer as a matter of law or equity, including, but not
limited to, the damages described in clause (i) above.
P. 9.06. No Withdrawal or Revocation. An Offer shall be irrevocable and shall
not be subject to withdrawal or revocation by the Offeror, except by the written
agreement of all of the Members.
P. 9.07. Decision-Making. Notwithstanding anything to the contrary in this
Agreement, at any time during the period after the acceptance or rejection of an
Offer and the earlier of (i) the termination of the Offer pursuant to P.
9.05(a)(ii) or (b)(ii)(2) above, as the case may be, or (ii) the Closing Date,
the Buyer shall have exclusive control of all decision-making on behalf of the
Company (other than any decisions which may have a substantial adverse impact on
the financial obligations of the Seller in the event that the Buyer defaults in
the purchase of the Seller's Membership Interest).
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ARTICLE 10
DISSOLUTION, LIQUIDATION AND TERMINATION
P. 10.01. Events of Dissolution. The Company shall be dissolved and shall
commence winding up its affairs upon the first to occur of the following:
(a) December 31, 2025;
(b) The vote of Members holding two thirds of the Units;
(c) Any event which makes it unlawful or impossible to carry on the
Company's business;
(d) The sale, disposition or abandonment of all or substantially all of
the Company Property;
(e) The entry of a decree of judicial dissolution under the Act; or
(f) The death, incompetency, retirement, resignation, expulsion,
dissolution or bankruptcy of a Member, or any other event which terminates the
membership of a Member in the Company, unless within ninety (0) days after such
event the Remaining Member agrees to continue the business of the Company with
the Representative of the Withdrawing Member or with a new Member admitted to
the Company.
P. 10.02. Winding Up. Upon the dissolution of the Company, the Members shall
wind up the Company's affairs and satisfy the Company's liabilities. The Members
shall liquidate all of the Company Property as quickly as possible consistent
with obtaining the full fair market value of said Property. During this period,
the Company shall continue to operate Company Property and all of the provisions
of this Agreement shall remain in effect. The Company shall notice all known
creditors and claimants of the dissolution of the Company in accordance with the
Act.
P. 10.03. Final Distribution. The proceeds from the liquidation of the Company
Property shall be distributed as follows:
(a) First, to creditors, including Members who are creditors, until all of
the Company's debts and liabilities are paid and discharged (or provision is
made for payment thereof); and
(b) The balance, if any, to the Members, in proportion to their Capital
Accounts as of the date of such distribution, after giving effect to all
contributions, distributions, and allocations for all periods.
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P. 10.04. Distributions in Kind. In connection with the termination and
liquidation of the Company, the Members shall attempt to sell all of the
Property. To the extent that Property is not sold, each Member will receive a
pro rata share of any distribution in kind. Any Property distributed in kind
upon liquidation of the Company shall be treated as though the Property were
sold and the cash proceeds distributed.
P. 10.05. No Recourse Against Members. The Members shall look solely to the
assets of the Company for the return of their investment, and if the Property
remaining after the payment or discharge of the debts and liabilities of the
Company is insufficient to return such investment, they shall have no recourse
against any other Member.
P. 10.06. Purchase by Member. A Member or an Affiliate of a Member may, if it so
desires, purchase an item of Property upon liquidation provided that (a) the
purchase price is at fair market value as determined by an independent appraiser
selected by the other Member, and (b) at least 15 days' advance notice of the
proposed sale has been given to the other Member.
P. 10.07. Deficit Capital Accounts. Notwithstanding anything to the contrary
contained in this Agreement, and notwithstanding any custom or rule of law to
the contrary, the deficit, if any, in the Capital Account of any Member upon
dissolution of the Company shall not be an asset of the Company and such Member
shall not be obligated to contribute such amount to the Company to bring the
balance of such Member's Capital Account to zero.
P. 10.08. Articles of Dissolution. On completion of the distribution of Company
assets as provided herein, the Company is terminated, and the Members (or such
other Person or Persons as the Act may require or permit) shall file articles of
dissolution with the Secretary of State, cancel any other filings made pursuant
to P. 2.05 and take such other actions as may be necessary to terminate the
Company.
ARTICLE 11
GENERAL PROVISIONS
P. 11.01. Entire Agreement; Amendments. This Agreement embodies the entire
understanding between the Members concerning the Company and their relationship
as Members and supersedes any and all prior negotiations, understandings or
agreements. This Agreement may be amended or modified from time to time only by
a written instrument adopted, executed and agreed to by all of the Members.
P. 11.02. Notices. All notices and demands required or permitted under this
Agreement shall be in writing, as follows: (i) by actual delivery of the notice
into the hands of the party entitled to receive it; (ii) by mailing such notice
by registered or certified mail, return receipt requested, in which case the
notice shall be deemed to be given on the date of its mailing; or (iii) by
Federal Express or any other overnight carrier, in which case the notice shall
be deemed to be given as of the date it is sent. All notices which concern this
as follows:
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If to the Company or Managers:
c/o Iron Mountain Records Management, Inc.
745 Atlantic Avenue
Boston, Massachusetts 02111
Attn: Eugene B. Doggett, Executive Vice President
Copy to:
Iron Mountain Records Management, Inc.
745 Atlantic Avenue
Boston, Massachusetts 02111
Attn: General Counsel
If to the Members: To the address as shown from time to time on the records of
the Company. Any Member may specify a different address, which change shall
become effective upon receipt of such notice by the Company.
P. 11.03. Severability. If any provision of this Agreement or the application of
such provision to any Person or circumstance shall be held invalid, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those as to which it is held invalid, shall not be
affected.
P. 11.04. Parties Bound. This Agreement shall be binding upon the Members and
their respective successors, assigns, heirs, devisees, legal representatives,
executors and administrators.
P. 11.05. Applicable Law. The laws of the State of Delaware shall govern this
Agreement, excluding any conflict of laws rules. The Members irrevocably agree
that all actions or proceedings in any way, manner or respect, arising out of or
from or related to this Agreement shall be litigated only in courts having situs
within the State of Delaware. Each Member hereby consents and submits to the
jurisdiction of any local, state or federal court located within said county and
state and hereby waives any rights it may have to transfer or change the venue
of any such litigation. The prevailing party in any litigation in connection
with this Agreement shall be entitled to recover from the other party all costs
and expenses, including without limitation fees of attorneys and paralegals,
incurred by such party in connection with any such litigation. To the extent
permitted by applicable law, the provisions of this Agreement shall override the
provisions of the Act to the extent of any inconsistency or contradiction
between them.
P. 11.06. Partition. Each Member irrevocably waives any right that it may have
to maintain any action for partition with respect to Company Property.
P. 11.07. Strict Construction. It is the intent of the Members that this
Agreement shall be deemed to have been prepared by all of the parties to the end
that no Member shall be entitled to
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the benefit of any favorable interpretation or construction of any term or
provision hereof under any rule or law.
P. 11.08. Headings. The headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provision.
P. 11.09. Counterparts. This Agreement may be executed in multiple counterparts
with separate pages, and each such counterpart shall be considered an original,
but all of which together shall constitute one and the same instrument.
P. 11.10. Pronouns. All pronouns shall be deemed to refer to the masculine,
feminine or neuter, singular or plural, as the identify of the person or persons
may require.
P. 11.11. Effect of Waiver or Consent. A waiver or consent, express or implied,
to or of any breach or default by any Person in the performance by that Person
of its obligations hereunder or with respect to the Company is not a consent or
waiver to or of any other breach or default in the performance by that Person of
the same or any other obligations of that Person. Failure on the part of a
Person to complain of any act or to declare any Person in default hereunder,
irrespective of how long that failure continues, does not constitute a waiver by
that Person of its rights with respect to that default.
P. 11.12. Further Assurances. Each Member shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and the transactions contemplated herein.
P. 11.13. Indemnification for Breach. To the fullest extent permitted by law,
each Member shall indemnify the Company and each other member and hold them
harmless from and against all losses, costs, liabilities, damages and expenses
(including, without limitation, costs of suit and attorneys' fees) they may
incur on account of any material breach by that Member of this Agreement.
P. 11.14. Disclosure and Wavier of Conflicts. In connection with the preparation
of this Agreement, the Members acknowledge and agree: (i) the attorney that
prepared this Agreement ("Attorney") acted as legal counsel to the Company; (ii)
the Members have been advised by the Attorney that the interests of the members
are opposed to each other and are opposed to the interests of the Company and,
accordingly, the Attorney's representation of the Company may not be in the best
interests of the Members; and (iii) each of the Members has been advised by the
Attorney to retain separate legal counsel. Notwithstanding the foregoing, the
Members (i) desire the Attorney to represent the Company; (ii) acknowledge that
they have been advised to retain separate counsel and have waived their right to
do so; and (iii) jointly and severally forever waive any claim that the
Attorney's representation of the Company constitutes a conflict of interest.
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IN WITNESS WHEREOF, the Members have executed this Agreement as of the
date first set forth above.
MEMBERS:
Iron Mountain Records Management, Inc.
By: /s/ Eugene B. Doggett
Name: Eugene B. Doggett
Title: Executive Vice President
Date of Execution: April 24, 1996
Iron Mountain Records Management of
Maryland, Inc.
By: /s/ Eugene B. Doggett
Name: Eugene B. Doggett
Title: Executive Vice President
Date of Execution: April 24, 1996
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EXHIBIT A
Name and Address of Each Member Capital Contribution Number of Units
- ------------------------------- -------------------- ---------------
Iron Mountain Records Management, $1,000.00 50
Inc.
745 Atlantic Avenue
Boston, MA 02111
Iron Mountain Records Management $1,000.00 50
of Maryland, Inc.
745 Atlantic Avenue
Boston, MA 02111
Exhibit 3.2N
BY-LAWS
of
Iron Mountain Records Management of Boston, Inc.
ARTICLE I
Articles of Organization
The name and purposes of the Corporation shall be as set forth in the
Articles of Organization. These By-Laws, the powers of the Corporation and
of its Directors and stockholders, and all matters concerning the conduct and
regulation of the business of the Corporation shall be subject to such
provisions in regard thereto, if any, as are set forth in the Articles of
Organization; and the Articles of Organization, as from time to time amended,
are hereby made a part of these By-Laws. All references in these By-Laws to
the Articles of Organization shall be construed to mean the Articles of
Organization of the Corporation as from time to time amended.
ARTICLE II
Annual Meeting of Stockholders
The annual meeting of stockholders shall be held on the second Thursday
in May of each year at such other hour as may be fixed by vote of the Board
of Directors or, if the Board shall not fix such hour, as may be determined
by the President and set forth in the notice thereof, unless that day be a
legal holiday at the site of the meeting, in which case the meeting shall be
held at the same hour on the next succeeding business day at the site of the
meeting. Purposes for which an annual meeting is to be held, in addition to
those prescribed by law, by the Articles of Organization and by these
By-Laws, may be specified by the President, or by a vote of a majority of the
Directors then in office, or by one or more stockholders who are entitled to
vote and who hold in the aggregate at least ten per cent (10%) of the capital
stock entitled to vote at the meeting.
If such annual meeting is omitted on the day herein provided therefor,
a special meeting of stockholders may be held in place thereof and any
business transacted or elections held at such special meeting shall have the
same effect as if transacted or held at the annual meeting, and, in such
case, all references in these By-Laws, except in this Article II and in
Article IV, to the annual meeting of stockholders shall be deemed to refer to
such special meeting. Any such special meeting shall be called, and the
purposes thereof shall be specified in the notice thereof, as provided in
Article III.
ARTICLE III
Special Meetings of Stockholders
A special meeting of stockholders may be called at any time by the
President or by a majority of the Directors then in office. A special
meeting of stockholders shall be called by the Clerk, or in the case of the
death, absence, incapacity or refusal of the Clerk, by any other officer,
upon written application of one or more stockholders who hold in the
aggregate at least ten percent (10%) of the capital stock entitled to vote at
the meeting. Such call shall state the time, place and purpose of the
meeting.
ARTICLE IV
Place of Stockholders' Meetings
The annual meeting of stockholders and any special meeting of
stockholders, by whomever called, shall be held at the principal office of
the Corporation in Massachusetts, or at such other place in Massachusetts or
within the continental limits of the United States of America as may be
determined by the Board of Directors (or, in the event such meeting shall
have been called upon the application of stockholders, by such stockholders)
and stated in the notice thereof. Any adjourned session of any annual or
special meeting of stockholders shall be held within the continental limits
of the United States at such place as is designated in the vote of
adjournment.
ARTICLE V
Notice of Stockholders' Meetings
A written notice of each annual or special meeting of stockholders,
stating the place, date and hour thereof, and the purpose or purposes for
which the meeting is to be held, shall be given at least seven (7) days
before the meeting to each stockholder entitled to vote thereat, and to each
stockholder who, under the Articles of Organization or these By-Laws, is
entitled to such notice, by leaving such notice with him or at his residence,
or usual place of business, or by mailing it, postage prepaid, addressed to
such stockholder at his address as it appears in the records of the
Corporation. Such notice shall be given by the Clerk, by any other officer,
or by a person designated either by the Clerk or by the person or persons
calling the meeting, or by the Board of Directors. No notice of the time,
place or purposes of any annual or special meeting of stockholders shall be
required to be given to a stockholder if a written waiver of such notice is
executed before or after the meeting by such stockholder, or by his attorney
thereunto authorized, and filed with the records of the meeting.
ARTICLE VI
Quorum of Stockholders
At any meeting of stockholders, a quorum for the election of any
Director or officer, or for the consideration of any question, shall consist
of a majority in interest of all stock issued, outstanding and entitled to
vote at such election, or upon such question, respectively; except that if
two or more classes of stock are entitled to vote as separate classes upon
any question, then, in the case of each such class, a quorum for the
consideration of such question shall consist of a majority in interest of all
stock of that class issued, outstanding and entitled to vote; and except in
any case where a larger quorum is required by law, by the Articles of
Organization or by these By-Laws. Stock owned by the Corporation, if any,
shall not be deemed outstanding for this purpose. In any case, any meeting
may be adjourned from time to time by a majority of the votes properly cast
upon the question, whether or not a quorum is present, and the meeting may be
held as adjourned without further notice.
When a quorum is present at any meeting, a plurality of the votes
properly cast for any office shall elect to such office, except where a
larger vote is required by law, by the Articles of Organization or by these
By-Laws, and a majority of the votes properly cast upon any other question
(or if two or more classes
of stock are entitled to vote as separate classes upon such question, then,
in the case of each such class, a majority of the votes of such class
properly cast upon the question), except in any case where a larger vote is
required by law, by the Articles of Organization or by these By-Laws, shall
decide the matter.
ARTICLE VII
Proxies and Voting
Except as may be provided in the Articles of Organization, with respect
to two or more classes or series of stock, stockholders entitled to vote
shall have one vote for each share of stock entitled to vote owned by them
and a proportionate vote for each fractional share. No ballot shall be
required for such election unless requested by a stockholder present or
represented at the meeting and entitled to vote in the election. The
Corporation shall not, directly or indirectly, vote upon any share of its own
stock.
Stockholders entitled to vote may vote either in person or by proxy in
writing dated not more than six (6) months before the meeting named therein,
which proxies shall be filed with the Clerk of the meeting, or any
adjournment thereof, before being voted. Such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting, but shall not be
valid after the final adjournment of such meeting.
Any action to be taken by stockholders may be taken without a meeting
if all stockholders entitled to vote on the matter consent to the action by a
writing or writings filed with the records of the meetings of stockholders.
Such consent shall be treated for all purposes as a vote at a meeting.
The Chairman of the Board, if there be one, or in his absence the
President, or in absence of both the Chairman of the Board and the President
a vice-president, shall call meetings of the stockholders to order and shall
act as chairman thereof. The Clerk of the corporation, if present, shall
record the proceedings of all meetings of stockholders and, in his absence,
the presiding officer may appoint a clerk pro tempore of the meeting.
ARTICLE VIII
Board of Directors
A Board of not fewer than one, nor more than five, Directors shall be
elected annually (by ballot if so requested by any stockholder entitled to
vote) at the annual meeting of stockholders by such stockholders as have the
right to vote at such election; provided that, at any time when the
Corporation shall have two or more stockholders, the Board of Directors shall
consist of not fewer than two person, and at any time when the Corporation
has three or more stockholders, the Board of Directors shall consist of not
fewer than three persons. The number of Directors for each corporate year
shall initially be fixed by vote at the meeting at which they are elected.
Any action which may by law, the Articles of Organization or these
By-Laws be taken by a majority of the Board of Directors then in office may
be taken by the sole Director when and if the Corporation has only one
Director.
At any time during any year the number of the Board of Directors may be
increased by vote of a majority of the Directors then in office. At any time
during any year, the whole number of Directors may be increased or reduced by
the stockholders at a meeting called for the purpose and, in the case of a
reduction, the particular directorships which shall terminate shall be
determined by the stockholders, in each case by vote of a majority of the
stock outstanding and entitled to vote for the election of Directors, or, in
the case of a reduction which involves the termination of the directorship of
an incumbent Director, by such larger vote, if any, as would be required to
remove such incumbent from office.
Each newly-created directorship resulting from any increase in the
number of Directors may be filled in the manner provided in Article XIX.
No Director need be a stockholder except as may be otherwise provided
by law, by the Articles of Organization or these By- Laws. Each Director
shall hold office until the next annual meeting of stockholders and until his
successor is elected and qualified, or until he sooner dies, resigns or is
removed.
ARTICLE IX
Powers of Directors
The business, property and affairs of the Corporation shall be managed
by, and be under the control and direction of, the Board of Directors, which
shall have and may exercise all the powers of the Corporation except such as
are conferred upon the stockholders or other officers by law, by the Articles
of Organization or by these By-Laws.
Except as may be otherwise specifically provided by law or by vote of
the stockholders, the Board of Directors is expressly authorized to issue,
from time to time, all or any portion or portions of the capital stock of the
Corporation of any class which may have been authorized but not issued or
otherwise reserved for issue, to such person or persons and for such
consideration (but not less than the par value thereof in case of stock
having par value), whether cash, tangible or intangible property, good will,
services or expenses, as they may deem best, without first offering (for
subscription or sale) such authorized but unissued stock to any present or
future stockholders of the Corporation, and generally in their absolute
discretion to determine the terms and manner of any disposition of such
authorized but unissued stock.
The Board of Directors may delegate from time to time to any committee,
officer or agent such powers and authority as the law, the Articles of
Organization and these By-Laws may permit. The Board of Directors in its
discretion may appoint and remove and determine the compensation and duties
in addition to those fixed by law, the Articles of Organization and these
By-Laws, of all the officers, representatives, agents, employees, and
servants of the Corporation. The Board of Directors shall have power to fix
a reasonable compensation or fee for the attendance of their members at
meetings of the Board. The Board of Directors shall have the power, from
time to time, to fix and determine and to vary the amount of working capital
of the Corporation and to direct and determine the use and disposition of any
surplus or net profits of the Corporation over and above the amount
contributed as, or constituting, paid-in capital. The Board of Directors, in
its discretion, shall, from time to time, declare what, if any, dividends
shall be paid on the stock of the Corporation out of the remaining surplus or
net profits, and any dividend so declared shall be payable at such time or
times as the Board shall determine.
ARTICLE X
Committees of Directors
The Board of Directors, by vote of a majority of the Directors then in
office, may at any time elect from its own number an executive committee
and/or one or more other committees, to consist of not fewer than three
members, and may from time to time designate or alter, within the limits
permitted by this Article X, the duties and powers of such committees or
change their membership, and may at any time abolish such committees or any
of them.
Any committee shall be vested with such powers of the Board of
Directors as the Board may determine in the vote establishing such committee
or in a subsequent vote of a majority of directors then in office, provided,
however, that no such committee shall have any power prohibited by law, or
the Articles of Organization, or the power
(a) to change the principal office of the Corporation;
(b) to amend or authorize the amendment of the Articles of
Organization or these By-Laws;
(c) to issue stock;
(d) to establish and designate series of stock, or fix and
determine the relative rights and preferences of any series
of stock;
(e) to elect officers required by law, the Articles of
Organization or these By-Laws to be elected by stockholders
or Directors, or to fill vacancies in any such office;
(f) to change the number of the Board of Directors or to fill
vacancies in the Board of Directors;
(g) to remove officers or Directors from office;
(h) to authorize the payment of any dividend or distribution to
stockholders;
(i) to authorize the reacquisition for value of stock of the
Corporation;
(j) to authorize a merger or consolidation of the Corporation
or a sale or other disposition of all or substantially all
the property and business of the Corporation; or
(k) to authorize the liquidation or dissolution of the
Corporation;
and provided further, that the fact that a particular power appears in the
foregoing enumeration of powers denied to committees of the Board of
Directors shall not be construed to over-ride by implication any other
provision of the Articles of Organization or these By-Laws limiting or
denying to the Board of Directors the right to exercise such power.
Each member of a committee shall hold office until the first meeting of
the Board of Directors following the next annual meeting of stockholders (or
until such other time as the Board of Directors may determine, either in the
vote establishing the committee or at the election of such member) and until
his successor is elected and qualified, or until he sooner dies, resigns, is
removed, is replaced by change of membership or
becomes disqualified by ceasing to be a Director, or until the committee is
sooner abolished by the Board of Directors.
A majority of the members of any committee then in office, but not
fewer than two, shall constitute a quorum for the transaction of business,
but any meeting may be adjourned from time to time by a majority of the votes
cast upon the question, whether or not a quorum is present, and the meeting
may be held as adjourned without further notice. Each committee may make
rules not inconsistent herewith for the holding and conduct of its meetings,
but unless otherwise provided in such rules its meetings shall be held and
conducted in the same manner, as nearly as may be, as is provided in these
By-Laws for meetings of the Board of Directors. The Board of Directors shall
have the power to rescind any vote or resolution of any committee; provided,
however, that no rights of third parties shall be impaired by such rescission.
ARTICLE XI
Meetings of the Board of Directors;
Action without a Meeting
Regular meetings of the Board of Directors may be held without call or
notice at such places and at such times as the Board may from time to time
determine; provided, however, that reasonable notice of such determination
and of any changes therein is given to each member of the Board then in
office. A regular meeting of the Board of Directors for the purpose of
electing officers and agents may be held without call or notice immediately
after and at the same place as the annual meeting of stockholders, and, if
held upon due call or notice, for such other and further purposes as may be
specified in such call or notice.
Special meetings of the Board of Directors may be held at any time and
at any place when called by the President, the Treasurer, the Chairman of the
Board, if there be one, or two or more Directors, reasonable notice thereof
being given to each Director by the Secretary, or, if there be no Secretary,
by the Clerk, or, in the case of death, absence, incapacity or refusal of the
Secretary (or the Clerk, as the case may be), by the officer or Directors
calling the meeting. In any case, it shall be deemed sufficient notice to a
Director to send notice by mail at least forty-eight (48) hours, or by
telegram at least twenty- four (24) hours, before the meeting, addressed to
him at his usual or last known business or residence address; or to give
notice to him in person, either by telephone or by handing him a written
notice, at least twenty-four (24) hours before the meeting.
Notwithstanding the foregoing, notice of a meeting need not be given to
any Director if a written waiver of notice, executed by him before or after
the meeting, is filed with the records of the meeting, or to any Director who
attends the meeting without protesting prior thereto, or at its commencement,
the lack of notice to him.
Any action required or permitted to be taken at any meeting of the
Directors may be taken without a meeting if a written consent thereto is
signed by all the Directors and such written consent is filed with the
records of the meetings of the Directors. Such consent shall be treated as a
vote at a meeting for all purposes. Such consents may be executed in one or
more counterparts and not every Director need sign the same counterpart.
ARTICLE XII
Quorum of Directors
At any meeting of the Board of Directors, a quorum for any election, or
for the consideration of any question, shall consist of a majority of the
Directors then in office, but any meeting may be adjourned from time to time
by a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
When a quorum is present at any meeting, the votes of a majority of the
Directors present shall be requisite and sufficient for election to any
office, and a majority of the Directors present shall decide any question
brought before such meeting except in any case where a larger vote is
required by law, by the Articles of Organization or by these By-Laws.
ARTICLE XIII
Officers and Agents
The officers of the Corporation shall be a President, a Treasurer, a
Clerk, and such other officers, which may include a Chairman of the Board, a
Secretary, a Controller, one or more Vice Presidents, Assistant Treasurers,
Assistant Clerks, or Assistant Controllers, as the Board of Directors may, in
its discretion, elect or appoint. The Corporation may also have such agents,
if any, as the Board of Directors may, in its discretion, appoint. The
President need not be a Director. The Clerk shall be a resident of
Massachusetts unless the Corporation has a resident agent appointed for the
purpose of receiving service of process. So far as is permitted by law, any
two or more offices may be held by the same person.
Subject to law, to the Articles of Organization and the other
provisions of these By-Laws, each officer shall have, in addition to the
duties and powers herein set forth, such duties and powers as are commonly
incident to his office and as the Board of Directors may from time to time
designate.
The President, Treasurer, and Clerk (and the Secretary and Chairman of
the Board, if, as the case may be, there be one) shall be elected annually by
the Board of Directors at its first meeting following the annual meeting of
stockholders, by vote of a majority of the full Board of Directors. Such
other officers of the Corporation as may be created in accordance with these
By-Laws may be filled at such meeting by vote of a majority of the full Board
of Directors or any other time by vote of a majority of the Directors then in
office.
Each officer shall (subject to Article XVIII of these By- Laws) hold
office until the first meeting of the Board of Directors following the next
annual meeting of stockholders and until his successor is elected or
appointed and qualified, or until he sooner dies, resigns, is removed, or
becomes disqualified. Each agent shall retain his authority at the pleasure
of the Board of Directors.
Any officer, employee, or agent of the Corporation may be required, as
and if determined by the Board of Directors, to give bond for the faithful
performance of his duties.
ARTICLE XIV
President and Vice Presidents; Chairman of the Board
The President shall be the chief executive officer of the Corporation
and shall have general charge and supervision of the business, property and
affairs of the Corporation and such other powers and duties as the Board of
Directors may prescribe, subject to the control of the Board of Directors,
unless otherwise provided by law, the Articles of Organization, these By-Laws
or by specific vote of the Board of Directors. Unless a Chairman of the
Board shall have been elected, the President shall preside at all meetings of
stockholders and of the Board of Directors at which he is present except as
otherwise voted by the Board of Directors.
Any Vice President shall have such duties and powers as shall be
designated from time to time by the Board of Directors or by the President,
and, in any case, shall be responsible to and shall report to the President.
In the absence or disability of the President, the Vice President or, if
there be more than one, the Vice Presidents in the order of their seniority
or as otherwise designated by the Board of Directors, shall have the powers
and duties of the President.
The Chairman of the Board, if there be one, shall be a member of the
Board of Directors and shall preside at its meetings and at the meetings of
the stockholders. He shall keep himself informed of the administration of
the affairs of the Corporation, shall advise and counsel with the President,
and, in the President's absence, with other officers of the Corporation, and
shall perform such other duties as may from time to time be assigned to him
by the Board of Directors.
ARTICLE XV
Treasurer and Assistant Treasurer
The Treasurer shall be the chief financial officer of the Corporation
and shall be in charge of its funds and the disbursements thereof, subject to
the President and the Board of Directors, and shall have such duties and
powers as are commonly incident to the office of a corporate treasurer and
such other duties and powers as may be prescribed from time to time by the
Board of Directors or by the President. If no Controller is elected, the
Treasurer shall also have the duties and powers of the Controller as provided
in these By-Laws. The Treasurer shall be responsible to and shall report to
the Board of Directors, but in the ordinary conduct of the Corporation's
business, shall be under supervision of the President.
Any Assistant Treasurer shall have such duties and powers as shall be
prescribed from time to time by the Board of Directors or by the Treasurer,
and shall be responsible to and shall report to the Treasurer. In the
absence or disability of the Treasurer, the Assistant Treasurer or, if there
be more than one, the Assistant Treasurers in their order of seniority or as
otherwise designated by the Board of Directors shall have the powers and
duties of the Treasurer.
ARTICLE XVI
Controller
If a Controller is elected, he shall be the chief accounting officer of
the Corporation and shall be in charge of its books of account and accounting
records and of its accounting procedures, and shall have such duties and
powers as are commonly incident to the office of a corporate controller and
such other duties and powers as may be prescribed from time to time by the
Board of Directors or by the President. The Controller shall be responsible
to and shall report to the Board of Directors, but in the ordinary conduct of
the Corporation's business, shall be under the supervision of the President.
Any Assistant Controller shall have duties and powers as shall be
prescribed from time to time by the Board of Directors or by the Controller,
and shall be responsible to and shall report to the Controller. If the
absence or disability of the Controller, the Assistant Controller or, if
there be more than one, Assistant Controllers in their order of seniority or
as otherwise designated by the Board of Directors, shall have the powers and
duties of the Controller.
ARTICLE XVII
Clerk; Secretary; Assistant Clerk and Assistant Secretary
The Clerk shall record all proceedings of the stockholders in books to
be kept therefor, and shall have custody of the Corporation's records,
documents and valuable papers. In the absence of the Clerk from any such
meeting, the Secretary, if any, may act as temporary clerk, and shall record
the proceedings thereof in the aforesaid books, or a temporary clerk may be
chosen by vote of the meeting.
The Clerk shall also keep, or cause to be kept, the stock transfer
records of the Corporation which shall contain a complete list of the names
and addresses of all stockholders and the amount of stock held by each.
Unless the Board of Directors shall otherwise designate, the Clerk or,
in his absence, the Assistant Clerk, if any, shall have custody of the
corporate seal and be responsible for affixing it to such documents as may be
required to be sealed.
The Clerk shall have such other duties and powers as are commonly
incident to the office of a corporate clerk, and such other duties and powers
as may be prescribed from time to time by the Board of Directors or by the
President.
If no Secretary is elected, the Clerk shall also record all proceedings
of the Board of Directors and of any meetings of any committees of the Board,
and, in his absence from any such meeting, a temporary clerk shall be chosen
who shall record the proceedings thereof.
The Secretary shall attend all meetings of the Board of Directors and
shall record the proceedings thereat in books provided for that purpose which
shall be open during business hours to the inspection of any Director. He
shall notify the Directors of the meetings in accordance with these By-Laws
and shall have and may exercise such other powers and duties as the Board of
Directors may prescribe. In the absence of the Secretary at a meeting of the
Board of Directors, a temporary secretary shall be chosen.
Any Assistant Clerk and any Assistant Secretary shall have such duties
and powers as shall from time to time be designated by the Board of Directors
or the Clerk or the Secretary, respectively, and shall be responsible to and
shall report to the Clerk and the Secretary, respectively.
ARTICLE XVIII
Resignations and Removals
Any Director or officer may resign at any time by delivering his
resignation in writing to the President, the Clerk or the Secretary, or to a
meeting of the Board of Directors. The stockholders may, by vote of a
majority in interest of the stock issued and outstanding and entitled to vote
at an election of Directors, remove any Director or Directors from office
with or without cause; provided, however, that the Directors of a class
elected by a particular class of stockholders may be removed only by the vote
of the holders of a majority of the shares of such class. The Board of
Directors may, by vote of the majority of the Directors in office, remove any
Director from office with cause, or remove any officer from office, with or
without cause. The Board of Directors may, at any time, by vote of a majority
of the Directors present and voting, terminate or modify the authority of any
agent. No Director or officer resigning and (except where a right to receive
compensation for a definite future period shall be expressly provided in a
written agreement with the Corporation, duly approved by the Board of
Directors) no Director or officer removed shall have any right to any
compensation as such Director or officer for any period following his
resignation or removal, or any right to damages on account of such removal,
whether his compensation be by the month, by the year or otherwise. Any
Director or officer may be removed for cause only after reasonable notice and
opportunity to be heard before the body proposing to remove him.
ARTICLE XIX
Vacancies
Any vacancy in the Board of Directors, however occurring, including a
vacancy resulting from the enlargement of the Board, and any vacancy in any
other office, may be filled by the stockholders or, in the absence of
stockholder action, by a majority of the Directors then in office.
If the office of any member of any committee or of any other office
becomes vacant, the Board of Directors may elect or appoint a successor or
successors by vote of a majority of the Directors then in office.
Each successor as a Director or officer shall hold office for the
unexpired term and until his successor shall be elected or appointed and
qualified, or until he sooner dies, resigns, is removed or becomes
disqualified.
The Board of Directors shall have and may exercise all its powers,
notwithstanding the existence of one or more vacancies in its number as fixed
by either the stockholders or the Directors.
ARTICLE XX
Capital Stock
The authorized amount of the capital stock and the par value, if any,
of the shares shall be as fixed in the Articles of Organization. At all
times when there are two or more classes of stock, the several classes of
stock shall conform to the description and terms, and have the respective
preferences, voting powers, restrictions and qualifications set forth in the
Articles of Organization.
ARTICLE XXI
Certificate of Stock
Each stockholder shall be entitled to a certificate of the capital
stock of the Corporation owned by him, in such form as shall, in conformity
to law, be prescribed from time to time by the Board of Directors. Such
certificate shall be signed by either the President or a Vice President, and
by either the Treasurer or an Assistant Treasurer, and may, but need not be,
sealed with the corporate seal; but when any such certificate is signed by a
transfer agent or by a registrar other than a Director, officer, or employee
of the Corporation, the signature of the President or a Vice President and of
the Treasurer or an Assistant Treasurer of the Corporation, or either or both
such signatures and such seal upon such certificate, may be facsimile. If any
officer who has signed, or whose facsimile signature has been placed on, any
such certificate shall have ceased to be such officer before such certificate
is issued, the certificate may be issued by the Corporation with the same
effect as if he were such officer at the time of issue.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Articles of Organization, these
By-Laws, or any agreement to which the Corporation is a party, shall have the
restriction noted
conspicuously on the certificate, and shall also set forth, on the face or
back, either the full text of the restriction or a statement of the existence
of such restriction and (except if such restriction is imposed by law) a
statement that the Corporation will furnish a copy thereof to the holder of
such certificate upon written request and without charge. Every certificate
issued when the Corporation is authorized to issue more than one class or
series of stock shall set forth on its face or back either the full text of
the preferences, voting powers, qualifications, and special and relative
rights of the shares of each class and series authorized to be issued, or a
statement of the existence of such preferences, powers, qualifications and
rights, and a statement that the Corporation will furnish a copy thereof to
the holder of such certificate upon written request and without charge.
ARTICLE XXII
Transfer of Shares of Stock
Subject to the restrictions, if any, stated or noted on the stock
certificates, shares of stock may be transferred on the books of the
Corporation only by surrender to the Corporation, or its transfer agent, of
the certificate therefor, properly endorsed or accompanied by a written
assignment or power of attorney properly executed, with all requisite stock
transfer stamps affixed, and with such proof of the authenticity and
effectiveness of the signature as the Corporation or its transfer agent shall
reasonably require. Except as may be otherwise required by law, the Articles
of Organization or these By-Laws, the Corporation shall have the right to
treat the person registered on the stock transfer books as the owner of any
shares of the Corporation's stock as the owner-in-fact thereof for all
purposes, including the payment of dividends, liability for assessments, the
right to vote with respect thereto and otherwise, and accordingly shall not
be bound to recognize any attempted transfer, pledge or other disposition
thereof, or any equitable or other claim with respect thereto, whether or not
it shall have actual or other notice thereof, until such shares shall have
been transferred on the Corporation's books in accordance with these
By-Laws. It shall be the duty of each stockholder to notify the Corporation
of his post office address.
ARTICLE XXIII
Transfer Agents and Registrars; Further Regulations
The Board of Directors may appoint one or more banks, trust companies
or corporations doing a corporate trust business, in good standing under the
laws of the United States or any state therein, to act as the Corporation's
transfer agent and/or registrar for shares of capital stock, and the Board
may make such other and further regulations, not inconsistent with applicable
law, as it may deem expedient concerning the issue, transfer and registration
of capital stock and stock certificates of the Corporation.
ARTICLE XXIV
Loss of Certificates
In the case of the alleged loss, destruction, or wrongful taking of a
certificate of stock, a duplicate certificate may be issued in place thereof
upon receipt by the Corporation of such evidence of loss and such indemnity
bond, with or without surety, as shall be satisfactory to the President and
the Treasurer, or otherwise upon such terms, consistent with law, as the
Board of Directors may prescribe.
ARTICLE XXV
Record Date
The Directors may fix in advance a time, which shall not be more than
sixty days before the date of any meeting of stockholders or the date for the
payment of any dividend or the making of any distribution to stockholders, or
the last day on which the consent or dissent of stockholders may be
effectively expressed for any purpose, as the record date for determining the
stockholders having the right to notice of and to vote at, such meeting and
any adjournment thereof, or the right to receive such dividend or
distribution, or the right to give such consent or dissent, and in such case,
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the Corporation after
the record date; or, without fixing such record date, the Directors may, for
any such purposes, close the transfer books for all or any part of such
period.
