Document:

Exhibit 4.2

 

 

 

IRON MOUNTAIN INCORPORATED

 

THE GUARANTORS NAMED HEREIN

 

AND

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee

 

 

7 3⁄4% Senior Subordinated Notes due 2019

 

 

FORM OF FIRST SUPPLEMENTAL INDENTURE

 

 

Dated as of September 23, 2011

 

 

TO

 

 

SENIOR SUBORDINATED INDENTURE

 

 

Dated as of September 23, 2011

 

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 1.   DEFINITIONS
    	
1
    
	
 
    	
 
    
	
Section 1.1.
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE 2. FORM AND   TERMS OF THE NOTES
    	
16
    
	
 
    	
 
    
	
Section 2.1.
    	
Form and Dating
    	
16
    
	
Section 2.2.
    	
Execution and Authentication
    	
17
    
	
Section 2.3.
    	
Depository and Paying Agent for Notes
    	
17
    
	
Section 2.4.
    	
Transfer and Exchange of Notes
    	
17
    
	
Section 2.5.
    	
Redemption
    	
19
    
	
Section 2.6.
    	
Additional Covenants
    	
21
    
	
 
    	
(a)
    	
Restricted Payments
    	
21
    
	
 
    	
(b)
    	
Incurrence of Indebtedness and Issuance of Preferred Stock
    	
24
    
	
 
    	
(c)
    	
Liens
    	
26
    
	
 
    	
(d)
    	
Dividend and Other Payment Restrictions Affecting   Restricted Subsidiaries
    	
26
    
	
 
    	
(e)
    	
Transactions with Affiliates
    	
28
    
	
 
    	
(f)
    	
Certain Senior Subordinated Debt
    	
29
    
	
 
    	
(g)
    	
Additional Subsidiary Guarantees
    	
29
    
	
 
    	
(h)
    	
Designation of Unrestricted Subsidiaries
    	
30
    
	
 
    	
(i)
    	
Limitation on Sale and Leaseback Transactions
    	
31
    
	
 
    	
(j)
    	
Asset Sales
    	
31
    
	
 
    	
(k)
    	
Change of Control Offer
    	
33
    
	
 
    	
(l)
    	
Changes in Covenants When Notes Rated Investment Grade
    	
35
    
	
Section 2.7.
    	
Subsidiary Guarantees
    	
35
    
	
Section 2.8.
    	
Legal Defeasance and Covenant Defeasance
    	
35
    
	
Section 2.9.
    	
Subordination
    	
35
    
	
Section 2.10.
    	
Amend, Restate and Replace Provision Regarding Redemption
    	
36
    
	
 
    	
(a) Selection of Securities to be Redeemed
    	
36
    
	
 
    	
 
    	
 
    
	
ARTICLE 3. MISCELLANEOUS
    	
36
    
	
 
    	
 
    
	
Section 3.1.
    	
Effect of Headings
    	
36
    
	
Section 3.2.
    	
Successors and Assigns
    	
36
    
	
Section 3.3.
    	
Separability Clause
    	
36
    
	
Section 3.4.
    	
Governing Law
    	
36
    
	
Section 3.5.
    	
Eighth Supplement to Supersede Indenture
    	
37
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    
	
Exhibit A
    	
FORM OF   NOTE
    	
 
    
	
Exhibit B
    	
FORM OF   SUPPLEMENTAL INDENTURE
    	
 
    

 

 

THIS FIRST SUPPLEMENTAL INDENTURE, dated as of September 23, 2011 (“Supplemental Indenture”), is by and between IRON MOUNTAIN INCORPORATED, a Delaware corporation (the “Company”), having its principal office at 745 Atlantic Avenue, Boston, Massachusetts 02111, the Guarantors signatory hereto, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association, as trustee (the “Trustee”), having its principal corporate trust office at 525 William Penn Place, 38th Floor, Pittsburgh, PA 15259.

 

WITNESSETH:

 

WHEREAS, the Company and the Trustee are parties to that certain Senior Subordinated Indenture, dated as of the date hereof (the “Indenture”), to provide for the issuance by the Company from time to time of Securities to be issued in one or more series as provided in the Indenture;

 

WHEREAS, the issuance and sale of up to $400,000,000 aggregate principal amount of a series of the Company’s Securities (the “Notes”) have been authorized by resolutions adopted by the Board of Directors of the Company on September 9, 2011 and by the Strategic Planning and Capital Allocation Committee of the Board of Directors of the Company on September 19, 2011;

 

WHEREAS, the Company desires to issue and sell $400,000,000 aggregate principal amount of the Notes on the date hereof;

 

WHEREAS, the Company desires to enter into this Supplemental Indenture pursuant to Section 9.1(e) of the Indenture to supplement the Indenture to establish the form and terms of the Notes; and

 

NOW, THEREFORE, for and in consideration of the premises stated herein and the purchase of the Notes by the Holders thereof, the parties hereto hereby enter into this Supplemental Indenture, for the equal and proportionate benefit of all Holders of Notes, as follows:

 

ARTICLE 1.

 

DEFINITIONS

 

Section 1.1. Definitions. All of the terms used in this Supplemental Indenture that are defined in the Indenture shall have the meanings specified in the Indenture, unless otherwise defined herein (in which case they shall have the meanings defined herein for the purposes of the Indenture as well as for this Supplemental Indenture) or unless the context otherwise requires, and for the purposes of this Supplemental Indenture, the following terms have the meanings set forth in this Section:

 

“Acquired Debt” means, with respect to any specified Person:

 

(1)                                  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

 

(2)                                  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:

 

 

(1)                                  EBITDA of such Acquisition EBITDA Entity for the most recently ended four full quarters for which internal financial statements are available at such date of determination (adjusted to give pro forma effect to any acquisition or disposition of a business or Person by such Acquisition EBITDA Entity consummated during the period covered by, or after the date of, such four full fiscal quarters) or, if statements are not available for such four full fiscal quarters, EBITDA for the most recently ended fiscal quarter for which internal financial statements are available, annualized, plus

 

(2)                                  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:

 

(1)                                  which has been acquired by the Company or one of its Restricted Subsidiaries and with respect to which internal financial statements on a consolidated basis with the Company are not available for four full fiscal quarters; or

 

(2)                                  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 2.6(b) of this Supplemental Indenture (Section 4.9 of the Indenture).

 

“Additional Notes” means such amount of the Company’s 7 3⁄4% Senior Subordinated Notes due 2021 (other than the Initial Notes) as the Company may issue from time to time under this Supplemental Indenture in accordance with Section 2.2 hereof as part of the same series as the Initial Notes.

 

“Adjusted EBITDA” means, as of any date of determination and without duplication, the sum of:

 

(1)                                  EBITDA of the Company and its Restricted Subsidiaries for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available at such date of determination; and

 

(2)                                  Acquisition EBITDA of each business or Person that is an Acquisition EBITDA Entity as of such date of determination, multiplied by a fraction, (i) the numerator of which is 12 minus the number of months (and/or any portion thereof) in such most recent four full fiscal quarters for which the financial results of such Acquisition EBITDA Entity are included in the EBITDA of the Company and its Restricted Subsidiaries under clause (1) above, and (ii) the denominator of which is 12.  The effects of unusual items, including merger-related expenses permitted to be shown as a separate line item on a statement of operations in accordance with GAAP, 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.

 

“Agent Members” means members of, or participants in, the Depository.

 

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“Attributable Indebtedness” in respect of a Sale and Leaseback Transaction means, as of the time of determination, the greater of:

 

(1)                                  the fair market value of the property subject to such arrangement (as determined by the Board of Directors); and

 

(2)           the present value (discounted at the rate of interest implicit in such transaction) of the total obligations of the lessee for rental payments during the remaining terms of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended).

 

“Cash Equivalents” means:

 

(1)                                  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;

 

(2)                                  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;

 

(3)                                  commercial paper of an issuer rated at least A-2 by Standard & Poor’s Rating Group, a division of The McGraw-Hill Companies, 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;

 

(4)                                  money market accounts or funds with or issued by Qualified Issuers; and

 

(5)                                  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 (1) through (3) above.

 

“Change of Control” means the occurrence of any of the following events:

 

(1)                                  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;

 

(2)                                  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

 

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(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 2.6(a) of this Supplemental Indenture (Section 4.8 of the Indenture) 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;

 

(3)                                  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

 

(4)                                  the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution other than in a transaction which complies with Section 5.1 of the Indenture.

 

“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:

 

(1)                                  any net after-tax extraordinary gains or losses (less all fees and expenses relating thereto);

 

(2)                                  any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to Asset Sales;

 

(3)                                  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

 

(4)                                  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:

 

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(1)                                  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

 

(2)                                  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 (including without limitation any minority interest) reducing Consolidated Adjusted Net Income for such period, determined on a consolidated basis in accordance with GAAP (excluding any such non-cash charge to the extent that it requires an accrual of or reserve for cash charges for any future period).

 

“Definitive  Notes” means Notes that are in the form of the Notes attached hereto as Exhibit A, that do not include the information called for by Section 2.15 of the Indenture.

 

“EBITDA” means for any period Consolidated Adjusted Net Income for such period increased by:

 

(1)                                  Consolidated Interest Expense for such period; plus

 

(2)                                  Consolidated Income Tax Expense for such period; plus

 

(3)                                  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:

 

(1)                                  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

 

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(2)                                  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 Restricted Subsidiary organized under the laws of a jurisdiction other than the United States (as defined in Regulation S under the Securities Act) and that has not delivered a Subsidiary Guarantee.

 

“Existing Indebtedness” means Indebtedness of the Company and its Subsidiaries (other than under the Credit Agreement) in existence on the date of this Supplemental Indenture, until such amounts are repaid.

 

“Existing Senior Subordinated Securities” means the 6 5/8% Notes, the 6 3/4% Notes, the 7 1/4% Notes, the 7 1/2% Notes, the 8% Notes, the second 8% Notes, the 8 3/8% Notes and the 8 3/4% Notes.

 

“GAAP” means accounting principles generally accepted in the United States of America which were in effect on December 30, 2002.

 

“Global Note” means a permanent global Note that contains the paragraph referred to in Section 2.15.3 of the Indenture and the additional Schedule of Exchanges of Notes to the form of the Note attached hereto as Exhibit A, and that is deposited with and registered in the name of the Depository.

 

“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:

 

(1)           every obligation of such Person for money borrowed;

 

(2)           every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(3)           every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person;

 

(4)           every obligation of such Person issued or assumed as the deferred purchase price of property or services;

 

(5)           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;

 

(6)           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);

 

(7)           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

 

(8)           every obligation of the type referred to in clauses (1) through (7) 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

 

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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. Indebtedness shall be calculated without giving effect to the effects of Accounting Standards Codification No. 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.

 

“Initial Notes” means the first $400,000,000 aggregate principal amount of 7 3⁄4% Senior Subordinated Notes due 2021 that are issued under this Supplemental Indenture, as amended or supplemented from time to time pursuant to the Indenture.

 

“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:

 

(1)                                  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

 

(2)                                  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).

 

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‘‘Make-Whole Amount’’ means, with respect to any Note, an amount equal to the excess, if any, of:

 

(1) the present value of the remaining principal, premium and interest payments that would be payable with respect to such Note if such Note were redeemed on October 1, 2015 computed using a discount rate equal to the Treasury Rate plus 50 basis points, over

 

(2) the outstanding principal amount of such Note.

