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
(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
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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)
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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
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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
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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.
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(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
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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.
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(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
(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
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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
12
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,
14
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
15
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
16
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
17
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
18
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
19
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
20
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
21
(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;
22
(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
23
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
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
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
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
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.
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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
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________________________
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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
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