ARTICLE XXVI
Seal
The seal of the Corporation shall, subject to alteration by the Board
of Directors, consist of a flat-faced circular die with the word
"Massachusetts", together with the name of the Corporation and the year of
incorporation, cut or engraved thereon. An impression of the seal impressed
upon the original copy of these By-Laws shall be deemed conclusively to be
the seal adopted by the Board of Directors.
ARTICLE XXVII
Execution of Papers
Except as the Board of Directors may generally or in particular cases
otherwise authorize or direct, all deeds, leases, transfers, contracts,
proposals, bonds, notes, checks, drafts and other obligations made, accepted
or endorsed by the Corporation shall be signed or endorsed on behalf of the
Corporation by its President or by one of its Vice Presidents or by its
Treasurer.
ARTICLE XXVIII
Fiscal Year
Except as from time to time provided by the Board of Directors, the
fiscal year of the Corporation shall end on the December 31 of each year.
ARTICLE XXIX
Voting Stock in Other Corporations
Unless otherwise ordered by the Board of Directors, the President or,
in the case of his absence or failure to act, the Treasurer, shall have full
power and authority on behalf of the Corporation to attend and to act and to
vote at any meetings of stockholders of any corporation in which this
Corporation may hold stock, and at any such meeting shall possess and may
exercise any and all rights and powers incident to the ownership of such
stock and which, as the owner thereof, the Corporation might have possessed
and exercised if present. The Board of Directors, by resolution from time to
time, or, in the absence thereof, the President, may confer like powers upon
any other person or persons as attorneys and proxies of the Corporation.
ARTICLE XXX
Corporate Records
The original or attested copies of the Articles of Organization,
By-Laws, and records of all meetings of the incorporators and stockholders,
and the stock and transfer records which shall contain the names of all
stockholders and the record address and the amount of stock held by each,
shall be kept in Massachusetts either at the principal office of the
Corporation or at an office of its transfer agent or of the Clerk. Said
copies and records need not all be kept in the same office. They shall be
available at all reasonable times for inspection by any stockholder for any
proper purpose, but not to secure a list of the stockholders for the purpose
of selling said list, or copies thereof, or of using the same for a purpose
other than in the present interest of the applicant, as a stockholder,
relative to the affairs of the Corporation.
ARTICLE XXXI
Amendments
These By-Laws may be altered, amended or repealed, in whole or in part
at any time by vote of the stockholders. The Board of Directors, by a
majority vote of Directors at the time in office, may alter, amend or repeal
these By-Laws in whole or in part, except with respect to any provision
hereof which by law, the Articles of Organization or these By-Laws requires
action by the stockholders; provided that not later than the time of giving
notice of the meeting of stockholders next following the alteration,
amendment or repeal of these By-Laws, in whole or in part, notice thereof,
stating the substance of such action shall be given to all stockholders
entitled to vote on amending these By-Laws. By-Laws adopted by the Directors
may be amended by the stockholders.
Exhibit 3.2O
BYLAWS
OF
DATA ARCHIVE SERVICES, INC.
(a Florida corporation)
ARTICLE I
SHAREHOLDERS
1. SHARE CERTIFICATES. Certificates evidencing fully-paid shares of
the corporation shall set forth thereon the statements prescribed by Section
607.0625 of the Florida Business Corporation Act ("Business Corporation Act")
and by any other applicable provision of law, must be signed, either manually or
in facsimile, by any one of the following officers: the President, a Vice
President, the Secretary, an Assistant Secretary, the Treasurer, an Assistant
Treasurer, or by any officer designated by the Board of Directors, and may bear
the corporate seal or its facsimile. If the person who signed, either manually
or in facsimile, a share certificate no longer holds office when the certificate
is issued, the certificate is nevertheless valid.
2. FRACTIONAL SHARES OR SCRIP. The corporation may issue fractions
of a share or pay in money the fair value of fractions of a share; make
arrangements, or provide reasonable opportunity, for any person entitled to or
holding a fractional interest in a share to sell such fractional interest or to
purchase such additional fractional interests as may be necessary to acquire a
full share; and issue scrip in registered or bearer form, over the manual or
facsimile signature of an officer of the corporation or its agent, entitling the
holder to receive a full share upon surrendering enough scrip to equal a full
share. Each certificate representing scrip must be conspicuously labeled "scrip"
and must contain the information required by of Section 607.0625 of the Business
Corporation Act. The holder of a fractional share is entitled to exercise the
rights of a shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the corporation upon liquidation. The holder of
scrip is not entitled to any of these rights unless the scrip provides for them.
The Board of Directors may authorize the issuance of scrip subject to any
condition considered desirable, including (a) that the scrip will become void if
not exchanged for full shares before a specified date; and (b) that the shares
for which the scrip is exchangeable may be sold and the proceeds paid to the
scripholders.
3. SHARE TRANSFERS. Upon compliance with any provisions restricting
the transferability of shares that may be set forth in the articles of
incorporation, these Bylaws, or any written agreement in respect thereof,
transfers of shares of the corporation shall be made only on the books of the
corporation by the registered holder thereof, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the
<PAGE>
corporation, or with a transfer agent or a registrar and on surrender of the
certificate or certificates for such shares properly endorsed and the payment of
all taxes thereon, if any. Except as may be otherwise provided by law or these
Bylaws, the person in whose name shares stand on the books of the corporation
shall be deemed the owner thereof for all purposes as regards the corporation;
provided that whenever any transfer of shares shall be made for collateral
security, and not absolutely, such fact, if known to the Secretary of the
corporation, shall be so expressed in the entry of transfer.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders to
demand a special meeting, or to take any other action. the Board of Directors,
of the corporation may fix a date as the record date for any such determination
of shareholders, such date in any case to be not more than seventy days before
the meeting or action requiring such determination of shareholders. A
determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date, which it must do if the meeting is
adjourned to a date more than one hundred twenty days after the date fixed for
the original meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right
to notice of a meeting of shareholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "shareholder" or "shareholders'
refers to an outstanding share or shares and to a holder or holders of record of
outstanding shares when the corporation is authorized to issue only one class of
shares, and said reference is also intended to include any outstanding share or
shares and any holder or holders of record of outstanding shares of any class
upon which or upon whom the articles of incorporation confer such rights where
there are two or more classes or series of shares or upon which or upon whom the
Business Corporation Act confers such rights notwithstanding that the articles
of incorporation may provide for more than one class or series of shares, one or
more of which are limited or denied such rights thereunder.
6. SHAREHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date fixed from time
to time by the directors. A special meeting shall be held on the date fixed from
time to time by the directors except where the Business Corporation Act confers
the right to call a special meeting upon the shareholders.
- PLACE. Annual meetings and special meetings shall be held at such
place in or out of the State of Florida as the directors shall from time to time
fix.
- CALL. Annual meetings may be called by the directors or the
Chairman of the Board of Directors, the Vice Chairman of the Board of Directors,
the President, or the Secretary or by any officer instructed by the directors or
the President to call the meeting. Special meetings may be called in like
manner.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. The corporation
shall notify shareholders of the date, time, and place of each annual and
special
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<PAGE>
shareholders' meeting. Such notice shall be no fewer than ten nor more than
sixty days before the meeting date. Unless the Business Corporation Act or the
articles of incorporation require otherwise, notice of an annual meeting need
not include a description of the purpose or purposes for which the meeting is
called. Notice shall be given in the manner provided in Section 607.0141 of the
Business Corporation Act, by or at the direction of the President, the
Secretary, or the officer or persons calling the meeting. Notice of a special
meeting must include a description of the purpose or purposes for which the
meeting is called. Unless the Business Corporation Act or the articles of
incorporation require otherwise, the corporation is required to give notice only
to shareholders entitled to vote at the meeting. A shareholder may waive any
notice required by the Business Corporation Act, the articles of incorporation,
or the Bylaws before or after the date and time stated in the notice. The waiver
must be in writing, be signed by the shareholder entitled to the notice, and be
delivered to the corporation for inclusion in the minutes or filing with the
corporate records. A shareholder's attendance at a meeting waives objection to
lack of notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting; or waives objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder objects to considering the matter when it is
presented.
- VOTING LIST FOR MEETING. After fixing a record date for a meeting,
the corporation shall prepare an alphabetical list of the names of all its
shareholders who are entitled to notice of a shareholders' meeting, arranged by
voting group, with the address of and number and class and series, if any of
shares held by each shareholder. The shareholders' list must be available for
inspection by any shareholder, for a period of ten days prior to the meeting or
such shorter time as exists between the record date and the meeting and
continuing through the meeting at the corporation's principal office, or at a
place identified in the meeting notice in the city where the meeting will be
held, or at the office of the corporation's transfer agent or registrar. A
shareholder, his agent or attorney is entitled on written demand to inspect the
list subject to the requirements of Section 607.1602(3) of the Business
Corporation Act, to copy the list, during regular business hours and at his
expense, during the period it is available for inspection. The corporation shall
make the shareholders' list available at the meeting, and any shareholder, or
his agent or attorney is entitled to inspect the list at any time during the
meeting or any adjournment.
- CONDUCT OF MEETING. Meetings of the shareholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice Chairman of the Board,
if any, the President, a Vice President, if any, or, if none of the foregoing is
in office and present and acting, by a chairman to be chosen by the
shareholders. The Secretary of the corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but, if neither the
Secretary nor an Assistant Secretary is present, the chairman of the meeting
shall appoint a secretary of the meeting.
- PROXY REPRESENTATION. A shareholder may appoint a proxy to vote or
otherwise act for him by signing an appointment form, either personally or by
his attorney-in fact. An appointment of a proxy is effective when received by
the Secretary or other officer or agent authorized to tabulate votes. An
appointment is valid for up to eleven months, unless a
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<PAGE>
longer period is expressly provided in the appointment form. An appointment of a
proxy is revocable by the shareholder unless the appointment form conspicuously
states that it is irrevocable and the appointment is coupled with an interest.
- SHARES HELD BY NOMINEES. The corporation may establish a procedure
by which the beneficial owner of shares that are registered in the name of a
nominee is recognized by the corporation as the shareholder. The extent of this
recognition may be determined in the procedure.
- QUORUM. Unless the articles of incorporation or the Business
Corporation Act provides otherwise, a majority of the votes entitled to be cast
on a matter by a voting group constitutes a quorum of that voting group for
action on that matter. Shares entitled to vote as a separate voting group may
take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Once a share is represented for any purpose at a
meeting, it is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting unless a new record date is or
must be set for that adjourned meeting.
- VOTING. Directors are elected by a plurality of the votes cast by
the shares entitled to vote in the election at a meeting at which a quorum is
present. If a quorum exists, action on a matter, other than the election of
directors, by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation or the Business Corporation Act requires a greater
number of affirmative votes.
7. ACTION WITHOUT MEETING. Unless otherwise provided in the articles
of incorporation, action required or permitted by the provisions of the Business
Corporation Act to be taken at an annual or special meeting of shareholders may
be taken without a meeting, without prior notice, and without a vote if the
action is taken by the holders of outstanding stock of each voting group
entitled to vote thereon having not less than the minimum number of votes with
respect to each voting group that would be necessary to authorize or take such
action at a meeting at which all voting groups and shares entitled to vote
thereon were present and voted. In order to be effective the action must be
evidenced by one or more written consents describing the action taken, dated and
signed by approving shareholders having the requisite number of each voting
group entitled to vote thereon, and delivered to the corporation by delivery to
its principal office in the State of Florida, its principal place of business,
the corporate Secretary, or another officer or agent of the corporation having
custody of the book in which proceedings of meetings of shareholders are
recorded. No written consent shall be effective to take the corporate action
referred to therein, unless within sixty days of the date of the earliest dated
consent delivered in the manner required by Section 607.0704 of the Business
Corporation Act, written consents signed by holders of shares having the number
of votes required to take action are delivered to the corporation by delivery as
set forth in Section 607.0704 of the Florida Business Corporation Act. Action
under this paragraph be subject to the requirements of Section 607.0704 of the
Business Corporation Act.
-4-
<PAGE>
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS GENERALLY - COMPENSATION. All corporate powers
shall be exercised by or under the authority of, and the business and affairs of
the corporation managed under the direction of, a Board of Directors. The Board
may fix the compensation of directors.
2. QUALIFICATIONS AND NUMBER. A director need not be a shareholder,
a citizen of the United States, or a resident of the State of Florida. The
initial Board of Directors shall consist of __ persons, which shall be the
number of directors until changed. Thereafter, the number of directors shall not
be less than __ nor more than ____ . The number of directors may be fixed or
changed from time to time by the shareholders. If not so fixed, the number shall
be ___ . The number of directors shall never be less than one.
3. TERMS AND VACANCIES. The terms of the initial directors of the
corporation expire at the first shareholders meeting at which directors are
elected. The terms of all other directors expire at the next annual
shareholders' meeting following their election. A decrease in the number of
directors does not shorten an incumbent director's term. The term of a director
elected to fill a vacancy expires at the next shareholders' meeting at which
directors are elected. Despite the expiration of a director's term, the director
continues to serve until his successor is elected and qualifies or until there
is a decrease in the number of directors. Whenever a vacancy occurs on the Board
of Directors, including a vacancy resulting from an increase in the number of
directors, it may be filled by the affirmative vote of a majority of the
remaining directors, though less than a quorum of the Board of Directors, or by
the shareholders, unless the articles of incorporation provide otherwise.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. The Board of Directors may hold regular or special meetings
in or out of the State of Florida at such place as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice Chairman of the Board,
if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Regular meetings
of the Board of Directors may be held without notice of the date, time, place,
or purpose of the meeting. Written, or oral, notice of the time and place shall
be given for special meetings in sufficient time for the convenient assembly of
the directors thereat. The notice of a special meeting need not describe the
purpose of the meeting. Notice of a meeting of the Board of
-5-
<PAGE>
Directors need not be given to any director who signs a waiver of notice either
before or after the meeting. Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting and a waiver of any and all
objection to the place of the meeting, the time of the meeting, sr the manner in
which it has been called or convened, except when a director states, at the
beginning of the meeting or promptly upon arrival at the meeting, any objection
to the transaction of business because the meeting is not lawfully called or
convened.
- QUORUM AND ACTION. A quorum of the Board of Directors consists of
a majority of the number of directors prescribed in or fixed in accordance with
these Bylaws. If a quorum is present when a vote is taken, the affirmative vote
of a majority of directors present is the act of the Board of Directors. The
Board of Directors may permit any or all directors to participate in a regular
or special meeting by, or conduct the meeting through use of, any means of
communication by which all directors participating may simultaneously hear each
other during the meeting. A director participating in a meeting by this means is
deemed to be present in person at the meeting.
- CHAIRMAN OF THE MEETING. Meetings of the Board of Directors shall
be presided over by the following directors in the order of seniority and if
present and acting the Chairman of the Board, if any, the Vice Chairman of the
Board, if any, the President, or any other director chosen by the Board.
5. REMOVAL OF DIRECTORS. The shareholders may remove one or more
directors with or without cause pursuant lo the provisions of Section 607.0808
of the Business Corporation Act.
6. COMMITTEES The Board of Directors by resolution adopted by a
majority of the full Board of Directors, may designate from among its members an
executive committee and one or more other committees each of which, to the
extent provided in such resolution or in the articles of incorporation or the
Bylaws, shall have and may exercise all the authority of the Board of Directors,
except such authority as may not be delegated under the Business Corporation
Act. Each committee may have two or more members, who serve at the pleasure of
the Board of Directors. The provisions of Sections 607.0822, 607.0823, and
607.0824 of the Business Corporation Act, which govern meetings, notice and
waiver of notice, and quorum and voting requirements, apply to committees and
their members as well.
7. ACTION WITHOUT MEETING. Action required or permitted by the
Business Corporation Act to be taken at a Board of Directors' meeting or
committee meeting may be taken without a meeting if the action is taken by all
members of the Board or of the committee. The action must be evidenced by one or
more written consents describing the action taken, signed by each director or
committee member. Action taken under this paragraph is effective when the last
director signs the consent, unless the consent specifies a different effective
date.
-6-
<PAGE>
ARTICLE III
OFFICERS
The corporation shall have a President, and a Secretary, and such other
officers as may be deemed necessary, who may be appointed by the directors. The
same individual may simultaneously hold more than one office in the corporation.
A duly appointed officer may appoint one or more officers or assistant
officers if authorized by the Board of Directors.
Each officer of the corporation has the authority and shall perform the
duties prescribed by the Board of Directors or by direction of an officer
authorized by the Board of Directors to prescribe the duties of other officers;
provided, that the Secretary shall have the responsibility for preparation and
custody of minutes of the directors' and shareholders' meetings and for
authenticating records of the corporation.
The Board of Directors may remove any officer at any time with or without
cause.
ARTICLE IV
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the corporation and the
name of the initial registered agent of the corporation are set forth in the
original articles of incorporation.
ARTICLE V
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and shall be in such form and contain such other words and/or
figures as the Board of Directors shall determine or the law require.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
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<PAGE>
ARTICLE VII
CONTROL OVER BYLAWS
The Board of Directors may amend or repeal these Bylaws unless the
articles of incorporation or the Business Corporation Act reserves this power
exclusively to the shareholders in whole or in part, or the shareholders in
amending or repealing the Bylaws generally or a particular Bylaw provision
provide expressly that the Board of Directors may not amend or repeal the
Bylaws, generally or that Bylaw provision. The shareholders may amend or repeal
these Bylaws even though the Bylaws may also be amended or repealed by the Board
of Directors. No provision of this Article shall be construed as purporting to
negate the requirements of Section 607.1201 of the Business Corporation Act.
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy of
the Bylaws of , a corporation of the State of Florida, as in effect on the date
hereof.
WITNESS my hand and seal of the corporation.
Dated:
-----------------------------------------
Secretary of
(SEAL)
-8-
Exhibit 3.2P
BYLAWS
OF
DATA ARCHIVE SERVICES OF MIAMI, INC.
(a Florida corporation)
ARTICLE I
SHAREHOLDERS
1. SHARE CERTIFICATES. Certificates evidencing fully-paid shares of
the corporation shall set forth thereon the statements prescribed by Section
607.0625 of the Florida Business Corporation Act ("Business Corporation Act")
and by any other applicable provision of law, must be signed, either manually or
in facsimile, by any one of the following officers: the President, a Vice
President, the Secretary, an Assistant Secretary, the Treasurer, an Assistant
Treasurer, or by any officer designated by the Board of Directors, and may bear
the corporate seal or its facsimile. If the person who signed, either manually
or in facsimile, a share certificate no longer holds office when the certificate
is issued, the certificate is nevertheless valid.
2. FRACTIONAL SHARES OR SCRIP. The corporation may issue fractions
of a share or pay in money the fair value of fractions of a share; make
arrangements, or provide reasonable opportunity, for any person entitled to or
holding a fractional interest in a share to sell such fractional interest or to
purchase such additional fractional interests as may be necessary to acquire a
full share; and issue scrip in registered or bearer form, over the manual or
facsimile signature of an officer of the corporation or its agent, entitling the
holder to receive a full share upon surrendering enough scrip to equal a full
share. Each certificate representing scrip must be conspicuously labeled "scrip"
and must contain the information required by of Section 607.0625 of the Business
Corporation Act. The holder of a fractional share is entitled to exercise the
rights of a shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the corporation upon liquidation. The holder of
scrip is not entitled to any of these rights unless the scrip provides for them.
The Board of Directors may authorize the issuance of scrip subject to any
condition considered desirable, including (a) that the scrip will become void if
not exchanged for full shares before a specified date; and (b) that the shares
for which the scrip is exchangeable may be sold and the proceeds paid to the
scripholders.
3. SHARE TRANSFERS. Upon compliance with any provisions restricting
the transferability of shares that may be set forth in the articles of
incorporation, these Bylaws, or any written agreement in respect thereof,
transfers of shares of the corporation shall be made only on the books of the
corporation by the registered holder thereof, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the
<PAGE>
corporation, or with a transfer agent or a registrar and on surrender of the
certificate or certificates for such shares properly endorsed and the payment of
all taxes thereon, if any. Except as may be otherwise provided by law or these
Bylaws, the person in whose name shares stand on the books of the corporation
shall be deemed the owner thereof for all purposes as regards the corporation;
provided that whenever any transfer of shares shall be made for collateral
security, and not absolutely, such fact, if known to the Secretary of the
corporation, shall be so expressed in the entry of transfer.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders to
demand a special meeting, or to take any other action. the Board of Directors,
of the corporation may fix a date as the record date for any such determination
of shareholders, such date in any case to be not more than seventy days before
the meeting or action requiring such determination of shareholders. A
determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date, which it must do if the meeting is
adjourned to a date more than one hundred twenty days after the date fixed for
the original meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right
to notice of a meeting of shareholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "shareholder" or "shareholders'
refers to an outstanding share or shares and to a holder or holders of record of
outstanding shares when the corporation is authorized to issue only one class of
shares, and said reference is also intended to include any outstanding share or
shares and any holder or holders of record of outstanding shares of any class
upon which or upon whom the articles of incorporation confer such rights where
there are two or more classes or series of shares or upon which or upon whom the
Business Corporation Act confers such rights notwithstanding that the articles
of incorporation may provide for more than one class or series of shares, one or
more of which are limited or denied such rights thereunder.
6. SHAREHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date fixed from time
to time by the directors. A special meeting shall be held on the date fixed from
time to time by the directors except where the Business Corporation Act confers
the right to call a special meeting upon the shareholders.
- PLACE. Annual meetings and special meetings shall be held at such
place in or out of the State of Florida as the directors shall from time to time
fix.
- CALL. Annual meetings may be called by the directors or the
Chairman of the Board of Directors, the Vice Chairman of the Board of Directors,
the President, or the Secretary or by any officer instructed by the directors or
the President to call the meeting. Special meetings may be called in like
manner.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. The corporation
shall notify shareholders of the date, time, and place of each annual and
special
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<PAGE>
shareholders' meeting. Such notice shall be no fewer than ten nor more than
sixty days before the meeting date. Unless the Business Corporation Act or the
articles of incorporation require otherwise, notice of an annual meeting need
not include a description of the purpose or purposes for which the meeting is
called. Notice shall be given in the manner provided in Section 607.0141 of the
Business Corporation Act, by or at the direction of the President, the
Secretary, or the officer or persons calling the meeting. Notice of a special
meeting must include a description of the purpose or purposes for which the
meeting is called. Unless the Business Corporation Act or the articles of
incorporation require otherwise, the corporation is required to give notice only
to shareholders entitled to vote at the meeting. A shareholder may waive any
notice required by the Business Corporation Act, the articles of incorporation,
or the Bylaws before or after the date and time stated in the notice. The waiver
must be in writing, be signed by the shareholder entitled to the notice, and be
delivered to the corporation for inclusion in the minutes or filing with the
corporate records. A shareholder's attendance at a meeting waives objection to
lack of notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting; or waives objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder objects to considering the matter when it is
presented.
- VOTING LIST FOR MEETING. After fixing a record date for a meeting,
the corporation shall prepare an alphabetical list of the names of all its
shareholders who are entitled to notice of a shareholders' meeting, arranged by
voting group, with the address of and number and class and series, if any of
shares held by each shareholder. The shareholders' list must be available for
inspection by any shareholder, for a period of ten days prior to the meeting or
such shorter time as exists between the record date and the meeting and
continuing through the meeting at the corporation's principal office, or at a
place identified in the meeting notice in the city where the meeting will be
held, or at the office of the corporation's transfer agent or registrar. A
shareholder, his agent or attorney is entitled on written demand to inspect the
list subject to the requirements of Section 607.1602(3) of the Business
Corporation Act, to copy the list, during regular business hours and at his
expense, during the period it is available for inspection. The corporation shall
make the shareholders' list available at the meeting, and any shareholder, or
his agent or attorney is entitled to inspect the list at any time during the
meeting or any adjournment.
- CONDUCT OF MEETING. Meetings of the shareholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice Chairman of the Board,
if any, the President, a Vice President, if any, or, if none of the foregoing is
in office and present and acting, by a chairman to be chosen by the
shareholders. The Secretary of the corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but, if neither the
Secretary nor an Assistant Secretary is present, the chairman of the meeting
shall appoint a secretary of the meeting.
- PROXY REPRESENTATION. A shareholder may appoint a proxy to vote or
otherwise act for him by signing an appointment form, either personally or by
his attorney-in fact. An appointment of a proxy is effective when received by
the Secretary or other officer or agent authorized to tabulate votes. An
appointment is valid for up to eleven months, unless a
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<PAGE>
longer period is expressly provided in the appointment form. An appointment of a
proxy is revocable by the shareholder unless the appointment form conspicuously
states that it is irrevocable and the appointment is coupled with an interest.
- SHARES HELD BY NOMINEES. The corporation may establish a procedure
by which the beneficial owner of shares that are registered in the name of a
nominee is recognized by the corporation as the shareholder. The extent of this
recognition may be determined in the procedure.
- QUORUM. Unless the articles of incorporation or the Business
Corporation Act provides otherwise, a majority of the votes entitled to be cast
on a matter by a voting group constitutes a quorum of that voting group for
action on that matter. Shares entitled to vote as a separate voting group may
take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Once a share is represented for any purpose at a
meeting, it is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting unless a new record date is or
must be set for that adjourned meeting.
- VOTING. Directors are elected by a plurality of the votes cast by
the shares entitled to vote in the election at a meeting at which a quorum is
present. If a quorum exists, action on a matter, other than the election of
directors, by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation or the Business Corporation Act requires a greater
number of affirmative votes.
7. ACTION WITHOUT MEETING. Unless otherwise provided in the articles
of incorporation, action required or permitted by the provisions of the Business
Corporation Act to be taken at an annual or special meeting of shareholders may
be taken without a meeting, without prior notice, and without a vote if the
action is taken by the holders of outstanding stock of each voting group
entitled to vote thereon having not less than the minimum number of votes with
respect to each voting group that would be necessary to authorize or take such
action at a meeting at which all voting groups and shares entitled to vote
thereon were present and voted. In order to be effective the action must be
evidenced by one or more written consents describing the action taken, dated and
signed by approving shareholders having the requisite number of each voting
group entitled to vote thereon, and delivered to the corporation by delivery to
its principal office in the State of Florida, its principal place of business,
the corporate Secretary, or another officer or agent of the corporation having
custody of the book in which proceedings of meetings of shareholders are
recorded. No written consent shall be effective to take the corporate action
referred to therein, unless within sixty days of the date of the earliest dated
consent delivered in the manner required by Section 607.0704 of the Business
Corporation Act, written consents signed by holders of shares having the number
of votes required to take action are delivered to the corporation by delivery as
set forth in Section 607.0704 of the Florida Business Corporation Act. Action
under this paragraph be subject to the requirements of Section 607.0704 of the
Business Corporation Act.
-4-
<PAGE>
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS GENERALLY - COMPENSATION. All corporate powers
shall be exercised by or under the authority of, and the business and affairs of
the corporation managed under the direction of, a Board of Directors. The Board
may fix the compensation of directors.
2. QUALIFICATIONS AND NUMBER. A director need not be a shareholder,
a citizen of the United States, or a resident of the State of Florida. The
initial Board of Directors shall consist of __ persons, which shall be the
number of directors until changed. Thereafter, the number of directors shall not
be less than __ nor more than ____ . The number of directors may be fixed or
changed from time to time by the shareholders. If not so fixed, the number shall
be ___ . The number of directors shall never be less than one.
3. TERMS AND VACANCIES. The terms of the initial directors of the
corporation expire at the first shareholders meeting at which directors are
elected. The terms of all other directors expire at the next annual
shareholders' meeting following their election. A decrease in the number of
directors does not shorten an incumbent director's term. The term of a director
elected to fill a vacancy expires at the next shareholders' meeting at which
directors are elected. Despite the expiration of a director's term, the director
continues to serve until his successor is elected and qualifies or until there
is a decrease in the number of directors. Whenever a vacancy occurs on the Board
of Directors, including a vacancy resulting from an increase in the number of
directors, it may be filled by the affirmative vote of a majority of the
remaining directors, though less than a quorum of the Board of Directors, or by
the shareholders, unless the articles of incorporation provide otherwise.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. The Board of Directors may hold regular or special meetings
in or out of the State of Florida at such place as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice Chairman of the Board,
if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Regular meetings
of the Board of Directors may be held without notice of the date, time, place,
or purpose of the meeting. Written, or oral, notice of the time and place shall
be given for special meetings in sufficient time for the convenient assembly of
the directors thereat. The notice of a special meeting need not describe the
purpose of the meeting. Notice of a meeting of the Board of
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<PAGE>
Directors need not be given to any director who signs a waiver of notice either
before or after the meeting. Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting and a waiver of any and all
objection to the place of the meeting, the time of the meeting, sr the manner in
which it has been called or convened, except when a director states, at the
beginning of the meeting or promptly upon arrival at the meeting, any objection
to the transaction of business because the meeting is not lawfully called or
convened.
- QUORUM AND ACTION. A quorum of the Board of Directors consists of
a majority of the number of directors prescribed in or fixed in accordance with
these Bylaws. If a quorum is present when a vote is taken, the affirmative vote
of a majority of directors present is the act of the Board of Directors. The
Board of Directors may permit any or all directors to participate in a regular
or special meeting by, or conduct the meeting through use of, any means of
communication by which all directors participating may simultaneously hear each
other during the meeting. A director participating in a meeting by this means is
deemed to be present in person at the meeting.
- CHAIRMAN OF THE MEETING. Meetings of the Board of Directors shall
be presided over by the following directors in the order of seniority and if
present and acting the Chairman of the Board, if any, the Vice Chairman of the
Board, if any, the President, or any other director chosen by the Board.
5. REMOVAL OF DIRECTORS. The shareholders may remove one or more
directors with or without cause pursuant lo the provisions of Section 607.0808
of the Business Corporation Act.
6. COMMITTEES The Board of Directors by resolution adopted by a
majority of the full Board of Directors, may designate from among its members an
executive committee and one or more other committees each of which, to the
extent provided in such resolution or in the articles of incorporation or the
Bylaws, shall have and may exercise all the authority of the Board of Directors,
except such authority as may not be delegated under the Business Corporation
Act. Each committee may have two or more members, who serve at the pleasure of
the Board of Directors. The provisions of Sections 607.0822, 607.0823, and
607.0824 of the Business Corporation Act, which govern meetings, notice and
waiver of notice, and quorum and voting requirements, apply to committees and
their members as well.
7. ACTION WITHOUT MEETING. Action required or permitted by the
Business Corporation Act to be taken at a Board of Directors' meeting or
committee meeting may be taken without a meeting if the action is taken by all
members of the Board or of the committee. The action must be evidenced by one or
more written consents describing the action taken, signed by each director or
committee member. Action taken under this paragraph is effective when the last
director signs the consent, unless the consent specifies a different effective
date.
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<PAGE>
ARTICLE III
OFFICERS
The corporation shall have a President, and a Secretary, and such other
officers as may be deemed necessary, who may be appointed by the directors. The
same individual may simultaneously hold more than one office in the corporation.
A duly appointed officer may appoint one or more officers or assistant
officers if authorized by the Board of Directors.
Each officer of the corporation has the authority and shall perform the
duties prescribed by the Board of Directors or by direction of an officer
authorized by the Board of Directors to prescribe the duties of other officers;
provided, that the Secretary shall have the responsibility for preparation and
custody of minutes of the directors' and shareholders' meetings and for
authenticating records of the corporation.
The Board of Directors may remove any officer at any time with or without
cause.
ARTICLE IV
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the corporation and the
name of the initial registered agent of the corporation are set forth in the
original articles of incorporation.
ARTICLE V
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and shall be in such form and contain such other words and/or
figures as the Board of Directors shall determine or the law require.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
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<PAGE>
ARTICLE VII
CONTROL OVER BYLAWS
The Board of Directors may amend or repeal these Bylaws unless the
articles of incorporation or the Business Corporation Act reserves this power
exclusively to the shareholders in whole or in part, or the shareholders in
amending or repealing the Bylaws generally or a particular Bylaw provision
provide expressly that the Board of Directors may not amend or repeal the
Bylaws, generally or that Bylaw provision. The shareholders may amend or repeal
these Bylaws even though the Bylaws may also be amended or repealed by the Board
of Directors. No provision of this Article shall be construed as purporting to
negate the requirements of Section 607.1201 of the Business Corporation Act.
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy of
the Bylaws of , a corporation of the State of Florida, as in effect on the date
hereof.
WITNESS my hand and seal of the corporation.
Dated:
-----------------------------------------
Secretary of
(SEAL)
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Draft of September 10, 1996
===============================================================================
IRON MOUNTAIN INCORPORATED
__% SENIOR SUBORDINATED NOTES DUE 2006
_________________
INDENTURE
Dated as of _________, 1996
_________________
____________________________________________
Trustee
===============================================================================
NYMAIN01 Doc: 159158_2
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)............................................. 7.10
(a)(2)............................................. 7.10
(a)(3) ............................................ N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 7.10
(b) ............................................... 7.10
(c) ............................................... N.A.
311 (a) ............................................... 7.11
(b) ............................................... 7.11
(c) ............................................... N.A.
312 (a)................................................ 2.05
(b)................................................ 12.03
(c) ............................................... 12.03
313 (a) ............................................... 7.06
(b)(1) ............................................ N.A.
(b)(2) ............................................ 7.06;7.07
(c) ............................................... 7.06;12.02
(d)................................................ 7.06
314 (a) ............................................... 4.03;12.02
(b) ............................................... N.A.
(c)(1) ............................................ 12.04
(c)(2) ............................................ 12.04
(c)(3) ............................................ N.A.
(d)................................................ N.A.
(e) .............................................. 12.05
(f)................................................ N.A.
315 (a)................................................ 7.01
(b)................................................ 7.05,12.02
(c) .............................................. 7.01
(d)................................................ 7.01
(e)................................................ 6.11
316 (a)(last sentence) ................................ 2.09
(a)(1)(A).......................................... 6.05
(a)(1)(B) ......................................... 6.04
(a)(2) ............................................ N.A.
(b) ............................................... 6.07
(c) ............................................... 2.13
317 (a)(1) ............................................ 6.08
(a)(2)............................................. 6.09
(b) ............................................... 2.04
318 (a)................................................ 12.01
(b)................................................ N.A.
(c)................................................ 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE...................................................... 1
Section 1.01. Definitions........................................ 1
Section 1.02. Other Definitions.................................. 14
Section 1.03. Incorporation by Reference of Trust Indenture Act.. 15
Section 1.04. Rules of Construction.............................. 16
ARTICLE 2
THE NOTES......................................................... 16
Section 2.01. Form and Dating.................................... 16
Section 2.02. Execution and Authentication....................... 16
Section 2.03. Registrar and Paying Agent......................... 17
Section 2.04. Paying Agent to Hold Money in Trust................ 18
Section 2.05. Lists of Holders of the Notes...................... 18
Section 2.06. Transfer and Exchange.............................. 18
Section 2.07. Replacement Notes.................................. 19
Section 2.08. Outstanding Notes.................................. 20
Section 2.09. Treasury Notes..................................... 20
Section 2.10. Temporary Notes.................................... 20
Section 2.11. Cancellation....................................... 21
Section 2.12. Defaulted Interest................................. 21
Section 2.13. Record Date........................................ 21
Section 2.14. CUSIP Number....................................... 21
Section 2.15. Computation of Interest............................ 22
ARTICLE 3
REDEMPTION AND OFFERS TO PURCHASE................................. 22
Section 3.01. Notices to Trustee................................. 22
Section 3.02. Selection of Notes to Be Redeemed.................. 22
Section 3.03. Notice of Redemption............................... 22
Section 3.04. Effect of Notice of Redemption..................... 23
Section 3.05. Deposit of Redemption Price........................ 23
Section 3.06. Notes Redeemed in Part............................. 24
Section 3.07. Optional Redemption................................ 24
Section 3.08. Mandatory Redemption............................... 24
Section 3.09. Asset Sale Offers.................................. 25
ARTICLE 4
COVENANTS......................................................... 27
Section 4.01. Payment of Notes................................... 27
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TABLE OF CONTENTS (cont.)
Page
Section 4.02. Maintenance of Office or Agency.................... 27
Section 4.03. Reports............................................ 28
Section 4.04. Compliance Certificate............................. 28
Section 4.05. Taxes.............................................. 29
Section 4.06. Stay, Extension and Usury Laws..................... 29
Section 4.07. Restricted Payments................................ 29
Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries............................ 31
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock.................................... 32
Section 4.10. Asset Sales........................................ 33
Section 4.11. Transactions with Affiliates....................... 34
Section 4.12. Liens.............................................. 35
Section 4.13. Additional Subsidiary Guarantees................... 35
Section 4.14. Offer to Purchase Upon Change of Control........... 36
Section 4.15. Corporate Existence................................ 37
Section 4.16. Certain Senior Subordinated Debt................... 38
Section 4.17. Designation of unrestricted subsidiaries........... 38
ARTICLE 5
SUCCESSORS........................................................ 39
Section 5.01. Merger, Consolidation, or Sale of Assets........... 39
Section 5.02. Successor Corporation Substituted.................. 39
ARTICLE 6
CERTAIN DEFAULT PROVISIONS........................................ 40
Section 6.01. Events of Default.................................. 40
Section 6.02. Acceleration....................................... 42
Section 6.03. Other Remedies..................................... 43
Section 6.04. Waiver of Past Defaults............................ 43
Section 6.05. Control by Majority................................ 43
Section 6.06. Limitation on Suits................................ 43
Section 6.07. Rights of Holders of Notes to Receive Payment...... 44
Section 6.08. Collection Suit by Trustee......................... 44
Section 6.09. Trustee May File Proofs of Claim................... 44
Section 6.10. Priorities......................................... 45
Section 6.11. Undertaking for Costs.............................. 45
ARTICLE 7
TRUSTEE .......................................................... 46
Section 7.01. Duties of Trustee.................................. 46
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TABLE OF CONTENTS (cont.)