 

‘‘Make-Whole Average Life’’ means, with respect to any date of redemption of Notes, the number of years (calculated to the nearest one-twelfth) from such redemption date to October 1, 2015.

 

“Make-Whole Price” means, with respect to any Note, the greater of:

 

(1)                                  the sum of the principal amount of and Make-Whole Amount with respect to such Note; and

 

(2)                                  the redemption price of such Note on October 1, 2015.

 

“Market Price” means:

 

(1)                                  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

 

(2)                                  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:

 

(1)                                  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 than the New York Stock Exchange (including for this purpose the Nasdaq Global 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

 

(2)                                  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

 

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Financial Industry Regulatory Authority 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:

 

(1)           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

 

(2)           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” has the meaning assigned to it in the preamble to this Supplemental Indenture.  The Initial Notes and any Additional Notes shall be treated as a single class for all purposes under this Supplemental Indenture and the Indenture.

 

“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 Chief Executive Officer and President, the Chief Financial Officer, the Controller, or an Executive Vice President of the Company, and delivered to the Trustee.

 

“Permitted Investments” means:

 

(1)           any Investments in the Company or in a Restricted Subsidiary (other than an Excluded Restricted Subsidiary) of the Company, including without limitation the

 

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Guarantee of Indebtedness permitted under Section 2.6(b) of this Supplemental Indenture (Section 4.9 of the Indenture);

 

(2)           any Investments in Cash Equivalents;

 

(3)           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;

 

(4)           Investments in assets (including accounts and notes receivable) owned or used in the ordinary course of business;

 

(5)           Investments for any purpose related to the Company’s records and information management business (including, without limitation, the Company’s confidential destruction and fulfillment businesses) in an aggregate outstanding amount not to exceed $10.0 million; and

 

(6)           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 30% of the consolidated assets of the Company and its Restricted Subsidiaries (and, for the avoidance of doubt, Permitted Investments shall include any Investment by an Excluded Restricted Subsidiary in another Excluded Restricted Subsidiary).

 

“Permitted Liens” means:

 

(1)           Liens existing as of the date of issuance of the Notes;

 

(2)           Liens on property or assets of the Company or any Restricted Subsidiary securing Senior Debt;

 

(3)           Liens on any property or assets of a Restricted Subsidiary granted in favor of the Company or any Wholly Owned Restricted Subsidiary;

 

(4)           Liens securing the Notes or the Subsidiary Guarantees;

 

(5)           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 2.6(b) of this Supplemental Indenture (Section 4.9 of the Indenture);

 

(6)           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

 

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assets of the Company or any Restricted Subsidiary other than the assets acquired in connection with the incurrence of such Acquired Debt;

 

(7)           Liens securing Hedging Obligations permitted to be incurred pursuant to clause (7) of Section 2.6(b) of this Supplemental Indenture (clause (7) of Section 4.9 of the Indenture);

 

(8)           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;

 

(9)           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;

 

(10)         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;

 

(11)         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);

 

(12)         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;

 

(13)         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;

 

(14)         Liens arising under options or agreements to sell assets;

 

(15)         other Liens securing obligations incurred in the ordinary course of business, which obligations do not exceed $10.0 million in the aggregate at any one time outstanding; and

 

11

 

(16)         any extension, renewal or replacement, in whole or in part, of any Lien described in the foregoing clauses (1) through (15); provided that any such extension, renewal or replacement shall not extend to any additional property or assets.

 

“Principal Stockholders” means each of Vincent J. Ryan, Schooner Corporation, C. Richard Reese, Kent P. Dauten, and their respective Affiliates.

 

“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:

 

(1)           any lender party to the Credit Agreement; or

 

(2)           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 The McGraw-Hill Companies, 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 Supplemental 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:

 

(1)           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);

 

(2)           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 the maturity date of the Notes;

 

(3)           to the extent such Refinancing Indebtedness refinances Indebtedness that has a final maturity date occurring after the initial scheduled maturity date of the Notes, such new Indebtedness shall have a final scheduled maturity not earlier than the final scheduled maturity of the Indebtedness so repaid, redeemed, defeased,

 

12

 

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;

 

(4)           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

 

(5)           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:

 

(1)           each direct or indirect Subsidiary of the Company existing on the date of the Indenture (other than Iron Mountain India Private Limited, IndexInfo Services Pty Ltd., Iron Mountain South America Ltd., Iron Mountain Mexico, S.de R.L. de C.V., Iron Mountain India Holdings, Iron Mountain Australia Holdings Pty Ltd., IM New Zealand Holdings ULC, Iron Mountain Asia Pacific Holdings Limited, Iron Mountain Assurance Corporation, Mountain West Palm Real Estate, Inc. and Upper Providence Venture I, L.P. and their respective direct and indirect Subsidiaries, and all direct and indirect Subsidiaries of Iron Mountain Europe (Group) Limited (other than IME, Iron Mountain (UK) Limited and Iron Mountain Secure Shredding Ltd.); and

 

(2)           any other direct or indirect Subsidiary of the Company formed, acquired or existing after the date of the Indenture (including an Excluded Restricted Subsidiary), excluding, however (unless otherwise designated by the Company’s board of directors) any such direct or indirect Subsidiary of Iron Mountain India Private Limited, IndexInfo Services Pty Ltd., Iron Mountain South America Ltd., Iron Mountain Mexico, S de R.L. de C.V., Iron Mountain India Holdings, IM Australia Holdings Pty Ltd., IM New Zealand Holdings ULC, Iron Mountain Asia Pacific Holdings Limited, Iron Mountain Europe (Group) Limited, Iron Mountain Assurance Corporation, Mountain West Palm Real Estate, Inc. or Upper Providence Venture I, L.P.,

 

which, in the case of (1) or (2), is not designated by the Company’s Board of Directors as an “Unrestricted Subsidiary.”

 

13

 

“Senior Debt” means:

 

(1)           the Senior Bank Debt; and

 

(2)           any other Indebtedness permitted to be incurred by the Company or any Restricted Subsidiary, as the case may be, under the terms of this Supplemental Indenture or 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:

 

(1)           any liability for federal, state, local or other taxes owed or owing by the Company;

 

(2)           any Indebtedness of the Company to any of its Subsidiaries or other Affiliates;

 

(3)           any trade payables; or

 

(4)           any Indebtedness that is incurred in violation of this Supplemental Indenture or the Indenture, provided that such Indebtedness shall be deemed not to have been incurred in violation of this Supplemental Indenture or the Indenture for purposes of this clause (4) 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 this Supplemental Indenture or the Indenture.

 

“Treasury Rate” means, at any time of computation, the yield to maturity at such time (as compiled by and published in the most recent Federal Reserve Statistical Release H.15(519), which has become publicly available at least two business days prior to the date of the redemption notice or, if such Statistical Release is no longer published, any publicly available source of similar market data) of United States Treasury securities with a constant maturity most nearly equal to the Make-Whole Average Life; provided, however, that if the Make-Whole Average Life is not equal to the constant maturity of the United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the Make-Whole Average Life is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

 

“Unrestricted Subsidiary” means:

 

(1)           any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary in accordance with Section 2.6(h) of this Supplemental Indenture (Section 4.15 of the Indenture); and

 

(2)           any Subsidiary of an Unrestricted Subsidiary.

 

14

 

“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:

 

(1)           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

 

(2)           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.

 

(b)           Other Definitions.

 

The definitions of the following terms may be found in the Sections indicated as follows:

 

	
Term
    	
 
    	
Defined in Section
    
	
 
    	
 
    	
 
    
	
“Affiliate   Transaction”
    	
 
    	
2.6(e)
    
	
“Asset   Sale”
    	
 
    	
2.6(j)
    
	
“Asset   Sale Offer”
    	
 
    	
2.6(j)
    
	
“Authentication   Order”
    	
 
    	
2.2
    
	
“CDS”
    	
 
    	
2.4(g)(2)
    
	
“Change   of Control Offer”
    	
 
    	
2.6(k)
    
	
“Change   of Control Payment”
    	
 
    	
2.6(k)
    
	
“Change   of Control Payment Date”
    	
 
    	
2.6(k)
    
	
“Commencement   Date”
    	
 
    	
2.6(j)
    
	
“Company”
    	
 
    	
Preamble
    
	
“Supplemental   Indenture”
    	
 
    	
Preamble
    
	
“Excess   Proceeds”
    	
 
    	
2.6(j)
    
	
“Indenture”
    	
 
    	
Recitals
    
	
“Offer   Amount”
    	
 
    	
2.5
    
	
“Offer   Period”
    	
 
    	
2.5
    
	
“Previously   Issued Notes”
    	
 
    	
2.16
    
	
“Purchase   Date”
    	
 
    	
2.5
    
	
“Required   Consent”
    	
 
    	
2.16
    
	
“Restricted   Payments”
    	
 
    	
2.6(a)
    
	
“Trustee”
    	
 
    	
Preamble
    

 

15

 

ARTICLE 2.

 

FORM AND TERMS OF THE NOTES

 

Section 2.1. Form and Dating.

 

(a)           General.  The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A attached hereto.  The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage.  Each Note shall be dated the date of its authentication.  The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Supplemental Indenture and the Indenture, and the Company, the Guarantors and the Trustee, by their execution and delivery of this Supplemental Indenture and the Indenture (or in the case of any Guarantor that becomes such after the date hereof, a supplemental indenture pursuant to Section 2.6(g) of this Supplemental Indenture (Section 4.14 of the Indenture)), expressly agree to such terms and provisions and to be bound thereby.  However, to the extent any provision of any Note conflicts with the express provisions of the Indenture (as supplemented by this Supplemental Indenture), the provisions of the Indenture shall govern and be controlling.

 

(b)           Global Notes.  Notes shall be issued initially in the form of the Global Notes, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Depository at its New York office, and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.

 

Each Global Note shall represent such of the outstanding Notes as shall be specified therein, and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Service Agent, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.4 hereof.

 

(c)           Book-Entry Provisions.  This Section 2.1(c) shall apply only to the Global Notes deposited with or on behalf of the Depository.

 

The Company shall execute and the Trustee shall, in accordance with this Section 2.1(c), authenticate and deliver the Global Notes that (i) shall be registered in the name of the Depository or the nominee of the Depository and (ii) shall be delivered by the Trustee to the Depository or pursuant to the Depository’s instructions or held by the Service Agent.

 

Agent Members shall have no rights either under this Supplemental Indenture or the Indenture with respect to any Global Notes held on their behalf by the Depository or by the Service Agent or under such Global Notes, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Notes for all purposes whatsoever.

 

(d)           Definitive Note.  Notes issued in certificated form shall be substantially in the form of Exhibit A attached hereto (but without including the text referred to in Section 2.15.3 of the Indenture).  Except as provided in Section 2.4, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of certificated Securities.

 

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Section 2.2. Execution and Authentication.

 

The Trustee shall, upon a written order of the Company signed by an Officer, authenticate up to $400,000,000 aggregate principal amount of Initial Notes and such amount of Additional Notes as the Company may issue from time to time.

 

Section 2.3. Depository and Paying Agent for Notes.

 

The Company initially appoints The Depository Trust Company (“DTC”) to act as Depository with respect to the Global Notes.  The Company initially appoints the Trustee to act as the Registrar, Paying Agent and Service Agent with respect to the Global Notes.

 

Section 2.4. Transfer and Exchange of Notes.