Page
Section 7.02. Rights of Trustee.................................... 47
Section 7.03. Individual Rights of Trustee......................... 48
Section 7.04. Trustee's Disclaimer................................. 48
Section 7.05. Notice of Defaults................................... 48
Section 7.06. Reports by Trustee to Holders of the Notes........... 48
Section 7.07. Compensation and Indemnity........................... 49
Section 7.08. Replacement of Trustee............................... 50
Section 7.09. Successor Trustee by Merger, etc..................... 51
Section 7.10. Eligibility; Disqualification........................ 51
Section 7.11. Preferential Collection of Claims Against Company.... 51
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE............................ 51
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................... 51
Section 8.02. Legal Defeasance and Discharge....................... 51
Section 8.03. Covenant Defeasance.................................. 52
Section 8.04. Conditions to Legal or Covenant Defeasance........... 52
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions............. 54
Section 8.06. Repayment to Company................................. 54
Section 8.07. Reinstatement........................................ 55
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER ................................... 55
Section 9.01. Without Consent of Holders of Notes.................. 55
Section 9.02. With Consent of Holders of Notes..................... 56
Section 9.03. Compliance with Trust Indenture Act.................. 57
Section 9.04. Revocation and Effect of Consents.................... 57
Section 9.05. Notation on or Exchange of Notes..................... 58
Section 9.06. Trustee to Sign Amendments, etc...................... 58
ARTICLE 10
SUBORDINATION....................................................... 58
Section 10.01. Agreement to Subordinate............................. 58
Section 10.02. Liquidation; Dissolution; Bankruptcy................. 58
Section 10.03. Default on Designated Senior Debt.................... 59
Section 10.04. Acceleration of Notes................................ 60
Section 10.05. When Distribution Must be Paid Over.................. 60
Section 10.06. Notice By Company.................................... 60
Section 10.07. Subrogation.......................................... 61
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TABLE OF CONTENTS (cont.)
Page
Section 10.08. Relative Rights.................................... 61
Section 10.09. Subordination May Not Be Impaired by Company....... 61
Section 10.10. Distribution or Notice to Representative........... 61
Section 10.11. Rights of Trustee and Paying Agent................. 62
Section 10.12. Authorization to Effect Subordination.............. 62
Section 10.13. Amendments......................................... 62
ARTICLE 11
SUBSIDIARY GUARANTEES............................................. 62
Section 11.01. Subsidiary Guarantee............................... 62
Section 11.02. Subordination...................................... 64
Section 11.03. Liquidation; Dissolution; Bankruptcy............... 64
Section 11.04. Default on Senior Debt of the Guarantor............ 65
Section 11.05. Acceleration of Notes.............................. 66
Section 11.06. When Distribution Must Be Paid Over................ 66
Section 11.07. Notice by a Guarantor.............................. 66
Section 11.08. Subrogation........................................ 66
Section 11.09. Relative Rights.................................... 67
Section 11.10. Subordination May Not Be Impaired By Any Guarantor. 67
Section 11.11. Distribution or Notice to Representative........... 67
Section 11.12. Rights of Trustee and Paying Agent................. 68
Section 11.13. Authorization to Effect Subordination.............. 68
Section 11.14. Amendments......................................... 68
Section 11.15. Limitation of Guarantor's Liability................ 68
Section 11.16. Restricted Subsidiaries May Consolidate, etc.,
on Certain Term.................................... 69
Section 11.17. Releases Following Sale of Assets or Designation
as Unrestricted Subsidiary......................... 69
ARTICLE 12
MISCELLANEOUS..................................................... 70
Section 12.01. Trust Indenture Act Controls...................... 70
Section 12.02. Notices........................................... 70
Section 12.03. Communication by Holders of Notes with Other
Holders of Notes.................................. 71
Section 12.04. Certificate and Opinion as to Conditions Precedent 71
Section 12.05. Statements Required in Certificate or Opinion..... 71
Section 12.06. Rules by Trustee and Agents....................... 72
Section 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders........................ 72
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TABLE OF CONTENTS (cont.)
Page
Section 12.08. Governing Law....................................... 72
Section 12.09. No Adverse Interpretation of Other Agreements....... 72
Section 12.10. Successors.......................................... 72
Section 12.11. Severability........................................ 73
Section 12.12. Counterpart Originals............................... 73
Section 12.13. Table of Contents, Headings, etc.................... 73
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF SUPPLEMENTAL INDENTURE
Exhibit C FORM OF NOTATION ON NOTE RELATING TO
GUARANTEE
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INDENTURE dated as of ________, 1996 among Iron Mountain
Incorporated, a Delaware corporation (the "Company") and First Bank National
Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the __%
Senior Subordinated Notes due 2006:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person,
(a) Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person
and (b) Indebtedness encumbering any asset acquired by such specified Person.
"Acquisition EBITDA" means, as of any date of determination,
with respect to an Acquisition EBITDA Entity, the sum of (a) EBITDA of such
Acquisition EBITDA Entity for its last fiscal quarter for which financial
statements are available at such date of determination, multiplied by four (or
if such quarterly statements are not available, EBITDA for the most recent
fiscal year for which financial statements are available), plus (b) projected
quantifiable improvements in operating results (on an annualized basis) due to
cost reductions calculated in good faith by the Company or one of its Restricted
Subsidiaries, as certified by an Officers' Certificate filed with the Trustee,
without giving effect to any operating losses of the acquired Person.
"Acquisition EBITDA Entity" means, as of any date of
determination, a business or Person (a) which has been acquired by the Company
or one of its Restricted Subsidiaries and with respect to which financial
results on a consolidated basis with the Company have not been made available
for an entire fiscal quarter or (b) which is to be acquired in whole or in part
with Indebtedness, the incurrence of which will require the calculation on such
date of the Acquisition EBITDA of such Acquisition EBITDA Entity for purposes of
Section 4.09 hereof.
"Adjusted EBITDA" means, as of any date of determination and
without duplication, the sum of (a) EBITDA of the Company and its Restricted
Subsidiaries for the most recent fiscal quarter for which internal financial
statements are available at such date of determination, multiplied by four, and
(b) Acquisition EBITDA of each business or Person that is an Acquisition EBITDA
Entity as of such date of determination, multiplied by a fraction, the numerator
of which is three minus the number of months (and/or any portion thereof ) in
such most recent fiscal quarter for which the financial results of such
Acquisition EBITDA Entity are included in the EBITDA of the Company and its
Restricted Subsidiaries under clause (a) above, and (ii) the
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denominator of which is three. The effects of unusual or non-recurring items in
respect of the Company, a Restricted Subsidiary or an Acquisition EBITDA Entity
occurring in any period shall be excluded in the calculation of Adjusted EBITDA.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, will mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; provided,
however, that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company, or any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be so required to be capitalized on the
balance sheet in accordance with GAAP.
"Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, including, without limitation, with respect to partnerships, partnership
interests (whether general or limited) and any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership.
"Cash Equivalents" means (a) securities with maturities of one
year or less from the date of acquisition, issued, fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit, time deposits, overnight bank deposits, bankers acceptances and
repurchase agreements issued by a Qualified Issuer having maturities of 270 days
or less from the date of acquisition, (c) commercial paper of an issuer rated at
least A-2 by Standard & Poor's Rating Group, a division of McGraw Hill, Inc., or
P-2 by Moody's Investors Service, or carrying an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments and having maturities of 270 days or
less from the date of acquisition, (d) money market accounts or funds with or
issued by Qualified Issuers and (e) Investments in money market funds
substantially all of the assets of which are comprised of securities and other
obligations of the types described in clauses (a) through (c) above.
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<PAGE>
"Change of Control" means the occurrence of any of the
following events:
(a) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), other than
the Principal Stockholders (or any of them), is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of more than a
majority of the voting power of all classes of Voting Stock of
the Company;
(b) the Company consolidates with, or merges with or
into, another Person or conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets
to any Person, or any Person consolidates with, or merges with
or into, the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities or
other property, other than any such transaction where (i) the
outstanding Voting Stock of the Company is not converted or
exchanged at all (except to the extent necessary to reflect a
change in the jurisdiction of incorporation) or is converted
into or exchanged for (A) Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person or
(B) cash, securities and other property (other than Capital
Stock described in the foregoing clause (A)) of the surviving
or transferee Person in an amount that could be paid as a
Restricted Payment pursuant to Section 4.07 hereof and (ii)
immediately after such transaction, no "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Principal Stockholders (or any
of them), is the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of
more than a majority of the total outstanding Voting Stock of
the surviving or transferee Person;
(c) during any consecutive two-year period,
individuals who at the beginning of such period constituted
the Board of Directors (together with any new directors whose
election to such Board of Directors, or whose nomination for
election by the stockholders of the Company, was approved by a
vote of 662/3% of the directors then still in office who were
either directors at the beginning of such period or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of Directors then in office; or
(d) the Company is liquidated or dissolved or adopts
a plan of liquidation or dissolution other than in a
transaction which complies with the provisions described under
"Consolidation, Merger and Sale of Assets."
"Chrysler Notes" means the 13.42% Senior Subordinated Notes
due December 41, 2000 in the original principal amount of $15.0 million issued
by Iron Mountain Information Services, Inc. to Chrysler Capital Corporation.
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<PAGE>
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"Consolidated Adjusted Net Income" means, for any period, the
net income (or net loss) of the Company and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP, adjusted
to the extent included in calculating such net income or loss by excluding (a)
any net after-tax extraordinary gains or losses (less all fees and expenses
relating thereto), (b) any net after-tax gains or losses (less all fees and
expenses relating thereto) attributable to Asset Sales, (c) the portion of net
income (or loss) of any Person (other than the Company or a Restricted
Subsidiary), including Unrestricted Subsidiaries, in which the Company or any
Restricted Subsidiary has an ownership interest, except to the extent of the
amount of dividends or other distributions actually paid to the Company or any
Restricted Subsidiary in cash dividends or distributions by such Person during
such period, and (d) the net income (or loss) of any Person combined with the
Company or any Restricted Subsidiary on a "pooling of interests" basis
attributable to any period prior to the date of combination.
"Consolidated Income Tax Expense" means, for any period, the
provision for federal, state, local and foreign income taxes of the Company and
its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, the sum of (a) the amount which, in conformity with GAAP, would be
set forth opposite the caption "interest expense" (or any like caption) on a
consolidated statement of operations of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (i) amortization of
debt discount, (ii) the net cost of interest rate contracts (including
amortization of discounts), (iii) the interest portion of any deferred payment
obligation, (iv) amortization of debt issuance costs and (v) the interest
component of Capital Lease Obligations of the Company and its Restricted
Subsidiaries, plus (b) all interest on any Indebtedness of any other Person
guaranteed and paid by the Company or any of its Restricted Subsidiaries;
provided, however, that Consolidated Interest Expense will not include any gain
or loss from extinguishment of debt, including write-off of debt issuance costs.
"Consolidated Non-Cash Charges" means, for any period, the
aggregate depreciation, amortization and other non-cash expenses of the Company
and its Restricted Subsidiaries reducing Consolidated Adjusted Net Income for
such period, determined on a consolidated basis in accordance with GAAP
(excluding any such non-cash charge that requires an accrual of or reserve for
cash charges for any future period).
"Corporate Trust Office of the Trustee" will be at the address
of the Trustee specified in Section 12.02 hereof or such other address as to
which the Trustee may give notice to the Company.
"Credit Agent" means The Chase Manhattan Bank, in its capacity
as administrative agent for the lenders party to the Credit Agreement, or any
successor or successors party thereto.
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4
<PAGE>
"Credit Agreement" means the Credit Agreement dated as of
December 10, 1990, as amended and restated as of April 15, 1993, and as further
amended and restated as of January 31, 1995, among the Company, the lenders
party thereto and the Credit Agent, as the same may be refunded, replaced or
refinanced by the New Credit Facility, and in each case as amended, restated,
supplemented, modified, renewed, refunded, increased, extended, replaced or
refinanced from time to time.
"Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Depositary" means, with respect to Notes issuable in whole or
in part in the form of one or more Global Notes, a clearing agency registered
under the Exchange Act that is designated to act as Depositary for such Notes as
contemplated by Section 2.01.
"Designated Senior Debt" means (a) Senior Bank Debt and (b)
other Senior Debt the principal amount of which is $50.0 million or more at the
date of designation by the Company in a written instrument delivered to the
Trustee; provided that Senior Debt designated as Designated Senior Debt pursuant
to clause (b) shall cease to be Designated Senior Debt at any time that the
aggregate principal amount thereof outstanding is $10.0 million or less.
"Disqualified Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the Holder thereof, in whole or in part, in each
case on or prior to the stated maturity of the Notes.
"distribution" means, for purposes of Articles 10 and 11, a
distribution consisting of cash, securities or other property, by set-off or
otherwise.
"Dollars" and "$" mean lawful money of the United States of
America.
"EBITDA" means for any period Consolidated Adjusted Net Income
for such period increased by (a) Consolidated Interest Expense for such period,
plus (b) Consolidated Income Tax Expense for such period, plus (c) Consolidated
Non-Cash Charges for such period.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Equity Proceeds" means (a) with respect to Equity Interests
(or debt securities converted into Equity Interests) issued or sold for cash
Dollars, the aggregate amount of such cash Dollars and (b) with respect to
Equity Interests (or debt securities converted into Equity Interests)
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<PAGE>
issued or sold for any consideration other than cash Dollars, the aggregate
Market Price thereof computed on the date of the issuance or sale thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Restricted Subsidiary" means any Wholly Owned
Restricted Subsidiary principally engaged in the records management business
domiciled outside the United States of America if the issuance of a Subsidiary
Guarantee by such Subsidiary would, as determined in a resolution of the Board
of Directors set forth in an Officers' Certificate delivered to the Trustee,
create a tax disadvantage that is material in relation to the aggregate amount
of the Company's and any Restricted Subsidiary's Investment or proposed
Investment therein.
"Existing Indebtedness" means Indebtedness of the Company and
its Subsidiaries (other than under the Credit Agreement) in existence on the
date of this Indenture, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"Global Note" means a Note that evidences all or part of the
Notes and is authenticated and delivered to, and registered in the name of, the
Depositary for the Notes or a nominee thereof.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged.
"Guarantee" means, as applied to any obligation, (a) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (b) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
obligation to reimburse amounts drawn down under letters of credit securing such
obligations.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (a) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (b) other agreements
or arrangements designed to protect such Person against fluctuations in interest
rates.
"Holder" means a Person in whose name a Note is registered.
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"Indebtedness" means (without duplication), with respect to
any Person, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (a) every obligation of such Person for
money borrowed, (b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (d)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services, (e) every Capital Lease Obligation and every obligation
of such Person in respect of Sale and Leaseback Transactions that would be
required to be capitalized on the balance sheet in accordance with GAAP, (f) all
Disqualified Stock of such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price, plus accrued and unpaid dividends
(unless included in such maximum repurchase price), (g) all obligations of such
Person under or with respect to Hedging Obligations which would be required to
be reflected on the balance sheet as a liability of such Person in accordance
with GAAP and (h) every obligation of the type referred to in clauses (a)
through (g) of another Person and dividends of another Person the payment of
which, in either case, such Person has guaranteed. For purposes of this
definition, the "maximum fixed repurchase price" of any Disqualified Stock that
does not have a fixed repurchase price will be calculated in accordance with the
terms of such Disqualified Stock as if such Disqualified Stock were repurchased
on any date on which Indebtedness is required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Stock, such fair market value will be determined in
good faith by the board of directors of the issuer of such Disqualified Stock.
Notwithstanding the foregoing, trade accounts payable and accrued liabilities
arising in the ordinary course of business and any liability for federal, state
or local taxes or other taxes owed by such Person will not be considered
Indebtedness for purposes of this definition. The amount outstanding at any time
of any Indebtedness issued with original issue discount is the aggregate
principal amount at maturity of such Indebtedness, less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time, as determined in accordance with GAAP.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities and all other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Issuance Date" means the closing date for the sale and
original issuance of the Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest will
accrue for the intervening period.
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"Leverage Ratio" means, at any date, the ratio of (a) the
aggregate principal amount of Indebtedness of the Company and its Restricted
Subsidiaries outstanding as of the most recent available quarterly or annual
balance sheet to (b) Adjusted EBITDA, after giving pro forma effect, without
duplication, to (i) the incurrence, repayment or retirement of any Indebtedness
by the Company or its Restricted Subsidiaries since the last day of the most
recent full fiscal quarter of the Company, (ii) if the Leverage Ratio is being
determined in connection with the incurrence of Indebtedness by the Company or a
Restricted Subsidiary, such Indebtedness to be incurred, and (iii) the
Indebtedness to be incurred in connection with the acquisition of any
Acquisition EBITDA Entity.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code, or equivalent statutes, of any
jurisdiction).
"Market Price" means, (a) with respect to the calculation of
Equity Proceeds from the issuance or sale of debt securities which have been
converted into Equity Interests, the value received upon the original issuance
or sale of such converted debt securities, as determined reasonably and in good
faith by the Board of Directors, and (b) with respect to the calculation of
Equity Proceeds from the issuance or sale of Equity Interests, the average of
the daily closing prices for such Equity Interests for the 20 consecutive
trading days preceding the date of such computation. The closing price for each
day will be (a) if such Equity Interests are then listed or admitted to trading
on the New York Stock Exchange, the closing price on the NYSE Consolidated Tape
(or any successor consolidated tape reporting transactions on the New York Stock
Exchange) or, if such composite tape is not in use or does not report
transactions in such Equity Interests, or if such Equity Interests are listed on
a stock exchange other than the New York Stock Exchange (including for this
purpose the Nasdaq National Market), the last reported sale price regular way
for such day, or in case no such reported sale takes place on such day, the
average of the closing bid and asked prices regular way for such day, in each
case on the principal national securities exchange on which such Equity
Interests are listed or admitted to trading (which will be the national
securities exchange on which the greatest number of such Equity Interests have
been traded during such 20 consecutive trading days), or (b) if such Equity
Interests are not listed or admitted to trading on any such exchange, the
average of the closing bid and asked prices thereof in the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotation System or any successor system, or if not included therein, the
average of the closing bid and asked prices thereof furnished by two members of
the National Association of Securities Dealers selected reasonably and in good
faith by the Board of Directors for that purpose. In the absence of one or more
such quotations, the Market Price for such Equity Interests will be determined
reasonably and in good faith by the Board of Directors.
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale,
which amount is equal to the excess, if any, of (a) the cash received by the
Company or such Restricted Subsidiary (including any cash
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payments received by way of deferred payment pursuant to, or monetization of, a
note or installment receivable or otherwise, but only as and when received) in
connection with such disposition over (b) the sum of (i) the amount of any
Indebtedness which is secured by such asset and which is required to be repaid
in connection with the disposition thereof, plus (ii) the reasonable
out-of-pocket expenses incurred by the Company or such Restricted Subsidiary, as
the case may be, in connection with such disposition or in connection with the
transfer of such amount from such Restricted Subsidiary to the Company, plus
(iii) provisions for taxes, including income taxes, attributable to the
disposition of such asset or attributable to required prepayments or repayments
of Indebtedness with the proceeds thereof, plus (iv) if the Company does not
first receive a transfer of such amount from the relevant Restricted Subsidiary
with respect to the disposition of an asset by such Restricted Subsidiary and
such Restricted Subsidiary intends to make such transfer as soon as practicable,
the out-of-pocket expenses and taxes that the Company reasonably estimates will
be incurred by the Company or such Restricted Subsidiary in connection with such
transfer at the time such transfer is expected to be received by the Company
(including, without limitation, withholding taxes on the remittance of such
amount).
"Notes" means the __% Senior Subordinated Notes due 2006, as
amended or supplemented from time to time pursuant to the terms hereof, that are
issued under this Indenture.
"Obligations" means any principal, interest (including
post-petition interest, whether or not allowed as a claim in any proceeding),
penalties, fees, costs, expenses, indemnifications, reimbursements, damages and
other liabilities payable under or in connection with any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed, unless
otherwise specified, by any two of the Chairman of the Board, a Vice Chairman of
the Board, the President, the Chief Financial Officer, the Controller or an
Executive Vice President of the Company, and delivered to the Trustee, that
meets the requirements of Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Permitted Investments" means (a) any Investments in the
Company or in a Restricted Subsidiary (other than an Excluded Restricted
Subsidiary) of the Company, including without limitation the Guarantee of
Indebtedness permitted under Section 4.09 hereof; (b) any Investments in Cash
Equivalents; (c) Investments by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment (i) such Person becomes a
Restricted Subsidiary (other than an Excluded Restricted Subsidiary) of the
Company or (ii) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its
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assets to, or is liquidated into, the Company or a Restricted Subsidiary (other
than an Excluded Restricted Subsidiary) of the Company; (d) Investments in
assets (including accounts and notes receivable) owned or used in the ordinary
course of business; (e) Investments for any purpose related to the Company's
records management business in an aggregate outstanding principal amount not to
exceed $10.0 million; and (f) Investments by the Company or a Restricted
Subsidiary (other than an Excluded Restricted Subsidiary) in one or more
Excluded Restricted Subsidiaries, the aggregate outstanding amount of which does
not exceed 10% of the consolidated assets of the Company and its Restricted
Subsidiaries.
"Permitted Liens" means:
(a) Liens existing as of the Issuance Date;
(b) Liens on property or assets of the Company or
any Restricted Subsidiary securing Senior Debt;
(c) Liens on any property or assets of a Restricted
Subsidiary granted in favor of the Company or any Wholly
Owned Restricted Subsidiary;
(d) Liens securing the Notes or the Subsidiary
Guarantees;
(e) any interest or title of a lessor under any
Capital Lease Obligation or Sale and Leaseback Transaction so
long as the Indebtedness, if any, secured by such Lien does
not exceed the principal amount of Indebtedness permitted
under Section 4.09 hereof;
(f) Liens securing Acquired Debt created prior to
(and not in connection with or in contemplation of) the
incurrence of such Indebtedness by the Company or any
Restricted Subsidiary; provided that such Lien does not extend
to any property or assets of the Company or any Restricted
Subsidiary other than the assets acquired in connection with
the incurrence of such Acquired Debt;
(g) Liens securing Hedging Obligations permitted to
be incurred pursuant to clause (g) of Section 4.09 hereof;
(h) Liens arising from purchase money mortgages and
purchase money security interests, or in respect of the
construction of property or assets, incurred in the ordinary
course of the business of the Company or a Restricted
Subsidiary; provided that (i) the related Indebtedness is not
secured by any property or assets of the Company or any
Restricted Subsidiary other than the property and assets so
acquired or constructed and (ii) the Lien securing such
Indebtedness is created within 60 days of such acquisition or
construction;
(i) statutory Liens or landlords' and carriers',
warehousemen's, mechanics', suppliers', materialmen's,
repairmen's or other like Liens arising in
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the ordinary course of business and with respect to amounts
not yet delinquent or being contested in good faith by
appropriate proceedings, if a reserve or other appropriate
provision, if any, as is then required in conformity with GAAP
has been made therefor;
(j) Liens for taxes, assessments, government charges
or claims with respect to amounts not yet delinquent or that
are being contested in good faith by appropriate proceedings
diligently conducted, if a reserve or other appropriate
provision, if any, as is required in conformity with GAAP has
been made therefor;
(k) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, government contracts, performance
bonds and other obligations of a like nature incurred in the
ordinary course of business (other than contracts for the
payment of money);
(l) easements, rights-of-way, restrictions and other
similar charges or encumbrances not interfering in any
material respect with the business of the Company or any
Restricted Subsidiary incurred in the ordinary course of
business;
(m) Liens arising by reason of any judgment, decree
or order of any court so long as such Lien is adequately
bonded and any appropriate legal proceedings that may have
been duly initiated for the review of such judgment, decree or
order shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have
expired;
(n) Liens arising under options or agreements to
sell assets;
(o) other Liens securing obligations incurred in the
ordinary course of business, which obligations do not exceed
$1.0 million in the aggregate at any one time outstanding;
and
(p) any extension, renewal or replacement, in whole
or in part, of any Lien described in the foregoing clauses (a)
through (o); provided that any such extension, renewal or
replacement does not extend to any additional property or
assets.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or any government or any agency or political
subdivision thereof.
"Principal Stockholders" means each of Vincent J. Ryan,
Schooner Capital Corporation, C. Richard Reese, Eugene B. Doggett, and their
respective Affiliates.
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"Qualified Equity Offering" means an offering of Capital
Stock, other than Disqualified Stock, of the Company for Dollars, whether
registered or exempt from registration under the Securities Act.
"Qualified Issuer" means (a) any lender party to the Credit
Agreement or (b) any commercial bank (i) which has capital and surplus in excess
of $500,000,000 and (ii) the outstanding short-term debt securities of which are
rated at least A-2 by Standard & Poor's Rating Group, a division of McGraw-Hill,
Inc. or at least P-2 by Moody's Investors Service, or carry an equivalent rating
by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments.
"Qualifying Sale and Leaseback Transaction" means any Sale and
Leaseback Transaction between the Company or any of its Restricted Subsidiaries
and any bank, insurance company or other lender or investor providing for the
leasing to the Company or such Restricted Subsidiary of any property (real or
personal) which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such lender or investor or to any Person to whom funds
have been or are to be advanced by such lender or investor and where the
property in question has been constructed or acquired after the date of this
Indenture.
"Refinancing Indebtedness" means new Indebtedness incurred or
given in exchange for, or the proceeds of which are used to repay, redeem,
defease, extend, refinance, renew, replace or refund, other Indebtedness;
provided, however, that (a) the principal amount of such new Indebtedness shall
not exceed the principal amount of Indebtedness so repaid, redeemed, defeased,
extended, refinanced, renewed, replaced or refunded (plus the amount of fees,
premiums, consent fees, prepayment penalties and expenses incurred in connection
therewith); (b) such Refinancing Indebtedness shall have a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to Maturity of
the Indebtedness so repaid, redeemed, defeased, extended, refinanced, renewed,
replaced or refunded or shall mature after _______, 2006; (c) to the extent such
Refinancing Indebtedness refinances Indebtedness that has a final maturity date
occurring after ________, 2006, such new Indebtedness shall have a final
scheduled maturity not earlier than the final scheduled maturity of the
Indebtedness so repaid, redeemed, defeased, extended, refinanced, renewed,
replaced or refunded and shall not permit redemption at the option of the holder
earlier than the earliest date of redemption at the option of the holder of the
Indebtedness so repaid, redeemed, defeased, extended, refinanced, renewed,
replaced or refunded; (d) to the extent such Refinancing Indebtedness refinances
Indebtedness subordinate to the Notes, such Refinancing Indebtedness shall be
subordinated in right of payment to the Notes and to the extent such Refinancing
Indebtedness refinances Notes or Indebtedness pari passu with the Notes, such
Refinancing Indebtedness shall be pari passu with or subordinated in right of
payment to the Notes, in each case on terms at least as favorable to the holders
of Notes as those contained in the documentation governing the Indebtedness so
repaid, redeemed, defeased, extended, refinanced, renewed, replaced or refunded;
and (e) with respect to Refinancing Indebtedness incurred by a Restricted
Subsidiary, such Refinancing Indebtedness shall rank no more senior, and shall
be at least as subordinated, in right of payment to the Subsidiary Guarantee of
such Restricted Subsidiary as the Indebtedness being extended, refinanced,
renewed, replaced or refunded.
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"Representative" means, for purposes of Articles 10 and 11,
the Credit Agent or other agent, trustee or representative for any Senior Debt
of the Company or, with respect to any Restricted Subsidiary, for any Senior
Debt of such Restricted Subsidiary.
"Responsible Officer" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means (a) each direct or indirect
Subsidiary of the Company existing on the date of this Indenture and (b) any
other direct or indirect Subsidiary of the Company formed, acquired or existing
after the date of this Indenture, in each case which is not designated by the
Board of Directors as an "Unrestricted Subsidiary."
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Sale and Leaseback Transaction" means any transaction or
series of related transactions pursuant to which a Person sells or transfers any
property or asset in connection with the leasing, or the resale against
installment payments, of such property or asset to the seller or transferor.
"Senior Bank Debt" means all Obligations outstanding under or
in connection with the Credit Agreement (including Guarantees of such
Obligations by Subsidiaries of the Company).
"Senior Debt" means (a) the Senior Bank Debt and (b) any other
Indebtedness permitted to be incurred by the Company or any Restricted
Subsidiary, as the case may be, under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Notes.
Notwithstanding anything to the contrary in the foregoing, Senior Debt shall not
include (i) any liability for federal, state, local or other taxes owed or owing
by the Company, (ii) any Indebtedness of the Company to any of its Subsidiaries
or other Affiliates, (iii) any trade payables or (iv) any Indebtedness that is
incurred in violation of this Indenture.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
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managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof.
"Subsidiary Guarantee" means a Guarantee of a Guarantor
pursuant to Article 11 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means (a) any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary in accordance
with Section 4.17 hereof and (b) any Subsidiary of an Unrestricted Subsidiary.
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of any Person (irrespective of whether or not, at the time,
stock of any other class or classes has, or might have, voting power by reason
of the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary of the Company all of the outstanding Capital Stock or other
ownership interests of which (other than director's qualifying shares) shall at
the time be owned by the Company or by one of more Wholly Owned Restricted
Subsidiaries of the Company.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"....................................... 4.11
"Asset Sale".................................................. 4.10
"Asset Sale Offer"............................................ 4.10
"Benefitted Party"............................................ 11.01
"Change of Control Offer"..................................... 4.14
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"Change of Control Payment"................................... 4.14
"Change of Control Payment Date".............................. 4.14
"Covenant Defeasance"......................................... 8.03
"Commencement Date"........................................... 4.10
"Event of Default"............................................ 6.01
"Excess Proceeds"............................................. 4.10
"Guarantor"................................................... 11.01
"incur"....................................................... 4.09
"Legal Defeasance" ........................................... 8.02
"Non-Monetary Default"........................................ 10.03
"Offer Amount"................................................ 3.09
"Offer Period"................................................ 3.09
"Paying Agent"................................................ 2.03
"Payment Blockage Notice"..................................... 10.03
"Payment Default"............................................. 10.03
"Purchase Date"............................................... 3.09
"Registrar"................................................... 2.03
"Restricted Payments"......................................... 4.07
"Separation Date"............................................. 2.06
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture,
other than those provisions of the TIA that may be excluded herein, which
provision shall be excluded to the extent specifically excluded in this
Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes and the Subsidiary Guarantees,
if any;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, the Guarantors and any
successor obligor upon the Notes or any Subsidiary Guarantee, as the case may
be.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule or regulation
promulgated by the SEC under the TIA have the meanings so assigned to them.
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SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act or
the Exchange Act shall be deemed to include substitute, replacement or
successor sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The notation on each Note
relating to the Subsidiary Guarantees shall be substantially in the form set
forth on Exhibit C, which is part of this Indenture. The Notes may have
notations, legends or endorsements approved as to form by the Company and
required by law, stock exchange rule, agreements to which the Company or each
Restricted Subsidiary is subject, or usage. Each Note shall be dated the date of
its authentication. The Notes shall be issuable only in denominations of $1,000
and integral multiples thereof.
The Notes may, at the option of the Company, be issuable in whole or
in part in the form of one or more Global Notes and, in such case, the
Depositary or Depositaries for such Global Note or Global Notes shall be
designated by the Company in an Officers' Certificate delivered to the Trustee
on or prior to the Issuance Date. Every Global Note authenticated and delivered
hereunder will bear a legend substantially in the form thereof set forth on
Exhibit A hereto.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers of the Company shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal shall be reproduced on the
Notes and may be in
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facsimile form. An Officer of each Guarantor shall sign the Subsidiary Guarantee
for such Guarantor by manual or facsimile signature.
If an Officer of the Company or a Guarantor whose signature is on a
Note or a Subsidiary Guarantee, as the case may be, no longer holds that office
at the time the Note is authenticated, the Note or the Subsidiary Guarantee, as
the case may be, shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Notes for original issue up to an
aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time shall not exceed $__,000,000
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or any Guarantor or an Affiliate of the Company
or any Guarantor.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (including any
co-registrar, the "Registrar") and (ii) an office or agency where Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent, Registrar or co-registrar without prior notice to any Holder of a Note.
The Company shall notify the Trustee and the Trustee shall notify the Holders of
the Notes of the name and address of any Agent not a party to this Indenture.
The Company or any Guarantor may act as Paying Agent, Registrar or co-registrar.
The Company shall enter into an appropriate agency agreement with any Agent not
a party to this Indenture, which shall be subject to any obligations imposed by
the provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such, and shall be entitled to appropriate compensation in accordance with
Section 7.07 hereof.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Notes.
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SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders of the Notes or the Trustee all money held by the Paying Agent for
the payment of principal of, premium, if any, and interest on the Notes, and
shall notify the Trustee of any Default by the Company or the Guarantors in
making any such payment. While any such Default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Guarantor) shall have no further liability for the money delivered
to the Trustee. If the Company or a Guarantor acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders of
the Notes, subject to Article 10 hereof, all money held by it as Paying Agent.
Upon any bankruptcy or reorganization proceeding relating to the Company or a
Guarantor, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. LISTS OF HOLDERS OF THE NOTES.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of the Notes and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company and/or the Guarantors shall furnish to
the Trustee at least seven Business Days before each interest payment date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of the Notes, including the aggregate principal amount of
the Notes held by each thereof, and the Company and each Guarantor shall
otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar with a request to register
the transfer or to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met; provided, however, that any Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar and the Trustee duly executed by the Holder
thereof or by his attorney duly authorized in writing. To permit registrations
of transfer and exchanges, the Company shall issue and the Trustee shall
authenticate Notes at the Registrar's request, subject to such rules as the
Trustee may reasonably require.
Neither the Company nor the Registrar shall be required to (a) issue,
register the transfer of or exchange Notes during a period beginning at the
opening of business on a Business Day 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection or (b) register the transfer of or exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
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No service fee shall be charged to any Holder of a Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.06 or 9.05 hereof, which shall be paid by
the Company).
Prior to due presentment to the Trustee for registration of the
transfer of any Note, the Trustee, any Agent, the Company and each Guarantor may
deem and treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of,
premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and none of the Trustee, any
Agent, the Company or any Guarantor shall be affected by notice to the contrary.
Notwithstanding any other provision in this Indenture, no Global Note
may be transferred to, or registered or exchanged for Notes registered in the
name of, any Person other than the Depositary for such Global Note or any
nominee thereof, and no such transfer may be registered, unless (a) such
Depositary (i) notifies the Company that it is unwilling or unable to continue
as Depositary for such Global Note or (ii) ceases to be a clearing agency
registered under the Exchange Act, (b) the Company delivers to the Trustee an
Officers' Certificate stating that such Global Note shall be so transferable,
registrable, and exchangeable, and such transfers shall be registrable, or (c)
there shall have occurred and be continuing an Event of Default with respect to
the Notes evidenced by such Global Note. Notwithstanding any other provision in
this Indenture, a Global Note to which the restriction set forth in the
preceding sentence shall have ceased to apply may be transferred only to, and
may be registered and exchanged for Notes registered only in the name or names
of, such Person or Persons as the Depositary for such Global Note shall have
directed and no transfer thereof other than such a transfer may be registered.
Every Note authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Note to which the restriction set forth in
the first sentence of this paragraph shall apply, whether pursuant to this
Section 2.06 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Note.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers of the Company, shall authenticate a
replacement Note (accompanied by a notation of the Subsidiary Guarantees duly
endorsed by each Guarantor) if the Trustee's requirements for replacements of
Notes are met. If required by the Trustee, the Company or the Guarantors, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee, the Company and the Guarantors to protect the Company, the
Guarantors, the Trustee, any Agent or any authenticating agent from any loss
which any of them may suffer if a Note is replaced. Each of the Company, the
Guarantors and the Trustee may charge for its expenses in replacing a Note.