 

(a)               Transfer and Exchange of Global Notes.  The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depository, in accordance with this Supplemental Indenture and the Indenture and the procedures of the Depository therefor.  Beneficial interests in the Global Notes may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the Global Notes.

 

(b)               Transfer and Exchange of Definitive Notes.  When Definitive Notes are presented by a Holder to the Registrar with a request:

 

(x) to register the transfer of the Definitive Notes; or

 

(y) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met; provided, however, that the Definitive Notes presented or surrendered for register of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing.

 

(c)               Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any other provision of this Supplemental Indenture or the Indenture (other than the provisions set forth in subsection (d) of this Section 2.4), the Global Notes may not be transferred as a whole except by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or to another nominee of the Depository, or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

 

(d)               Authentication of Definitive Notes in Absence of Depository. If at any time:

 

(i) the Depository for the Notes notifies the Company that the Depository is unwilling or unable to continue as Depository for the Global Notes and a successor Depository for the Global Notes is not appointed by the Company within 90 days after delivery of such notice; or

 

(ii) the Company at its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes under this Supplemental Indenture and the Indenture, then the Company shall execute, and the Trustee shall, upon receipt of an authentication order in accordance with Section 2.2 hereof, authenticate and deliver, Definitive Notes in an aggregate principal amount equal to the principal amount of the Global Notes in exchange for such Global Notes.

 

17

 

(e)               Cancellation and/or Adjustment of the Global Notes.  At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.12 of the Indenture.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by the Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.

 

(f)            General Provisions Relating to Transfers and Exchanges.

 

(i)            To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.2 hereof or at the Registrar’s request.

 

(ii)           No service charge shall be made to a Holder of a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, 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 any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Section 2.4 hereof).

 

(iii)          All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Supplemental Indenture and the Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(iv)          The Company shall not be required to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

 

(v)           Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent, the Company and any Guarantor may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for all purposes, including receiving payment of principal of and interest on such Notes, and neither the Trustee, any Agent, the Company nor any Guarantor shall be affected by notice to the contrary.

 

(vi)          The Trustee shall authenticate Definitive Notes and the Global Notes in accordance with the provisions of Section 2.2 hereof and Section 2.3 of the Indenture.

 

18

 

 

(vii)         All certifications, certificates and opinions of counsel required to be submitted to the Registrar pursuant to this Section 2.4 to effect a registration of transfer or exchange may be submitted by facsimile.

 

Section 2.5. Redemption.

 

With respect to the Notes issued under this Supplemental Indenture, the following Sections supplement Article III of the Indenture:

 

§ 3.7.       Optional Redemption.

 

Prior to October 1, 2015, the Notes shall be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the Make-Whole Price, plus accrued and unpaid interest to but excluding the applicable redemption date. On and after October 1, 2015, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the redemption price (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest to but excluding the applicable redemption date, if redeemed during the 12-month period beginning on October 1 of the years indicated below:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
2015
    	
 
    	
103.875
    	
%
    
	
2016
    	
 
    	
101.938
    	
%
    
	
2017 and thereafter
    	
 
    	
100.000
    	
%
    

 

Notwithstanding the foregoing, at any time prior to October 1, 2014 the Company may on any one or more occasions redeem the Notes at a redemption price of 107.750% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings; provided that:

 

(1)           at least $260.0 million in aggregate principal amount of the Notes (including any Additional Notes) issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or any of its subsidiaries); and

 

(2)           the redemption must occur within six months of the date of the closing of any such Qualified Equity Offering.

 

§ 3.8.       Mandatory Redemption.

 

The Company shall not be required to make mandatory redemption payments or sinking fund payments with respect to the Notes.

 

§ 3.9        Asset Sale Offers.

 

In the event that the Company shall commence an Asset Sale Offer pursuant to Section 4.17 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

 

19

 

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 3.2 and 4.17 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 3.9 and Section 4.17 of the Indenture 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;

 

(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 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 such Holder’s 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 to be appropriate by the Company so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess 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.

 

20

 

On or before 12:00 noon 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, to be held for payment in accordance with the terms of this Section 3.9.  On such 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 and other notes (in accordance with the terms of Section 4.17 of the Indenture) tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes and such other 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 3.9.  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 3.9 shall be made pursuant to the provisions of Sections 3.1 through 3.6 hereof to the extent applicable.

 

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.

 

Section 2.6. Additional Covenants.

 

With respect to the Notes issued under this Supplemental Indenture, Sections 2.6(a) through 2.6(l) are added to Article IV of the Indenture.

 

(a)           Restricted Payments.

 

§4.8.  Restricted Payments.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(1)           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);

 

(2)           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

 

21

 

than any such Equity Interests owned by the Company or any Restricted Subsidiary);

 

(3)           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

 

(4)           make any Investment other than a Permitted Investment (all such payments and other actions set forth in clauses (1) through (4) 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;

 

(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 4.9 of the Indenture; and

 

(iii)          such Restricted Payment, together with the aggregate of all other Restricted Payments made by the Company and its Restricted Subsidiaries after October 1, 1996 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 October 1, 1996 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:

 

(1)           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;

 

(2)           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);

 

(3)           the defeasance, redemption, repurchase, retirement or other acquisition or retirement for value of Indebtedness that is subordinated in right of payment to the Notes in exchange for, or with the net cash proceeds of, a substantially

 

22

 

concurrent issuance and sale (other than to a Restricted Subsidiary of the Company) of Equity Interests of the Company (other than Disqualified Stock);

 

(4)           the defeasance, redemption, repurchase, retirement or other acquisition or retirement for value of Indebtedness that is subordinated 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;

 

(5)           the repurchase of any Indebtedness subordinated 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 4.18 of the Indenture, 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; and

 

(6)           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 aggregate amount of all such payments under this clause (6) does not exceed $0.5 million in any year and $2.0 million in the aggregate.

 

The Restricted Payments described in clauses (2), (3), (5) and (6) of the immediately preceding paragraph shall be Restricted Payments that shall be permitted to be taken in accordance with such paragraph but shall 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 (1) and (4) of the immediately preceding paragraph shall be Restricted Payments that shall be permitted to be taken in accordance with such paragraph and shall 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 shall 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.  In addition, for the avoidance of doubt and to avoid double counting, if an Investment results in the making of a Restricted Payment, then the subsequent assignment, contribution, distribution or other transfer of such Investment by the Company or any Restricted Subsidiary of the Company to any Excluded Restricted Subsidiary or Unrestricted Subsidiary shall not be considered a new Investment or Restricted Payment and shall not further reduce the amount that would otherwise be available for Restricted Payments under clause (iii) of the first paragraph of this Section.

 

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.

 

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For the purpose of making any Restricted Payment calculations under the Indenture:

 

(1)           Investments shall 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 shall exclude the fair market value of the net assets of any Unrestricted Subsidiary that is designated as a Restricted Subsidiary, in each case with fair market value determined by the Board of Directors in good faith and, for the avoidance of doubt, such inclusions and exclusions will not be limited by the amount of any Investment or aggregate Investments;

 

(2)           any asset or property transferred to or from an Unrestricted Subsidiary shall 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, for the avoidance of doubt, the fair market value (as so determined) of such asset of property shall be subtracted from (in the case of a transfer to an Unrestricted Subsidiary) or added to (in the case of a transfer from an Unrestricted Subsidiary) the calculation under clause (iii) of the first paragraph of this Section; and

 

(3)           subject to the foregoing, the amount of any Restricted Payment, if other than cash, shall be determined by the Board of Directors, whose good faith determination shall be conclusive.

 

The Board of Directors may designate a Restricted Subsidiary to be an Unrestricted Subsidiary in compliance with Section 4.15 of the Indenture.  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 4.8.  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.

 

(b)           Incurrence of Indebtedness and Issuance of Preferred Stock.

 

§4.9.  Incurrence of Indebtedness and Issuance of Preferred Stock.  The Company shall not, and shall 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 shall 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 6.5 to 1.0.

 

The foregoing limitations shall not apply to:

 

(1)           the incurrence by the Company or any Restricted Subsidiary of Senior Bank Debt in an aggregate amount not to exceed $790.0 million at any one time outstanding;

 

(2)           the issuance by the Restricted Subsidiaries of Subsidiary Guarantees;

 

(3)           the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;

 

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(4)           the issuance by the Company of the Notes;

 

(5)           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 $5.0 million at any one time outstanding, provided that the Liens securing such Indebtedness constitute Permitted Liens;

 

(6)           the incurrence of Indebtedness between (i) the Company and its Restricted Subsidiaries and (ii) the Restricted Subsidiaries;

 

(7)           Hedging Obligations that are incurred in the ordinary course of business, provided, in the case of Hedging Obligations with respect to Indebtedness, that such Indebtedness is permitted to be outstanding by the terms of the Indenture;

 

(8)           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 $5.0 million at any one time outstanding;

 

(9)           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;

 

(10)         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 (2) through (5) above, and this clause (10) or that was otherwise permitted to be incurred pursuant to the test set forth in the first paragraph of this Section 4.9; and

 

(11)         the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (11), not to exceed $50.0 million.

 

For purposes of determining compliance with this Section 4.9, for the avoidance of doubt, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted debt described in clauses (1) through (11) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.9, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.9. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.9; provided, in each such case, that the amount thereof is included in the Consolidated Interest Expense of the Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent

 

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principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.9, the maximum amount of Indebtedness that the Company or any of its Restricted Subsidiaries may incur pursuant to this Section 4.9 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

 

The amount of any Indebtedness outstanding as of any date will be:

 

(1)           the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

 

(2)           the principal amount of the Indebtedness, in the case of any other Indebtedness; and

 

(3)           in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

 

(i)            the fair market value of such assets at the date of determination; and

 

(ii)           the amount of the Indebtedness of the other Person.

 

(c)           Liens.

 

§4.10.  Liens.  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 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.

 

(d)           Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

§4.11.  Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.  The Company shall not, and shall 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:

 

(1)           (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;

 

(2)           make loans or advances to the Company or any of its Restricted Subsidiaries; or

 

(3)           transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.

 

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

 

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(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, including, for the avoidance of doubt, any applicable rule, regulation or order;

 

(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 obligations or Capital Lease Obligations otherwise permitted by clause (5) of Section 4.9 of the Indenture;

 

(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;

 

(9)           any agreement or instrument governing Indebtedness of an Excluded Restricted Subsidiary provided that (i) at the time such agreement or instrument is entered into, such Excluded Restricted Subsidiary and its Restricted Subsidiaries have a Leverage Ratio of less than 6.5 to 1.0 and (ii) neither such Excluded Restricted Subsidiary nor any of its Restricted Subsidiaries shall, directly or indirectly, incur any Indebtedness (including Acquired Debt) unless at the time of such incurrence and after giving effect thereto, the Leverage Ratio for such Excluded Restricted Subsidiary and its Restricted Subsidiaries would be less than 6.5 to 1.0.  For purposes of determining the Leverage Ratio under this clause (9) only, all references to the “Company” and its “Restricted Subsidiaries” or similar references in the definition of “Leverage Ratio” and other defined terms necessary to determine the Leverage Ratio shall be deemed to refer to such Excluded Restricted Subsidiary and its Restricted Subsidiaries, respectively; or

 

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(10)         agreements governing other Indebtedness permitted to be incurred under the provisions of Section 4.9 and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements; provided that the restrictions therein are not materially more restrictive, taken as a whole, than those contained in the Indenture, the Notes and the Subsidiary Guarantees.

 

(e)           Transactions with Affiliates

 

§4.12.  Transactions with Affiliates.  The Company shall not, and shall 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:

 

(1)           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

 

(2)           the Company delivers to the Trustee:

 

(i)            with respect to any Affiliate Transaction involving aggregate payments in excess of $10.0 million, a resolution of the Board of Directors set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) 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 $25.0 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, appraisal or accounting firm of national standing.

 

The following items shall not be deemed Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

 

(1)           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;

 

(2)           transactions between or among the Company and/or its Restricted Subsidiaries;

 

(3)           transactions permitted by the provisions of Section 4.8 of the Indenture; and

 

(4)           the grant of stock, stock options or other equity interests to employees and directors of the Company and any Restricted Subsidiary in accordance with duly adopted Company stock grant, stock option and similar plans.

 

The provisions set forth in clause (2) above shall not apply to sales of inventory by the Company or any Restricted Subsidiary to any Affiliate in the ordinary course of business.  The provisions

 

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of clause (2) (ii) above 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 Section 4.9 of the Indenture.

 

(f)            Certain Senior Subordinated Debt.

 

§4.13.          Certain Senior Subordinated Debt.  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.  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.

 

(g)           Additional Subsidiary Guarantees.

 

§4.14.          Additional Subsidiary Guarantees.  If any entity (other than an Excluded Restricted Subsidiary) shall become a Restricted Subsidiary after the date of this Supplemental Indenture, then such Restricted Subsidiary shall execute a supplemental indenture in the form of Exhibit B attached hereto, pursuant to which it shall provide a Subsidiary Guarantee and deliver an Opinion of Counsel with respect thereto, in accordance with the terms of the Indenture.

 

No Restricted Subsidiary (including any Excluded Restricted Subsidiary) shall consolidate (or for the avoidance of doubt, amalgamate) 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:

 

(1)           subject to the provisions of the following paragraph, the Person formed by or surviving any such consolidation (or amalgamation) or merger (if other than such Restricted Subsidiary) assumes all the obligations of such Restricted Subsidiary under its Subsidiary Guarantee (except in the case of an Excluded Restricted Subsidiary) pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee;

 

(2)           immediately after giving effect to such transaction, no Default or Event of Default exists; and

 

(3)           such Restricted Subsidiary, or any Person formed by or surviving any such consolidation (or amalgamation) 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 Section 4.9 of the Indenture.

 

In the event of:

 

(1)           a sale or other disposition of all of the assets of any Restricted Subsidiary, by way of merger, consolidation (or amalgamation) or otherwise;

 

(2)           a sale or other disposition of all of the capital stock of any Restricted Subsidiary; or

 

(3)           the designation of a Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the terms of Section 4.15 of the Indenture,

 

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then such Restricted Subsidiary (in the event of a sale or other disposition, by way of such a merger, consolidation (or amalgamation) 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 Person 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 Section 4.17 of the Indenture.

 

(h)           Designation of Unrestricted Subsidiaries.

 

§4.15.          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:

 

(1)           neither the Company nor any Restricted Subsidiary is directly or indirectly liable for any Indebtedness of such Subsidiary;

 

(2)           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;

 

(3)           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 4.8 of the Indenture;

 

(4)           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 (i) those that might be obtained at the time from Persons who are not Affiliates of the Company or (ii) administrative, tax sharing and other ordinary course contracts, agreements, arrangements and understandings or obligations entered into in the ordinary course of business; and

 

(5)           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 4.8 of the Indenture.

 

Notwithstanding the foregoing, the Company may not designate as an Unrestricted Subsidiary any Subsidiary which, on April 26, 1999, was 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, in each case other than Iron Mountain Global, Inc. and its Subsidiaries (including without limitation Iron Mountain Europe Limited and its Subsidiaries). For the avoidance of doubt, the provisions of this Section 4.15 shall not limit or restrict the ability of any Restricted Subsidiary to sell, transfer or otherwise dispose of any properties or assets to any other Subsidiary, including any Unrestricted Subsidiary, to the extent such sale, transfer or other disposition is permitted by the provisions of the Indenture described under Section 4.12 or Section 4.17.

 

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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:

 

(1)           such Indebtedness is permitted under Section 4.9 of the Indenture; and

 

(2)           no Default or Event of Default would occur as a result of such designation.

 

(i)            Limitation on Sale and Leaseback Transactions.

 

§4.16.      Limitation on Sale and Leaseback Transactions.  The Company will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction unless:

 

(1)           the consideration received in such Sale and Leaseback Transaction is at least equal to the fair market value of the property sold, as determined by a resolution of the Board of Directors; and

 

(2)           the Company or such Restricted Subsidiary could incur the Attributable Indebtedness in respect of such Sale and Leaseback Transaction in compliance with Section 4.9 of the Indenture.

 

(j)            Asset Sales.

 

§4.17.      Asset Sales.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to:

 

(1)           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 4.18 of the Indenture and/or the provisions of Section 5.1 of the Indenture and not by the provisions of this Section 4.17); or

 

(2)           issue or sell Equity Interests of any of its Restricted Subsidiaries

 

that in the case of either clause (1) or (2) above, whether in a single transaction or a series of related transactions:

 

(i)            have a fair market value in excess of $2.0 million; or

 

(ii)           result in Net Proceeds in excess of $2.0 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 $10.0 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, Cash Equivalents,

 

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like-kind assets or other assets used in or useful in the Company’s business (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 delivered to 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 (ii) (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.  For the avoidance of doubt, a disposition that constitutes a Restricted Payment will be governed by the provisions of Section 4.8 and not by this Section 4.17.

 

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:

 

(1)           to permanently reduce Senior Debt; or

 

(2)           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 this Supplemental 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 $10.0 million, the Company shall make an offer to all Holders of the Notes, all holders of the Existing Senior Subordinated Securities and the holders of any future Indebtedness ranking pari passu with the Notes, which Indebtedness contains similar provisions requiring the Company to repurchase such Indebtedness (an “Asset Sale Offer”), to purchase the maximum principal amount of Notes and such other Indebtedness 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

 

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Indenture.  To the extent that the aggregate amount of Notes and other pari passu Indebtedness (including the Existing Senior Subordinated Securities) 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 and such other Indebtedness surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other Indebtedness 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.

 

The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.17, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such conflict.

 

An Asset Sale Offer shall be made pursuant to the provisions of Section 3.9 hereof.  No later than the date which is five Business Days after the date on which the aggregate amount of Excess Proceeds exceeds $10.0 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 Notes.  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”).

 

(k)           Change of Control Offer.

 

§ 4.18.     Change of Control Offer.

 

(a)           Upon the occurrence of a Change of Control, each Holder of Notes shall have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess 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 to but excluding the date of repurchase (the “Change of Control Payment”).

 

Within 30 calendar days following any Change of Control, the Company shall mail a notice to each Holder, with a copy to the Trustee, stating:

 

(1)           that the Change of Control Offer is being made pursuant to this Section 4.18 and that all Notes tendered shall be accepted for payment;

 

(2)           the purchase price and the purchase date, which shall 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”);

 

(3)           that any Note not tendered shall continue to accrue interest;

 

(4)           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 shall cease to accrue interest on and after the Change of Control Payment Date;

 

(5)           that Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender the Notes, with the form entitled “Option of

 

33

 

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;

 

(6)           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, 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 its election to have such Notes purchased; and

 

(7)           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 $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.

 

The Company shall 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.  To the extent that the provisions of any securities laws or regulations conflict with this Section 4.18, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the Change of Control provisions of the Indenture or this Supplemental Indenture by virtue of such conflict.

 

(b)           On the Change of Control Payment Date, the Company shall, to the extent lawful:

 

(1)           accept for payment Notes or portions thereof tendered pursuant to the Change of Control Offer;

 

(2)           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

 

(3)           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 shall promptly mail to each Holder of Notes so accepted the Change of Control Payment for such Notes, and the Trustee shall 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 shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

 

The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.18 applicable to a Change of Control Offer made by the Company and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer.  Notwithstanding anything to the contrary contained in the Indenture, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.

 

34

 

(l)            Changes in Covenants When Notes Rated Investment Grade.

 

§ 4.19.     Changes in Covenants When Notes Rated Investment Grade.

 

If on any date following the date of this Supplemental Indenture:

 

(1)           at least two of the following events occur:

 

i.      the Notes are rated Baa3 or better by Moody’s Investors Service,

 

ii.     the Notes are rated BBB- or better by Standard & Poor’s Rating Group, a division of The McGraw-Hill Companies, Inc., or

 

iii.    the Notes rated BBB- or better by Fitch Ratings, Inc.,

 

(or, if any such entity ceases to rate the Notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company as a replacement agency); and

 

(2)           no Default or Event of Default shall have occurred and be continuing,

 

then, beginning on that day and continuing at all times thereafter regardless of any subsequent changes in the rating of the Notes, Sections 3.9, 4.8, 4.9, 4.11, 4.12, 4.15 and 4.17, clause (3) of Section 4.14, clause (2) of Section 4.16 and clause (d) of Section 5.1 of the Indenture shall no longer be applicable to the Notes.

 

Section 2.7. Subsidiary Guarantees.

 

With respect to the Notes issued under this Supplemental Indenture, Article XII of the Indenture shall apply, and the Notes shall constitute a Series to be guaranteed by the Guarantors pursuant to Article XII of the Indenture.

 

Section 2.8. Legal Defeasance and Covenant Defeasance.

 

With respect to the Notes issued under this Supplemental Indenture, Article VIII of the Indenture shall apply, and the Company shall have the option to effect Legal Defeasance or Covenant Defeasance pursuant to Article VIII of the Indenture.  In connection with any Covenant Defeasance, the Company shall be released from its obligations under the covenants specified in Sections 4.2 and 5.1 of the Indenture and Section 2.6 of this Supplemental Indenture.

 

Section 2.9. Subordination.

 

With respect to the Notes issued under this Supplemental Indenture, Article XIII of the Indenture shall apply, and the Notes shall be subject to subordination pursuant to Article XIII of the Indenture.

 

35

 

Section 2.10. Amend, Restate and Replace Provision Regarding Redemption.

 

With respect to the Notes issued under this Supplemental Indenture, Section 3.2 of the Indenture is amended, restated and replaced in its entirety by the following:

 

§ 3.2.       Selection of Securities 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 on a pro rata basis (or, in the case of Notes issued in global form as discussed in Section 2.1(c), based on a method that most nearly approximates a pro rata selection as the Trustee deems fair and appropriate) unless otherwise required by law or applicable stock exchange or depositary requirements, provided that no Securities of $2,000 or less shall be redeemed in part.

 

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 $2,000 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.

 

ARTICLE 3.

 

MISCELLANEOUS

 

Section 3.1. Effect of Headings.

 

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

 

Section 3.2. Successors and Assigns.

 

All covenants and agreements in this Supplemental Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

 

Section 3.3. Separability Clause.

 

In case any provision in this Supplemental Indenture or in the Notes 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 3.4. Governing Law.

 

This Supplemental Indenture and the Notes created hereby shall be governed by and construed in accordance with the laws of the State of New York without giving effect to any conflicts of law provisions (other than Section 5-1401 of the New York General Obligations Law) that might cause

 

36

 

this Supplemental Indenture and the Notes to be governed by or construed or enforced in accordance with the laws of any other jurisdiction.