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Every replacement Note is an additional obligation of the Company and
the Guarantors and shall be entitled to all of the benefits of this Indenture
equally and ratably with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding. If a
Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser. If the principal amount of any Note is considered
paid under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue. Subject to Section 2.09 hereof, a Note does not cease to be
outstanding because the Company, a Guarantor, a Subsidiary of the Company or a
Guarantor or an Affiliate of the Company or a Guarantor holds the Note.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Guarantor, any of their respective Subsidiaries or any Affiliate of
the Company or any Guarantor shall be considered as though not outstanding,
except that for purposes of determining whether the Trustee shall be protected
in relying on any such direction, waiver or consent, only Notes which the
Trustee knows to be so owned shall be so considered. Notwithstanding the
foregoing, Notes that are to be acquired by the Company, any Guarantor, any
Subsidiary of the Company or any Guarantor or an Affiliate of the Company or any
Guarantor pursuant to an exchange offer, tender offer or other agreement shall
not be deemed to be owned by the Company, such Guarantor, a Subsidiary of the
Company or such Guarantor or an Affiliate of the Company or such Guarantor until
legal title to such Notes passes to the Company, such Guarantor, such Subsidiary
or such Affiliate, as the case may be.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes (accompanied by a
notation of the Subsidiary Guarantees duly endorsed by each Guarantor).
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company and the Trustee consider appropriate for
temporary Notes. Without unreasonable delay, the Company shall prepare and the
Trustee, upon receipt of the written order of the Company signed by two Officers
of the Company, shall authenticate definitive Notes (accompanied by a notation
of the Subsidiary Guarantees duly endorsed by each Guarantor) in exchange for
temporary Notes. Until such exchange, temporary Notes shall be entitled to the
same rights, benefits and privileges as definitive Notes.
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SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall destroy canceled Notes
(subject to the record retention requirement of the Exchange Act), unless the
Company directs canceled Notes to be returned to it. The Company may not issue
new Notes to replace Notes that it has redeemed or paid or that have been
delivered to the Trustee for cancellation. All canceled Notes held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Company, unless by a written order, signed by two Officers of the Company,
the Company shall direct that canceled Notes be returned to it.
SECTION 2.12. DEFAULTED INTEREST.
If the Company and the Guarantors default in a payment of interest on
the Notes, the Company or any such Guarantor (to the extent of its obligations
under its Subsidiary Guarantee) shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest,
to the Persons who are Holders of the Notes on a subsequent special record date,
which date shall be at the earliest practicable date but in all events at least
five Business Days prior to the payment date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall fix or cause to be
fixed each such special record date and payment date, and shall, promptly
thereafter, notify the Trustee of any such date. At least 15 days before the
special record date, the Company (or the Trustee, in the name of and at the
expense of the Company) shall mail to Holders of the Notes a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders
of the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA ss. 316(c).
SECTION 2.14. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number and, if it
does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company will
promptly notify the Trustee of any change in the CUSIP number.
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SECTION 2.15. COMPUTATION OF INTEREST.
Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months.
ARTICLE 3
REDEMPTION AND OFFERS TO PURCHASE
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the Section of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the applicable Holders of
the Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not so listed, on a pro rata basis, by lot or in accordance with any other
method the Trustee considers fair and appropriate, provided that no Notes of
$1,000 or less shall be redeemed in part. In the event of partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the redemption
date by the Trustee from the outstanding Notes not previously called for
redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
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(b) the redemption price (including accrued interest to the
redemption date);
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption shall cease to accrue on
and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional. On and after the redemption date, unless the Company defaults in
the payment of the redemption price, interest will cease to accrue on the Notes
or portions thereof called for redemption and all rights of Holders with respect
to such Notes will terminate except for the right to receive payment of the
redemption price upon surrender for redemption.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
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If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption, whether or not such
Notes are presented for payment. If a Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest shall be paid to the Person in whose name such Note
was registered at the close of business on such record date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note (accompanied by a
notation of the Subsidiary Guarantees duly endorsed by each Guarantor) equal in
principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The Notes shall not be redeemable at the Company's option prior to
______, 2001. Thereafter, the Notes shall be subject to redemption at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on ______ of the years indicated below:
Year Percentage
2001..................................................... ___.__%
2002..................................................... ___.__%
2003..................................................... ___.__%
2004 and thereafter...................................... 100.00%
Notwithstanding the foregoing, at any time prior to ______, 1999, the
Company may redeem up to 35% of the initial principal amount of the Notes
originally issued with the net proceeds of one or more Qualified Equity
Offerings at a redemption price equal to ___% of the principal amount of such
Notes, plus accrued and unpaid interest, if any, to the date of redemption;
provided, that at least 65% of the principal amount of Notes originally issued
remains outstanding immediately after the occurrence of any such redemption and
that such redemption occurs within 60 days following the closing of any such
Qualified Equity Offering.
SECTION 3.08. MANDATORY REDEMPTION.
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Except as set forth below under Section 4.10 and Section 4.14 hereof,
the Company shall not be required to make sinking fund or redemption payments
with respect to the Notes.
SECTION 3.09. ASSET SALE OFFERS.
In the event that the Company shall commence an Asset Sale Offer
pursuant to Section 4.10 hereof, it shall follow the procedures specified below:
The Asset Sale Offer shall remain open for 20 Business Days after the
Commencement Date relating to such Asset Sale Offer, except to the extent
required to be extended by applicable law (as so extended, the "Offer Period").
No later than one Business Day after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount (the "Offer
Amount") of Notes required to be purchased in such Asset Sale Offer pursuant to
Sections 3.02 and 4.10 hereof or, if less than the Offer Amount has been
tendered, all Notes tendered in response to the Asset Sale Offer.
If the Purchase Date is on or after an interest payment record date
and on or before the related interest payment date, any interest accrued to such
Purchase Date shall be paid to the Person in whose name a Note is registered at
the close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
On the Commencement Date of any Asset Sale Offer, the Company shall
send or cause to be sent, by first class mail, a notice to each of the Holders,
with a copy to the Trustee. Such notice, which shall govern the terms of the
Asset Sale Offer, shall contain all instructions and materials necessary to
enable the Holders to tender Notes pursuant to the Asset Sale Offer and shall
state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer shall remain open;
(2) the Offer Amount, the Purchase Price and the Purchase Date;
(3) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Purchase
Price, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address
specified in the notice prior to the close of business on the
Business Day preceding the Purchase Date;
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(6) that Holders shall be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be,
receives, not later than the close of business on the Business
Day preceding the termination of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have the Note purchased;
(7) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Trustee shall select the
Notes to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples thereof, shall
be purchased); and
(8) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
On or before 12:00 p.m. on each Purchase Date, the Company shall
irrevocably deposit with the Trustee or Paying Agent in immediately available
funds the aggregate Purchase Price with respect to a principal amount of Notes
equal to the Offer Amount, together with accrued interest thereon, if any, to be
held for payment in accordance with the terms of this Section 3.09. On the
Purchase Date, the Company shall, to the extent lawful, (i) accept for payment,
on a pro rata basis to the extent necessary, an aggregate principal amount equal
to the Offer Amount of Notes tendered pursuant to the Asset Sale Offer, or if
less than the Offer Amount has been tendered, all Notes or portions thereof
tendered, (ii) deliver or cause the Paying Agent or depositary, as the case may
be, to deliver to the Trustee Notes so accepted and (iii) deliver to the Trustee
an Officers' Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section
3.09. The Company, depositary or Paying Agent, as the case may be, shall
promptly (but in any case not later than three Business Days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the Purchase
Price with respect to the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee shall authenticate and mail or deliver such new Note, to such Holder,
equal in principal amount to any unpurchased portion of such Holder's Notes
surrendered. Any Note not accepted in the Asset Sale Offer shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company shall
publicly announce in a newspaper of general circulation the results of the Asset
Sale Offer on the Purchase Date.
The Asset Sale Offer shall be made by the Company in compliance with
all applicable laws, including, without limitation, Regulation 14E of the
Exchange Act and the rules thereunder, to the extent applicable, and all other
applicable federal and state securities laws.
Each purchase pursuant to this Section 3.09 shall be made pursuant to
the provisions of the second paragraph of Section 3.05 hereof to the extent
applicable.
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In the event the amount of Excess Proceeds to be applied to an Asset
Sale Offer would result in the purchase of a principal amount of Notes which is
not evenly divisible by $1,000, the Trustee shall promptly refund to the Company
the portion of such Excess Proceeds that is not necessary to purchase the
immediately lesser principal amount of Notes that is so divisible.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Restricted
Subsidiary, holds as of 10:00 a.m. Eastern Time on the due date money deposited
by the Company in immediately available funds and designated for and sufficient
to pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company or any Restricted Subsidiary in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
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SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company will furnish to the Holders of
Notes (i) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10- Q and 10-K if the Company
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all financial information that would be
required to be included in a Form 8-K filed with the SEC if the Company were
required to file such reports. In addition, whether or not required by the rules
and regulations of the SEC, the Company will file a copy of all such information
and reports with the SEC for public availability (unless the SEC will not accept
such a filing) and make such information available to investors who request it
in writing. Notwithstanding anything to the contrary contained herein, the
Trustee shall have no duty to review such documents for purposes of determining
compliance with any provisions of this Indenture.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company and each Restricted Subsidiary has kept,
observed, performed and fulfilled its obligations under this Indenture
(including with respect to any Restricted Payments made during such year, the
basis upon which the calculations required by Section 4.07 hereof were computed,
which calculations may be based on the Company's latest available financial
statements), and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge, the Company and each
Restricted Subsidiary has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company and each Restricted Subsidiary, as the case may be, is taking
or proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company and each Restricted Subsidiary, as the case may be, is taking
or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 hereof shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of
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existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except (i) such as are contested in good faith and by appropriate
proceedings or (ii) the nonpayment of which would not materially adversely
affect the business, condition (financial or otherwise), operations, performance
or properties of the Company and its Subsidiaries, taken as a whole.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and each of
the Company and the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly: (a) declare or pay any dividend or make
any distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or such
Restricted Subsidiary or dividends or distributions payable to the Company or
any Restricted Subsidiary); (b) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company or any Restricted Subsidiary or
other Affiliate of the Company (other than any such Equity Interests owned by
the Company or any Restricted Subsidiary); (c) purchase, redeem or otherwise
acquire or retire prior to scheduled maturity for value any Indebtedness that is
subordinated in right of payment to the Notes; or (d) make any Investment other
than a Permitted Investment (all such payments and other actions set forth in
clauses (a) through (d) above being collectively referred to as "Restricted
Payments"), unless, at the time of such Restricted Payment:
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(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the test set forth in
the first paragraph of Section 4.09 hereof; and
(iii)such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of this Indenture is less than (x) the
cumulative EBITDA of the Company, minus 1.75 times the cumulative
Consolidated Interest Expense of the Company, in each case for the period
(taken as one accounting period) from June 30, 1996, to the end of the
Company's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment, plus (y)
the aggregate net Equity Proceeds received by the Company from the
issuance or sale since the date of this Indenture of Equity Interests of
the Company or of debt securities of the Company that have been converted
into such Equity Interests (other than Equity Interests or convertible
debt securities sold to a Restricted Subsidiary of the Company and other
than Disqualified Stock or debt securities that have been converted into
Disqualified Stock), plus (z) $2.0 million.
The foregoing provisions will not prohibit (A) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (B) the redemption, repurchase, retirement or other acquisition or
retirement for value of any Equity Interests of the Company in exchange for, or
with the net cash proceeds of, the substantially concurrent sale (other than to
a Restricted Subsidiary of the Company) of other Equity Interests of the Company
(other than any Disqualified Stock); (C) the defeasance, redemption, repurchase,
retirement or other acquisition or retirement for value of Indebtedness that is
subordinated or pari passu in right of payment to the Notes in exchange for, or
with the net cash proceeds of, a substantially concurrent issuance and sale
(other than to a Restricted Subsidiary of the Company) of Equity Interests of
the Company (other than Disqualified Stock); (D) the defeasance, redemption,
repurchase, retirement or other acquisition or retirement for value of
Indebtedness that is subordinated or pari passu in right of payment to the Notes
in exchange for, or with the net cash proceeds of, a substantially concurrent
issue and sale (other than to the Company or any of its Restricted Subsidiaries)
of Refinancing Indebtedness; (E) the repurchase of any Indebtedness subordinated
or pari passu in right of payment to the Notes at a purchase price not greater
than 101% of the principal amount of such Indebtedness in the event of a Change
of Control in accordance with provisions similar to the covenant set forth in
Section 4.14 hereof, provided that prior to or contemporaneously with such
repurchase the Company has made the Change of Control Offer as provided in such
covenant with respect to the Notes and has repurchased all Notes validly
tendered for payment in connection with such Change of Control Offer; (F) the
prepayment of the Chrysler Notes, together with premium and interest thereon;
(G) the prepayment of $450,000 of junior subordinated notes originally issued by
the Company to First Document Storage, Inc. in connection with a 1990
acquisition, together with interest thereon; and (H) additional payments to
current or former employees or directors of the Company for repurchases of
stock, stock options or other equity interests, provided that the
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aggregate amount of all such payments under this clause (H) does not exceed
$500,000 in any year and $2.0 million in the aggregate.
The Restricted Payments described in clauses (B), (C), (E) and (H) of
the immediately preceding paragraph will be Restricted Payments that will be
permitted to be taken in accordance with such paragraph but will reduce the
amount that would otherwise be available for Restricted Payments under clause
(iii) of the first paragraph of this section, and the Restricted Payments
described in clauses (A), (D), (F) and (G) of the immediately preceding
paragraph will be Restricted Payments that will be permitted to be taken in
accordance with such paragraph and will not reduce the amount that would
otherwise be available for Restricted Payments under clause (iii) of the first
paragraph of this section.
If an Investment results in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments deemed to have been made as
calculated under the foregoing provision will be reduced by the amount of any
net reduction in such Investment (resulting from the payment of interest or
dividends, loan repayment, transfer of assets or otherwise) to the extent such
net reduction is not included in the Company's EBITDA; provided, however, that
the total amount by which the aggregate amount of all Restricted Payments may be
reduced may not exceed the lesser of (a) the cash proceeds received by the
Company and its Restricted Subsidiaries in connection with such net reduction
and (b) the initial amount of such Investment.
If the aggregate amount of all Restricted Payments calculated under
the foregoing provision includes an Investment in an Unrestricted Subsidiary or
other Person that thereafter becomes a Restricted Subsidiary, such Investment
will no longer be counted as a Restricted Payment for purposes of calculating
the aggregate amount of Restricted Payments. For the purpose of making any
calculations under this Indenture, (a) an Investment will include the fair
market value of the net assets of any Restricted Subsidiary at the time that
such Restricted Subsidiary is designated an Unrestricted Subsidiary and will
exclude the fair market value of the net assets of any Unrestricted Subsidiary
that is designated as a Restricted Subsidiary, (b) any property transferred to
or from an Unrestricted Subsidiary will be valued at fair market value at the
time of such transfer, provided that, in each case, the fair market value of an
asset or property is as determined by the Board of Directors in good faith, and
(c) subject to the foregoing, the amount of any Restricted Payment, if other
than cash, will be determined by the Board of Directors, whose good faith
determination will be conclusive.
The Board of Directors may designate a Restricted Subsidiary to be an
Unrestricted Subsidiary in compliance with Section 4.17 hereof. Upon such
designation, all outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so
designated will be deemed to be Restricted Payments made at the time of such
designation and will reduce the amount available for Restricted Payments under
the first paragraph of this Section 4.07. Such designation will only be
permitted if such Restricted Payment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
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SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) (i) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries (A) on its Capital Stock or
(B) with respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (b) make loans or advances to the Company or any of its
Restricted Subsidiaries or (c) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (1) Existing Indebtedness as in
effect on the date of this Indenture, (2) the Credit Agreement as in effect as
of the date of this Indenture, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancing
thereof, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are no more
restrictive in the aggregate with respect to such dividend and other payment
restrictions than those contained in the Credit Agreement as in effect on the
date of this Indenture, (3) this Indenture and the Notes, (4) applicable law,
(5) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness was incurred in
connection with or in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired, provided that the EBITDA of such Person is not taken into account in
determining whether such acquisition was permitted by the terms of this
Indenture, (6) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices, (7) restrictions
on the transfer of property subject to purchase money or capitalized lease
obligations otherwise permitted by clause (e) of Section 4.09 hereof, or (8)
permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Refinancing Indebtedness are no more restrictive
in the aggregate than those contained in the agreements governing the
Indebtedness being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty
or otherwise become directly or indirectly liable with respect to (collectively,
"incur") any Indebtedness (including Acquired Debt) and the Company will not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness and may permit
a Restricted Subsidiary to incur Indebtedness if at the time of such incurrence
and after giving effect thereto the Leverage Ratio would be less than 6.0 to
1.0.
The foregoing limitations will not apply to (a) the incurrence by the
Company or any Restricted Subsidiary of Senior Bank Debt in an aggregate amount
not to exceed $25.0 million at any one time outstanding, (b) the issuance by the
Restricted Subsidiaries of Subsidiary Guarantees,
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(c) the incurrence by the Company and its Restricted Subsidiaries of the
Existing Indebtedness, (d) the issuance by the Company of the Notes, (e) the
incurrence by the Company and its Restricted Subsidiaries of Capital Lease
Obligations and/or additional Indebtedness constituting purchase money
obligations up to an aggregate of $2.5 million at any one time outstanding,
provided that the Liens securing such Indebtedness constitute Permitted Liens,
(f) the incurrence of Indebtedness between (i) the Company and its Restricted
Subsidiaries and (ii) the Restricted Subsidiaries, (g) Hedging Obligations that
are incurred for the purpose of fixing or hedging interest rate risk with
respect to any floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding, (h) the incurrence by the Company and its
Restricted Subsidiaries of Indebtedness arising out of letters of credit,
performance bonds, surety bonds and bankers' acceptances incurred in the
ordinary course of business up to an aggregate of $2.0 million at any one time
outstanding, (i) the incurrence by the Company and its Restricted Subsidiaries
of Indebtedness consisting of guarantees, indemnities or obligations in respect
of purchase price adjustments in connection with the acquisition or disposition
of assets, including, without limitation, shares of Capital Stock, and (j) the
incurrence by the Company and its Restricted Subsidiaries of Refinancing
Indebtedness issued in exchange for, or the proceeds of which are used to repay,
redeem, defease, extend, refinance, renew, replace or refund, Indebtedness
referred to in clauses (b) through (e) above, and this clause (j).
SECTION 4.10. ASSET SALES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, (a) sell, lease, convey or otherwise dispose of any assets
(including by way of a Sale and Leaseback Transaction, but excluding a
Qualifying Sale and Leaseback Transaction) other than sales of inventory in the
ordinary course of business (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company will be
governed by the provisions of Section 4.14 hereof and/or the provisions of
Section 5.01 hereof, and not by the provisions of this Section 4.10), or (b)
issue or sell Equity Interests of any of its Restricted Subsidiaries, that, in
the case of either clause (a) or (b) above, whether in a single transaction or a
series of related transactions, (i) have a fair market value in excess of $1.0
million, or (ii) result in Net Proceeds in excess of $1.0 million (each of the
foregoing, an "Asset Sale"), unless (x) the Company (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such Asset
Sale at least equal to the fair market value (evidenced by an Officers'
Certificate delivered to the Trustee, and for Asset Sales having a fair market
value or resulting in net proceeds in excess of $5.0 million, evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets sold or otherwise disposed of and (y) at
least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash or like-kind assets (in each case
as determined in good faith by the Company, evidenced by a resolution of the
Board of Directors and certified by an Officers' Certificate filed with the
Trustee); provided, however, that the amount of (A) any liabilities (as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet or in
the notes thereto) of the Company or such Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Notes or any Subsidiary
Guarantee) that are assumed by the transferee of any such assets and (B) any
notes or other obligations received by the Company or such Restricted Subsidiary
from such transferee that are immediately converted by the Company or such
Restricted
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Subsidiary into cash (to the extent of the cash received) or Cash Equivalents,
shall be deemed to be cash for purposes of this provision; and provided,
further, that the 75% limitation referred to in the foregoing clause (y) shall
not apply to any Asset Sale in which the cash portion of theconsideration
received therefrom is equal to or greater than what the after-tax proceeds would
have been had such Asset Sale complied with the aforementioned 75% limitation. A
transfer of assets or issuance of Equity Interests by the Company to a Wholly
Owned Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to the
Company or to another Wholly Owned Restricted Subsidiary will not be deemed to
be an Asset Sale.
Within 360 days of any Asset Sale, the Company may, at its option,
apply an amount equal to the Net Proceeds from such Asset Sale either (a) to
permanently reduce Senior Debt, or (b) to an investment in a Restricted
Subsidiary or in another business or capital expenditure or other
long-term/tangible assets, in each case, in the same or a similar line of
business as the Company or any of its Restricted Subsidiaries was engaged in on
the date of this Indenture or in businesses similar or reasonably related
thereto. Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Senior Bank Debt or otherwise invest such Net Proceeds in any
manner that is not prohibited by this Indenture. Any Net Proceeds from such
Asset Sale that are not applied or invested as provided in the first sentence of
this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $5.0 million, the Company shall make
an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes that may be purchased out of the Excess Proceeds, at
an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase, in
accordance with the procedures set forth in this Indenture. To the extent that
the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
An Asset Sale Offer shall be made pursuant to the provisions of
Section 3.09 hereof. No later than the date which is five Business Days after
the date on which the aggregate amount of Excess Proceeds exceeds $5 million,
the Company shall notify the Trustee of such Asset Sale Offer and provide the
Trustee with an Officers' Certificate setting forth the calculations used in
determining the amount of Net Proceeds to be applied to the purchase of
Securities. The Company shall commence or cause to be commenced the Asset Sale
Offer on a date no later than 15 Business Days after such notice (the
"Commencement Date").
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
any contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (a) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant
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Restricted Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with a non-Affiliated
Person and (b) the Company delivers to the Trustee (i) with respect to any
Affiliate Transaction involving aggregate payments in excessof $1.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (a) above and
such Affiliate Transaction is approved by a majority of the disinterested
members of the Board of Directors and (ii) with respect to any Affiliate
Transaction involving aggregate payments in excess of $5.0 million, an opinion
as to the fairness to the Company or such Restricted Subsidiary from a financial
point of view issued by an investment banking firm of national standing;
provided, however, that (A) any employment agreement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted Subsidiary,
(B) transactions between or among the Company and/or its Restricted
Subsidiaries, (C) transactions permitted by the provisions of Section 4.07
hereof and (D) the grant of stock, stock options or other equity interests to
employees and directors of the Company in accordance with duly adopted Company
stock grant, stock option and similar plans, in each case, shall not be deemed
Affiliate Transactions; and further provided that (1) the provisions of clause
(b) shall not apply to sales of inventory by the Company or any Restricted
Subsidiary to any Affiliate in the ordinary course of business and (2) the
provisions of clause (b)(ii) shall not apply to loans or advances to the Company
or any Restricted Subsidiary from, or equity investments in the Company or any
Restricted Subsidiary by, any Affiliate to the extent permitted by Section 4.09
hereof.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than a Permitted Lien) upon any property or assets now
owned or hereafter acquired, or any income, profits or proceeds therefrom, or
assign or otherwise convey any right to receive income therefrom, unless (a) in
the case of any Lien securing any Indebtedness that is subordinate to the Notes,
the Notes are secured by a Lien on such property, assets or proceeds that is
senior in priority to such Lien and (b) in the case of any other Lien, the Notes
are equally and ratably secured with the obligation or liability secured by such
Lien.
SECTION 4.13. ADDITIONAL SUBSIDIARY GUARANTEES.
If any entity (other than an Excluded Restricted Subsidiary) shall
become a Restricted Subsidiary after the date of this Indenture, then such
Restricted Subsidiary shall execute a Subsidiary Guarantee and deliver an
opinion of counsel with respect thereto, in accordance with the terms of this
Indenture.
No Restricted Subsidiary shall consolidate with or merge with or into
(whether or not such Restricted Subsidiary is the surviving Person), another
Person (other than the Company) whether or not affiliated with such Restricted
Subsidiary unless (a) subject to the provisions of the following paragraph, the
Person formed by or surviving any such consolidation or merger (if other than
such Restricted Subsidiary) assumes all the obligations of such Restricted
Subsidiary under
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its Subsidiary Guarantee, if any, pursuant to a supplemental indenture in form
and substance reasonably satisfactory to the Trustee; (b) immediately after
giving effect to such transaction, no Default or Event of Default exists; and
(c) such Restricted Subsidiary, or any Person formed byor surviving any such
consolidation or merger, would be permitted to incur, immediately after giving
effect to such transaction, at least $1.00 of additional Indebtedness pursuant
to Section 4.09 hereof.
In the event of (a) a sale or other disposition of all of the assets
of any Guarantor by way of merger, consolidation or otherwise, (b) a sale or
other disposition of all of the capital stock of any Guarantor, or (c) the
designation of a Guarantor as an Unrestricted Subsidiary in accordance with the
terms of Section 4.17, then such Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of such Guarantor, or in the event of the designation of such
Guarantor as an Unrestricted Subsidiary) or the corporation acquiring the
property (in the event of a sale or other disposition of all of the assets of
such Guarantor) shall be released and relieved of any obligations under its
Subsidiary Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of this
Indenture.
SECTION 4.14. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder of Notes will
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to but excluding the date of purchase (the "Change of Control
Payment"). Within 30 calendar days following any Change of Control, the Company
will mail a notice to each Holder stating:
(a) that the Change of Control Offer is being made pursuant to
this Section 4.14 and that all Notes tendered will be accepted for
payment;
(b) the purchase price and the purchase date, which will be no
earlier than 30 calendar days nor later than 60 calendar days from the
date such notice is mailed (the "Change of Control Payment Date");
(c) that any Note not tendered will continue to accrue
interest;
(d) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the
Change of Control Offer will cease to accrue interest on and after the
Change of Control Payment Date;
(e) that Holders electing to have any Notes purchased pursuant
to a Change of Control Offer will be required to surrender the Notes, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Notes completed, to the Paying Agent at the
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address specified in such notice prior to the close of business on the fifth
Business Day preceding the Change of Control Payment Date;
(f) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have such Notes
purchased; and
(g) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable to the repurchase of the Notes in connection
with a Change of Control.
On the Change of Control Payment Date, the Company will, to the
extent lawful, (a) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (b) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (c) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof tendered to the Company. The Paying Agent will
promptly mail to each Holder of Notes so accepted the Change of Control Payment
for such Notes, and the Trustee will promptly authenticate and mail to each
Holder a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. Prior to complying
with the provisions of this Section 4.14, but in any event within 90 calendar
days following a Change of Control, the Company shall either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of Notes
required by this Section 4.14. The Company shall publicly announce in The Wall
Street Journal, or if no longer published, a national newspaper of general
circulation the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
SECTION 4.15. CORPORATE EXISTENCE.
Subject to Article 5 and Article 11 hereof, as the case may be, the
Company and each of the Restricted Subsidiaries shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of their
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company, any such Restricted
Subsidiary or any such Subsidiary, as the case may be, and (ii) the rights
(charter and statutory), licenses and franchises of the Company, the Restricted
Subsidiaries and their respective Subsidiaries; provided, however, that the
Company and the Restricted Subsidiaries shall not be required to preserve any
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such right, license or franchise, or the corporate, partnership or other
existence of any of their respective Subsidiaries, if an officer of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company, the Restricted Subsidiaries and their
Subsidiaries, taken as a whole and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.
SECTION 4.16. CERTAIN SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, (a) the
Company shall not incur any Indebtedness that is subordinated or junior in right
of payment to any Senior Debt of the Company and senior in any respect in right
of payment to the Notes, and (b) the Company shall not permit any Restricted
Subsidiary to incur any Indebtedness that is subordinated or junior in right of
payment to its Senior Debt and senior in any respect in right of payment to its
Subsidiary Guarantee.
SECTION 4.17. DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
The Board of Directors may designate any Subsidiary (including any
Restricted Subsidiary or any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary so long as: (i) neither the Company nor any Restricted
Subsidiary is directly or indirectly liable for any Indebtedness of such
Subsidiary; (ii) no default with respect to any Indebtedness of such Subsidiary
would permit (upon notice, lapse of time or otherwise) any holder of any other
Indebtedness of the Company or any Restricted Subsidiary to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; (iii) any Investment in such Subsidiary
deemed to be made as a result of designating such Subsidiary an Unrestricted
Subsidiary will not violate the provisions of Section 4.07 hereof; (iv) neither
the Company nor any Restricted Subsidiary has a contract, agreement,
arrangement, understanding or obligation of any kind, whether written or oral,
with such Subsidiary other than (A) those that might be obtained at the time
from Persons who are not Affiliates of the Company or (B) administrative, tax
sharing and other ordinary course contracts, agreements, arrangements and
understandings or obligations entered into in the ordinary course of business;
and (v) neither the Company nor any Restricted Subsidiary has any obligation to
subscribe for additional shares of Capital Stock or other Equity Interests in
such Subsidiary, or to maintain or preserve such Subsidiary's financial
condition or to cause such Subsidiary to achieve certain levels of operating
results, other than as permitted under Section 4.07 hereof. Notwithstanding the
foregoing, the Company may not designate as an Unrestricted Subsidiary any
Subsidiary which, on the date of this Indenture, is a Significant Subsidiary,
and may not sell, transfer or otherwise dispose of any properties or assets of
any such Significant Subsidiary to an Unrestricted Subsidiary, other than in the
ordinary course of business.
The Board of Directors may designate any Unrestricted Subsidiary as a
Restricted Subsidiary; provided that such designation will be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (i) such Indebtedness is permitted under Section 4.09 hereof and
(ii) no Default or Event of Default would occur as a result of such designation.
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ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another Person unless (a) the
Company is the surviving corporation or the entity or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (b) the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the obligations
of the Company under the Notes and this Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (c) immediately
after such transaction no Default or Event of Default exists; and (d) the
Company or any Person formed by or surviving any such consolidation or merger,
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made will, at the time of such transaction and after
giving pro forma effect thereto, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company or the Company and its Subsidiaries on a consolidated basis in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
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ARTICLE 6
CERTAIN DEFAULT PROVISIONS
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company and the Guarantors default in the payment of
interest on the Notes (whether or not prohibited by the subordination
provisions of Article 10 or Article 11 hereof, as the case may be) when
the same becomes due and payable and such default continues for a period
of 30 days;
(b) the Company and the Guarantors default in the payment of
principal of or premium, if any, on the Notes (whether or not prohibited
by the subordination provisions of Article 10 or Article 11 hereof, as the
case may be) when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or
otherwise;
(c) the Company fails to comply with the provisions of
Section 4.14 hereof;
(d) the Company or the Guarantors fail to comply with any of
their other respective agreements or covenants in, or provisions of, the
Notes, the Subsidiary Guarantees or this Indenture and the Default
continues for the period and after the notice specified below;
(e) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is Guaranteed by the
Company or any of its Restricted Subsidiaries), whether such Indebtedness
or Guarantee now exists or shall be created hereafter if (i) such default
results in the acceleration of such Indebtedness prior to its express
maturity or shall constitute a default in the payment of such Indebtedness
at final maturity of such Indebtedness and (ii) the principal amount of
such Indebtedness that has been accelerated or not paid at maturity,
together with the principal amount of any other Indebtedness that has been
accelerated or not paid at maturity, exceeds $5.0 million;
(f) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against the
Company or any of its Restricted Subsidiaries and such judgments remain
unpaid, undischarged or unstayed for a period of 60 days, provided that
the aggregate of all such unpaid, undischarged or unstayed judgments
exceeds $5.0 million;
(g) except as otherwise permitted hereunder, any Subsidiary
Guarantee issued by a Guarantor shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Guarantor (or its successors or
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assigns), or any Person acting on behalf of any Guarantor (or its
successors or assigns), shall deny or disaffirm its obligations in writing
under its Subsidiary Guarantee;
(h) the Company or any of its Restricted Subsidiaries that is
a Significant Subsidiary:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) admits in writing its inability generally to pay its
debts as the same become due, in each case, pursuant to or within
the meaning of any Bankruptcy Law; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary of the Company in an
involuntary case,
(ii) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary of the Company or for all
or substantially all of the property of the Company or any Restricted
Subsidiary that is a Significant Subsidiary of the Company, or
(iii)orders the liquidation of the Company or any
Restricted Subsidiary that is a Significant Subsidiary of the
Company, and such order or decree remains unstayed and in effect for
60 consecutive days.
A Default under clause (d) is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in principal amount
of the then outstanding Notes notify the Company and the Trustee, of the Default
and the Company does not cure the Default within 60 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."
In the case of any Event of Default pursuant to the provisions of
this Section 6.01 occurring by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium that the Company would have
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had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof,an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law upon acceleration of the Notes as
provided below, anything in this Indenture or in the Notes to the contrary
notwithstanding. If an Event of Default occurs prior to ______, [2004] by reason
of any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding the prohibition on redemption of the
Notes prior to ______, [2004] pursuant to Section 3.07 hereof, then the premium
payable for purposes of this paragraph for each of the years beginning on ______
of the years set forth below shall be as set forth in the following table
expressed as a percentage of the amount that would otherwise be due but for the
provisions of this sentence, plus accrued interest, if any, to the date of
payment:
Year Percentage
1996...................................... ___%
1997...................................... ___%
1998...................................... ___%
1999...................................... ___%
2000...................................... ___%
2001...................................... ___%
2002...................................... ___%
2003...................................... ___%
2004...................................... ___%
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clauses (h)(i) through (h)(iv) and (i) of Section 6.01 hereof relating to the
Company or any Significant Subsidiary) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in principal amount of the
then outstanding Notes by notice to the Company and the Trustee may declare the
unpaid principal of and any accrued interest on all the Notes to be due and
payable. Upon such declaration the principal and interest shall be due and
payable immediately (together with the premium referred to in Section 6.01
hereof, if applicable); provided, however, that if any Obligation with respect
to Senior Bank Debt is outstanding pursuant to the Credit Agreement upon a
declaration of acceleration of the Notes, the principal, premium, if any, and
interest on the Notes will not be payable until the earlier of (1) the day which
is five Business Days after written notice of acceleration is received by the
Company and the Credit Agent, and (2) the date of acceleration of the
Indebtedness under the Credit Agreement. If an Event of Default specified in
clauses (h)(i) through (h)(iv) or (i) of Section 6.01 hereof relating to the
Company or any Significant Subsidiary occurs, such an amount shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. In the event of a declaration of
acceleration of the Notes because an Event of Default has occurred and is
continuing as a result of the acceleration of any Indebtedness described in
Section 6.01(e) hereof, the declaration of acceleration of the Notes shall be
automatically annulled if the holders of any Indebtedness described in Section
6.01(e) have rescinded the declaration of acceleration in respect of such
Indebtedness within 30 days of the date of such declaration and if (a) the
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annulment of the acceleration of the Notes would not conflict with any judgment
or decree of a competent jurisdiction, and (b) all existing Events of Default,
except non-payment of principal or interest on the Notes that became due solely
because of the acceleration of the Notes, have been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase) (provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration). Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes if, and only if:
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(a) the Holder of a Note gives to the Trustee written notice of
a continuing Event of Default or the Trustee receives such notice from the
Company;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note. Nothing contained in this Section 6.06 shall affect the right of a Holder
of a Note to sue for enforcement of any overdue payment thereon.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Subject to Articles 10 and 11 hereof, notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive
payment of principal of, premium, if any, and interest on the Note, on or after
the respective due dates expressed in the Note (including in connection with a
Purchase Offer), or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, and interest remaining unpaid on the
Notes and interest on overdue principal and, to the extent lawful, interest and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
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(or any other obligor upon the Notes, including the Guarantors), its creditors
or its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to the holders of Senior Debt of the Company or the
Restricted Subsidiaries, as the case may be, to the extent required by
Article 10 or Article 11 hereof, as applicable;
Third: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively; and
Fourth: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
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SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) Except with respect to Sections 4.01 and 4.04 herein, the Trustee
shall have no duty to inquire as to the performance of the Company's covenants
in Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.01(a), 6.01(b), 4.01 and 4.04 herein or (ii)
any Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Restricted Subsidiary or any Affiliate of the Company or any Restricted
Subsidiary with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to the Holders of the Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in
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accordance with TIA ss. 313(d). The Company shall promptly notify the Trustee
when the Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Restricted Subsidiaries shall pay to the Trustee
from time to time reasonable compensation for its acceptance of this Indenture
and services hereunder. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company and the
Restricted Subsidiaries shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company and the Restricted Subsidiaries shall indemnify the
Trustee against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company and the Restricted Subsidiaries (including this
Section 7.07), and defending itself against any claim (whether asserted by the
Company, any Restricted Subsidiary or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or expense may
be attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company and the
Restricted Subsidiaries of their obligations hereunder. The Company and the
Restricted Subsidiaries shall defend the claim and the Trustee shall cooperate
in the defense. The Trustee may have separate counsel and the Company and the
Restricted Subsidiaries shall pay the reasonable fees and expenses of such
counsel. The Company and the Restricted Subsidiaries need not pay for any
settlement made without their consent, which consent shall not be unreasonably
withheld.