 

Section 3.5. Supplement to Supersede Indenture.

 

The Indenture, as supplemented by this Supplemental Indenture, remains in full force and effect as of the date hereof.  Notwithstanding the foregoing, to the extent that any provision of the Indenture shall conflict with any provision of this Supplemental Indenture, the terms of this Supplemental Indenture shall be deemed controlling and the conflicting provision of the Indenture shall be null and void to the extent of such conflict.

 

[The rest of this page has been intentionally left blank.]

 

37

 

IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed, and attested, all as of the date and year first written above.

 

 

	
 
    	
IRON   MOUNTAIN INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN FULFILLMENT SERVICES, INC.
    
	
 
    	
IRON MOUNTAIN INFORMATION MANAGEMENT, INC.
    
	
 
    	
IRON MOUNTAIN INTELLECTUAL PROPERTY MANAGEMENT, INC.
    
	
 
    	
MOUNTAIN   REAL ESTATE ASSETS, INC.
    
	
 
    	
MOUNTAIN   RESERVE III, INC.
    
	
 
    	
NETTLEBED   ACQUISITION CORP.
    
	
 
    	
TREELINE   SERVICES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN GLOBAL LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN GLOBAL HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    

 

 

	
 
    	
IRON   MOUNTAIN STATUTORY TRUST - 1998
    
	
 
    	
 
    
	
 
    	
By:
    	
U.S.   BANK NATIONAL ASSOCIATION, not individually but as Owner Trustee under that   certain Amended and Restated Owner Trust Agreement dated as of   October 1, 1998, as amended
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN STATUTORY TRUST - 1999
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
U.S.   BANK NATIONAL ASSOCIATION, not individually but as Owner Trustee under that   certain Owner Trust Agreement dated as of July 1, 1999, as amended
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN STATUTORY TRUST - 2001
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
U.S.   BANK NATIONAL ASSOCIATION, not individually but as Owner Trustee under that   certain Owner Trust Agreement dated as of May 22, 2001, as amended
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
					

 

 

 

	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

EXHIBIT A

 

FORM OF NOTES

 

[Face of Note]
 7 3⁄4% Senior Subordinated Notes due 2019

 

	
ISIN   No.: US46284PAN42
    	
 
    	
$[    ]
    
	
CUSIP   No.: 46284 PAN4
    	
 
    	
 
    

 

IRON MOUNTAIN INCORPORATED

 

promises to pay to CEDE & Co. or registered assigns, the principal sum of $[    ] Dollars on October 1, 2019.

 

Interest Payment Dates:  October 1 and April 1

 

Record Dates:  September 15 and March 15

 

Dated:  September 23, 2011

 

	
 
    	
IRON   MOUNTAIN INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title
    	
 
    

 

(SEAL)

 

	
This   is one of the Notes
    	
 
    
	
referred   to in the within-
    	
 
    
	
mentioned   Indenture:
    	
 
    
	
 
    	
 
    
	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
    	
 
    
	
as   Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
				

 

A-1

 

73/4% Senior Subordinated Notes due 2019

 

This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depository or a nominee of the Depository. This Security is exchangeable for Securities registered in the name of a Person other than the Depository or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a whole by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.

 

Unless and until it is exchanged in whole or in part for Notes in definitive form, this Note may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) (“DTC”), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to 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 73⁄4% per annum from September 23, 2011 until October 1, 2019.  The Company shall pay interest, semi-annually in arrears on October 1 and April 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”).  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 issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be April 1, 2012.  The Company shall pay interest (including post-petition interest to the extent allowed in any proceeding under any Bankruptcy Law) on overdue principal from time to time on demand at a rate equal to the per annum rate on the Notes then in effect; it shall pay interest (including post-petition interest to the extent allowed in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

2.             METHOD OF PAYMENT.  The Company will pay principal, premium, if any, and interest on the Notes in money of the United States that at the time of payment is legal tender

 

A-2

 

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 Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as paying agent, registrar and service agent.  The Notes may be presented for registration of transfer and exchange at the offices of the registrar.  The Company may change any paying agent, service agent or registrar without notice to any Holder.  The Company or any of its Subsidiaries may act in any such capacity.

 

4.             INDENTURE.  The Company issued the Notes under an Indenture dated as of September 23, 2011 (the “Base Indenture”) as supplemented by a First Supplemental Indenture dated as of September 23, 2011 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) among the Company, the Guarantors 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, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes issued under the Indenture are subordinated unsecured obligations of the Company limited to $400,000,000 in aggregate principal amount.

 

5.             OPTIONAL REDEMPTION.  Prior to October 1, 2015, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the Make-Whole Price, plus accrued and unpaid interest to but excluding the applicable redemption date. On and after October 1, 2015, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the redemption price (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest to but excluding the applicable redemption date, if redeemed during the 12-month period beginning on October 1 of the years indicated below:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
2015
    	
 
    	
103.875
    	
%
    
	
2016
    	
 
    	
101.938
    	
%
    
	
2017   and thereafter
    	
 
    	
100.000
    	
%
    

 

Notwithstanding the foregoing, at any time prior to October 1, 2014 the Company may on any one or more occasions redeem the Notes at a redemption price of 107.750% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings; provided that: (i) at least $260.0 million in the aggregate principal amount of the Notes (including any Additional Notes) issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or any of its Subsidiaries); and (ii) the redemption must occur within six months of the date of the closing of any such Qualified Equity Offering.

 

A-3

 

6.             NOTICE OF REDEMPTION.  Notice of redemption will be mailed at least 10 days but not more than 60 days before the redemption date to each Holder of the Notes to be redeemed at such Holder’s address of record. The Notes in denominations larger than $2,000 may be redeemed in part but only in integral multiples of $1,000 in excess thereof, unless all the Notes held by a Holder are to be redeemed. In the event of a redemption of less than all of the Notes, the Notes will be chosen for redemption by the Trustee in accordance with the Indenture. On and after the redemption date, interest ceases to accrue on the Notes or portions of them called for redemption.

 

If this Note is redeemed subsequent to a Record Date with respect to any Interest Payment Date specified above and on or prior to such Interest Payment Date, then any accrued interest will be paid to the Person in whose name this Note is registered at the close of business on such Record Date.

 

7.             MANDATORY REDEMPTION.  Except as set forth in paragraph 8 below, the Company shall not be required to repurchase or to make mandatory redemption payments with respect to the Notes.  There are no sinking fund payments with respect to the Notes.

 

8.             REPURCHASE AT OPTION OF HOLDER.  This Note is subject to purchase at the option of the Holder upon the circumstances set forth in Sections 3.9, 4.17 and 4.18 of the Indenture.

 

9.             SUBORDINATION. The payment of the principal of, interest on or any other amounts due on the Notes is subordinated in right of payment to all existing and future Senior Debt of the Company, as described in the Indenture. Each Holder, by accepting a Note, agrees to such subordination and authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and appoints the Trustee as its attorney-in-fact for such purpose.

 

10.           DENOMINATIONS, TRANSFER AND EXCHANGE.  The Notes are in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. 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 the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company 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.  The registered Holder of a Note may be treated as its owner for all purposes.

 

12.           AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture with respect to the Notes or the Notes may be amended or supplemented with the written consent of the Holders of a majority in principal amount of the Notes and any existing default or compliance with any provision of the Indenture with respect to the Notes or the Notes may be waived with the consent of the Holders of a majority in principal amount of the Notes (including,

 

A-4

 

in each case, Additional Notes, if any). Without the consent of any Holder of the Notes, the Indenture with respect to the Notes or the Notes may be amended or supplemented to, in addition to other events more fully described in the Indenture, cure any ambiguity, defect or inconsistency, provide for uncertificated Notes in addition to or in place of certificated Notes, provide for the assumption of the Company’s obligations to Holders of the Notes in the case of a merger or consolidation, 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 the Indenture of any such Holder, or comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA.

 

13.           DEFAULTS AND REMEDIES.  An Event of Default with respect to the Notes occurs upon the occurrence of any of the following events: the 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); the 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); the failure by the Company to comply with Section 4.18 of the Indenture; the failure by the Company or any 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 (including Additional Notes, if any) outstanding to comply with any of its other agreements in the Indenture, Notes or the Subsidiary Guarantees; the 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 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 $50.0 million; the failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $50.0 million, which judgments remain unpaid, undischarged or unstayed for a period of 60 days; certain events of bankruptcy or insolvency with respect to the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary; or 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 (including Additional Notes, if any) 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: (1) the day which is five business days after written notice of acceleration is received by the Company and the Credit Agent or (2) 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

 

A-5

 

premium, if any, and any accrued and unpaid interest on all outstanding Notes will become due and payable without further action or notice. 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 6.1(e) of the Indenture, the declaration of acceleration of the Notes shall be automatically annulled if the holders of any Indebtedness described in such section have rescinded the declaration of acceleration in respect of such Indebtedness within 30 days from the date of such declaration and if: (1) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a competent jurisdiction and (2) 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.

 

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 and what action the Company is taking or proposes to take thereto.

 

14.           SUBSIDIARY GUARANTEES.  Payment of principal of, premium, if any, and interest (including interest on overdue principal, if any, and interest, if lawful) on the Notes is guaranteed on an unsecured, senior subordinated basis by the Guarantors pursuant to Article XII of the Indenture.

 

15.           TRUSTEE DEALINGS WITH COMPANY.  The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

 

16.           NO RECOURSE AGAINST OTHERS.  No director, officer, employee, incorporator or stockholder, as such, of the Company or any Guarantor shall have any liability for any obligations of the Company or any Guarantor 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 waives and releases all such liability.  The waiver and release are part of the consideration for the issuance of the Notes and the Subsidiary Guarantees.

 

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

 

A-6

 

numbers to be printed on the Notes and the Trustee may 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.

 

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:

 

Iron Mountain Incorporated
 745 Atlantic Avenue
 Boston, Massachusetts 02111
 Attention:  Chief Financial Officer

 

A-7

 

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)

 

A-8

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to Section 4.17 or 4.18 of the Indenture, check the box below:

 

o            Section 4.17

 

o            Section 4.18

 

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.17 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.:
    	
 
    
						

 

A-9

 

SCHEDULE OF EXCHANGES OF NOTES*

 

The following exchanges of a part of this Global Note for other Notes have been made:

 

	
Date of Exchange
    	
 
    	
Amount of
   decrease in
   Principal Amount
   of this Global Note
    	
 
    	
Amount of
   increase in
   Principal Amount
   of this Global Note
    	
 
    	
Principal Amount of
   this Global Note
   following such
   decrease (or
   increase)
    	
 
    	
Signature of
   authorized office
   of Trustee or
   Service Agent
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*This schedule should be included only if the Note is issued in global form.

 

A-10

 

EXHIBIT B

 

FORM OF SUPPLEMENTAL INDENTURE
 TO BE DELIVERED BY FUTURE GUARANTORS

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                                 , 20    , among                                (the “Guaranteeing Subsidiary”), a subsidiary of Iron Mountain Incorporated (or its successor), a Delaware corporation (the “Company”),  and The Bank of New York Mellon Trust Company, N.A., 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, the Company has heretofore executed and delivered to the Trustee an indenture, dated as of September 23, as supplemented by the First Supplemental Indenture, dated as of September 23, 2011 (the indenture, as so supplemented, the “Indenture”) providing for the issuance of an aggregate principal amount of up to $400,000,000 of 7 3⁄4% Senior Subordinated Notes due 2019 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary Guarantee”); and

 

WHEREAS, pursuant to Section 9.1 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 Guaranteeing 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 Guaranteeing Subsidiary hereby agrees that its obligations to the Holder and the Trustee pursuant to the Subsidiary Guarantee shall be as expressly set forth in Article XII of the Indenture and in such other provisions of the Indenture as are applicable to the Guarantors (including, without limitation, Article XIII of the Indenture), and reference is made to the Indenture for the precise terms of this Supplemental Indenture.  The terms of Article XII of the Indenture and such other provisions of the Indenture (including, without limitation, Article XIII of the Indenture) as are applicable to the Guarantors are incorporated herein by reference.

 

3.             EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.

 

(a)           If an Officer whose signature is on this Supplemental Indenture no longer holds that office at the time the Trustee authenticates the Note, the Subsidiary Guarantee shall be valid nevertheless.

 

(b)           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 Guaranteeing Subsidiary.

 

B-1

 

4.             NO RECOURSE AGAINST OTHERS.  No past, present or future director, officer, employee, incorporator or stockholder of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guarantor (including the Guaranteeing 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 BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

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.

 

7.             EFFECT OF HEADINGS.  The Section headings herein are for convenience only and shall not affect the construction hereof.

 

8.             THE TRUSTEE.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

 

B-2

 

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:                                , 20

 

	
 
    	
[GUARANTEEING   SUBSIDIARY]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
[COMPANY]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
[TRUSTEE],
    
	
 
    	
 as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

B-3Exhibit 10.1

 

3043 Walton Road
 Plymouth Meeting, PA

 

PURCHASE AND SALE AGREEMENT

 

 

by and between

 

 

HUB PROPERTIES TRUST,

 

 

as Seller,

 

 

and

 

 

SENIOR HOUSING PROPERTIES TRUST,

 

 

as Purchaser

 

 

 

 

September 20, 2011

 

 

3043 Walton Road
 Plymouth Meeting, PA

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 1.
    	
DEFINITIONS
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.
    	
PURCHASE AND SALE; CLOSING
    	
 
    	
3
    
	
2.1
    	
Purchase and   Sale
    	
 
    	
3
    
	
2.2
    	
Closing
    	
 
    	
3
    
	
2.3
    	
Purchase   Price
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.
    	
TITLE, DILIGENCE MATERIALS, ETC.
    	
 
    	
3
    
	
3.1
    	
Title
    	
 
    	
3
    
	
3.2
    	
No Other Diligence
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4.
    	
CONDITIONS TO THE PURCHASER’S   OBLIGATION TO CLOSE
    	
 
    	
5
    
	
4.1
    	
Closing   Documents
    	
 
    	
5
    
	
4.2
    	
Title Policy
    	
 
    	
6
    
	
4.3
    	
Environmental   Reliance Letters
    	
 
    	
6
    
	
4.4
    	
Condition of   Property
    	
 
    	
6
    
	
4.
    	
Other   Conditions
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.
    	
CONDITIONS TO SELLER’S OBLIGATION TO   CLOSE
    	
 
    	
6
    
	
5.1
    	
Purchase   Price
    	
 
    	
6
    
	
5.2
    	
Closing   Documents
    	
 
    	
6
    
	
5.3
    	
Other   Conditions
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 6.
    	
REPRESENTATIONS AND WARRANTIES OF   SELLER
    	
 
    	
7
    
	
6.1
    	
Status and   Authority of the Seller
    	
 
    	
7
    
	
6.2
    	
Action of   the Seller
    	
 
    	
7
    
	
6.3
    	
No   Violations of Agreements
    	
 
    	
7
    
	
6.4
    	
Litigation
    	
 
    	
7
    
	
6.5
    	
Existing   Leases, Etc.
    	
 
    	
7
    
	
6.6
    	
Agreements,   Etc.
    	
 
    	
9
    
	
6.7
    	
Not a   Foreign Person
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 7.
    	
REPRESENTATIONS AND WARRANTIES OF   PURCHASER
    	
 
    	
10
    
	
7.1
    	
Status and   Authority of the Purchaser
    	
 
    	
10
    
	
7.2
    	
Action of   the Purchaser
    	
 
    	
10
    
	
7.3
    	
No   Violations of Agreements
    	
 
    	
11
    
	
7.4
    	
Litigation
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 8.
    	
COVENANTS OF THE SELLER
    	
 
    	
11
    
	
8.1
    	
Approval of   Agreements
    	
 
    	
11
    
	
8.2
    	
Operation of   Property
    	
 
    	
11
    
	
8.3
    	
Compliance   with Laws, Etc.
    	
 
    	
11
    
	
8.4
    	
Compliance   with Agreements
    	
 
    	
12
    
	
8.5
    	
Notice of   Material Changes or Untrue Representations
    	
 
    	
12
    
	
8.6
    	
Insurance
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 9.
    	
APPORTIONMENTS
    	
 
    	
12
    
	
9.1
    	
Real   Property Apportionments
    	
 
    	
12
    

 

 

	
9.2
    	
Closing   Costs
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 10.
    	
DAMAGE TO OR CONDEMNATION OF PROPERTY
    	
 
    	
16
    
	
10.1
    	
Casualty
    	
 
    	
16
    
	
10.2
    	
Condemnation
    	
 
    	
16
    
	
10.3
    	
Survival
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 11.
    	
DEFAULT
    	
 
    	
17
    
	
11.1
    	
Default by   the Seller
    	
 
    	
17
    
	
11.2
    	
Default by   the Purchaser
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 12.
    	
MISCELLANEOUS
    	
 
    	
17
    
	
12.1
    	
Allocation   of Liability
    	
 
    	
17
    
	
12.2
    	
Brokers
    	
 
    	
18
    
	
12.3
    	
Publicity
    	
 
    	
18
    
	
12.4
    	
Notices
    	
 
    	
18
    
	
12.5
    	
Waivers, Etc.
    	
 
    	
20
    
	
12.6
    	
Assignment;   Successors and Assigns
    	
 
    	
20
    
	
12.7
    	
Severability
    	
 
    	
20
    
	
12.8
    	
Counterparts   Complete Agreement, Etc.
    	
 
    	
21
    
	
12.9
    	
Performance   on Business Days
    	
 
    	
21
    
	
12.10
    	
Section and   Other Headings
    	
 
    	
21
    
	
12.11
    	
Time of   Essence
    	
 
    	
21
    
	
12.12
    	
Governing   Law
    	
 
    	
21
    
	
12.13
    	
Arbitration
    	
 
    	
21
    
	
12.14
    	
Like Kind   Exchange
    	
 
    	
25
    
	
12.15
    	
Recording
    	
 
    	
25
    
	
12.16
    	
Non-liability   of Trustees of Seller
    	
 
    	
25
    
	
12.17
    	
Non-liability   of Trustees of Purchaser
    	
 
    	
25
    
	
12.18
    	
Waiver and   Further Assurances
    	
 
    	
26
    

 

2

 

3043 Walton Road
 Plymouth Meeting, PA

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT is made as of September 20, 2011, by and between HUB PROPERTIES TRUST, a Maryland real estate investment trust (the “Seller”), and SENIOR HOUSING PROPERTIES TRUST, a Maryland real estate investment trust (the “Purchaser”).

 

WITNESSETH:

 

WHEREAS, the Seller is the owner of the Property (this and other capitalized terms used and not otherwise defined herein shall have the meanings given such terms in Section 1); and

 

WHEREAS, the Seller wishes to sell to the Purchaser, and the Purchaser desires to purchase from the Seller, the Property, subject to and upon the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged, the Seller and the Purchaser hereby agree as follows:

 

SECTION 1.         DEFINITIONS.

 

Capitalized terms used in this Agreement shall have the meanings set forth below or in the section of this Agreement referred to below:

 

1.1           “Agreement”  shall mean this Purchase and Sale Agreement, together with any exhibits and schedules attached hereto, as it and they may be amended from time to time as herein provided.

 

1.2           “Business Day”  shall mean any day other than a Saturday, Sunday or any other day on which banking institutions in The Commonwealth of Massachusetts are authorized by law or executive action to close.

 

1.3           “Closing”  shall have the meaning given such term in Section 2.2.

 

1.4           “Closing Date”  shall have the meaning given such term in Section 2.2.

 

1.5           “Existing Survey”  shall mean the existing ALTA survey of the Property.

 

 

1.6           “Existing Title Policy”  shall mean, the existing title insurance policy for the Property.

 

1.7           “Improvements”  shall mean, the Seller’s entire right, title and interest in and to the existing office buildings, fixtures and other structures and improvements situated on, or affixed to, the Land.

 

1.8           “Land”  shall mean, the Seller’s entire right, title and interest in and to (a) the parcel(s) of land described in Schedule A hereto, together with (b) all easements, rights of way, privileges, licenses and appurtenances which the Seller may own with respect thereto.

 

1.9           “Leases”  shall mean the leases identified in the Rent Roll and any other leases hereafter entered into in accordance with the terms of this Agreement.

 

1.10         “Other Property”  shall mean the Seller’s entire right, title and interest in and to (a) all fixtures, machinery, systems, equipment and items of personal property owned by the Seller and attached or appurtenant to, located on and used in connection with the ownership, use, operation or maintenance of the Land or Improvements, if any, and (b) all intangible property owned by the Seller arising from or used in connection with the ownership, use, operation or maintenance of the Land or Improvements, if any.

 

1.11         “Permitted Exceptions”  shall mean, collectively, (a) liens for taxes, assessments and governmental charges not yet due and payable or due and payable but not yet delinquent; (b) the Leases; (c) the exceptions to title set forth in the Existing Title Policy; (d) all matters shown on the Existing Survey, and (e) such other nonmonetary encumbrances with respect to the Property as may be shown on the Update which are not objected to by the Purchaser (or which are objected to, and subsequently waived, by the Purchaser) in accordance with Section 3.1.

 

1.12         “Property”  shall mean, collectively, all of the Land, the Improvements and the Other Property.

 

1.13         “Purchase Price”  shall mean Eleven Million Four Hundred Fifty-Six Thousand Two Hundred Dollars ($11,456,200).

 

1.14         “Purchaser”  shall have the meaning given such term in the preambles to this Agreement, together with any permitted successors and assigns.

 

2

 

1.15         “Rent Roll”  shall mean Schedule B to this Agreement.

 

1.16         “Seller”  shall have the meaning given such term in the preambles to this Agreement, together with any permitted successors and assigns.

 

1.17         “Title Company”  shall mean Stewart Title Guaranty Company.

 

1.18         “Update”  shall have the meaning given such term in Section 3.1.

 

SECTION 2.         PURCHASE AND SALE; CLOSING.

 

2.1           Purchase and Sale.  In consideration of the payment of the Purchase Price by the Purchaser to the Seller and for other good and valuable consideration, the Seller hereby agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase from the Seller, the Property for the Purchase Price, subject to and in accordance with the terms and conditions of this Agreement.

 

2.2           Closing.  The purchase and sale of the Property shall be consummated at a closing (the “Closing”) to be held at the offices of Sullivan & Worcester LLP, One Post Office Square, Boston, Massachusetts, or at such other location as the Seller and the Purchaser may agree, at 10:00 a.m., local time, on December 31, 2011, as the same may be accelerated or extended by agreement of the parties (the “Closing Date”).