The obligations of the Company and the Restricted Subsidiaries under
this Section 7.07 shall survive the satisfaction and discharge of this
Indenture.
To secure the Company's and the Restricted Subsidiaries' payment
obligations in this Section, the Trustee shall have a Lien prior to the Notes on
all money or property held or collected by the Trustee, except that held in
trust to pay principal and interest on particular Notes. Such Lien shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
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SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, any
Restricted Subsidiary, or the Holders of Notes of at least 10% in principal
amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's and the Restricted Subsidiaries' obligations
under Section 7.07 hereof shall continue for the benefit of the retiring
Trustee.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, each of the Company and the Guarantors, if any,
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from its obligations with respect to
all outstanding Notes and Subsidiary Guarantees on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.05 hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Notes
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and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Notes when such payments are due, (b) the Company's
and Guarantors' obligations with respect to such Notes under Article 2 and
Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith and (d) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, each of the Company and the Guarantors, if any,
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from its obligations under the covenants contained in
Sections 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17
and Article V hereof with respect to the outstanding Notes and Subsidiary
Guarantees on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture, such Notes and the Subsidiary
Guarantees, if any, shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.01 hereof of the option applicable to this Section 8.03
hereof, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(c) through 6.01(f) and Section 6.01(h) and 6.01(i) hereof
shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a
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combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay
the principal of, premium, if any, and interest on the outstanding Notes
on the stated date for payment thereof or on the applicable redemption
date, as the case may be, of such principal or installment of principal
of, premium, if any, or interest on the outstanding Notes;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States (which counsel may be an employee of the Company or any
Subsidiary of the Company) reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the Issuance Date,
there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States (which counsel may be an employee of the Company or any
Subsidiary of the Company) reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as Sections 6.01(h) and
6.01(i) hereof are concerned, at any time in the period ending on the 91st
day after the date of deposit (or greater period of time in which any such
deposit of trust funds may remain subject to Bankruptcy Law insofar as
those apply to the deposit by the Company);
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of
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Notes over any other creditors of the Company with the intent of
defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company and the Guarantors shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section 8.04 hereof or
the principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest, if any, on any Note and remaining unclaimed for two years
after such principal, and premium, if any, or interest, if any, have become due
and payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the
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Company cause to be published once, in The New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Restricted Subsidiaries' obligations
under this Indenture, the Notes and the Subsidiary Guarantees shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02 or
8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply
all such money in accordance with Section 8.02 or 8.03 hereof, as the case may
be; provided, however, that, if the Company and the Restricted Subsidiaries make
any payment of principal of, premium, if any, or interest, if any, on any Note
following the reinstatement of its obligations, the Company and the Restricted
Subsidiaries shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's or any
Guarantor's obligations to the Holders of the Notes in the case of a
merger or consolidation pursuant to Article Five or Article 11 hereof, as
the case may be;
(d) to make any change that would provide any additional rights
or benefits to the Holders of the Notes (including providing for
additional Subsidiary Guarantees pursuant to Section 4.13 hereof) or that
does not materially adversely affect the legal rights hereunder of any
Holder of the Note; or
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(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
with the consent of the Holders of at least a majority in principal amount of
the Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Notes), and, subject to Sections 6.04 and
6.07 hereof, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence reasonably
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company and the Guarantors in the
execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in
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a particular instance by the Company or any Guarantor with any provision of this
Indenture, the Note or the Subsidiary Guarantees. However, without the consent
of each Holder affected, an amendment or waiver may not (with respect to any
Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Note or alter any of the provisions with respect to the redemption of the
Notes in a manner adverse to the Holders of the Notes;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes and a
waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, if any, or interest on the Notes;
(g) waive a redemption payment with respect to any Note (other
than a payment required by Section 4.10 or Section 4.14 hereof);
(h) except pursuant to Article 4, Article 8 and Article 11
hereof, release any Guarantor from its obligations under its Subsidiary
Guarantee, or change any Subsidiary Guarantee in any manner that would
materially adversely affect the Holders; or
(i) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation
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of the consent is not made on any Note. However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the Trustee
receives written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
(accompanied by a notation of the Subsidiary Guarantees duly endorsed by the
Restricted Subsidiaries) that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company and the Guarantors may not sign an amendment or supplemental
Indenture until the Board of Directors of the Company and each of the Guarantors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company, the Trustee and each Holder by accepting a Note agrees,
that the indebtedness and obligations evidenced by the Note are subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full, in cash, of all Obligations with respect to Senior
Debt of the Company (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt of the Company.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar
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proceeding relating to the Company or its property, in an assignment for the
benefit of creditors or any marshaling of the Company's assets and liabilities:
(1) holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash of all Obligations due in respect of such
Senior Debt of the Company (including interest after the commencement of
any such proceeding at the rate specified in the applicable Senior Debt of
the Company, whether or not allowed as a claim in such proceeding) before
Holders shall be entitled to receive any payment or distribution from the
Company with respect to the Notes; and
(2) until all Obligations with respect to Senior Debt of the
Company (as provided in subsection (1) above) are paid in full in cash,
any payment or distribution to which the Trustee or any Holder would be
entitled but for this Article shall be made to holders of Senior Debt of
the Company, as their interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution upon or in
respect of the Notes, including, without limitation, by way of set-off or
otherwise, or redeem (or make a deposit in redemption of), defease or acquire
any of the Notes, for cash, properties or securities if:
(i) a default in the payment of any principal, premium, if any,
or interest or other Obligations (a "Payment Default") with respect to
Senior Debt of the Company occurs and is continuing; or
(ii) a default (other than a Payment Default) or any event that,
after notice or passage of time would become a default (a "Non-Monetary
Default"), on Senior Debt of the Company occurs and is continuing that
then permits holders of the Senior Debt of the Company to accelerate its
maturity and the Trustee receives a notice of the default (a "Payment
Blockage Notice") from a Person who may give it pursuant to Section 10.11
hereof. Any number of such Payment Blockage Notices may be given,
provided, however, that (i) not more than one Payment Blockage Notice may
be commenced during any period of 360 consecutive days and (ii) any
Non-Monetary Default that existed or was continuing on the date of
delivery of any such notice to the Trustee (to the extent the holder of
Designated Senior Debt, or such trustee or agent, giving such Payment
Blockage Notice had knowledge of the same) shall not be the basis for a
subsequent Payment Blockage Notice, unless such default has been cured or
waived for a period of not less than 90 days.
The Company may and shall resume payments on and distributions in
respect of the Notes and all Obligations with respect thereto, and may acquire
such Notes or Obligations upon the earlier of:
(1) in the case of a payment default, the date upon which
such default is cured or waived, or
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(2) in the case of a Non-Monetary Default, on the earlier of the
date on which such Non-Monetary Default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is
received, if the maturity of such Senior Debt of the Company has not been
accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time thereof.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify Representatives of the holders of
Senior Debt of the Company of the acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives from the Company
any payment of any Obligations with respect to the Notes at a time when the
Trustee or such Holder, as applicable, has actual knowledge that such payment is
prohibited by Section 10.02 or 10.03 hereof, such payment shall be held by the
Trustee or such Holder in trust for the benefit of, and shall be paid forthwith
over and delivered upon written request to, the holders of Senior Debt of the
Company, as their interests may appear, or their Representative under the
indenture or other agreement (if any) pursuant to which Senior Debt of the
Company may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to Senior Debt of the
Company remaining unpaid to the extent necessary to pay such Obligations in full
in accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt of the Company.
With respect to the holders of Senior Debt of the Company, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt of the Company shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Debt of the Company, and shall
not be liable to any such holders if the Trustee shall pay over or distribute to
or on behalf of Holders or the Company or any other Person money or assets to
which any holders of Senior Debt of the Company shall be entitled by virtue of
this Article 10, except if such payment is made as a result of the willful
misconduct or gross negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt of the
Company as provided in this Article.
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SECTION 10.07. SUBROGATION.
After all Obligations with respect to Senior Debt of the Company are
paid in full, in cash, and until the Notes are paid in full, Holders shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Debt of the Company to receive
distributions applicable to Senior Debt of the Company to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Debt of the Company. A distribution made under this Article to holders
of Senior Debt of the Company that otherwise would have been made to Holders is
not, as between the Company and Holders, a payment by the Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article defines the relative rights of Holders and holders of
Senior Debt of the Company. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation
of the Company, which is absolute and unconditional, to pay principal of
and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of Senior Debt of
the Company; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt of the Company to receive
distributions and payments otherwise payable to Holders.
If the Company fails because of this Article 10 to pay principal of,
premium or interest on a Note on the due date, the failure is still a Default or
Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt of the Company to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of the Company, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating
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trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Debt of the Company and other
Indebtedness of the Company, the amount or amounts thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least one Business Day prior to the date of such
payment a Payment Blockage Notice. Only the holders or the Representative of
holders of Designated Senior Debt of the Company may give a Payment Blockage
Notice. Nothing in this Article 10 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt of the Company with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.09 hereof at least 30 days before the expiration of the time to file such
claim, the Representatives of the Senior Debt of the Company are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt of the Company.
ARTICLE 11
SUBSIDIARY GUARANTEES
SECTION 11.01. SUBSIDIARY GUARANTEE.
Each Subsidiary that is a signatory hereto and each Restricted
Subsidiary of the Company which in accordance with Section 4.13 hereof is
required to guarantee the obligations of the
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Company under the Notes (each, a "Guarantor"), upon execution of a counterpart
of this Indenture, hereby jointly and severally unconditionally guarantees to
each Holder of a Note authenticated and delivered by the Trustee irrespective of
the validity or enforceability of this Indenture, the Notes or the obligations
of the Company under this Indenture or the Notes, that: (i) the principal of and
interest on the Notes will be paid in full when due, whether at the maturity or
interest payment or mandatory redemption date, by acceleration, call for
redemption or otherwise, and interest on the overdue principal of and interest,
if any, on the Notes and all other obligations of the Company to the Holders or
the Trustee under this Indenture or the Notes will be promptly paid in full or
performed, all in accordance with the terms of this Indenture and the Notes; and
(ii) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, they will be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed
for whatever reason, each Guarantor will be obligated to pay the same whether or
not such failure to pay has become an Event of Default which could cause
acceleration pursuant to Section 6.02 hereof. Each Guarantor agrees that this is
a guarantee of payment not a guarantee of collection.
Each Guarantor hereby agrees that its obligations with regard to this
Subsidiary Guarantee shall be joint and several, unconditional, irrespective of
the validity or enforceability of the Notes or the obligations of the Company
under this Indenture, the absence of any action to enforce the same, the
recovery of any judgment against the Company or any other obligor with respect
to this Indenture, the Notes or the obligations of the Company under this
Indenture or the Notes, any action to enforce the same or any other
circumstances (other than complete performance) which might otherwise constitute
a legal or equitable discharge or defense of a Guarantor. Each Guarantor
further, to the extent permitted by law, waives and relinquishes all claims,
rights and remedies accorded by applicable law to guarantors and agrees not to
assert or take advantage of any such claims, rights or remedies, including but
not limited to: (a) any right to require the Trustee, the Holders or the Company
(each, a "Benefitted Party") to proceed against the Company or any other Person
or to proceed against or exhaust any security held by a Benefitted Party at any
time or to pursue any other remedy in any Benefitted Party's power before
proceeding against such Guarantor; (b) the defense of the statute of limitations
in any action hereunder or in any action for the collection of any Indebtedness
or the performance of any obligation hereby guaranteed; (c) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of any
other Person or the failure of a Benefitted Party to file or enforce a claim
against the estate (in administration, bankruptcy or any other proceeding) of
any other Person; (d) demand, protest and notice of any kind including but not
limited to notice of the existence, creation or incurring of any new or
additional Indebtedness or obligation or of any action or non-action on the part
of such Guarantor, the Company, any Benefitted Party, any creditor of such
Guarantor, the Company or on the part of any other Person whomsoever in
connection with any Indebtedness or obligations hereby guaranteed; (e) any
defense based upon an election of remedies by a Benefitted Party, including but
not limited to an election to proceed against such Guarantor for reimbursement;
(f) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (g) any defense arising because of a
Benefitted Party's election, in any proceeding instituted under Bankruptcy Law,
of the application of 11 U.S.C. Section 1111(b)(2); or (h) any defense based on
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any borrowing or grant of a security interest under 11 U.S.C. Section 364. Each
Guarantor hereby covenants that its Subsidiary Guarantee will not be discharged
except by complete performance of the obligations contained in its Subsidiary
Guarantee and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or any Guarantor, or any Custodian acting in
relation to either the Company or such Guarantor, any amount paid by the Company
or such Guarantor to the Trustee or such Holder, the applicable Subsidiary
Guarantees, to the extent theretofore discharged, shall be reinstated and be in
full force and effect. Each Guarantor agrees that it will not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between such Guarantor, on the
one hand, and the Holders and the Trustee, on the other hand, (i) the maturity
of the obligations guaranteed hereby may be accelerated as provided in Section
6.02 hereof for the purposes of this Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration as to the
Company or any other obligor on the Notes of the obligations guaranteed hereby,
and (ii) in the event of any declaration of acceleration of those obligations as
provided in Section 6.02 hereof, those obligations (whether or not due and
payable) will forthwith become due and payable by such Guarantor for the purpose
of this Subsidiary Guarantee.
SECTION 11.02. SUBORDINATION.
Each Guarantor, the Trustee, and each Holder by accepting a Note
agrees, that the Indebtedness evidenced by the Subsidiary Guarantees is
subordinated in right of payment, to the extent and in the manner provided in
this Article 11, to the prior payment in full, in cash, of all Obligations with
respect to Senior Debt of such Guarantor (whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt of such
Guarantor.
SECTION 11.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of any Guarantor in a
liquidation or dissolution of such Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Guarantor or its
property, in an assignment for the benefit of creditors or any marshaling of
such Guarantor's assets and liabilities:
(1) holders of Senior Debt of such Guarantor shall be entitled
to receive payment in full in cash of all Obligations due in respect of
such Senior Debt of such Guarantor (including interest after the
commencement of any such proceeding at the rate specified in the
applicable Senior Debt of such Guarantor, whether or not allowed as a
claim in such proceeding) before the Holders shall be entitled to receive
any payment or distribution from the Guarantor with respect to such
Guarantor's Subsidiary Guarantee; and
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(2) until all Obligations with respect to Senior Debt of such
Guarantor (as provided in subsection (1) above) are paid in full in cash,
any payment or distribution to which the Trustee or any Holder would be
entitled but for this Article shall be made to holders of Senior Debt of
such Guarantor, as their interests may appear.
SECTION 11.04. DEFAULT ON SENIOR DEBT OF THE GUARANTOR.
No Guarantor shall make any payment or distribution upon or in
respect of the Notes or its Subsidiary Guarantee, including, without limitation,
by way of set-off or otherwise, or redeem (or make a deposit in redemption of),
defease or acquire any of the Notes, for cash, properties or securities if:
(i) a Payment Default with respect to Senior Debt of such
Guarantor occurs and is continuing; or
(ii) a Non-Monetary Default on Senior Debt of such Guarantor
occurs and is continuing that then permits holders of the Senior Debt of
such Guarantor to accelerate its maturity and the Trustee receives a
Payment Blockage Notice from a Person who may give it pursuant to Section
11.12 hereof. Any number of such Payment Blockage Notices may be given,
provided, however, that (i) not more than one Payment Blockage Notice may
be commenced during any period of 360 consecutive days and (ii) any
default or event of default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee (to the extent the
holder of Designated Senior Debt, or such trustee or agent, giving such
Payment Blockage Notice had knowledge of the same) shall not be the basis
for a subsequent Payment Blockage Notice pursuant to Section 11.12 herein,
unless such default has been cured or waived for a period of not less than
90 consecutive days.
Each Guarantor may and shall resume payments on and distributions in
respect of its Subsidiary Guarantee, the Notes and all Obligations with respect
thereto, and may acquire such Notes or Obligations upon the earlier of:
(1) in the case of a payment default, the date upon which
such default is cured or waived, or
(2) in the case of a Non-Monetary Default, on the earlier of the
date on which such Non-Monetary Default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is
received, if the maturity of such Senior Debt of such Guarantor has not
been accelerated,
if this Article 11 otherwise permits the payment, distribution or acquisition at
the time thereof.
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SECTION 11.05. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, each Guarantor shall promptly notify the Representative of the holders
of Senior Debt of such Guarantor of the acceleration.
SECTION 11.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives from a Guarantor
any payment of any Obligations with respect to the Notes or the Subsidiary
Guarantees at a time when the Trustee or such Holder, as applicable, has actual
knowledge that such payment is prohibited by Section 11.03 or 11.04 hereof, such
payment shall be held by the Trustee or such Holder, in trust for the benefit
of, and shall be paid forthwith over and delivered upon written request to, the
holders of Senior Debt of such Guarantor, as their interests may appear, or
their Representative under the indenture or other agreement (if any) pursuant to
which Senior Debt of such Guarantor may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt of such Guarantor remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt of such Guarantor.
With respect to the holders of Senior Debt of any Guarantor, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Debt of such Guarantor shall
be read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Debt of such Guarantor, and
shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders or the Company or any other Person money
or assets to which any holders of Senior Debt of such Guarantor shall be
entitled by virtue of this Article 11, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 11.07. NOTICE BY A GUARANTOR.
Each Guarantor shall promptly notify the Trustee and the Paying Agent
of any facts known to such Guarantor that would cause a payment of any
Obligations with respect to the Notes or its Subsidiary Guarantee to violate
this Article, but failure to give such notice shall not affect the subordination
of its Subsidiary Guarantee or of the Notes to the Senior Debt of such Guarantor
as provided in this Article.
SECTION 11.08. SUBROGATION.
With respect to any Guarantor, after all Obligations with respect to
Senior Debt of such Guarantor is paid in full, in cash, and until the Notes are
paid in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with such Guarantor's Subsidiary Guarantee) to the
rights of holders of Senior Debt of such Guarantor to receive distributions
applicable to Senior Debt of such Guarantor to the extent that distributions
otherwise payable to
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the Holders have been applied to the payment of Senior Debt of such Guarantor. A
distribution made under this Article to holders of Senior Debt of such Guarantor
that otherwise would have been made to Holders is not, as between such Guarantor
and Holders, a payment by such Guarantor on the Notes or the Subsidiary
Guarantee.
SECTION 11.09. RELATIVE RIGHTS.
This Article defines the relative rights of Holders and holders of
Senior Debt of such Guarantor. Nothing in this Indenture shall:
(1) impair, as between such Guarantor and the Holders, the
obligation of such Guarantor, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with the terms of the
Subsidiary Guarantee;
(2) affect the relative rights of Holders and creditors of such
Guarantor other than their rights in relation to holders of Senior Debt of
such Guarantor; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Debt of such Guarantor set forth herein to
receive distributions and payments otherwise payable to Holders.
If any Guarantor fails because of this Article 11 to pay principal
of, premium or interest on a Note on the due date, the failure is still a
Default or Event of Default.
SECTION 11.10. SUBORDINATION MAY NOT BE IMPAIRED BY ANY GUARANTOR.
With respect to any Guarantor, no right of any holder of Senior Debt
of such Guarantor to enforce the subordination of the Indebtedness evidenced by
the Subsidiary Guarantee shall be impaired by any act or failure to act by such
Guarantor or any Holder or by failure of such Guarantor or any Holder to comply
with this Indenture.
SECTION 11.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
With respect to any Guarantor, whenever a distribution is to be made
or a notice given to holders of Senior Debt of such Guarantor, the distribution
may be made and the notice given to their Representative.
Upon any payment or distribution of assets of any Guarantor referred
to in this Article 11, the Trustee and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt of such Guarantor and other
Indebtedness of such Guarantor, the amount or amounts thereof
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or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 11.
SECTION 11.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least one Business Day prior to the date of such
payment a Payment Blockage Notice. Only the Representative of holders of
Designated Senior Debt may give a Payment Blockage Notice. Nothing in this
Article 11 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
With respect to any Guarantor, the Trustee in its individual or any
other capacity may hold Senior Debt of such Guarantor with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
SECTION 11.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 11, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding relative to any
Guarantor referred to in Section 6.09 hereof at least 30 days before the
expiration of the time to file such claim, the Representatives of Senior Debt of
such Guarantor are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
SECTION 11.14. AMENDMENTS.
With respect to any Guarantor, the provisions of Section 11.02
through 11.14 hereof shall not be amended or modified without the written
consent of the holders of all Senior Debt of such Guarantor.
SECTION 11.15. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and, by its acceptance hereof, the Trustee and each
Holder hereby confirm that it is its intention that the Subsidiary Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to any Subsidiary Guarantee. To effectuate the foregoing intention,
each such person hereby irrevocably agrees that the obligation of such Guarantor
under its Subsidiary Guarantee under this Article 11 shall be limited to the
maximum amount as will, after giving effect to such maximum amount and all other
(contingent or other) liabilities of such Guarantor that are relevant
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under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor in respect of such
maximum amount not constituting a fraudulent transfer or conveyance under said
laws. The Trustee and each Holder by accepting the benefits hereof, confirms its
intention that, in the event of a bankruptcy, reorganization or other similar
proceeding of the Company or any Guarantor in which concurrent claims are made
upon such Guarantor hereunder, to the extent such claims will not be fully
satisfied, each such claimant with a valid claim against the Company shall be
entitled to a ratable share of all payments by such Guarantor in respect of such
concurrent claims.
SECTION 11.16. RESTRICTED SUBSIDIARIES MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
No Guarantor shall consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person), another Person whether or not it is
affiliated with such Guarantor unless (i) subject to the provisions of Section
11.17 hereof, the Person formed by or surviving any such consolidation or merger
(if other than such Guarantor) assumes all the obligations of such Guarantor
pursuant to a supplemental indenture in form reasonably satisfactory to the
Trustee, under its Subsidiary Guarantee, the Notes and this Indenture, (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists, and (iii) such Guarantor, or any Person formed by or surviving
any such consolidation or merger, will be permitted to incur, immediately after
giving effect to such transaction, at least $1.00 of additional Indebtedness
pursuant to the first paragraph of Section 4.09 hereof. In case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee in
this Indenture and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor.
SECTION 11.17. RELEASES FOLLOWING SALE OF ASSETS OR DESIGNATION AS
UNRESTRICTED SUBSIDIARY.
In the event of (a) a sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or (b) a sale or other disposition of all of the
capital stock of any Guarantor, or (c) the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary in accordance with the terms of Section
4.17 hereof, then such Guarantor (in the event of a sale or other disposition,
by way of such a merger, consolidation or otherwise, of all of the capital stock
of such Guarantor, or in the event of the designation of such Guarantor as an
Unrestricted Subsidiary) or the corporation acquiring the property (in the event
of a sale or other disposition of all or substantially all of the assets of such
Guarantor) shall be released and relieved of its obligations under its
Subsidiary Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied in accordance with Section 4.10 hereof.
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ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss.318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company, the Restricted
Subsidiaries or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address:
If to the Company or any Restricted Subsidiary:
Iron Mountain Incorporated
745 Atlantic Avenue
Boston, MA 02111
Attention: President
Telecopier No.: (617) 350-7881
With a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Telecopier No.: (617) 338-2880
Attention: William J. Curry, Esq.
If to the Trustee:
First Bank National Association
c/o First Trust National Association
180 East Fifth Street
St. Paul, MN 55101
Telecopier No.: (612) 244-0711
Attention: Richard Prokosch, 2nd Floor
The Company, the Restricted Subsidiaries or the Trustee, by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
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All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company or any Restricted Subsidiary mails a notice or
communication to Holders, it shall mail a copy to the Trustee and each Agent at
the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Restricted Subsidiaries, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or the Restricted
Subsidiaries to the Trustee to take any action under this Indenture, the Company
or the Restricted Subsidiaries shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants provided for in this Indenture relating
to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
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(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company or any Restricted Subsidiary, as such, shall have
any liability for any obligations of the Company or any Restricted Subsidiary
under the Notes, the Subsidiary Guarantees, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note and the related Subsidiary Guarantees
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes and the Subsidiary Guarantees.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10. SUCCESSORS.
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All agreements of the Company and the Restricted Subsidiaries in this
Indenture and the Notes and the Subsidiary Guarantees, as the case may be, shall
bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture, in the Notes or in the
Subsidiary Guarantees shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
Dated as of _________, 1996 IRON MOUNTAIN INCORPORATED
By:
--------------------------------
Name:
Title:
Dated as of _________, 1996 __________________________________,
as Trustee
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
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EXHIBIT A
(Face of Note)
__% Senior Subordinated Notes due 2006
No. $__________
IRON MOUNTAIN INCORPORATED
promises to pay to ____________________________________ or registered assigns,
the principal sum of ________________________________ Dollars on ______, 2006.
Interest Payment Dates: ________ and ________.
Record Dates: ________ and ________.
Dated: _______________ __, 1996
[Every Global Note authenticated and delivered hereunder will bear a legend in
substantially the following form:]
[This Note is a Global Note within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Note may not be transferred to, or registered or
exchanged for Notes registered in the name of, any Person other than the
Depositary or a nominee thereof, and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Note
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, this Note will be a Global Note subject to the foregoing,
except in such limited circumstances.]
IRON MOUNTAIN INCORPORATED
By:____________________________________
Name:
CUSIP No. __________ Title:
By:____________________________________
Name:
Title:
This is one of the Notes
referred to in the
within-mentioned Indenture:
First Bank National Association, as Trustee
By: _______________________
Authorized Officer
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(Back of Note)
__% SENIOR SUBORDINATED NOTE
DUE 2006
Capitalized terms used herein have the meanings assigned to
them in the Indenture (as defined below) unless otherwise indicated.
1. Interest. Iron Mountain Incorporated, a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at the rate and in the manner specified below.
The Company shall pay in cash interest on the principal amount
of this Note at the rate per annum of __%. The Company will pay interest
semi-annually in arrears on ________ and ________ of each year, commencing on
________, 1997 or if any such day is not a Business Day (as defined in the
Indenture), on the next succeeding Business Day (each an "Interest Payment
Date"), to Holders of record on the immediately preceding ________ and
_________.
Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Interest shall accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of the original issuance of the Notes. To the extent lawful, the Company
shall pay interest on overdue principal at the rate of 1% per annum in excess of
the then applicable interest rate on the Notes; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) at the
same rate to the extent lawful.
2. Method of Payment. The Company will pay interest on the
Notes (except defaulted interest) to the Persons who are registered Holders of
Notes at the close of business on the record date next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. The Company, however, may pay principal,
premium, if any, and interest by check payable in such money. It may mail an
interest check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without notice to any Holder. The Company or any
Restricted Subsidiary may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture
dated as of ________, 1996 (the "Indenture") between the Company, the Restricted
Subsidiaries named therein and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) as in effect on
the date of the Indenture. The Notes are subject to all such terms, and Holders
of
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the Notes are referred to the Indenture and such act for a statement of such
terms. The terms of the Indenture shall govern any inconsistencies between the
Indenture and the Notes. The Notes are unsecured general obligations of the
Company limited to $___,000,000 in aggregate principal amount.
5. Optional Redemption. The Company shall not have the option
to redeem the Notes pursuant to Section 3.07 of the Indenture prior to
_________, 2001. Thereafter, the Company shall have the option to redeem the
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of the principal amount) set
forth below, plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the 12 month period beginning on ________ 15
of the years indicated below:
Year Percentage
2001..................................................... ___.__%
2002..................................................... ___.__%
2003..................................................... ___.__%
2004 and thereafter...................................... 100.00%
Notwithstanding the foregoing, at any time prior to ________,
1999, the Company may redeem up to 35% of the initial principal amount of the
Notes originally issued with the net proceeds of one or more Qualified Equity
Offerings at a redemption price equal to ___% of the principal amount of such
Notes, plus accrued and unpaid interest, if any, to the date of redemption;
provided, that at least 65% of the principal amount of Notes originally issued
remains outstanding immediately after the occurrence of any such redemption and
that such redemption occurs within 60 days following the closing of any such
Qualified Equity Offering.
6. Mandatory Redemption. Except as described in paragraph 7
below, the Company shall not be required to make sinking fund or redemption
payments with respect to the Notes.
7. Redemption or Repurchase at Option of Holder. This Note
is subject to purchase at the option of the Holder upon the circumstances set
forth in Section 3.09 and 4.14 of the Indenture.
8. Notice of Redemption. Notice of redemption shall be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at its registered address. Notes may be redeemed
in part but only in whole multiples of $1,000, unless all of the Notes held by a
Holder are to be redeemed. On and after the redemption date, interest ceases to
accrue on Notes or portions of them called for redemption.
9. Subordination. The Notes are subordinated to Senior Debt
(as defined in the Indenture) (whether outstanding on the date of the Indenture
or thereafter created, incurred,
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assumed or guaranteed) and all Obligations (as defined in the Indenture) with
respect thereto. To the extent provided in the Indenture, Senior Debt must be
paid in full in cash before the Notes may be paid. The Company agrees, and each
Holder by accepting a Note agrees, to the subordination and authorizes the
Trustee to give it effect.
10. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not exchange or register the transfer of any
Note or portion of a Note selected for redemption. Also, it need not exchange or
register the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed, or during the period between a record date and the
corresponding Interest Payment Date.
11. Persons Deemed Owners. Prior to due presentment to the
Trustee for registration of the transfer of this Note, the Trustee, any Agent,
the Company and the Guarantors may deem and treat the Person in whose name this
Note is registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Note and for all other
purposes whatsoever, whether or not this Note is overdue, and none of the
Trustee, any Agent, the Company or any Guarantor shall be affected by notice to
the contrary. The registered holder of a Note shall be treated as its owner for
all purposes.
12. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended with the consent of the Holders of at
least a majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes), and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes). Without
the consent of any Holder, the Indenture or the Notes may be amended to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for assumption of the
Company's or any Restricted Subsidiary's obligations to Holders in the case of a
merger or consolidation or to make any change that would provide any additional
rights or benefits to the Holders or that does not adversely affect the rights
of any Holder under the Indenture or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
13. Defaults and Remedies. Events of Default include: default
for 30 days in the payment when due of interest on the Notes (whether or not
prohibited by the subordination provisions of the Indenture); default in payment
when due of principal of or premium, if any, on the Notes (whether or not
prohibited by the subordination provisions of the Indenture); failure by the
Company to comply with Section 4.14 of the Indenture; failure by the Company or
the Restricted Subsidiaries for 60 days after notice from the Trustee or the
Holders of not less than
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25% of the aggregate principal amount of the Notes outstanding to comply with
any of its other agreements in the Indenture or the Notes; default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or Guarantee now exists, or is created after the date of the
Indenture, if (a) such default results in the acceleration of such Indebtedness
prior to its express maturity or shall constitute a default in the payment of
such Indebtedness at final maturity of such Indebtedness and (b) the principal
amount of such Indebtedness that has been accelerated or not paid at maturity,
together with the principal amount of any other Indebtedness that has been
accelerated or not paid at maturity, exceeds $5.0 million; failure by the
Company or any of its Subsidiaries to pay final judgments aggregating in excess
of $5.0 million, which judgments remain unpaid, undischarged or unstayed for a
period of 60 days; except as permitted by the Indenture, any Subsidiary
Guarantee issued by a Restricted Subsidiary shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Restricted Subsidiary, or any Person acting on
behalf of any Restricted Subsidiary, shall deny or disaffirm its obligations
under its Subsidiary Guarantees; and certain events of bankruptcy or insolvency
with respect to the Company or any of its Subsidiaries. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately, except that in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, relating to the Company
or any Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice; provided, however, that if any Obligation with
respect to Senior Bank Debt is outstanding pursuant to the Credit Agreement upon
a declaration of acceleration of the Notes, the principal, premium, if any, and
interest on the Notes will not be payable until the earlier of (1) the day which
is five Business Days after written notice of acceleration is received by the
Company and the Credit Agent, and (2) the date of acceleration of the
Indebtedness under the Credit Agreement. Holders of the Notes may not enforce
the Indenture or the Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest. The Company must furnish an annual compliance certificate
to the Trustee.
14. Subsidiary Guarantees. Payment of principal of, premium,
if any, and interest (including interest on overdue principal, premium, if any,
and interest, if lawful) on the Notes is guaranteed on an unsecured, senior
subordinated basis by the Guarantors pursuant to Article 11 of the Indenture.
15. Trustee Dealings with Company. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company, any Restricted Subsidiary
or their respective Affiliates, and may otherwise deal with the Company, any
Restricted Subsidiary or their respective Affiliates, as if it were not Trustee.
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16. No Recourse Against Others. No past, present or future
director, officer, employee, incorporator or stockholder, as such, of the
Company or any Restricted Subsidiary shall have any liability for any
obligations of the Company or any Restricted Subsidiary under the Notes, the
Subsidiary Guarantees or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. Each Holder by accepting a
Note and the related Subsidiary Guarantees, if any, waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
17. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
19. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
20. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND
THE GUARANTEES, IF ANY.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Request may be made to:
Iron Mountain Incorporated
745 Atlantic Avenue
Boston, MA 602111
Telecopier No.: (617) 350-7881
Attention: Chief Financial Officer
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<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
_______________________________________________________________________________
Date: ____________________________
Your Signature: ___________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:
$____________
Date: __________________ Your Signature: _______________________
(Sign exactly as your name
appears on the Note)
Tax Identification No.: _______________
Signature Guarantee.
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EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY FUTURE RESTRICTED SUBSIDIARIES
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, between __________________ (the "Restricted Subsidiary"), a
subsidiary of Iron Mountain Incorporated (or its successor), a Delaware
corporation (the "Company"), and ______________________________, a national
banking association, as trustee under the indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, Iron Mountain Incorporated, a Delaware corporation has
heretofore executed and delivered to the Trustee an indenture (the "Indenture"),
dated as of ________, 1996, providing for the issuance of an aggregate principal
amount of $___,000,000 of __% Senior Subordinated Notes due 2006 (the "Notes");
WHEREAS, Section 4.13 of the Indenture provides that under certain
circumstances the Company is required to cause the Restricted Subsidiary to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the Restricted Subsidiary shall unconditionally guarantee all of the Company's
obligations under the Notes pursuant to a Subsidiary Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Restricted Subsidiary and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Restricted Subsidiary hereby agrees that
its obligations to the Holder and the Trustee pursuant to this Subsidiary
Guarantee shall be as expressly set forth in Article 11 of the Indenture and in
such other provisions of the Indenture as are applicable to Restricted
Subsidiaries, and reference is made to the Indenture for the precise terms of
this Supplemental Indenture. The terms of Article 11 of the Indenture and such
other provisions of the Indenture as are applicable to Restricted Subsidiaries
are incorporated herein by reference.
3. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
(a) To evidence its Subsidiary Guarantee set forth in this
Supplemental Indenture, the Restricted Subsidiary hereby agrees that a
notation of such Subsidiary Guarantee substantially
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in the form of Exhibit C to the Indenture shall be endorsed by an Officer
of such Restricted Subsidiary on each Note authenticated and delivered by
the Trustee after the date hereof.
(b) Notwithstanding the foregoing, the Restricted Subsidiary hereby
agrees that its Subsidiary Guarantee set forth herein shall remain in full
force and effect notwithstanding any failure to endorse on each Note a
notation of such Subsidiary Guarantee.
(c) If an Officer whose signature is on this Supplemental Indenture
or on the Subsidiary Guarantee no longer holds that office at the time the
Trustee authenticates the Note on which a Subsidiary Guarantee is
endorsed, the Subsidiary Guarantee shall be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the authentication
thereof under the Indenture, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Supplemental Indenture on behalf of
the Restricted Subsidiary.
4. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder of the Restricted Subsidiary, as
such, shall have any liability for any obligations of the Company or any
Restricted Subsidiary under the Notes, any Subsidiary Guarantee, the Indenture
or this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
5. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture and the
Subsidiary Guarantee.
6. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
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7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ____________, ____ [Restricted Subsidiary]
By: ___________________________
Name:
Title:
Dated: ____________, ____ ____________________________,
as Trustee
By: ___________________________
Name:
Title:
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EXHIBIT C
FORM OF NOTATION ON SENIOR SUBORDINATED NOTE
RELATING TO SUBSIDIARY GUARANTEE
Each Guarantor set forth below and each Restricted Subsidiary of the
Company which in accordance with Section 4.13 of the Indenture is required to
guarantee the obligations of the Company under the Notes, upon execution of a
counterpart of the Indenture, jointly and severally unconditionally guarantees
(i) the due and punctual payment of the principal of and interest on the Notes,
whether at the maturity or interest payment or mandatory redemption date, by
acceleration, call for redemption or otherwise, and of interest on the overdue
principal of and interest, if any, on the Notes and all other obligations of the
Company to the Holders or the Trustee under the Indenture or the Notes and (ii)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
maturity, by acceleration or otherwise.
The obligations of each Guarantor to the Holder and to the Trustee
pursuant to this Subsidiary Guarantee and the Indenture are as expressly set
forth in Article 11 of the Indenture and in such other provisions of the
Indenture as are applicable to Guarantors, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article 11 of the Indenture and such other provisions of the Indenture as are
applicable to Guarantors are incorporated herein by reference. This Subsidiary
Guaranty is subject to release as described in Sections 4.13 and 11.17 of the
Indenture, and the obligations of each Guarantor under this Subsidiary Guaranty
and the Indenture are limited as provided in Section 11.15 of the Indenture.
This is a continuing guarantee and shall remain in full force and
effect and shall be binding upon each Guarantor and its successors and assigns
until full and final payment of all of the Company's obligations under the Notes
and the Indenture and shall inure to the benefit of the successors and assigns
of the Trustee and the Holders and, in the event of any transfer or assignment
of rights by any Holder or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This is
a guarantee of payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
[RESTRICTED SUBSIDIARY]
By:________________________________________
Name:
Title:
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[CONFORMED COPY]
AMENDMENT NO. 3
AMENDMENT NO. 3 dated as of August 29, 1996 among: IRON MOUNTAIN
INCORPORATED, a corporation duly organized and validly existing under the laws
of the State of Delaware (formerly known as Iron Mountain Information Services,
Inc., the "Company"); each of the lenders listed on the signature pages hereof
under the caption "LENDERS" (individually, a "Lender" and, collectively, the
"Lenders"); and THE CHASE MANHATTAN BANK (successor in interest of The Chase
Manhattan Bank (National Association)), as Agent for the Lenders (in such
capacity, the "Agent").
The Company, the Lenders and the Agent are parties to a Credit
Agreement dated as of December 10, 1990, as amended and restated as of April 15,
1993, and as further amended and restated as of January 31, 1995 (as in effect
on the date hereof, the "Credit Agreement"), providing, subject to the terms and
conditions thereof, for extensions of credit (by making of loans and issuing
letters of credit) to be made by said Lenders to the Company in an aggregate
principal or face amount not exceeding, initially, $125,000,000. The Company and
the Lenders wish to amend the Credit Agreement in certain respects. Accordingly,
the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 3, terms defined in the Credit Agreement are used herein as
defined therein.
Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 4 below, but effective as of the date hereof, the
Credit Agreement is hereby amended as follows:
A. General. References in the Credit Agreement to "this Agreement"
(and indirect references such as "hereunder", "hereby", "herein" and "hereof")
shall be deemed to be references to the Credit Agreement as amended hereby.
References in the Credit Agreement to "the Notes" shall be deemed to include
reference to the New Notes under and as defined in Section 4(B) hereof.
B. Definitions. Section 1.01 of the Credit Agreement shall be
amended by adding the following new definitions (to the extent such definitions
are not presently set forth in said Section 1.01) and amending in their entirety
the following
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definitions (to the extent such definitions are presently set forth in said
Section 1.01), as follows:
"Acquisition Revolving Credit Commitment" shall mean, as to any
Lender, the obligation of such Lender to make Acquisition Revolving Credit
Loans on and subject to the terms and conditions hereof up to an aggregate
principal amount at any one time outstanding equal to the amount set
opposite its name on the signature pages to Amendment No. 3 under the
heading "Acquisition Revolving Credit Commitment" and, as to all Lenders,
$55,000,000."
"Amendment No. 3" means Amendment No. 3 hereto dated as of August
29, 996.
C. Acquisition Revolving Credit Loans. Section 2.01(d) of the Credit
Agreement shall be amended by substituting "$55,000,000" for "$50,000,000"
therein.
Section 3. Representations and Warranties. The Company represents
and warrants to the Lenders that, both before and after giving effect to each of
the amendments set forth in Section 2 hereof:
(a) no Default has occurred and is continuing; and
(b) the representations and warranties made by each of the Company
and the Subsidiary Guarantors in each Basic Document to which it is a
party (other than the representations and warranties set forth in Sections
8.10 and 8.17 of the Credit Agreement) are true on and as of the date
hereof, with the same force and effect as if made on and as of such date
and as if each reference in the Basic Documents to "this Agreement" or
"the Credit Agreement" included reference to this Amendment No. 3.
Section 4. Conditions Precedent. As provided in Section 2 above, the
amendments to the Credit Agreement set forth in said Section 2 shall become
effective, as of the date hereof, upon the satisfaction of the following
conditions precedent:
A. Execution by All Parties. This Amendment No. 3 shall have been
executed and delivered by each of the parties hereto.
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B. New Notes. The Company shall have delivered to the Agent for each
of the Lenders whose Acquisition Revolving Credit Commitment is increasing
pursuant to this Amendment No. 3 (each such Lender, an "Increasing
Lender") a promissory note of the Company in substantially the form of
Exhibit B-2 to the Credit Agreement, dated the Second Restatement Date,
payable to the order of such Increasing Lender in a principal amount equal
to its Acquisition Revolving Credit Commitment as increased hereby and
otherwise duly completed, and each of such promissory notes (a "New Note")
delivered to the Increasing Lenders shall constitute a "Note" under the
Credit Agreement.
C. Acquisition Revolving Credit Loans. The Company shall have
borrowed from, and each of the Lenders having Acquisition Revolving Credit
Commitments shall have made Acquisition Revolving Credit Loans to, the
Company and (notwithstanding the provisions of Section 5.02 of the Credit
Agreement requiring that prepayments of Acquisition Revolving Credit Loans
be made ratably in accordance with the Acquisition Revolving Credit
Commitments of the Lenders) the Company shall have prepaid the Acquisition
Revolving Credit Loans made by the other Lenders in such amounts as shall
be necessary, together with accrued interest, accrued commitment fee and
any amounts payable under Section 6.05 of the Credit Agreement, so that
after giving effect to such Acquisition Revolving Credit Loans and
prepayments, the Acquisition Revolving Credit Loans (including, without
limitation, the Types and Interest Periods thereof) shall be held by the
Lenders pro rata in accordance with the respective amounts of their
Acquisition Revolving Credit Commitments as in effect after giving effect
to this Amendment No. 3.
D. Documents. The Agent shall have received the following documents,
each of which shall be satisfactory to the Agent in form and substance:
(1) Corporate Documents. Certified copies of the charter and
by-laws (or equivalent documents) of the Company and each Subsidiary
Guarantor (or, in the alternative, a certification to the effect
that none of such documents has been modified since delivery thereof
pursuant to the Credit Agreement or the previous
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amendments thereto) and of all corporate authority for the Company
and each Subsidiary Guarantor (including, without limitation, board
of director resolutions and evidence of the incumbency of officers
for the Company and each Subsidiary Guarantor) with respect to the
execution, delivery and performance of this Amendment No. 3 and the
Credit Agreement and the loans under the Credit Agreement as amended
hereby, the New Notes and each other document to be delivered by the
Company from time to time in connection with the Credit Agreement
(and the Agent and each Lender may conclusively rely on such
certificate until it receives notice in writing from the Company to
the contrary).
(2) Opinions. A favorable opinion of Sullivan & Worcester,
counsel for the Company, as to such matters as the Agent may
reasonably request; and a favorable opinion of Milbank, Tweed,
Hadley & McCloy, special New
York counsel to the Agent.
(3) Other Documents. Such other documents as the Agent or
any Lender or special New York counsel to the Agent may reasonably
request.
Section 5. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 3 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same amendatory instrument and any of the parties
hereto may execute this Amendment No. 3 by signing any such counterpart. This
Amendment No. 3 shall be governed by, and construed in accordance with, the law
of the State of New York.
<PAGE>
- 5 -
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 3 to be duly executed and delivered as of the day and year first above
written.
THE COMPANY
IRON MOUNTAIN INCORPORATED (formerly known
as Iron Mountain Information Services,
Inc.)
By /s/ Eugene Doggett
Title: EVP & CFO
Acquisition Revolving
Credit Commitment THE LENDERS
$12,269,230.76 THE CHASE MANHATTAN BANK
(successor in interest of The
Chase Manhattan Bank (National
Association))
By /s/ Edward McNulty
Title: Vice President
$ 8,000,000.00 FLEET NATIONAL BANK
By /s/ Michael A. Palmer
Title: Vice President
<PAGE>
- 6 -
$ 2,826,923.08 THE SUMITOMO BANK, LTD., CHICAGO
BRANCH
By /s/ Daniel G. Eastman
Title: Vice President & Manager
By /s/ Stephen O'Sullivan
Title: Assistant Vice President
$ 6,865,384.62 THE FIRST NATIONAL BANK OF BOSTON
By /s/ Virgiana W. Dennett
Title: Vice President
$ 5,250,000.00 SHAWMUT BANK, N.A.
By /s/ Michael A. Palmer
Title: Vice President
$ 2,423,076.92 BANK OF IRELAND GRAND CAYMAN BRANCH
By /s/ Patty Dowling
Title: Account Manager
$ 5,250,000.00 THE BANK OF NEW YORK
By /s/ Daniel Black
Title: Senior Vice President
<PAGE>
- 7 -
$ 6,057,692.31 CIBC INC.
By /s/ Lorain Granburg
Title: Director, CIBC Wood
Gundy Securities Corp.,
as Agent
$ - 0 - CRESCENT/MACH I PARTNERS, L.P.
By its General Partner
CRESCENT CAPITAL MACH I CORPORATION
By its attorney-in-fact
CRESCENT CAPITAL CORPORATION
By /s/ Mark L. Gold
Title: Managing Director
$6,057,692.31 SENIOR DEBT PORTFOLIO
By: Boston Management and
Research, as Investment
Advisor
By /s/ Barbara Campbell
Title: Assistant Treasurer
$ - 0 - VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By /s/ Jeffrey W. Maillet
Title: Sr. Vice President
- Portfolio Manager
THE AGENT
THE CHASE MANHATTAN BANK (successor in
interest of The
<PAGE>
- 8 -
Chase Manhattan Bank
(National Association))
By /s/ Edward McNulty
Title: Vice President
AGREED:
CRITERION ATLANTIC PROPERTY, INC.
By /s/ Eugene Doggett
Title: EVP
CRITERION PROPERTY, INC.
By /s/ Eugene Doggett
Title: EVP
HOLLYWOOD PROPERTY, INC.
By /s/ Eugene Doggett
Title: EVP
IM SAN DIEGO, INC.
By /s/ Eugene Doggett
Title: EVP
<PAGE>
- 9 -
IRON MOUNTAIN DATA PROTECTION
SERVICES, INC. (Delaware)
By /s/ Eugene Doggett
Title: EVP
IRON MOUNTAIN DATA PROTECTION
SERVICES, INC. (Massachusetts)
By /s/ Eugene Doggett
Title: EVP
IRON MOUNTAIN INFORMATION
PARTNERS, INC.
By /s/ Eugene Doggett
Title: EVP
IRON MOUNTAIN RECORDS
MANAGEMENT, INC.
By /s/ Eugene Doggett
Title: EVP
IRON MOUNTAIN RECORDS MANAGEMENT
OF MARYLAND, INC.
By /s/ Eugene Doggett
Title: EVP
<PAGE>
- 10 -
IRON MOUNTAIN RECORDS MANAGEMENT
OF OHIO, INC.
By /s/ Eugene Doggett
Title: EVP
METRO BUSINESS ARCHIVES, INC.
By /s/ Eugene Doggett
Title: EVP
ASSET PURCHASE AND SALE AGREEMENT
among
IRON MOUNTAIN RECORDS MANAGEMENT, INC.
as Buyer
MOHAWK BUSINESS RECORD STORAGE, INC.
as Seller
and
Michael M. Rabin, Richard K. Ladin, Herman Ladin and Sidney Ladin
as stockholders of Seller
As of September 6, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I............................................................1
DEFINITIONS..................................................1
ARTICLE II...........................................................4
SALE AND PURCHASE OF SUBJECT ASSETS..........................4
ARTICLE III..........................................................8
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS....8
ARTICLE IV..........................................................14
REPRESENTATIONS AND WARRANTIES OF BUYER.....................14
ARTICLE V...........................................................15
PRE-CLOSING AGREEMENTS......................................15
ARTICLE VI..........................................................18
CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE........18
ARTICLE VII.........................................................20
CONDITIONS PRECEDENT TO OBLIGATION OF SELLER................20
ARTICLE VIII........................................................21
THE CLOSING.................................................21
ARTICLE IX..........................................................22
POST-CLOSING MATTERS........................................22
ARTICLE X...........................................................23
TERMINATION.................................................23
ARTICLE XI..........................................................24
INDEMNIFICATION.............................................24
ARTICLE XII.........................................................29
MISCELLANEOUS PROVISIONS....................................29
<PAGE>
TABLE OF CONTENTS
(cont'd.)
Schedule 1.10 A Principal Items of Owned Tangible Assets
Schedule 3.4 Authorizations
Schedule 3.5 Encumbrances
Schedule 3.6 Contracts
Schedule 3.8 Litigation; Claims
Schedule 3.9 Permits, Licenses
Schedule 3.10 List of Environmental Reports
Schedule 3.13 Benefit Plans
Schedule 3.15 Customers Terminating/Seeking Bids
Schedule 3.17 Employee Information
Schedule 3.22 Transactions with Interested Persons
Exhibit 6.3 Noncompetition and Confidentiality Agreement
Exhibit 6.4 Form of Lease
Exhibit 6.9 Opinion of Seller's Counsel
Exhibit 6.10 Seller's Shelving Plan
Exhibit 7.4 Opinion of Buyer's General Counsel
<PAGE>
ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 6th day of September,
1996 by and among Iron Mountain Records Management, Inc., a Delaware corporation
("Buyer"), Mohawk Business Record Storage, Inc., a Minnesota corporation
("Seller") and Michael M. Rabin, Richard K. Ladin, Herman Ladin and Sidney
Ladin, individuals (each a "Stockholder" and collectively, the "Stockholders").
RECITALS
A. Seller is engaged in the business of providing records management and
storage services and records destruction services in the metropolitan area of
Minneapolis, Minnesota principally under the trade name "Mohawk Business Record
Storage".
B. Buyer desires to purchase, and Seller desires to sell, substantially
all the assets of the Business (as hereinafter defined) on the terms and subject
to the conditions contained in this Agreement.
C. Stockholders join in this Agreement to confirm certain
representations, warranties and agreements of Seller herein and to indemnify
Buyer in connection with certain matters.
In consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Seller, Stockholders and Buyer,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, certain terms used in this Agreement and not
otherwise defined herein shall have the meanings designated below:
Section 1.1 Agreement means all or any part of this Agreement, including
schedules, exhibits, and appendices, as any of the foregoing may be amended,
modified or supplemented in writing from time to time.
Section 1.2 Business means the paper and magnetic media records management and
storage, electronic vaulting and records destruction businesses conducted by
Seller in metropolitan Minneapolis, Minnesota under the trade name "Mohawk
Business Record Storage".
Section 1.3 Closing means the occasion upon which the transactions contemplated
by this Agreement are carried out by the delivery of documents, payment of funds
and other actions contemplated herein, as described in Article VIII.
<PAGE>
Section 1.4 Closing Date shall be November 1, 1996, or such other date as the
parties may agree.
Section 1.5 Effective Time means 12:00 a.m. in Minneapolis, Minnesota on the
Closing Date.
Section 1.6 Encumbrances means any and all encumbrances, mortgages, security
interests, liens, Taxes, claims, liabilities, options, commitments, charges,
restrictions or other obligations of whatsoever kind, quantity or nature,
whether accrued, absolute, contingent or otherwise, which affect title to the
Subject Assets.
Section 1.7 Excluded Assets means (i) Seller's cash and cash equivalents and
sums in checking and depository accounts, (ii) Stockholders' personal
automobiles owned or leased by Seller (which are identified on a separate
document delivered by Seller to Buyer), (iii) corporate records not relating to
the Business, and (iv) refunds for taxes and insurance premiums.
Section 1.8 Knowledge or the phrases "to the knowledge of" or "to the best of
Seller's knowledge", when used in reference to Seller, means (except as
otherwise stated herein) matters actually known by Michael M. Rabin, Richard K.
Ladin, Herman Ladin or Sidney Ladin after reasonable investigation.
Section 1.9 Leased Premises means the following buildings occupied by Seller in
which the Business is operated:
(i) 9715 James Avenue South, Minneapolis, Minnesota owned by Ladin
Properties, an affiliate of Seller;
(ii) 10951 Hampshire Street, Minneapolis, Minnesota, owned by Ladin
Properties,;
(iii) 9450 Bloomington Freeway, Minneapolis, Minnesota, owned by GRL
Properties, an affiliate of Seller; and
(iv) 9500 Bloomington Freeway, Minneapolis, Minnesota, owned by GRL
Properties.
Section 1.10 Subject Assets means all of Seller's assets and properties of
whatever kind, character and description, and whether tangible, intangible,
real, personal or mixed, and wherever located, except for the Excluded Assets.
The Subject Assets, which assets constitute all the assets, property and
equipment owned by Seller or any subsidiary of Seller and regularly used in the
Business (other than the Excluded Assets), include the following Tangible Assets
and Interests:
A. Tangible Assets means all tangible property used in the Business,
such as inventory; computers, computer peripherals and maintenance manuals; word
processors; typewriters and other business machines; automobiles, trucks and
other vehicles; warehouse equipment; lifts; pallet jacks; racking and shelving;
shredders, balers and other equipment used in the destruction processing
business; furniture, furnishings, and office equipment; and supplies. Principal
items of Tangible Assets, including vehicles, are listed on Schedule 1.10A.
B. Interests means all intangible property used in the Business to the
extent assignable, including rights, privileges, benefits and interests under
all contracts, agreements, consents, licenses and
<PAGE>
files and correspondence related thereto; computer software used or useful in
the Business (including software licensed to Seller by Vault Star and Data
Flex); permits or certificates of occupancy; agreements, leases and arrangements
with respect to intangible or tangible property or interests therein;
confidentiality and non-competition agreements with employees, whether oral or
written; consents; agreements with suppliers and customers; deposits held by
contract parties, including any lease deposits; rights to refunds (other than
refunds which are Excluded Assets); prepaid expenses; accounts receivable;
equity interests held by Seller in any business entity in any form of records
management business; Seller's rights in and to the trade name "Mohawk Business
Record Storage"; all financial and operating records related to the Business;
and any sales agent or sales affiliate agreements used in connection with the
Business.
Buyer acknowledges that where an Interest is represented by a contract
right, Buyer's failure to assume such contract may mean that the Interest
associated therewith will not be available to Buyer.
Section 1.11 Taxes means any and all taxes, sums or amounts assessed or
assessable, levied and due by any federal, state or county or other local
governmental authority or agency, including without limitation, real and
personal property taxes, income taxes, whether measured by gross or net income
or profit, franchise, excise, sales and use taxes, employee withholding, social
security, unemployment taxes and any other taxes required to be paid by Seller,
including interest and penalties in respect thereof whether disputed or not, and
whether accrued, contingent, due, absolute, deferred, unknown or other, together
with any and all penalties, interests and additions to all such taxes, sums or
amounts.
(ARTICLE II COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE II
SALE AND PURCHASE OF SUBJECT ASSETS
Section 2.1 Sale and Transfer.
A. The Sale. Subject to the terms and conditions set forth in this
Agreement, Seller shall sell, convey, transfer, assign and deliver to Buyer, and
Buyer shall purchase and receive from Seller, at the Closing, free and clear of
all Encumbrances, all of the Subject Assets.
Section 2.2 Purchase Price; Assumption of Certain Obligations.
A. Purchase Price. The Purchase Price to be paid by Buyer for all the
Subject Assets shall be Twenty Million Two Hundred Twelve Thousand Five Hundred
Dollars ($20,212,500) (the "Initial Payment"), plus two contingent payments in
the maximum amount of Two Million Dollars ($2,000,000) each (the "Contingent
Payments"), payable under the circumstances described in Section 2.2.C. The
aggregate of the Initial Payment and the Contingent Payments, adjusted as
provided in Sections 2.2.E, is hereinafter referred to as the "Purchase Price",
and shall be paid in United States currency.
B. Payment of Purchase Price. The Initial Payment shall be payable to
Seller at the Closing by wire transfer of immediately available funds to such
account as Seller shall designate in writing not less than two business days
prior to the Closing Date.
C. Contingent Payments. The two Contingent Payments shall be payable by
Purchaser, if at all, as follows:
(i) The 1997 Contingent Payment shall be payable on February 28,
1998 if Eligible Revenues (as hereinafter defined) during calendar year 1997
("1997 Eligible Revenues") are at least $8,731,000; no 1997 Contingent Payment
shall be payable if 1997 Eligible Revenues are less than $8,731,000. If 1997
Eligible Revenues are $8,731,000, the 1997 Contingent Payment shall be One
Dollar ($1.00); and if 1997 Eligible Revenues are at least $9,582,000, the 1997
Contingent Payment shall be Two Million Dollars. If 1997 Eligible Revenues are
greater than $8,731,000 but less than $9,582,000, the 1997 Contingent Payment
shall be $1.00 plus $2.35 for each dollar of 1997 Eligible Revenues in excess of
$8,731,000. In no event shall the 1997 Contingent Payment exceed $2,000,000.
(ii) The 1998 Contingent Payment shall be payable on February
28, 1999 if Eligible Revenues during calendar year 1998 ("1998 Eligible
Revenues") are at least $9,604,000; no Contingent Payment shall be payable if
1998 Eligible Revenues are less than $9,604,000. If 1998 Eligible Revenues are
$9,604,000, the 1998 Contingent Payment shall be One Dollar ($1.00); and if 1998
Eligible Revenues are at least $10,540,00, the 1998 Contingent Payment shall be
Two Million Dollars ($2,000,000). If 1998 Eligible Revenues are greater than
$9,604,000, but less than $10,540,000, the 1998 Contingent Payment shall be
$1.00 plus $2.14 for each dollar of 1998 Eligible Revenues in excess of
$9,604,000. The 1998 Contingent Payment shall not exceed $2,000,000; provided,
that if Seller earned only a portion of the maximum 1997 Contingent Payment, but
earns the maximum 1998 Contingent Payment, Buyer shall pay Seller the unpaid
portion of the maximum 1997 Contingent Payment on January 31, 1999.
<PAGE>
(iii) For purposes of this section, "Eligible Revenues" means
revenues of the Business from storage and service of records, but excluding
revenues derived from destructions and sales of recyclable materials. Eligible
Revenues shall be determined using accounting practices and policies consistent
with those used by Seller to determine such revenues in 1996 prior to the
Closing. Eligible Revenues shall not include revenues from customers of any
other records management service provider in the Minneapolis area acquired by
Buyer.
(iv) Seller (or, in the event Seller has been dissolved, one of
the Stockholders appointed by the other Stockholders) or its representative
shall have the right to examine the books and records of Buyer to audit the
determination of Eligible Revenues reported by Buyer in respect of 1997 and
1998. Such examination in respect of each year shall be commenced not later than
the June 30 next following the date upon which a Contingent is paid or to be
paid, and shall be conducted during normal business hours upon reasonable notice
to Buyer. Buyer shall give Seller reasonable access to its relevant books and
records for purposes of such examination. Any such examination shall be
conducted in such a manner as not to interfere unreasonably with the business or
operations of Buyer and shall be completed within 90 days of its commencement,
and any information provided to Seller during such examination shall be subject
to Section 5.2 hereof. Any dispute arising from such examination shall be
settled by arbitration in accordance with Section 11.5.
D. Limited Assumption of Contracts and Obligations. Buyer shall assume
no obligations or liabilities of Seller other than the following. Buyer shall
assume and perform:
(i) all obligations of Seller arising or accruing after the
Effective Time in respect of Seller's contracts, agreements and arrangements
with its customers providing for storage of business records at customary rates;
(ii) Seller's obligations under the equipment leases listed on
Schedule 3.5 which relate or are properly accruable to periods after the
Effective Time; and.
(iii) If and to the extent Buyer employs Seller's employees,
Buyer shall assume Seller's obligations under employment agreements, provided
that Seller has disclosed to Buyer all such employment agreements, and further
provided that Buyer shall have the right to negotiate with Seller's former
employees to amend any such employment terms or, if no agreement can be reached,
terminate the employment of any such employees.
E. Seller to Pay Pre-Closing Expenses; Purchase Price Adjustments.
(i) Seller shall be responsible for and pay when due all costs
and expenses of operating the Business accrued or accruable prior to the
Effective Time.
(ii) With respect to ongoing expenses the billing period for
which extends across the Closing Date, Buyer and Seller shall make Closing Date
adjustments to the Purchase Price so that Seller bears the costs of operating
the Business properly accruable under generally accepted accounting principles
("GAAP") in respect of the period prior to the Closing Date and Buyer bears the
cost thereof properly accruable under GAAP in respect of the period commencing
on the Closing Date and thereafter.
<PAGE>
(iii) Buyer shall receive a credit against the Purchase Price
for storage and services to be performed after the Closing Date for which Seller
has received payment prior to the Closing Date.
(iv) The Purchase Price shall be increased by an amount equal to
the sum of all advances made by Seller prior to the Closing which have not been
reimbursed to Seller as of that date. For purposes of this section, "advances"
shall mean any amounts paid by Seller for the benefit of or on behalf of a
customer which, in the ordinary course, is reimbursable to Seller by such
customer (for example, freight or delivery charges). Seller shall prepare and
deliver to Buyer at or prior to Closing a list of all advances outstanding as of
that date together with such documentation as is necessary to collect
reimbursement therefor from the relevant customer.
(v) In the event that Seller's accounts receivable as of the
Closing Date (excluding customary levels of doubtful accounts) aggregate less
than $700,000, the Purchase Price shall be reduced by the shortfall between such
amount and the actual amount as of the Closing Date; provided, that Seller's
account receivables from National Records Center Consortium ("NRCC") shall in no
event be deemed a doubtful account even if NRCC should take the position it
refuses to pay such amount.
Section 2.3 Allocation. The Purchase Price shall be allocated among the Subject
Assets as set forth on Schedule 2.3, and the parties shall report the
transactions contemplated hereby in a manner consistent with such allocation for
tax purposes.
Section 2.4 Seller's Employees. Buyer intends to offer employment to all of
Seller's employees; provided that Buyer shall not be obligated to offer
employment to any employee of Seller in connection with the acquisition of the
Subject Assets, and such acquisition shall not grant any employee of Seller a
right of continued employment with Buyer. Any of Seller's employees offered
employment by Buyer shall be employed on substantially the same terms as their
employment with Seller. For a period of one year after the Closing Date, Seller
shall not offer conflicting employment to any person who accepts employment with
Buyer.
Section 2.5 Post-Closing Adjustment Date. Buyer and Seller shall make all
proration adjustments and payments arising under Sections 2.2E, to the extent
known, on the Closing Date. On January 15, 1997, Buyer and Seller shall make any
additional net adjustment by payment of one to the other to effect a final
adjustment in the Purchase Price. If any adjustments are at that date not
determined, Buyer and Seller shall agree in a writing as to the date and method
of settlement of such undetermined amounts.
Section 2.6 Escrow Agreement.
(a) On or prior to the date of this Agreement, Buyer and Seller
have executed an Escrow Agreement with the law firm of Siegel, Brill, Greupner &
Duffy, P. A., Minneapolis, Minnesota, as escrow agent (the "Escrow Agent").
Within one business day after this Agreement has been executed, Buyer shall
deliver to the Escrow Agent the sum of One Million Dollars (the "Escrow
Deposit") to be held in escrow pursuant to the terms hereof.
(b) In the event Buyer fails to close the transactions
contemplated by this Agreement after public disclosure of this transaction
(whether by inclusion of information concerning
<PAGE>
this transaction in the Registration Statement described in Section 5.2(b),
publication with respect to any filing in respect of this transaction under the
HSR Act (as hereinafter defined) in the Federal register, or otherwise) on or
before the Closing Date, for any reason other than (i) Seller's inability or
refusal to deliver title to the Subject Assets free and clear of Encumbrances,
(ii) Seller's inability or refusal to deliver evidence that the transactions
were properly authorized by Seller, (iii) the failure or refusal of the
landlords to execute and deliver under the leases described in Section 6.4, or
(iv) the failure or refusal of one or more persons to execute the Noncompetition
and Confidentiality Agreements described in Section 6.3, the Escrow Agent shall
pay the Escrow Deposit, together with interest earned thereon, to Seller as
liquidated damages. Except as provided in the preceding sentence, Buyer waives
any and all of the conditions precedent to its obligation to close, whether set
forth in Article VI or otherwise, the satisfaction of which is required prior to
Seller's right to receive the Escrow Deposit; and payment of the Escrow Deposit
shall be made hereunder without regard to Buyer's termination of, or right to
terminate, this Agreement. Notwithstanding the foregoing, in the event that
Buyer has not received notification of clearance under the HSR Act by November
1, 1996, Buyer may elect by written notice to Seller to extend the Closing Date
to December 1, 1996, and in such event the Escrow Deposit shall continue to be
held in escrow pursuant to the terms hereof until the earlier of the Closing or
such date.
(c) It is agreed and understood that the Escrow Deposit is
intended to compensate Seller for any damages which it may sustain as a result
of Buyer's public disclosure of this transaction, as provided in 2.6(b) above,
without regard to whether there are demonstrable damages. The right of Seller to
retain the Escrow Deposit hereunder is independent of and in addition to such
rights and remedies as Seller may have at law or in equity or otherwise for
Buyer's failure or refusal to close the transactions contemplated by this
Agreement, none of which rights or remedies shall be affected or diminished
hereby; provided that Seller shall not be entitled to damages in excess of the
Escrow Deposit unless Seller shall have satisfied, or shall have been in a
position to satisfy, all of the conditions to Buyer's obligations to close in
Article VI on or prior to the Closing Date.
(ARTICLE III COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS
Seller and Stockholders jointly and severally represent and warrant to Buyer as
follows as of the date hereof:
Section 3.1 Organization and Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota, and has all requisite corporate power and authority to own, operate,
sell and lease its properties and to carry on its business as presently
conducted. Seller has all requisite corporate power and authority to execute and
deliver, and perform its obligations under, this Agreement. Seller is not
required by the nature or location of the Subject Assets to be qualified to do
business as a foreign corporation in any jurisdiction where failure to so
qualify would have a material adverse impact on the Business.
Section 3.2 Authorization. The execution and delivery of this Agreement and
performance by Seller of its obligations hereunder, and all transactions
contemplated hereby, have been duly and validly authorized by all necessary
corporate action. This Agreement has been, and the other agreements and
documents required to be delivered by Seller, in accordance with the provisions
hereof (the "Seller's Documents") will be, duly executed and delivered on behalf
of Seller, by duly authorized officers of Seller; and this Agreement
constitutes, and the Seller's Documents when executed and delivered will
constitute, the valid and binding obligations of Seller, enforceable in
accordance with their respective terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws from time to
time in effect affecting creditor's rights generally and by legal and equitable
limitations on the availability of specific remedies.
Section 3.3 Compliance With Other Instruments. Neither the execution and
delivery by Seller of this Agreement and the Seller's Documents, nor the
consummation by Seller of the transactions contemplated hereby and thereby,
will, with or without the giving of notice or passage of time, or both, be
contrary to or violate, breach, or constitute a default under, or permit the
termination or acceleration of maturity of, or result in the imposition of any
lien, claim or encumbrance upon any property or asset of Seller pursuant to any
provision of, any note, bond, indenture, mortgage, deed of trust, evidence of
indebtedness or lease agreement, other agreement or instrument or any judgment,
order, injunction or decree by which Seller is bound, to which either is a
party, or to which the assets of Seller is subject and which will continue in
force after the Closing; nor is the effectiveness or enforceability of this
Agreement or such other documents adversely affected by any provision of the
corporate charter or by-laws of Seller.
Section 3.4 No Governmental or Other Authorization Required. No authorization or
approval of, or filing with, any governmental agency, authority or other body or
any other third persons will be required in connection with Seller's execution
and delivery of this Agreement or the consummation by either of the transactions
contemplated hereby and thereby other than (i) as required by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) as set forth in Schedule 3.4, (iii) the consent of any customers
pursuant to their contracts, (iv) the consent of any suppliers of goods or
services to Seller whose contracts with Seller are assumed by Buyer, and (v) the
consent of the directors and stockholders of Seller (which have previously been
obtained)..
Section 3.5 Title to Subject Assets; Sufficiency. Seller has, or at Closing will
have, good and marketable title to all the Subject Assets, free and clear of all
Encumbrances except as set forth on
<PAGE>
Schedule 3.5, which Schedule identifies leases for vehicles and equipment as
well as Encumbrances. Seller is not a party to, nor are the Subject Assets
subject to, any judgment, judicial order, writ, injunction or decree that
materially adversely affects the Subject Assets or the use thereof by Seller.
The Subject Assets (other than the Excluded Assets) include all assets regularly
used by Seller in the operation of the Business.
Section 3.6 Contracts and Other Interests.
(a) Except as disclosed on Schedule 3.6, Part A, all material
contracts (including all customer contracts) are in full force and effect, valid
and enforceable in accordance with their respective terms against Seller and, to
Seller's knowledge, against the other parties thereto, and there are no existing
defaults of Seller or events of default that, with the giving of notice or lapse
of time, or both, would constitute defaults of Seller under any material
contracts, nor are material amendments pending with respect to any material
contracts.
(b) Except as set forth on Schedule 3.6, Part B, all of Seller's
customers have executed storage and service agreements with Seller pursuant to
which Seller's liability in the event of the loss or destruction of, or damage
to, stored material is limited to $2.00 per carton or other storage unit.
(c) Schedule 3.6, Part C lists Seller's ten largest paper
customers and ten largest magnetic media customers (measured by storage revenue
during the six-month period ended March 31, 1996). Seller has delivered a copy
or its contract with each such customer to Buyer.
(d) Seller has no oral agreements with customers which require
Seller to provide storage or services at no charge or at rates significantly
below the average rates for such services set forth in Seller's written customer
contracts, except for immaterial discounts and/or free services provided as
incentives to certain accounts.
Section 3.7 Taxes. Seller has filed all federal, state and local income tax
returns, and Seller has filed all excise or franchise tax returns, real estate
and personal property tax returns, sales and use tax returns and other tax
returns (including returns in respect of withholding and unemployment tax),
required to be filed by it and has paid all taxes owing by it, including any
interest and penalties thereon, except taxes which have not yet accrued or
otherwise become due for which adequate provision has been made.
Section 3.8 Litigation; Claims; Defaults. Except as set forth in Schedule 3.8,
Seller has not been served with any currently effective summons or complaint and
there is no action or suit, equitable or legal, to which Seller is a party, nor
any administrative, arbitration or other proceeding pending or, to Seller's
knowledge, threatened against Seller in respect of the Subject Assets or the
Business. Except as set forth on Schedule 3.8, during the past six months Seller
has not received any material written assertions from customers of the Business
to the effect that their materials stored with Seller have been lost, damaged or
inappropriately destroyed or that such customers are being billed inaccurately
for storage of materials or records. Seller is not in default with respect to
any currently effective judgment, order, writ, injunction, decree, demand or
assessment issued by any court or of any federal, state, municipal or other
governmental agency, board, commission, bureau, instrumentality or department
and applicable to Seller. Seller is not charged or to Seller's knowledge
(without investigation other than inquiry of employees of Seller whose
responsibilities place them in a position to be aware of such
<PAGE>
matters) threatened with or under investigation with respect to, any violation
of any provision of any federal, state, municipal or other law or administrative
rule or regulation with respect to the Subject Assets or the Business.
Section 3.9 Compliance with Laws. Seller has complied, and through the Closing
will continue to comply, in all material respects with federal, state and local
laws, rules and regulations applicable to the Business and the Subject Assets.
Seller possesses such certificates, authorities or permits issued by the
appropriate local, state or federal regulatory agencies or bodies as are
necessary to conduct the Business in all material respects, all of which are
listed on Schedule 3.9; and Seller has not received any written notice of
proceedings relating to the revocation or modification of any such certificate,
authority or permit. Seller shall not be liable, however, for any assertion by
governmental authorities that the transfer of the Subject Assets pursuant to
this Agreement gives rise to a right on the part of governmental authorities to
apply regulations or ordinances to the Subject Assets which were previously not
applicable because the relevant regulation or ordinance was adopted after the
Subject Asset was constructed or acquired.
Section 3.10 Certain Environmental Matters. Seller is operating and has operated
the Business in the Leased Premises in material compliance with all applicable
local, state and federal environmental laws, regulations and ordinances,
including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss.ss.9601 et seq. ("CERCLA"), the
Resource Conservation and Recovery Act, 42 U.S.C. ss.ss.6901 et seq., the Clean
Water Act, 33 U.S.C. ss.ss.1251 et seq., and the environmental laws and
regulations of the State of Minnesota as such statute or regulation has been
amended from time to time ("Environmental Laws and Regulations"). Seller has not
knowingly accepted for storage, and to the best of its knowledge does not store,
any nitrate film or any hazardous substance or hazardous material in the Leased
Premises except for de minimis amounts used in the ordinary course of business.