 

2.3           Purchase Price.

 

(a)         At Closing, the Purchaser shall pay the Purchase Price to the Seller, subject to adjustment as provided in Section 9.

 

(b)        The Purchase Price, as adjusted as provided herein, shall be payable by wire transfer of immediately available funds on the Closing Date to an account or accounts to be designated by the Seller.

 

SECTION 3.         TITLE, DILIGENCE MATERIALS, ETC.

 

3.1           Title.  Prior to the execution of this Agreement, the Seller has delivered the Existing Title Policy and the Existing Survey to the Purchaser.

 

Within ten (10) days after the execution hereof, the Purchaser shall order an update to the Existing Title Policy (an

 

3

 

“Update”) from the Title Company.  The Purchaser shall deliver to the Seller a copy of the Update promptly upon receipt thereof.  Promptly after receipt of the Update, but, in any event, prior to the Closing Date, the Purchaser shall give the Seller written notice of any title exceptions (other than Permitted Exceptions) set forth on the Update as to which the Purchaser objects.  The Seller shall have the right, but not the obligation, to attempt to remove, satisfy or otherwise cure any exceptions to title to which the Purchaser so objects.  If, for any reason, in its sole discretion, the Seller is unable or unwilling to take such actions as may be required to cause such exceptions to be removed from the Update, the Seller shall give the Purchaser notice thereof; it being understood and agreed that the failure of the Seller to give prompt notice of objection shall be deemed an election by the Seller not to remedy such matters.  If the Seller shall be unable or unwilling to remove any title defects to which the Purchaser has so objected, the Purchaser may elect (i) to terminate this Agreement or (ii) to consummate the transactions contemplated hereby, notwithstanding such title defect, without any abatement or reduction in the Purchase Price on account thereof (whereupon such objected to exceptions or matters shall be deemed to be Permitted Exceptions).  The Purchaser shall make any such election by written notice to the  Seller given on or prior to the fifth (5th) Business Day after the Seller’s notice of its unwillingness or inability to cure (or deemed election not to cure) such defect and time shall be of the essence with respect to the giving of such notice.  Failure of the Purchaser to give such notice shall be deemed an election by the Purchaser to proceed in accordance with clause (ii) above.

 

3.2           No Other Diligence.  The Purchaser acknowledges that, except as provided in Section 3.1, (i) the Purchaser has had the opportunity to fully investigate and inspect the physical and environmental condition of the Property, and to review and analyze all title examinations, surveys, environmental assessment reports, building evaluations, financial data and other investigations and materials pertaining to the Property which the Purchaser deems necessary to determine the feasibility of the Property and its decision to acquire the Property, (ii) the Purchaser shall not be conducting any further title examinations, surveys, environmental assessments, building evaluations, financial analyses or other investigations with respect to the Property, and (iii) the Purchaser shall not have any right to terminate this Agreement as a result of any title examinations, surveys, environmental assessments, building

 

4

 

valuations, financial analyses or other investigations with respect to the Property.

 

SECTION 4.         CONDITIONS TO THE PURCHASER’S OBLIGATION TO CLOSE.

 

The obligation of the Purchaser to acquire the Property shall be subject to the satisfaction of the following conditions precedent on and as of the Closing Date:

 

4.1           Closing Documents.  The Seller shall have delivered, or cause to have been delivered, to the Purchaser the following:

 

(a)         A good and sufficient deed in the form attached as Schedule C hereto, with respect to the Property, in proper statutory form for recording, duly executed and acknowledged by the Seller, conveying title to the Property, free from all liens and encumbrances other than the Permitted Exceptions;

 

(b)        An assignment by the Seller and an assumption by the Purchaser, in form and substance reasonably satisfactory to the Seller and the Purchaser, duly executed and acknowledged by the Seller and the Purchaser, of all of the Seller’s right, title and interest in, to and under the Leases and all of the Seller’s right, title and interest, if any, in, to and under all transferable licenses, contracts, permits and agreements affecting the Property;

 

(c)         A bill of sale by the Seller, without warranty of any kind, in form and substance reasonably satisfactory to the Seller and the Purchaser, with respect to any personal property owned by the Seller, situated at the Property and used exclusively by the Seller in connection with the Property (it being understood and agreed that no portion of the Purchase Price is allocated to personal property);

 

(d)        To the extent the same are in the Seller’s possession, original, fully executed copies of all material documents and agreements, plans and specifications and contracts, licenses and permits pertaining to the Property;

 

(e)         To the extent the same are in the Seller’s possession, duly executed original copies of the Leases;

 

(f)         A closing statement showing the Purchase Price, apportionments and fees, and costs and expenses paid in connection with the Closing; and

 

5

 

(g)        Such other conveyance documents, certificates, deeds and other instruments as the Purchaser, the Seller or the Title Company may reasonably require and as are customary in like transactions in sales of property in similar transactions.

 

4.2           Title Policy.  The Title Company shall be prepared to issue, upon payment of the title premium at its regular rates, a title policy in the amount of the Purchase Price, insuring title to the Property is vested in the Purchaser or its designee or assignee, subject only to the Permitted Exceptions, with such endorsements as shall be reasonably required by the Purchaser.

 

4.3           Environmental Reliance Letters.  The Purchaser shall have received a reliance letter, authorizing the Purchaser and its designees and assignees to rely on the most recent environmental assessment report prepared for the Property, in form and substance reasonably acceptable to the Purchaser.

 

4.4           Condition of Property.  The Property shall be in substantially the same physical condition as on the date of this Agreement, ordinary wear and tear and, subject to Section 10.1, casualty excepted.

 

4.5           Other Conditions.  All representations and warranties of the Seller herein shall be true, correct and complete in all material respects on and as of the Closing Date and the Seller shall have performed in all material respects all covenants and obligations required to be performed by the Seller on or before the Closing Date.

 

SECTION 5.         CONDITIONS TO SELLER’S OBLIGATION TO CLOSE.

 

The obligation of the Seller to convey the Property to the Purchaser is subject to the satisfaction of the following conditions precedent on and as of the Closing Date:

 

5.1           Purchase Price.  The Purchaser shall have delivered to the Seller the Purchase Price payable hereunder, subject to the adjustments set forth in Section 2.3, together with any closing costs to be paid by the Purchaser under Section 9.2.

 

5.2           Closing Documents.  The Purchaser shall have delivered to the Seller duly executed and acknowledged counterparts of the documents described in Section 4.1, where applicable.

 

5.3           Other Conditions.  All representations and warranties of the Purchaser herein shall be true, correct and complete in

 

6

 

all material respects on and as of the Closing Date and the Purchaser shall have performed in all material respects all covenants and obligations required to be performed by the Purchaser on or before the Closing Date.

 

SECTION 6.         REPRESENTATIONS AND WARRANTIES OF SELLER.

 

To induce the Purchaser to enter into this Agreement, the Seller represents and warrants to the Purchaser as follows:

 

6.1           Status and Authority of the Seller.  The Seller is duly organized, validly existing and in good standing under the laws of its state of organization or formation, and has all requisite power and authority under its charter documents to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.

 

6.2           Action of the Seller.  The Seller has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and upon the execution and delivery of any document to be delivered by the Seller on or prior to the Closing Date, this Agreement and such document shall constitute the valid and binding obligation and agreement of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors.

 

6.3           No Violations of Agreements.  Neither the execution, delivery or performance of this Agreement by the Seller, nor compliance with the terms and provisions hereof, will result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under, or result in the creation of any lien, charge or encumbrance upon the Property pursuant to the terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness or any other agreement or instrument by which the Seller is bound.

 

6.4           Litigation.  To the Seller’s actual knowledge, it has not received written notice that any investigation, action or proceeding is pending or threatened, which (i) questions the validity of this Agreement or any action taken or to be taken pursuant hereto, or (ii) involves condemnation or eminent domain proceedings against the Property or any portion thereof.

 

6.5           Existing Leases, Etc.  Subject to Section 8.1, other than the Leases listed in the Rent Roll, the Seller has not

 

7

 

entered into a contract or agreement with respect to the occupancy of the Property that will be binding on the Purchaser after the Closing.  To the Seller’s actual knowledge: (a) the copies of the Leases heretofore delivered by the Seller to the Purchaser are true, correct and complete copies thereof; and (b) such Leases have not been amended except as evidenced by amendments similarly delivered and constitute the entire agreement between the Seller and the tenants thereunder.  Except as otherwise set forth in the Rent Roll or the Leases: (i) to the Seller’ actual knowledge, each of its Leases is in full force and effect on the terms set forth therein; (ii) to the Seller’s actual knowledge, there are no uncured defaults or circumstances which with the giving of notice, the passage of time or both would constitute a default thereunder which would have a material adverse effect on the business or operations of the Property; (iii) to the Seller’s actual knowledge, each of its tenants is legally required to pay all sums and perform all material obligations set forth therein without any ongoing concessions, abatements, offsets, defenses or other basis for relief or adjustment; (iv) to the Seller’s actual knowledge, none of its tenants has asserted in writing or has any defense to, offsets or claims against, rent payable by it or the performance of its other obligations under its Lease which would have a material adverse effect on the on-going business or operations of the Property; (v) the Seller has no outstanding obligation to provide any of its tenants with an allowance to perform, or to perform at its own expense, any tenant improvements; (vi) none of its tenants has prepaid any rent or other charges relating to the post-Closing period; (vii) to the Seller’s actual knowledge, none of its tenants has filed a petition in bankruptcy or for the approval of a plan of reorganization or management under the Federal Bankruptcy Code or under any other similar state law, or made an admission in writing as to the relief therein provided, or otherwise become the subject of any proceeding under any federal or state bankruptcy or insolvency law, or has admitted in writing its inability to pay its debts as they become due or made an assignment for the benefit of creditors, or has petitioned for the appointment of or has had appointed a receiver, trustee or custodian for any of its property, in any case that would have a material adverse effect on the business or operations of the Property; (viii) to the Seller’s actual knowledge, none of its tenants has requested in writing a modification of its Lease, or a release of its obligations under its Lease in any material respect or has given written notice terminating its Lease, or has been released of its obligations thereunder in any material respect prior to the normal expiration of the term thereof, in

 

8

 

any case that would have a material adverse effect on the on-going business or operations of the Property; (ix) to the Seller’s actual knowledge, except as set forth in the Leases, no guarantor has been released or discharged, voluntarily or involuntarily, or by operation of law, from any obligation under or in connection with any of its Leases or any transaction related thereto; and (x) all brokerage commissions currently due and payable with respect to each of its Leases have been paid.  To the Seller’s actual knowledge, the other information set forth in the Rent Roll is true, correct and complete in all material respects.

 

6.6           Agreements, Etc.  Other than the Leases, the Seller has not entered into any contract or agreement with respect to the Property which will be binding on the Purchaser after the Closing other than contracts and agreements being assumed by the Purchaser or which are terminable upon thirty (30) days notice without payment of premium or penalty.

 

6.7           Not a Foreign Person.  The Seller is not a “foreign person” within the meaning of Section 1445 of the United States Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

 

The representations and warranties made in this Agreement by the Seller shall be continuing and shall be deemed remade by the Seller as of the Closing Date, with the same force and effect as if made on, and as of, such date.  All representations and warranties made in this Agreement by the Seller shall survive the Closing for a period of one (1) year, and upon expiration shall be of no further force or effect except to the extent that with respect to any particular alleged breach, the Purchaser gives the Seller written notice prior to the expiration of said one (1) year period of such alleged breach with reasonable detail as to the nature of such breach.