Seller has never knowingly caused the release from the Leased Premises of an
amount of any hazardous substance or hazardous material into the environment
which release would constitute a material violation of any Environmental Laws
and Regulations. For purposes of this paragraph, "hazardous substance",
"release" and "environment" shall have the same meanings as those terms are
defined by Section 101 of CERCLA, 42 U.S.C. ss.9601, and "hazardous material"
shall have the same meaning as those terms are defined by Environmental Laws and
Regulations. Seller does not own, lease, rent or otherwise utilize any
underground storage tanks in connection with the Business, and, to the best of
Seller's knowledge, there are no waste tanks, containers, cylinders, drums or
cans buried, stored or deposited in or at the Leased Premises. To the best of
Seller's knowledge (without having conducted an investigation), the Leased
Premises do not contain (i) any asbestos, (ii) any polychlorinated biphenyl
(PCB) substances or (iii) any waste petroleum products. Seller has delivered to
Buyer copies of all environmental surveys in Seller's possession related to the
Leased Premises, all of which are identified in Schedule 3.10.
Section 3.11 No Inconsistent Agreements. Seller has not entered into any letter
of intent, preliminary agreement or other agreement, written or oral, with any
other party which would be inconsistent with the terms of this Agreement.
Section 3.12 Financial Statements. Seller has previously delivered to Buyer
Seller's annual income and expense statement and balance sheet for the years
ended December 31, 1995 and 1994 and for the six months ended June 30, 1996 (the
"Financial Statements"). The Financial Statements are true, correct and complete
in all material respects for the periods covered and fairly present the results
of operation of the Business for the periods covered. The Financial Statements
for the years ended
<PAGE>
December 31, 1995 and 1994 were prepared pursuant to GAAP; the Financial
Statements for the six months ended June 30, 1996 were prepared on a basis
consistent with the Financial Statements for the year ended December 31, 1995,
except for accruals normally performed at year-end, such as bonuses and
profit-sharing, and other customary year-end adjustments and other adjustments
required by GAAP.
Section 3.13 ERISA Plans. Schedule 3.13 lists the Employee Pension Benefit Plans
or Employee Welfare Benefit Plans, as each term is defined in the Employee
Retirement Income Security Act of 1974, maintained by Seller for the employees
of the Business.
Section 3.14 Condition of Subject Assets. All the material tangible Subject
Assets are at present, and will be as of the Closing Date, in good operating
condition, normal wear and tear excepted, and, Seller has not received written
notice of any violation of the Occupational Safety and Health Act with respect
thereto, or rules and regulations issued thereunder.
Section 3.15 Absence of Certain Changes. Except as disclosed on Schedule 3.15,
since January 1, 1996, none of Seller's customers whose business averaged in
excess of $1,000 per month for the six months ending June 30, 1996 has
terminated or indicated in writing (or, to the best of Seller's knowledge,
orally) an intention to terminate its business with, or reduce the volume of its
business with, Seller. Except as otherwise stated in Schedule 3.15, to Seller's
knowledge (without investigation other than inquiry of employees of Seller whose
responsibilities place them in a position to be aware of such matters), Seller
has no customers whose storage business is or has within 90 days prior to the
date of this Agreement been the subject of competitive bidding procedures.
Section 3.16 No Material Undisclosed Liabilities. Except as described in this
Agreement or reflected in the Financial Statements, there is no liability or
obligation of Seller related to the operation of the Business, whether accrued,
absolute or contingent, other than liabilities and obligations that have been
incurred in the ordinary course of business consistent with past practice since
June 30, 1996 and are not material in the aggregate to the Business.
Section 3.17 Personnel Information. Schedule 3.17 lists the names of all full-
and part-time employees of Seller (or leased employees utilized by Seller) who
perform services for the Business and sets forth a brief job description or
title and compensation for each such person. Schedule 3.17 also sets forth a
list of all written and oral employment and noncompetition agreements with
Seller's employees employed in the Business.
Section 3.18 Patents, Trademarks, Etc. Except for the trade names "Mohawk
Business Records Storage", which is an unregistered trade name used by Seller,
Seller has no trademarks, service marks, trade names, copyrights, computer
programs or programs rights, patents, licenses or other similar intangible
property rights and interests which it uses in connection with the Business.
Section 3.19 Labor Relations. During the past three years there has not been,
and there is not now, any strike, labor dispute, slow down, stoppage, or other
material interference with or impairment by labor of the business of Seller
pending or, to the knowledge of Seller (without investigation), threatened or
contemplated against or directly affecting the Business. Seller's employees are
not represented by any labor or trade union, nor, to the knowledge of Seller,
has there been any attempt to organize Seller's employees during the two-year
period prior to the date hereof.
<PAGE>
Section 3.20 Insurance. There is in force comprehensive general liability and
casualty insurance for the Subject Assets and the Business which, in the
reasonable opinion of Seller, is appropriate and adequate coverage for such
assets and operations.
Section 3.21 Trade Secrets and Customer Lists. Seller has received no written
claims challenging its right to use any trade secrets, customer lists,
intellectual property and operating methods required for or incident to the
operation of the Business. To the best of its knowledge (without investigation),
Seller is not using or in any way making use of any confidential information or
trade secrets of any third party, including without limitation, a former
employer of any present or past employee or Seller.
Section 3.22 Transactions with Interested Persons. Except as set forth on
Schedule 3.22, Seller is not an affiliate of any customer, competitor or
supplier of the Business, or any organization which has a material contract or
arrangement with the Business.
Section 3.23 Records Services and Storage. Substantially all items received and
stored by Seller on behalf of customers (singly or in the aggregate) are held in
storage by Seller and are locatable and accessible without extraordinary effort
except for items withdrawn or destroyed at the respective customer's request.
The stored items for which customers are billed exist and, in all material
respects, can be accounted for.
Section 3.24 Filing; Destructions, Etc. Seller has shelved or refiled all
records received for filing or refiling more than five business days prior to
the date hereof. Seller has completed all destructions and other inventory and
special-service projects for which Seller has received payment.
Section 3.25 Business in Ordinary Course. From June 30, 1996 until the date
hereof, the Business has been conducted in the ordinary course in accordance
with past practice. Without limiting the generality of the foregoing, Seller has
not, since June 30, 1996
(i) mortgaged or pledged any of its property or assets;
(ii) sold, assigned, transferred or waived rights with
respect to any material part of the Subject Assets (except in the ordinary
course of business);
(iii) entered into or adopted any employee benefit plan or
any employment or severance agreement, or increased in any manner the
compensation or fringe benefits of its officers or employees (except in the
ordinary course of business and consistent with past practice or pursuant to
pre-existing agreements or as required by law);
(iv) changed its billing, accounts payable, collections or
other cash management practices; or
(v) agreed to take any of the foregoing actions.
Section 3.26 No Material Adverse Change. There has been no material adverse
change in the Subject Assets (including, without limitation, loss of or damage
to a material amount or part of the Subject Assets) or the results of operation
(including operating cash flow), other than possible industry-wide changes, as
to which Seller makes no representation, between June 30, 1996 and the date
hereof;
<PAGE>
provided that Seller makes no representation that Seller's NRCC contracts will
not be terminated or cancelled prior to the Closing Date.
(ARTICLE IV COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
Section 4.1 Organization and Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer possesses all requisite corporate power and authority to own,
operate and lease its properties and carry on its business, and to execute and
deliver, and perform its obligations under, this Agreement.
Section 4.2 Authorization. The execution and delivery of this Agreement and
performance by Buyer of its obligations hereunder, and all transactions
contemplated hereby, have been duly and validly authorized by all necessary
corporate action. This Agreement has been, and the other agreements and
documents required to be delivered by Buyer in accordance with the provisions
hereof (the "Buyer's Documents") will be, duly executed and delivered on behalf
of Buyer by duly authorized officers of Buyer; and this Agreement constitutes,
and Buyer's Documents when executed and delivered will constitute, the valid and
binding obligations of Buyer, enforceable in accordance with their respective
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws from time to time in effect affecting
creditor's rights generally and by legal and equitable limitations on the
availability of specific remedies.
Section 4.3 Compliance with Other Instruments. Neither the execution and
delivery by Buyer of this Agreement and the Buyer's Documents, nor the
consummation by Buyer of the transactions contemplated hereby and thereby, will,
with or without the giving of notice or passage of time, or both, be contrary to
or violate, breach, or constitute a default under, or permit the termination or
acceleration of maturity of, or result in the imposition of any lien, claim or
encumbrance on any property or asset of Buyer pursuant to any provision of, any
note, bond, indenture, mortgage, deed of trust, evidence of indebtedness or
lease agreement, other agreement or instrument or any judgment, order,
injunction or decree by which Buyer is bound, to which Buyer is a party, or to
which the assets of Buyer are subject; nor is the effectiveness or
enforceability of this Agreement or such other documents adversely affected by
any provision of the certificate of incorporation or by-laws of Buyer.
Section 4.4 Litigation. There is no action, suit or proceeding pending or, to
the knowledge of Buyer, threatened against Buyer which might interfere with its
ability to consummate the transactions contemplated hereunder.
Section 4.5 No Governmental or Other Authorization Required. Except as required
by the HSR Act, no authorization or approval of, or filing with, any
governmental agency, authority or other body or any other third persons will be
required in connection with Buyer's execution and delivery of this Agreement and
Buyer's Documents or its consummation of the transactions contemplated hereby
and thereby.
Section 4.6 Funding for Transaction. Buyer has, or will have prior to the
Closing Date, sufficient funds available to it, either from the proceeds of the
sale of Senior Subordinated Notes pursuant to the Registration Statement (as
defined in Section 5.2(d) or an amendment to its current Credit Agreement, to
carry out the transactions contemplated by this Agreement.
(ARTICLE V COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE V
PRE-CLOSING AGREEMENTS
Section 5.1 Access to Information and Facilities. Seller shall afford Buyer and
its representatives full access during normal business hours to all facilities,
properties, books, accounts, records, contracts and documents of or relating to
the Business in Seller's possession or control, subject to reasonable
requirements that Buyer not interfere with the operations and activity of the
Business. Buyer shall conduct its examinations off Seller's premises unless
Seller agrees otherwise.
Section 5.2 Confidentiality.
(a) Seller and Buyer shall not use or disclose to others, or
permit the use or disclosure of, any and all non-public information furnished by
each to the other (including confidential information transmitted by each to its
representatives, accountants, counsel, advisors or bankers) in the course of
negotiations relating to this Agreement and the business and financial reviews
and investigations referred to in this Agreement, except to their respective
officers, directors, employees and representatives who need to know such
information in connection with this Agreement or except to the extent that any
such information may become generally available to the public other than through
the actions of the parties or any other person under a duty of confidentiality.
Such obligation of confidentiality extends to the additional financial
statements described in Section 5.3.
(b) Notwithstanding the foregoing, (i) Buyer's parent, Iron
Mountain Incorporated ("IMI"), shall have the right to include disclosure
regarding the transactions contemplated by this Agreement in amendments to the
Registration Statement on Form S-1 (Registration No. 333-10359) which IMI has
filed with the Securities and Exchange Commission in respect of Senior
Subordinated Notes (as amended from time to time, the "Registration Statement")
and in any other registration statement, filing or other report which IMI, Buyer
or any of their respective affiliates files with the Securities and Exchange
Commission or the National Association of Securities Dealers, including in each
case any financial and other information concerning Seller and the transactions
contemplated hereby required in connection therewith; (ii) disclosure of such
information may be made to the extent required by judicial or regulatory
process, and reviews by financial institutions which are lenders to either
party; and (iii) such information may be used to the extent necessary as
evidence in or in connection with any pending or threatened litigation relating
to this Agreement or any transaction contemplated hereby.
(c) In the event that the sale contemplated by this Agreement is
not consummated for any reason, each party agrees to return to the other party
all materials containing nonpublic information provided by the other immediately
on request. The confidentiality obligation set forth in this Section 5.2 shall
survive termination of this Agreement.
(d) Each party agrees that the confidential information of the
other party is unique and that its release or misuse in contravention of the
terms of this Agreement may not be compensable in monetary damages and that the
non-breaching party shall be entitled to seek appropriate injunctive relief
therefor. In connection therewith the parties waive the claim or defense that an
adequate remedy exists at law or that a bond is necessary.
Section 5.3 Additional Financial Statements. In the event that IMI, Buyer or any
of their respective affiliates is required by any law (including securities
laws), statute or regulation to file or
<PAGE>
disclose financial information (including filings related to the registration of
securities of IMI, Buyer or any of their respective affiliates) related to the
Business which is in addition to information prepared by Seller and previously
delivered to Buyer, Seller shall make available to Buyer any relevant
information related to the Business or the Subject Assets not previously
delivered to Buyer and otherwise cooperate with Buyer, at Buyer's expense, in
preparing such information. If requested by Buyer, Seller shall use commercially
reasonable efforts to obtain Seller's auditors' consent to Buyer's use of
financial statements which they have audited, or shall consent to Seller's
auditors' preparing required audits for Buyer; and Buyer shall have the right to
file and disclose such information as required by any such law, statute or
regulation, including, without limitation, as contemplated by Section 5.2(b)
hereof.
Section 5.4 Communications to Seller's Employees. Buyer and Seller shall
mutually agree on the timing and content of a program of communications to
employees and customers of the Business in respect of the transactions
contemplated hereby; provided that Seller may elect to inform its employees of
the pending transaction if it determines such disclosure is necessary or
desirable.
Section 5.5 Continued Efforts. Seller shall use commercially reasonable efforts
to (a) cause to be fulfilled and satisfied all of the conditions to the Closing
which are the responsibility of Seller; (b) cause to be performed all of the
matters required upon the Closing which are the responsibility of Seller; and
(c) take such steps and do such acts as may be necessary to make all of its
warranties and representations true and correct as of the Closing Date with the
same effect as if the same had been made, and this Agreement had been dated, as
of the Closing Date.
Buyer shall use commercially reasonable efforts to (a) cause to be fulfilled and
satisfied all of the conditions to the Closing which are the responsibility of
Buyer; (b) cause to be performed all of the matters required upon the Closing
which are the responsibility of Buyer; and (c) take such steps and do such acts
as may be necessary to make all of its warranties and representations true and
correct as of the Closing with the same effect as if the same had been made, and
this Agreement had been dated, as of the Closing Date.
Section 5.6 Operation of Business Prior to Closing. From the date hereof until
the Closing Date, Seller shall conduct the Business in the ordinary course
consistent with past practice, and shall use its commercially reasonable efforts
to maintain and service the Business, to keep available the services of present
employees and agents and to maintain existing business relationships. Without
limiting the generality of the foregoing, Seller shall not take any of the
actions described in clauses (i) through (v) of Section 3.25.
Section 5.7 HSR Act Filing. Prior to the date hereof, Buyer and Seller have each
filed a Notification and Report Form with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice under the HSR Act;
each shall file any related materials that it may be required to file, shall use
its commercially reasonable best efforts to obtain an early termination of the
applicable waiting period, and shall make any further filings pursuant thereto
that may be necessary, proper or advisable in connection therewith.
Section 5.8 New Building. Seller has advised Buyer that Seller anticipates all
four of its present buildings which constitute the Leased Premises to be filled
to capacity by December 31, 1996, and that, in order to plan for its expansion
requirements efficiently, Seller may select an additional warehouse facility on
or prior to the Closing. Seller will consult with Buyer in connection with the
leasing of an additional facility, and will not enter a lease for a new facility
without Buyer's prior written consent
<PAGE>
(which will not be unreasonably withheld or delayed). Any new building lease
will provide for the assignment and assumption of such lease by Buyer at
Closing, but Buyer shall not be required to assume any lease that it has not
previously approved in writing. At the Closing, Buyer shall reimburse Seller for
all tenant improvement expenditures Seller has made in respect of the new
building (provided Buyer has reviewed and approved the budget therefor)..
(ARTICLE VI COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE
The obligation of Buyer to purchase the Subject Assets and carry out the other
transactions contemplated hereby are, unless waived in writing by Buyer, subject
to the satisfaction, on the Closing Date, of the following conditions:
Section 6.1 Accuracy of Representations and Performance of Seller. The
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as though made on and as of such date, except to the
extent that such representations and warranties are updated pursuant to updated
Schedules provided by Seller or shall be incorrect as of the Closing Date
because of events or changes occurring in the ordinary course of business of
Seller or as otherwise permitted by this Agreement, none of which, singly or in
the aggregate, constitutes a material adverse change; each and all of the
conditions and covenants to be performed or satisfied by Seller hereunder at or
prior to the Closing Date shall have been duly performed or satisfied in all
material respects; and Seller shall have furnished Buyer with a certificate to
that effect.
Section 6.2 Absence of Certain Litigation. On the Closing Date, no suit, action
or other proceeding, or injunction or final judgment relating thereto, shall be
threatened in writing or pending before any court or governmental or regulatory
official or agency, in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby (provided that any such suit, action or
other proceeding which would not have a material effect on the transactions
contemplated hereby shall not constitute a failure to satisfy this condition),
and no investigation that might result in any such suit, action or proceeding
shall be pending.
Section 6.3 Noncompetition and Nondisclosure Agreement. Seller, Michael M.
Rabin, Richard K. Ladin, Sidney Ladin and Herman Ladin shall have each executed
and delivered a Noncompetition and Confidentiality Agreement in the form of
Exhibit 6.3.
Section 6.4 Leases. Buyer shall have entered into leases for the following
buildings:
(a) 9715 James Avenue South, Minneapolis, Minnesota, and 10951
Hampshire Street, Minneapolis, Minnesota, both owned by Ladin Properties, for
which the aggregate monthly base rent will be $42,382 per month for the first
five years after the Closing Date; and
(b) 9450 and 9500 Bloomington Freeway, Minneapolis, Minnesota,
both owned by GRL Properties, for which the aggregate monthly base rent will be
$38,962 per month for the first five years after the Closing Date; and
The term of each lease will be fifteen years, and Buyer shall have two
five-year extension options. Rent for years 6 through 10 under each lease will
be increased by 10% over rent for the first five years, and rent for years 11
through 15 will be increased by 10% over the rent for years 6 through 10. Rent
in each option period will be increased by 10% over the rent for the prior
five-year period. Under each lease the landlord will be responsible for
maintenance and repair of the roof and other structural elements of the
building, and the tenant will be responsible for maintenance and repair of other
building components and parking areas and exterior lighting systems. Tenant will
be responsible
<PAGE>
for property taxes and operating costs. Each lease will be substantially in the
form of Exhibit 6.4. The parties may elect to have separate leases for each
building, in which event the base rent above will be allocated between the
buildings under each lease on a pro rata basis or on another basis mutually
acceptable to the parties.
Section 6.5 Software Providers. Vault Star and DataFlex shall have consented in
writing to Buyer's continued use of its software in connection with the Business
for a transition period after the Closing.
Section 6.6 Evidence of Corporate Approval. Seller shall deliver certified
copies of resolutions of its Board of Directors and stockholders pertaining to
the authorization of this Agreement and the consummation of the transactions
contemplated hereby, and a certificate executed by its secretary or assistant
secretary as to the due election, qualification and incumbency and valid
signature of the person or persons authorized to sign this Agreement or any
document, instrument or certificate to be delivered hereunder.
Section 6.7 Encumbrances. Seller shall have delivered evidence reasonably
satisfactory to Buyer of the satisfaction and release of any Encumbrances
affecting, or security interests or liens encumbering, the Subject Assets.
Section 6.8 No Material Adverse Change. There shall have been no material
adverse change in the Subject Assets (including, without limitation, loss of or
damage to a material amount or part of the Subject Assets) or the results of
operations (including operating cash flow) between June 30, 1996 and the Closing
Date; provided that Seller's loss or prospective loss of storage under [NRCC
Contracts] occasioned by this transaction shall in no event be deemed a material
adverse change.
Section 6.9 Opinion of Seller's Counsel. Seller shall have delivered the opinion
of Seller's counsel, Siegel, Brill, Greupner & Duffy, P. A., in the form of
Exhibit 6.9 hereto.
Section 6.10 Shelving. Seller shall have completed installation of, and paid
for, the shelving program under which Seller planned to spend approximately
$350,000 for additional shelving in the Hampshire Street building, a copy of
which is attached hereto as Exhibit 6.10.
Section 6.11 HSR Act. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise terminated.
Section 6.12 Further Documents. Seller shall have executed and delivered to
Buyer such documents, instruments, agreements, and certificates as may
reasonably be needed to carry out the transactions contemplated by this
Agreement, including such documents, instruments and agreements as Buyer's
general counsel may reasonably request in connection therewith.
(ARTICLE VII COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATION OF SELLER
The obligation of Seller to sell, assign, transfer and deliver the Subject
Assets to Buyer hereunder and to carry out the other transactions contemplated
hereby are, unless waived in writing by Seller, subject to the satisfaction at
or prior to the Closing Date of the following conditions:
Section 7.1 Accuracy of Representations and Performance of Conditions. The
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as though made on and as of such Date; each and all of the
conditions and covenants to be performed or satisfied by Buyer hereunder at or
prior to the Closing Date shall have been duly performed or satisfied in all
material respects; and Buyer shall have furnished Seller and with Buyer's
certificate to that effect.
Section 7.2 Approval. Buyer shall deliver certified copies of resolutions
adopted by Buyer's Board of Directors pertaining to the authorization of this
Agreement and the consummation of the transactions contemplated herein, and a
certificate executed by the secretary or assistant secretary of Buyer as to the
due election, qualification and incumbency and valid signatures of its officers
authorized to sign this Agreement or any document or certificates to be
delivered under it.
Section 7.3 Absence of Certain Litigation. On the Closing Date, no suit, action
or other proceeding, or injunction or final judgment relating thereto, shall be
threatened or pending before any court or governmental or regulatory official or
agency, in which it is sought to restrain or prohibit or to obtain damages or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby, and no investigation that might result in any
such suit, action or proceeding shall be pending.
Section 7.4 Opinion of Buyer's General Counsel. Buyer's General Counsel shall
have delivered his opinion in the form of Exhibit 7.4 hereto.
Section 7.5 HSR Act. All applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise terminated.
Section 7.6 Offers to Employ. Buyer shall have submitted written offers of
employment to Michael Rabin and Richard K. Ladin for management positions in the
acquired Business. Each offer will be for one year, with compensation at
$104,000, and with a bonus potential of $36,000 based on meeting the 1997
operating budget, which will be agreed upon. Each agreement will provide for
Buyer to pay a monthly expense amount of $500 to cover auto-related expenses and
cellular telephone charges. Reasonable work-related travel and entertainment
expenses will be reimbursed, and each will participate in Buyer's benefits
programs customary for their positions.
Section 7.7 Further Documents. Buyer shall have executed and delivered to Seller
such documents, instruments, agreements, and certificates as may reasonably be
needed to carry out the transactions contemplated by this Agreement, including
such documents, instruments, agreements as Seller's counsel may reasonably
request in connection therewith.
(ARTICLE VIII COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE VIII
THE CLOSING
Section 8.1 Closing and Closing Provisions. The Closing shall be effected by
delivery of documents at the office of Siegel, Brill, Greupner & Duffy, 1300
Washington Square, Minneapolis, Minnesota 55401, and payment of the Purchase
Price as provided herein or in such other manner and at such place as the
parties may agree.
Section 8.2 Deliveries by Seller and Stockholders. At or prior to the Closing,
Seller and Stockholders shall execute and deliver to Buyer all of the matters,
certificates and other documents designated as conditions precedent and
deliveries precedent to Buyer's obligation to close under this Agreement or to
carry out the transactions contemplated hereby.
Section 8.3 Deliveries by Buyer. At the Closing Buyer shall deliver to Seller
the Initial Payment of the Purchase Price, subject to adjustments as permitted
by this Agreement, in the manner and form provided for in this Agreement, and
all the certificates and other documents designated as conditions precedent and
deliveries precedent to Seller's obligation to close under this Agreement.
(ARTICLE IX COMMENCES ON NEXT PAGE)
<PAGE>
ARTICLE IX
POST-CLOSING MATTERS
Section 9.1 Records of the Business. For a period of four years following the
Closing Date or for such longer period as the statute of limitations applicable
to claims for taxes relating to the Business for any period through the Closing
Date shall be extended (through voluntary extension or otherwise), Buyer shall
grant to Seller and its representatives, at Seller's request, access to and the
right to make copies of those records and documents which report the conduct of
the Business or the results thereof as may be necessary in connection with
Seller's affairs or the Business, at Buyer's customary fees therefor. If Seller
notifies Buyer that Seller requires retention of such records beyond four years,
Seller shall have the right to take such records or pay Buyer's customary
storage charges for such post-four-year period.
Seller shall, for at least two years after the Closing Date, retain copies of
all records of the Business retained by Seller, and shall grant access thereto
to Buyer upon reasonable request.
Section 9.2 Public Announcement. Except as provided in Section 5.2(b), no party
shall issue any press release or make any public announcement relating to the
subject matter of this Agreement without the prior written approval of the other
party; provided, however, that after the Closing the parties may (i) make
appropriate announcements to customers of the Business, and (ii) make a public
announcement to the effect that the transaction has occurred (without any
financial information), each after consultation with, and approval of, the other
party; and provided further that either party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities.
Section 9.3 Right of First Refusal. In the event that during the five-year
period commencing with the Closing Date Buyer receives an offer to purchase the
Business which Buyer intends to accept, Buyer shall so notify Seller in writing
within ten (10) days after determination to accept such offer. Seller shall have
fifteen (15) business days in which to deliver notice to Buyer that Seller
elects to purchase the Business at the same price and upon the same terms as
described in Buyer's notice, and Seller shall thereupon have the right and
obligation to purchase the Business for such price and upon such terms. If
Seller fails to exercise this right of first refusal within said period, Buyer
may at any time thereafter within 180 days after the end of the fifteen-day
period sell the Business upon the same or substantially similar terms and at the
same price or within three percent thereof and this right of first refusal shall
terminate upon any such sale. If the proposed sale of the Business is not
consummated within the 180 day period, Seller shall again have a right of first
refusal in connection with any offer which Buyer intends to accept. This right
of first refusal shall not be exercisable by Seller upon a transfer by Buyer of
the Business to any corporation, trust, partnership or other entity controlling,
controlled by or under common control with Buyer, nor shall it apply to any sale
of the Business together with other records storage businesses of Buyer as a
single or integrated transaction, but this right of first refusal shall survive
such transfer. This right of first offer may be exercised by Seller or any
person designated by Seller.
(ARTICLE X COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE X
TERMINATION
Section 10.1 Termination of Agreement. The parties may terminate this Agreement
as provided below:
(i) Buyer and Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) Buyer may terminate this Agreement by giving written
notice to Seller at any time prior to the Closing (A) in the event Seller has
breached any material representation, warranty, or covenant contained in this
Agreement in any material respect, Buyer has notified Seller of the breach, and
the breach has continued without cure for a period of 20 days after the notice
of breach or (B) if the Closing shall not have occurred on or before December
31, 1996, by reason of the failure of any condition precedent under Article VI
hereof (unless the failure results primarily from Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(iii) Seller may terminate this Agreement by giving
written notice to Buyer at any time prior to the Closing (A) in the event Buyer
has breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, Seller has notified Buyer of the breach,
and the breach has continued without cure for a period of 20 days after the
notice of breach or (B) if the Closing shall not have occurred on or before
December 31, 1996, by reason of the failure of any condition precedent under
Article VII hereof (unless the failure results primarily from Seller itself
breaching any representation, warranty, or covenant contained in this
Agreement).
Section 10.2 Effect of Termination. If either party terminates this Agreement
pursuant to Section 10.1, all rights and obligations of the parties hereunder,
other than the confidentiality obligation set forth in Section 5.2, shall
terminate without any liability of any party to any other party (except for any
liability of any party then in breach). In addition, if the Agreement is
terminated and the transactions contemplated hereby are not completed by
December 31, 1996 because of the failure or inability of Seller to satisfy the
four conditions set forth in Section 2.6(b), Buyer shall be entitled to return
of the Escrow Deposit together with interest earned thereon.
Section 10.3 Risk of Loss. Prior to Closing the risk of loss, damage or
destruction with respect to the Subject Assets shall be borne solely by Seller.
If at the Closing Date the Subject Assets shall have suffered loss, damage or
destruction to an extent which materially affects the value thereof, and such
loss is not adequately covered by insurance or materially impairs Seller's
ability to conduct the Business, Buyer shall have the right at its election to
terminate this Agreement, or complete the transactions with such adjustment of
the Purchase Price as may be agreed in good faith between Buyer and Seller.
(ARTICLE XI COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE XI
INDEMNIFICATION
Section 11.1 General Indemnification Obligation of Seller and Stockholders. From
and after the Closing, Seller and Stockholders shall reimburse, indemnify and
hold harmless Buyer and its successors and assigns (each an "Indemnified Buyer
Party") against and in respect of:
(a) any and all damages (excluding consequential damages, lost
profits, lost business opportunities and incidental damages), losses,
deficiencies, liabilities, costs and expenses (including assessments, legal
fees, litigation costs, fines and judgments) incurred or suffered by any
Indemnified Buyer Party that result from, relate to or arise out of:
(i) any and all liabilities and obligations of Seller of
any nature whatsoever (including liabilities for Taxes) arising from or incurred
in the operation of the Business prior to the Closing Date, except for those
liabilities and obligations of Seller which Buyer specifically assumes pursuant
to this Agreement;
(ii) other than as described at (iii) below, any and all
actions, suits, claims or legal, administrative, arbitration, governmental or
other proceedings or investigations against any Indemnified Buyer Party to the
extent relating to Seller or the Business to the extent (and only to the extent)
the reason therefor or subject thereof arose or occurred prior to the Closing
Date or which result from or arise out of any action or inaction prior to the
Closing Date of Seller or any director, officer, employee, agent, representative
or subcontractor of Seller, except for those which Buyer specifically assumes
pursuant to this Agreement;
(iii) any cost, claim, expense or liability (including
legal fees and costs of litigation) which Buyer may incur or with which Buyer
may be threatened in writing by a customer in excess of $2.00 per carton, linear
foot of open-shelf files, disk pack or other storage unit in connection with
lost, damaged or destroyed records of customers with which Seller did not, as of
the Closing Date, have a contract which limited Seller's liability in the event
of loss, damage or destruction to such amount, provided that Seller shall not be
required to indemnify Buyer in respect of any loss, damage or destruction which
(i) relates to new cartons moved into the Leased Premises after the Closing
Date, (ii) Seller is able to demonstrate occurred after the Closing Date or
(iii) occurs after Buyer has picked up, retrieved, moved or otherwise physically
dealt with a lost, damaged or destroyed carton; and
(iv) any material misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of Seller under this
Agreement, or any material misrepresentation in or omission from any
certificate, schedule, statement, document or instrument furnished to Buyer at
the Closing pursuant hereto.
(b) The liability of the Stockholders hereunder shall be several
and not joint. Each Stockholder's liability in respect of any claims hereunder
shall be that proportionate share of the claim equal to the percentage of all
the issued and outstanding stock of Seller owned by such Stockholder on the date
hereof.
Notwithstanding anything herein contained to the contrary,
Seller and Stockholder shall have no obligations to Buyer under Section 11.1
with respect to any claim of which Buyer gives notice to Seller or Stockholder
later than the last day of the twelfth month after the Closing Date,
<PAGE>
except with respect to (i) federal, state and local taxes where the applicable
statute of limitations exceeds twelve months, in which case notice must be given
not later than thirty (30) days following the expiration of the relevant statute
of limitations, and (ii) claims related to consensual liens affecting the
Subject Assets, with respect to which notice of claims may be given at any time
within ninety days after such liens are discovered by Buyer.
Notwithstanding any other provision herein contained, Seller and
Stockholders shall not have any indemnification obligation with respect to the
first $50,000 of total claims incurred under Section 11.1. In no event shall
Seller's or Stockholders' indemnification obligation exceed the sum of
$1,500,000, provided that there shall be no limit on indemnification obligations
related to taxes or consensual liens affecting the Subject Assets.
In case any event shall occur which would otherwise entitle
either party to assert a claim for indemnification hereunder, no loss shall be
deemed to have been sustained by such party to the extent of (i) any tax savings
realized by such party with respect thereto, or (ii) any after-tax proceeds
received by such party from any third party, including but not limited to any
insurance carrier.
Section 11.2 General Indemnification Obligation of Buyer. From and after the
Closing, Buyer will reimburse, indemnify and hold harmless Seller and
Stockholders and their successors or assigns (an "Indemnified Seller Party")
against and in respect of:
(a) any and all damages (excluding consequential damages, lost
profits, lost business opportunities and incidental damages), losses,
deficiencies, liabilities, costs and expenses (including assessments, legal
fees, litigation costs, fines and judgments) incurred or suffered by any
Indemnified Seller Party that result from, relate to or arise out of:
(i) any and all liabilities and obligations of Seller
which have been specifically assumed by Buyer pursuant to this Agreement;
(ii) any and all liabilities and obligations arising from
or incurred in the operation of the Business after the Closing Date;
(iii) any and all actions, suits, claims or legal,
administrative, arbitration, governmental or other proceedings or investigations
against any Indemnified Seller Party to the extent relating to Buyer or the
Business to the extent (and only to the extent) the reason therefor or subject
thereof arose or occurred after the Closing Date or which result from or arise
out of any action or inaction after the Closing Date of Buyer or any director,
officer, employee, agent, representative or subcontractor of Buyer; and
(iv) any material misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant on the part of Buyer under this
Agreement, or any material misrepresentation in or omission from any
certificate, schedule, statement, document or instrument furnished to Seller
pursuant hereto or in connection with the negotiation, execution or performance
of this Agreement.
Notwithstanding anything herein contained to the contrary, Buyer
shall have no obligations to Seller or Stockholders under Section 11.2(a)(iv)
with respect to any claim of which Seller gives notice to Buyer later than the
last day of the twelfth month after the Closing Date.
<PAGE>
In case any event shall occur which would otherwise entitle
either party to assert a claim for indemnification hereunder, no loss shall be
deemed to have been sustained by such party to the extent of (i) any tax savings
realized by such party with respect thereto, or (ii) any after-tax proceeds
received by such party from any third party, including but not limited to any
insurance carrier.
Section 11.3 Method of Asserting Claims, Etc. In the event that any claim or
demand for which Seller or Stockholders (the "Indemnifying Party") would be
liable to an Indemnified Buyer Party hereunder is asserted against or sought to
be collected from an Indemnified Buyer Party by a third party, the Indemnified
Buyer Party shall promptly notify Seller of such claim or demand, specifying the
nature of such claim or demand and the amount or the estimated amount thereof to
the extent then feasible, which estimate shall not be conclusive of the final
amount of such claim and demand (the "Claim Notice"). Indemnifying Party shall
have thirty days from the personal delivery or mailing of the Claim Notice (the
"Notice Period") to notify the Indemnified Buyer Party (A) whether or not it
disputes its liability to the Indemnified Buyer Party hereunder with respect to
such claim or demand and (B) notwithstanding any such dispute, whether or not it
desires, at its sole cost and expense, to defend the Indemnified Buyer Party
against any such claim or demand.
(a) If Indemnifying Party disputes its obligation to indemnify
Buyer with respect to such claim or demand or the amount thereof (whether or not
Indemnifying Party desires to defend the Indemnified Buyer Party against such
claim or demand as provided in paragraphs (b) and (c) below), such dispute shall
be resolved in accordance with Section 11.5 hereof. Pending the resolution of
any dispute by Indemnifying Party of its liability with respect to any claim or
demand, such claim or demand shall not be settled without the prior written
consent of both Buyer and Seller, which consent shall not be unreasonably
withheld or delayed.
(b) In the event that Indemnifying Party notifies the
Indemnified Buyer Party within the Notice Period that it desires to defend the
Indemnified Buyer Party against such claim or demand then, except as hereinafter
provided, Indemnifying Party shall have the right to defend the Indemnified
Buyer Party, at the Indemnifying Party's sole cost and expense, by appropriate
proceedings, which proceedings shall be promptly settled or prosecuted by it to
a final conclusion in such a manner as to avoid any risk of Indemnified Buyer
Party becoming subject to further liability in respect of such matter; provided,
however, Indemnifying Party shall not, without the prior written consent of the
Indemnified Buyer Party (which consent shall not be unreasonably withheld or
delayed), consent to the entry of any judgment against the Indemnified Buyer
Party or enter into any settlement or compromise which does not include, as an
unconditional term thereof, the giving by the claimant or plaintiff to the
Indemnified Buyer Party of a release, in form and substance satisfactory to the
Indemnified Buyer Party, as the case may be, from all liability in respect of
such claim or litigation. If any Indemnified Buyer Party desires to participate
in, but not control, any such defense or settlement, it may do so at its sole
cost and expense.
(c) (i) If Indemnifying Party elects not to defend the
Indemnified Buyer Party against such claim or demand, whether by not giving the
Indemnified Buyer Party timely notice as provided above or otherwise, then the
amount of any such claim or demand as reduced to judgment or settlement, or if
the same be defended by Indemnifying Party or by the Indemnified Buyer Party
(but none of the Indemnified Buyer Party shall have any obligation to defend any
such claim or demand), then that portion thereof as to which such defense is
unsuccessful, in each case, shall be conclusively deemed to be a liability of
Indemnifying Party hereunder, unless Indemnifying Party shall have disputed
<PAGE>
its liability to the Indemnified Buyer Party hereunder, as provided in (a)
above, in which event such dispute shall be resolved as provided in Section 11.5
hereof.
(ii) In the event an Indemnified Buyer Party should have a
claim against Indemnifying Party hereunder that does not involve a claim or
demand being asserted against or sought to be collected from it by a third
party, the Indemnified Buyer Party shall promptly send a Claim Notice with
respect to such claim to Indemnifying Party. If Indemnifying Party disputes its
liability with respect to such claim or demand, such dispute shall be resolved
in accordance with Section 11.5 hereof.
(d) All claims for indemnification by an Indemnified Seller
Party under this Agreement shall be asserted and resolved under the procedures
set forth above substituting in the appropriate place "Indemnified Seller Party"
for "Indemnified Buyer Party", "Buyer" for "Indemnifying Party" and variations
thereof.
Section 11.4 Payment. Upon the determination of liability under Section 11.3 or
11.5 hereof, the appropriate party shall pay to the other, as the case may be,
within ten days after such determination, the amount of any claim for
indemnification made hereunder. In the event that the indemnified party is not
paid in full for any such claim pursuant to the foregoing provisions promptly
after the other party's obligation to indemnify has been determined in
accordance herewith, it shall have the right, notwithstanding any other rights
that it may have against any other person, firm or corporation, to set off the
unpaid amount of any such claim against any amounts owed by it under any
agreements entered into pursuant to this Agreement. Upon the payment in full of
any claim, either by setoff or otherwise, the entity making payment shall be
subrogated to the rights of the indemnified party against any person, firm or
corporation with respect to the subject matter of such claim.
Section 11.5 Arbitration.
(i) All disputes under this Article XI or otherwise
arising under this Agreement shall be settled by arbitration in Minneapolis,
Minnesota, before three arbitrators pursuant to the rules of the American
Arbitration Association. Arbitration may be commenced at any time by any party
hereto giving written notice to each other party to a dispute that such dispute
has been referred to arbitration under this Section 11.5. The arbitrators shall
be selected by the joint agreement of Seller and Buyer, but if they do not so
agree within 20 days after the date of the notice referred to above, the
selection shall be made pursuant to the rules from the panels of arbitrators
maintained by such Association. Any award rendered by the arbitrators shall be
conclusive and binding upon the parties hereto and not subject to appeal;
provided, however, that any such award shall be accompanied by a written opinion
of the arbitrators giving the reasons for the award. This provision for
arbitration shall be specifically enforceable by the parties and the decision of
the arbitrators in accordance herewith shall be final and binding and there
shall be no right of appeal therefrom. In any such action the arbitrators shall
be specifically authorized to award all or a portion of its attorneys' fees and
costs to a prevailing party or to cause such party to bear his or its own fees
and costs.
(ii) To the extent that arbitration may not be legally
permitted by applicable law or statute, and the parties to any dispute hereunder
do not at the time of such dispute mutually agree to submit such dispute to
arbitration, any party may commence a civil action in a court of appropriate
jurisdiction to solve disputes hereunder. Nothing contained in this Section 11.5
shall prevent the parties from settling any dispute by mutual agreement at any
time.
<PAGE>
Section 11.6 Compliance with Bulk Sales Law. Buyer and Seller hereby waive
compliance by Seller with the bulk sales law and any other similar laws in any
applicable jurisdiction in respect of the transactions contemplated by this
Agreement. Seller and Stockholders shall indemnify Buyer from, and hold it
harmless against, any liabilities, damages, costs and expenses resulting from or
arising out of (i) the parties' failure to comply with any of such laws in
respect of the transactions contemplated by this Agreement, or (ii) any action
brought or levy made as a result thereof, other than those liabilities which
have been expressly assumed, on such terms as expressly assumed, by Buyer
pursuant to this Agreement.
Section 11.7 Other Rights and Remedies Not Affected. Except as otherwise
specifically provided, the indemnification rights of the parties under this
Article XI are such parties' sole rights and remedies under this Agreement and
with respect to disputes arising herefrom, and are in lieu of, and not in
addition to, rights and remedies a party may otherwise have at law or in equity.
(ARTICLE XII COMMENCES ON THE NEXT PAGE)
<PAGE>
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1 Commissions. Each party represents and warrants that it has dealt
with no broker or finder in connection with this Agreement and, insofar as it
knows, no broker or other person is entitled to any commission or finder's fee
in connection with the consummation of the transactions contemplated by this
Agreement.
Section 12.2 Expenses. Except as otherwise provided herein, each of the parties
shall pay all costs and expenses incurred or to be incurred by it in the
negotiation and preparation of this Agreement and in closing and carrying out
the transactions contemplated by this Agreement.
Section 12.3 Headings; Schedules. The subject headings of the sections and
subsections of this Agreement are included only for purposes of convenience, and
shall not affect the construction or interpretation of any of its provisions.
Any disclosure made by Seller in a Schedule hereto shall be deemed a disclosure
on all Schedules hereto.
Section 12.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures on this
Agreement delivered by fax or telecopier shall be considered original signatures
for purposes of effectiveness of this Agreement.
Section 12.5 Rights of Parties. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third person to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action against any party to this Agreement.
Section 12.6 Assignment. Except as provided in the following paragraph, the
rights and obligations of the parties to this Agreement or any interest in this
Agreement shall not be assigned, transferred, hypothecated, pledged or otherwise
disposed of without the prior written consent of the nonassigning party which
consent may be withheld in such party's sole discretion.
Buyer shall have the right to assign to a wholly-owned subsidiary of Buyer its
rights and obligations under this Agreement; provided that such assignment shall
not release Buyer from its obligations hereunder, and Buyer shall remain fully
liable for all of Buyer's obligations hereunder, including without limitation
the payment of the entire Purchase Price (including contingent elements
thereof).
Section 12.7 Survival of Representations and Warranties. All representations,
warranties, covenants and agreements shall survive the Closing until the end of
the twelfth month after the Closing Date, except for ongoing agreements to
indemnify the other party for post-Closing actions.
Section 12.8 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if delivered by telecopier (with notice of
receipt), or if served personally on the party to whom notice is to be given; or
if delivered by overnight private carrier, on the date of delivery; or on the
third day after
<PAGE>
mailing if mailed to the party to whom notice is to be given by first class
mail, certified, postage prepaid, and properly addressed as following:
To Seller:
Mohawk Business Record Storage, Inc.
9715 James Avenue South
Minneapolis, Minnesota 55431-2577
Attention: Richard K. Ladin, Chief Executive Officer
Telecopier: (612) 888-8445
With a copy (which shall not constitute notice but which is nonetheless required
for notice) to:
James P. Greupner, Esq.
Siegel, Brill, Greupner & Duffy, P. A.
1300 Washington Square
100 Washington Avenue South
Minneapolis, Minnesota 55401
Telecopier: (612) 330-6501
To Buyer:
Iron Mountain Records Management, Inc.
745 Atlantic Avenue
10th Floor
Boston, Massachusetts 02111-2735
Attention: John F. Kenny, Jr.
Telecopier: (617) 350-7881
With a copy (which shall not constitute notice but which is nonetheless required
for notice) to:
Garry B. Watzke, Esq.
745 Atlantic Avenue
10th Floor
Boston, Massachusetts 02111-2735
Telecopier: (617) 350-7881
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set for above. If
Seller notifies Buyer after the Closing that Seller has been dissolved, Seller
may direct Buyer to send notices to a designated representative of the
Stockholders.
Section 12.9 Applicable Law and Remedies. The terms, conditions and other
provisions of this Agreement and any documents or instruments delivered in
connection with it shall be governed and construed according to the internal
laws of the State of Minnesota (other than the choice of law rules thereof)
except as to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, and as to
those matters, the jurisdiction under which such entity derives its powers shall
govern. All remedies at law, in equity, by statute or
<PAGE>
otherwise shall be cumulative and may be enforced concurrently or from time to
time and, subject to the express terms of this Agreement, the election of any
remedy or remedies shall not constitute a waiver of the right to pursue any
other available remedies. The parties agree that all disputes arising under this
Agreement shall be settled through arbitration procedures as described in
Section 11.5.
Section 12.10 Additional Instruments and Assistance. Each party hereto shall
from time to time execute and deliver such further instruments, provide
additional information and render such further assistance as the other party or
its counsel may reasonably request in order to complete and perfect the
transactions contemplated herein.
Section 12.11 Severability. If any provision of this Agreement is held or deemed
to be invalid or unenforceable to any extent when applied to any person or
circumstance, such invalidity or unenforceability shall not affect the remaining
provisions of this Agreement; the remaining provisions hereof and the
enforcement of such provision with respect to other persons or circumstances, or
to another extent, shall not be affected thereby and each provision hereof shall
be enforced to the fullest extent allowed by law. Moreover, the invalid or
inoperative provision shall be reformed and construed so that it shall be valid
and enforceable to the maximum extent permitted.
Section 12.12 Pronouns and Terms. In this Agreement, the singular shall include
the plural, the plural the singular, and the use of any gender shall include all
genders.
Section 12.13 Taxes. The party which customarily bears the economic burden
thereof shall pay any Minnesota sales taxes imposed on the transaction. Buyer
shall pay any other transfer and conveyance taxes and title, recording, transfer
and similar fees payable or assessable in connection with the sale and transfer
contemplated by this Agreement. Buyer and Seller shall each pay its portion
prorated as of the Effective Time of state and local ad valorem taxes on the
Business.
Seller's federal tax identification number is 41-1269120.
Buyer's federal tax identification number is 04-3038590.
Section 12.14 Disclosure. No representation or warranty made by either party in
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statement of facts contained within
it not materially misleading.
Section 12.15 Entire Agreement, Amendments and Waivers. This Agreement, together
with all Exhibits and Schedules hereto, constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties (including the letter of intent dated
July 12, 1996), and there are no representations, warranties or other agreements
among the parties in connection with the subject matter hereof except as set
forth specifically herein or contemplated hereby. No supplement, modification or
waiver of this Agreement shall be binding unless executed in
<PAGE>
writing by the party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
on the date first above written.
Mohawk Business Record Storage, Inc. Iron Mountain Records Management, Inc.
By _______________________________ By ___________________________________
Richard K. Ladin C. Richard Reese
Chief Executive Officer Chief Executive Officer
Stockholders:
- ----------------------------------
Michael M. Rabin
- ----------------------------------
Richard K. Ladin
- ----------------------------------
Herman Ladin
- ----------------------------------
Sidney Ladin
Exhibit 12
IRON MOUNTAIN INCORPORATED
STATEMENT OF THE CALCULATION OF RATIO OF EARNINGS OF FIXED CHARGES
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1991 1992 1993 1994 1995
----------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Earnings:
Income (Loss) from Operations
before Provision for Income
Taxes $(1,292) $ 3,682 $ 3,656 $ 3,241 $ 1,945
Add: Fixed Charges 11,689 12,079 12,430 13,472 17,058
------- ------- ------- ------- -------
$10,397 $15,761 $16,086 $16,713 $19,003
======= ======= ======= ======= =======
Fixed Charges:
Interest Expense $ 8,612 $ 8,412 $ 8,203 $ 8,954 $11,838
Interest Portion of Rent
Expense 3,077 3,667 4,227 4,518 5,220
------- ------- ------- ------- -------
$11,689 $12,079 $12,430 $13,472 $17,058
======= ======= ======= ======= =======
Ratio of Earnings to Fixed
Charges 0.9x(1) 1.3x 1.3x 1.2x 1.1x
======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Pro Forma
-------------------------------
For the For the
Six Months Ended Year Six Months
June 30, Ended Ended
-------------------------------- December 31, June 30,
1995 1996 1995 1996
--------------- -------------- ------------ ---------
<S> <C> <C> <C> <C>
Earnings:
Income (Loss) from Operations
before Provision for Income
Taxes $1,051 $ 1,585 $(1,576) $ (358)
Add: Fixed Charges 8,338 9,520 26,162 13,272
------ ------- ------- ------
$9,389 $11,105 $24,586 $12,914
====== ======= ======= =======
Fixed Charges:
Interest Expense $5,936 $ 6,385 $19,403 $ 9,699
Interest Portion of Rent
Expense 2,402 3,135 6,759 3,573
------ ------- ------- ------
$8,338 $ 9,520 $26,162 $13,272
====== ======= ======= =======
Ratio of Earnings to Fixed
Charges 1.1x 1.2x 0.9x(2) 0.9x(3)
====== ======= ======= =======
</TABLE>
(1) The Company reported a pretax loss for the fiscal year ended December 31,
1991. For such period the Company would have needed to generate
additional income from continuing operations, before provision for income
taxes, of $1,292 to cover its fixed charges of $11,689.
(2) On a pro forma basis, the Company would have needed to generate
additional income from continuing operations, before provision for income
taxes, of $1,576 to cover its fixed charges of $26,162.
(3) On a pro forma basis, the Company would have needed to generate
additional income from continuing operations, before provision for income
taxes, of $358 to cover its fixed charges of $13,272.
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports covering the audited historical financial statements and schedule of
Iron Mountain Incorporated and the audited historical financial statements of
Data Storage Systems, Inc., DKA Industries, Inc. d/b/a Systems Record
Storage, Mohawk Business Record Storage, Inc. and Security Archives
Corporation, and to all references to our Firm included in or made a part of
this registration statement.
Arthur Andersen LLP
Los Angeles, California
San Jose, California
Orlando, Florida
Minneapolis, Minnesota
September 6, 1996
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
registration statement.
/s/ Wolpoff & Company, LLP
Baltimore, Maryland
September 6, 1996
Exhibit 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
registration statement.
/s/ Morrison and Smith
Tuscaloosa, Alabama
September 6, 1996
Exhibit 23.5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
registration statement.
/s/ Geo. S. Olive & Co. LLC
Indianapolis, Indiana
September 6, 1996
Exhibit 23.6
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
registration statement.
/s/ Robert F. Gayton, CPA
Natick, Massachusetts
September 6, 1996
Exhibit 23.7
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
registration statement.
/s/ Perless, Roth, Jonas & Hartney, CPAs, PA
Miami, Florida
September 6, 1996
Exhibit 23.8
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
registration statement.
/s/ Rothstein, Kass & Company, P.C.
Roseland, New Jersey
September 6, 1996
Exhibit 24
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints C. Richard Reese, David S.
Wendell and Eugene B. Doggett, and each of them, to sign for him, and in his
name in the capacity indicated below, the Registration Statement on Form S-1
relating to the Senior Subordinated Notes due 2006 of Iron Mountain Incorporated
(File No. 333-10359) for the purpose of registering such securities under the
Securities Act of 1933, as amended, and any and all amendments thereto,
including without limitation any registration statement or post-effective
amendment thereof filed under and meeting the requirements of Rule 462(b) under
the Securities Act, hereby ratifying and confirming his signature as it may be
signed by said attorneys to such Registration Statement and any and all
amendments thereto.
Signature Title Date
/s/ Constantin R. Boden Director September 6, 1996
- ------------------------- -----------------
Constantin R. Boden
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0256895
(State of Incorporation) (I.R.S. Employer
Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
Iron Mountain Incorporated
(Exact name of registrant as specified in its charter)
Delaware 04-3107342
(State of Incorporation) (I.R.S. Employer
Identification No.)
745 Atlantic Avenue
Boston MA 02111
(Address of Principal Executive Offices) (Zip Code)
% Senior Subordinated Notes due 2006
(Title of the Indenture Securities)
<PAGE>
GENERAL
1. General Information Furnish the following information as to the
Trustee.
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement
of eligibility and qualification. Each of the exhibits listed below is
incorporated by reference from registration number 33-90786.
1. Copy of Articles of Association.
2. Copy of Certificate of Authority to Commence Business.
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).
4. Copy of existing By-Laws.
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
<PAGE>
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Bank National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 5th day of September,
1996.
FIRST BANK NATIONAL ASSOCIATION
[SEAL]
/s/ Richard Prokosch
--------------------------
Richard Prokosch
Trust Officer
/s/ Kathe Barrett
------------------------
Kathe Barrett
Assistant Secretary
<PAGE>
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, FIRST BANK NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: September 5, 1996
FIRST BANK NATIONAL ASSOCIATION
/s/ Richard Prokosch
------------------------------
Richard Prokosch
Trust Officer
<PAGE>
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
FIRST BANK NATIONAL ASSOCIATION
FIRST. The title of this Association, which shall carry on the
business of banking under the laws of the United States, shall be "First Bank
National Association."
SECOND. The main office of the Association shall be in the City of
Minneapolis, County of Hennepin, State of Minnesota. The general business of
the Association shall be conducted at its main office and branches.
THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five members. At any meeting of the
shareholders held for the purpose of electing Directors, or changing the number
thereof, the number of Directors may be determined by a majority of the votes
cast by the shareholders in person or by proxy. Between meetings of the
shareholders held for the purpose of electing Directors, the Board of Directors
by a majority vote of the full Board may increase the size of the Board by not
more than four Directors in any one year, but not to more than a total of
twenty-five Directors, and fill any vacancy so created in the Board. A majority
of the Board of Directors shall be necessary to constitute a quorum for the
transaction of business at any Directors' meeting. Each Director, during the
full term of his directorship, shall own a minimum of $1,000 par value of stock
of this Association, or any equivalent interest in stock of First Bank System,
Inc.
FOURTH. The regular annual meeting of the shareholders of this Association
shall be held at its main banking house, or other convenient place duly
authorized by the Board of Directors, on such day of each year as is specified
therefor in the By-laws, but if no election is held on that day, it may be held
on any subsequent day according to such lawful rules as may be prescribed by the
Board of Directors.
FIFTH. The authorized amount of capital stock of this Association shall be
divided into 3,500,000 shares of common stock at the par value of Fifty Dollars
($50.00) each; but said capital stock may be increased or decreased from time to
time, in accordance with the provisions of the laws of the United States.
If the capital stock is increased by the sale of additional shares
thereof, each shareholder shall be entitled to subscribe for such additional
share in proportion to the number of shares of said capital stock owned by him
at the time the increase is authorized by the shareholders, unless another time
subsequent to the date of the shareholders' meeting is specified in a resolution
adopted by the shareholders at the time the increase is authorized. The Board of
Directors shall have the power to prescribe a reasonable period of time within
which the preemptive rights to subscribe to the new shares of capital stock must
be exercised.
If the capital stock is increased by a stock dividend, each shareholder
shall be entitled to his proportionate amount of such increase in accordance
with the number of shares of capital stock owned by him at the time the increase
is authorized by the shareholders, unless another time subsequent to the date of
the shareholders' meeting is specified in a resolution adopted by the
shareholders at the time the increase is authorized.
The Association, and at any time and from time to time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of the
shareholders. In the event said debt obligations are convertible to capital
stock of the Association, each shareholder shall be entitled to subscribe for
such additional shares in proportion to the number of shares of capital stock
owned by him one month prior to the issuance of capital stock in satisfaction of
said convertible debt obligations.
SIXTH. The Board of Directors shall appoint one of its members President
of this Association, who shall be Chairman of the Board, unless the Board
appoints another director to be the Chairman. The Board may also appoint one or
more of its members to serve as Vice Chairman. The Board shall have the power to
appoint such officers and employees as may be required to transact the business
of this Association; to fix the salaries to be paid to such officers and
employees of this Association; and to dismiss any of such officers or employees
and appoint others to take their place.
The Board of Directors shall have the power to define the duties of
officers and employees of this Association and to require adequate bonds from
them for the faithful performance of their duties; to regulate the manner in
which any increase of the capital of the Association shall be made; to make all
By-laws that may be lawful for the general regulation of the business of this
Association and the management of its affairs; and generally to do and perform
all acts that may be lawful for a Board of Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the
location of the main office of this Association to any other place within the
limits of the City of Minneapolis, Minnesota, without the approval of the
shareholders of this Association but subject to the approval of the Comptroller
of the Currency; and shall have the power to change the location of any branch
or branches of this Association to any other location, without the approval of
the shareholders of this Association but subject to the approval of the
Comptroller of the Currency.
EIGHTH. This Association shall have succession from the date of its
organization certificate until such time as it be dissolved by the act of its
shareholders in accordance with the provisions of the banking laws of the United
States, or until its franchise becomes forfeited by reason of violation of law,
or until terminated by either a general or a special act of Congress, or until
its affairs be placed in the hands of a receiver and finally wound up by him.
NINTH. The Board of Directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than ten per centum of the stock
of this Association, may call a special meeting of shareholders at any time;
provided, however, that unless otherwise provided by law, not less than ten days
prior to the date fixed for any such meeting, a notice of the time, place, and
purpose of the meeting shall be given by first-class mail, postage prepaid, to
all shareholders of record of this Association at their respective addresses as
shown upon the books of the Association.
TENTH. Any action required to be taken at a meeting of the shareholders or
directors of or any action which may be taken at a meeting of shareholders or
directors may be taken without a meeting if consent in writing, setting forth
the action as taken shall be signed by all the shareholders or directors
entitled to vote with respect to the matter thereof. Such action shall be
effective on the date on which the last signature is place on the writing, or
such earlier date as is set forth therein.
ELEVENTH. Meetings of the Board of Directors or shareholders, regular or
special, may be held by means of conference telephone or similar communication
equipment by means of which all persons participating in the meeting can
simultaneously hear each other, and participation in such meeting by such
aforementioned means shall constitute presence in person at such meeting.
TWELFTH. (a) Any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than any action
by or in the right of the Corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall be indemnified by the Corporation, unless similar indemnification is
provided by such other corporation, partnership, joint venture, trust or other
enterprise (any funds received by any person as a result of the provisions of
this Article being deemed an advance against his receipt of any such other
indemnification from any such other corporation, partnership, joint venture,
trust or other enterprise), against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interest of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person seeking
indemnification did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interest of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(b) Any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other corporation, partnership, joint venture, trust or other enterprise shall
be indemnified by the Corporation, unless similar indemnification is provided by
such other corporation, partnership, joint venture, trust or other enterprise
(any funds received by any person as a result of the provisions of this Article
being deemed an advance against his receipt of any such other indemnification
from any such other corporation, partnership, joint venture, trust or other
enterprise), against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interest of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
of the circumstances of the case, such person is fairly and reasonably entitled
to indemnify for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b), or in defense
of any claim, issue or matter therein, such person shall be indemnified by the
Corporation against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
(d) Except as set forth in paragraph (c) of this Article, any
indemnification under paragraphs (a) and (b) of this Article (unless ordered by
the court), shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because such person has met the
applicable standard of conduct set forth in paragraphs (a) and (b) of this
Article. Such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) if there are no such directors, of if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of any
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Corporation. Such expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the Board of Directors deems appropriate.
(f) The indemnification and advancement of expenses provided by this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification or seeking advancement of expenses may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in an official capacity and as to action in another capacity
while holding such office.
(g) By action of the Board of Directors, notwithstanding any interest of
the directors in the action, the Corporation may purchase and maintain
insurance, in such amounts as the Board of Directors deems appropriate, on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation shall have the power to indemnify him against
such liability under the provisions of this Article.
(h) For purpose of this Article, references to "the Corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or agents, so that any
person who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
this Article with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this Article, references to "other enterprises" shall
include employee benefit plans; reference to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
(j) The indemnification and advancement of expenses hereby provided shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such person.
THIRTEENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law and in that case by the vote of the
holders of such greater amount. The notice of any shareholders' meeting at which
an amendment to the Articles of Association of this Association is to be
considered shall be given as hereinabove set forth.
IN WITNESS WHEREOF, we have hereunto set our hands as of the 23rd day of
February, 1995.
/s/ John F. Grundhofer /s/ Philip G. Heasley
- --------------------------------- ------------------------------------
John F. Grundhofer Philip G. Heasley
/s/ William F. Farley /s/ Richard A. Zona
- --------------------------------- ------------------------------------
William F. Farley Richard A. Zona
/s/ Daniel C. Rohr /s/ Michael J. O'Rourke
- --------------------------------- ------------------------------------
Daniel C. Rohr Michael J. O'Rourke
/s/ J. Robert Hoffmann
- ---------------------------------
J. Robert Hoffmann
<PAGE>
BYLAWS
OF
FIRST BANK NATIONAL ASSOCIATION
ARTICLE I.
MEETINGS OF SHAREHOLDERS
The regular annual meeting of the shareholders for the election of
directors and for the transaction of such other business as properly may come
before the meeting shall be held at the main banking house of the Association in
the City of Minneapolis, Minnesota, or other convenient place duly authorized by
the Board of Directors (hereinafter referred to as the "Board"), on the last
Thursday in February of each year at 9:30 o'clock A.M. of said day, or such
other date or time which the Board may designate at any Board meeting held prior
to the required date for sending notice of the annual meeting to the
shareholders. The holders of a majority of the outstanding shares entitled to
vote, and represented at any annual or special meeting of the shareholders, may
choose persons to act as Chairman and as Secretary of the meeting.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. Number. As provided in the Articles of Association, the Board
of this Association shall consist of not less than five nor more than
twenty-five members. At any meeting of the shareholders held for the purpose of
electing directors, or changing the number thereof, the number of directors may
be determined by a majority of the votes cast by the shareholders in person or
by proxy. Any vacancy occurring in the Board shall be filled by the remaining
directors. Between meetings of the shareholders held for the purpose of electing
directors, the Board by a majority vote of the full Board may increase the size
of the Board by not more than four directors in any one year, but not to more
than a total of twenty-five directors, and fill any vacancy so created in the
Board. All directors shall hold office until their successors are elected and
qualified.
Section 2. Powers. The Board shall have and may exercise all of the powers
granted to or conferred upon it by the Articles of Association and Bylaws of the
Association and by law. The Board may appoint from time to time one or more
committees for any purposes and with such powers as the Board may determine.
Section 3. Organization. The President or the Chairman of the Board shall
notify the directors-elect of their election and of the time at which they are
required to meet for the purpose of organizing the new Board. If, at the time
fixed for such meeting, there is not a quorum in attendance, the members
<PAGE>
present may adjourn from time to time until a quorum is secured, and no business
shall be transacted until a majority of the directors-elect shall have taken the
oath of office prescribed by law and shall otherwise duly qualified.
The Board shall appoint one of its members President of this Association,
who shall be Chairman of the Board, but the Board may appoint a Director in lieu
of the President, to be Chairman of the Board, in which case the latter shall
preside at all meetings and shall perform such other duties as may be designated
by the Board. If a Chairman of the Board is so appointed in lieu of the
President, in his absence the President shall preside at meetings of the Board.
In the absence of a presiding officer, the Board shall appoint a Chairman pro
tem. The Board shall appoint a recording officer who shall keep a record of the
meetings and proceedings of the Board. The recording officer need not be a
member of the Board.
Section 4. Meetings. The regular meetings of the Board shall consist of
the annual meeting following the annual election of directors by the
shareholders, and quarterly meetings which shall be held at such place and at
such time as the Chairman or President from time to time may designate. When the
date of any regular meeting of the Board falls on a holiday, the meeting shall
be held on the next ensuing business day other than a Saturday, or on such day
and at such time as may have been ordered.
Special meetings of the Board shall be held at any time upon the call of
the Chairman of the Board, a Vice Chairman, the President, or the acting Chief
Executive Officer, or upon written request of any three (3) directors.
Notice of all meetings of the Board, whether regular or special, shall be
given to each director either orally in person or by mail, telegraph or
telephone, on or before the day of the meeting. Meetings of the Board or
shareholders may be held by conference telephone or similar communication device
by means of which all persons participating in the meeting can simultaneously
hear each other. Participating in such a meeting shall constitute presence in
person at such meeting.
Section 5. Quorum. A majority of all the qualified directors shall
constitute a quorum and shall be necessary for the transaction of business, but,
if at any meeting there shall be less than a quorum present, a majority of those
present may adjourn the meeting from time to time until a quorum is in
attendance.
Section 6. Advisory Board of Directors. The Board may appoint persons, who
need not be shareholders or directors, to
-2-
<PAGE>
serve as advisory directors on an Advisory Board of Directors established to
serve this bank or a group of affiliated banks of which this bank is one. An
advisory director shall have such power and duties as may be determined by the
Board, provided that advisory directors shall have no power to vote on matters
presented to the Board for final decision and, provided further, that the
Board's responsibility for the affairs of the Association shall in no respect be
delegated or diminished.
Section 7. Directors' Fees, etc. The Board shall have the power to fix and
vote fees and compensation to directors and advisory directors of the
Association for their services as directors and advisory directors, and also for
their services as member of any committee or committees of the Association
contemplated by these Bylaws or otherwise created or appointed by the Board, the
Executive Committee, or the President of the Association. Nothing herein
contained shall be construed to preclude any director or advisory director from
serving the Association in any other capacity and being paid compensation
therefor by the Association.
ARTICLE III.
OFFICERS
Section 1. Officers. The Board may elect a Chairman of the Board of
Directors and one (1) or more Vice Chairmen. The Board shall also elect a
President. The Board shall elect, as appropriate, such additional officers as it
may determine, including Executive Vice Presidents or Senior Vice Presidents.
The Chief Executive Officer or in the absence of the Chief Executive Officer,
the President, may appoint such other officers necessary to conduct the affairs
of the Association.
Section 2. Chief Executive Officer. The Board of Directors may designate a
Chief Executive Officer of the Association, who shall be either the President or
Chairman of the Board. The Board may also designate an officer or director to
serve as acting Chief Executive Officer in the absence or incapacity of the
Chief Executive Officer. Subject to the law and the control of the Board and the
Executive Committee, the Chief Executive Officer, or, in the absence of the
Chief Executive Officer, the President shall have authority to manage the
affairs and business of the Association and prescribe and define the duties of
its officers, agents and employees.
Section 3. Term of Office. Any officer elected by the Board shall hold his
office for the current year for which the Board by which he is elected was
elected, unless he shall resign, become disqualified or be removed. The
Chairman, Vice Chairman, and President can be removed by action of a majority of
the Board. All other elected officers can be removed by order
-3-
<PAGE>
of the Chief Executive Officer, or in his absence, the President. Any other
officer shall hold his office at the pleasure of the Chief Executive Officer,
or, in his absence, the President.
Section 4. Bonds. All officers, agents or employees as the business of the
Association may require, shall give bond with surety to be approved and in a sum
to be fixed by the Board or the Chairman or the President, conditioned upon the
faithful and honest discharge of their respective duties.
ARTICLE IV.
STOCK CERTIFICATES
Section 1. Forms. Certificates of stock, signed by any elected officer and
any other officer, shall be issued to the shareholders, and each certificate
shall state upon its face that such stock is transferable only upon the books of
the Association.
Section 2. Transfers. Certificates of stock of this Association shall be
assignable and transferable only on the books of this Association subject to the
restrictions and provisions of the national banking laws, and a transfer book
shall be provided in which all assignments and transfers of stock shall be made.
When stock is transferred, the certificates representing the same shall be
returned to the bank, canceled and preserved, and new certificates issued.
Section 3. Dividends. Transfers of stock shall not be suspended
preparatory to the declaration of dividends; and, unless an agreement to the
contrary shall be expressed in the assignment or assignments, dividends shall be
paid to the shareholders in whose name the stock shall stand at the date of
declaration of dividends.
ARTICLE V.
MINUTE BOOK
The organization papers of this Association, the Bylaws as revised or
amended from time to time and the proceedings of all regular and special
meetings of the shareholders and the directors shall be recorded in a minute
book or books. All reports of committees required to be made to the Board shall
be recorded in a minute book or shall be filed by the recording officer. The
minutes of each meeting of the shareholders and the Board shall be signed by the
recording officer and approved by the Chairman of the meeting.
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ARTICLE VI.
CONVEYANCES, CONTRACTS, ETC.
All transfers and conveyances of real estate, mortgages, and transfers,
endorsements or assignments of stock, bonds, notes, debentures or other
negotiable instruments, securities or personal property shall be signed by any
elected or appointed officer.
All checks, drafts, certificates of deposit, mortgage satisfactions,
releases, all types of loans, all obligations of the Association, and all funds
of the Association held in its own or in a fiduciary capacity may be paid out by
an order, draft or check bearing the manual or facsimile signature of any
elected or appointed officer of the Association or of such other employees or
agents as may be designated by the Chief Executive Officer or the President.
All other instruments not hereinabove specifically provided for, whether
to be executed in a fiduciary capacity or otherwise, may be signed on behalf of
the Association by any officer thereof.
The Secretary of the Association or other proper officer may execute and
certify that required action or authority has been given or has taken place by
resolution of the Board under this Bylaw without the necessity of further action
by the Board.
ARTICLE VII.
SEAL
The following is an impression of the seal if this Association.
ARTICLE VIII.
INDEMNIFICATION OF DIRECTORS,
OFFICERS, AND EMPLOYEES
Section 1. The Association shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action, or proceeding, whether civil, criminal, administrative, or
investigative
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(other than an action by or in the right of the pertinent corporation) by reason
of the fact that he is or was a director, advisory director or officer of the
Association, or is or was serving at the request of the Association as a
director or officer of another corporation, partnership, joint venture, trust,
or other enterprise, against expenses (including attorneys' fees), judgments,
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interest
of the pertinent corporation. The termination of any action, suit, or proceeding
by judgment, order, settlement, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the pertinent corporation.
Section 2. The Association shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the pertinent corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, advisory director or officer of the Association, or is or was serving
at the request of the Association as a director or officer of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses, (including attorney's fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the pertinent corporation and except that no indemnification
shall be made in respect to any claim, issue, or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the pertinent corporation unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnify for such expenses which such court shall deem proper.
Section 3. To the extent that a director, advisory director, or officer
has been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in Sections 1 or 2 of this Article, or in defense of
any claim, issue, or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
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Section 4. Any indemnification under Sections 1 and 2 of this Article
(unless ordered by a court) shall be made by the Association only upon a
determination that indemnification of the director, advisory director, or
officer is proper in the circumstances because he has met the applicable
standards of conduct set fourth in said Sections 1 and 2. Such determination
shall be made: (a) by the Board of the Association by a majority vote of a
quorum consisting of directors who were not parties to such action, suit, or
proceeding; or (b) if such a quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel (who
may be regular counsel for the Association or pertinent corporation) in a
written opinion; or (c) by the stockholders of the Association.
Section 5. Expenses incurred by any person who may have a right of
indemnification under this Article in defending a civil or criminal action,
suit, or proceeding may be paid by the Association in advance of the final
disposition of such action, suit, or proceeding as authorized by its Board upon
receipt of an undertaking by or on behalf of such person, to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Association pursuant to this Article.
Section 6. The indemnification provided by this Article is in addition to
and independent of and shall not be deemed exclusive of any other rights to
which any person may be entitled under any certificate of incorporation,
articles of incorporation, articles of association, bylaw, agreement, vote of
stockholders, or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another while holding such office, and
shall continue as to a person who has ceased to be a director, advisory
director, or officer and shall inure to the benefit of the heirs, executors, and
administrators of such a person; provided, that any indemnification realized
other than under this Article shall apply as a credit against any
indemnification provided by this Article.
Section 7. The Association may purchase and maintain insurance on behalf
of any person who is or was a director, advisory director, officer, employee, or
agent of the Association, or is or was serving at the request of the Association
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, if the Association would have the power to indemnify him against
such liability under the provisions of the Article or of applicable law, if and
whenever the Board of the Association deems it to be in the best interest of the
Association to do so.
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Section 8. For purposes of this Article and indemnification hereunder, any
person who is or was a director or officer of any other corporation of which the
Association owns or controls or at the time owned or controlled directly or
indirectly a majority of the shares of stock entitled to vote for election of
directors of such other corporation shall be conclusively presumed to be serving
or to have served as such director or officer at the request of the Association.
Section 9. The Association may provide indemnification under this Article
to any employee or agent of the Association or of any other corporation of which
the Association owns or controls or at the time owned or controlled directly or
indirectly a majority of the shares of stock entitled to vote for election of
directors or to any director, officer, employee, or agent of any other
corporation, partnership, joint venture, trust, or other enterprise in which the
Association)'n has or at the time had an interest as an owner, creditor, or
otherwise, if and whenever the Board of the Association deems it in the best
interest of the Association to do so.
Section 10. The Association may, to the fullest extent permitted by
applicable law from time to time in effect, indemnify any and all persons whom
the Association shall have power to indemnify under said law from and against
any and all of the expenses, liabilities, or other matters referred to in or
covered by said law, if and whenever the Board of the Association deems it to be
in the best interest of the Association to do so.
ARTICLE IX.
AMENDMENTS
These Bylaws, or any of them, may be added to, altered, amended or
repealed by the Board at any regular or special meeting of the Board.