 

Except as otherwise expressly provided in this Agreement or in any documents to be delivered to the Purchaser at the Closing, the Seller has not made, and the Purchaser has not relied on, any information, promise, representation or warranty, express or implied, regarding the Property, whether made by the Seller, on the Seller’s behalf or otherwise, including, without limitation, the physical condition of the Property, the financial condition of the tenants under the Leases, title to or the boundaries of the Property, pest control matters, soil conditions, the presence, existence or absence of hazardous wastes, toxic substances or other environmental matters, compliance with building, health, safety, land use and zoning

 

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laws, regulations and orders, structural and other engineering characteristics, traffic patterns, market data, economic conditions or projections, and any other information pertaining to the Property or the market and physical environments in which they are located.  The Purchaser acknowledges that (i) the Purchaser has entered into this Agreement with the intention of relying upon its own investigation or that of third parties with respect to the physical, environmental, economic and legal condition of the Property and (ii) the Purchaser is not relying upon any statements, representations or warranties of any kind, other than those specifically set forth in this Agreement or in any document to be delivered to the Purchaser at the Closing, made (or purported to be made) by the Seller or anyone acting or claiming to act on the Seller’s behalf.  The Purchaser has inspected the Property and is fully familiar with the physical condition thereof and shall purchase the Property in its “as is”, “where is” and “with all faults” condition on the Closing Date.  Notwithstanding anything to the contrary contained herein, in the event that any party hereto has actual knowledge of the default of any other party (a “Known Default”), but nonetheless elects to consummate the transactions contemplated hereby and proceeds to Closing, then the rights and remedies of such non-defaulting party shall be waived with respect to such Known Default upon the Closing and the defaulting party shall have no liability with respect thereto.

 

SECTION 7.         REPRESENTATIONS AND WARRANTIES OF PURCHASER.

 

To induce the Seller to enter into this Agreement, the Purchaser represents and warrants to the Seller as follows:

 

7.1           Status and Authority of the Purchaser.  The Purchaser is duly organized, validly existing and in good standing under the laws of its state of organization or formation, and has all requisite power and authority under its charter documents to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.

 

7.2           Action of the Purchaser.  The Purchaser has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and upon the execution and delivery of any document to be delivered by the Purchaser on or prior to the Closing Date, this Agreement and such document shall constitute the valid and binding obligation and agreement of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or

 

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similar laws of general application affecting the rights and remedies of creditors.

 

7.3           No Violations of Agreements.  Neither the execution, delivery or performance of this Agreement by the Purchaser, nor compliance with the terms and provisions hereof, will result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under, or result in the creation of any lien, charge or encumbrance upon any property or assets of the Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness or any other agreement or instrument by which the Purchaser is bound.

 

7.4           Litigation.  The Purchaser has received no written notice that any investigation, action or proceeding is pending or threatened which questions the validity of this Agreement or any action taken or to be taken pursuant hereto.

 

The representations and warranties made in this Agreement by the Purchaser shall be continuing and shall be deemed remade by the Purchaser as of the Closing Date with the same force and effect as if made on, and as of, such date.  All representations and warranties made in this Agreement by the Purchaser shall survive the Closing for a period of one (1) year, and upon expiration shall be of no further force or effect except to the extent that with respect to any particular alleged breach, the Seller gives the Purchaser written notice prior to the expiration of said one (1) year period of such alleged breach with reasonable detail as to the nature of such breach.

 

SECTION 8.         COVENANTS OF THE SELLER.

 

The Seller hereby covenants with the Purchaser between the date of this Agreement and the Closing Date as follows:

 

8.1           Approval of Agreements.  Not to enter into, modify, amend or terminate any Lease or any other material agreement with respect to the Property, which would encumber or be binding upon the Property from and after the Closing Date, without in each instance obtaining the prior written consent of the Purchaser.

 

8.2           Operation of Property.  To continue to operate the Property consistent with past practices.

 

8.3           Compliance with Laws, Etc.  To comply in all material respects with (i) all laws, regulations and other requirements from time to time applicable of every governmental body having

 

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jurisdiction of the Property, or the use or occupancy thereof, and (ii) all material terms, covenants and conditions of all agreements affecting the Property.

 

8.4           Compliance with Agreements.  To comply with each and every material term, covenant and condition contained in the Leases and any other material document or agreement affecting the Property and to monitor compliance thereunder consistent with past practices.

 

8.5           Notice of Material Changes or Untrue Representations.  Upon learning of any material change in any condition with respect to the Property or of any event or circumstance which makes any representation or warranty of the Seller to the Purchaser under this Agreement untrue or misleading, promptly to notify the Purchaser thereof.

 

8.6           Insurance.  To maintain, or cause to be maintained, all existing property insurance relating to the Property.

 

SECTION 9.         APPORTIONMENTS.

 

9.1           Real Property Apportionments.  (a)  The following items shall be apportioned at the Closing as of the close of business on the day immediately preceding the Closing Date:

 

(i)                                                        annual rents, operating costs, taxes and other fixed charges payable under the Leases;

 

(ii)                                                     percentage rents and other unfixed charges payable under the Leases;

 

(iii)                                                  fuel, electric, water and other utility costs;

 

(iv)                                                 municipal assessments and governmental license and permit fees;

 

(v)                                                    Real estate taxes and assessments other than special assessments, based on the rates and assessed valuation applicable in the fiscal year for which assessed;

 

(vi)                                                 Water rates and charges;

 

(vii)                                              Sewer and vault taxes and rents; and

 

(viii)                                           all other items of income and expense normally apportioned in sales of property in similar

 

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situations in the jurisdiction where the Property is located.

 

If any of the foregoing cannot be apportioned at the Closing because of the unavailability of the amounts which are to be apportioned, such items shall be apportioned on the basis of a good faith estimate by the parties and reconciled as soon as practicable after the Closing Date but, in any event, no later than one (1) year after the Closing Date.

 

(b)        If there are water, gas or electric meters located at the Property, the Seller shall obtain readings thereof to a date not more than thirty (30) days prior to the Closing Date and the unfixed water rates and charges, sewer taxes and rents and gas and electricity charges, if any, based thereon for the intervening time shall be apportioned on the basis of such last readings.  If such readings are not obtainable by the Closing Date, then, at the Closing, any water rates and charges, sewer taxes and rents and gas and electricity charges which are based on such readings shall be prorated based upon the per diem charges obtained by using the most recent period for which such readings shall then be available.  Upon the taking of subsequent actual readings, the apportionment of such charges shall be recalculated and the Seller or the Purchaser, as the case may be, promptly shall make a payment to the other based upon such recalculations.  The parties agree to make such final recalculations within sixty (60) days after the Closing Date.

 

(c)         If any refunds of real property taxes or assessments, water rates and charges or sewer taxes and rents shall be made after the Closing, the same shall be held in trust by the Seller or the Purchaser, as the case may be, and shall first be applied to the unreimbursed costs incurred in obtaining the same, then to any required refunds to tenants under the Leases, and the balance, if any, shall be paid to the Seller (for the period prior to the Closing Date) and to the Purchaser (for the period commencing with the Closing Date).

 

(d)        If, on the Closing Date, the Property shall be or shall have been affected by any special or general assessment or assessments or real property taxes payable in a lump sum or which are or may become payable in installments of which the first installment is then a charge or lien and has become payable, the Seller shall pay

 

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or cause to be paid at the Closing the unpaid installments of such assessments due and as of the Closing Date.

 

(e)         No insurance policies of the Seller are to be transferred to the Purchaser, and no apportionment of the premiums therefor shall be made.

 

(f)         At the Closing, the Seller shall transfer to the Purchaser the amount of all unapplied security deposits held pursuant to the terms of the Leases.

 

(g)         Brokerage commissions, tenant improvement expenses and other amounts payable by the Seller as landlord under Leases entered into by the Seller after the date hereof, or in connection with the renewal or extension of any existing Lease, shall be allocated between the Seller and the Purchaser at Closing based upon their respective periods of ownership (calculated on a straight-line basis over the initial term or extension or renewal period, as applicable), and the Purchaser shall reimburse the Seller at the Closing for all amounts so allocated to the Purchaser and paid by the Seller prior to the Closing.  The Purchaser shall receive a credit at Closing for all unpaid brokerage commissions, tenant improvement expenses and other amounts payable by the Seller as landlord under any such new Lease, renewal or extension that are allocated to the Seller in accordance with the terms hereof.

 

(h)        Amounts payable after the date hereof on account of capital expenditures under the 2011 capital expenditure budget previously prepared by the Seller (the “CapEx Budget”) (including, without limitation, budgeted items for “building improvements” and “development and redevelopment”), shall be allocated between the Seller and the Purchaser at Closing based upon their respective periods of ownership (on a straight line basis), and the Purchaser shall reimburse the Seller at the Closing for all amounts so allocated to the Purchaser and paid by the Seller prior to the Closing.  The Purchaser shall receive a credit at Closing for all unpaid amounts payable on account of capital expenditures under the CapEx Budget allocated to the Seller in accordance with the terms hereof.

 

(i)          If a net amount is owed by the Seller to the Purchaser pursuant to this Section 9.1, such amount shall be credited against the Purchase Price.  If a net amount is owed by the Purchaser to the Seller pursuant to this

 

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Section 9.1, such amount shall be added to the Purchase Price paid to the Seller.

 

(j)          If, on the Closing Date, there are past due rents with respect to any Lease, amounts received by the Purchaser with respect to such Lease after the Closing Date shall be applied, first, to rents due or to become due during the calendar month in which the Closing occurs, and then, to all other rents due or past due in inverse order to the order in which they became due (i.e., first to arrearages most recently occurring, then to older arrearages).  Any such past due rents received by the Purchaser, once applied in the foregoing order of priority, to the extent applicable to the period prior to the Closing Date, shall be paid by the Purchaser to the Seller.  In no event shall the Seller have any right to take any action to collect any past due rents or other amounts following the Closing; provided, however, the Purchaser shall use commercially reasonable efforts to collect such past due rents and other amounts, except that the Purchaser shall have no obligation to institute any legal action or proceeding or otherwise enforce any of its rights and remedies under any Lease in connection with such commercially reasonable efforts.

 

The provisions of this Section 9.1 shall survive the Closing.

 

9.2           Closing Costs.

 

(a)         The Purchaser shall pay (i) the costs of closing and diligence in connection with the transactions contemplated hereby (including, without limitation, all premiums, charges and fees of the Title Company in connection with the title examination and insurance policies to be obtained by the Purchaser, including affirmative endorsements), (ii) fifty percent (50%) of all documentary, stamp, sales, intangible and other transfer taxes and fees incurred in connection with the transactions contemplated by this Agreement, and (iii) fifty percent (50%) of all state, city, county, municipal and other governmental recording and filing fees and charges.

 

(b)        The Seller shall pay (i) fifty percent (50%) of all documentary, stamp, sales, intangible and other transfer taxes and fees incurred in connection with the transactions contemplated by this Agreement, and (ii) fifty

 

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percent (50%) of all state, city, county, municipal and other governmental recording and filing fees and charges.

 

(c)         Except as otherwise set forth in this Section 9.2, each party shall pay the fees and expenses of its attorneys and other consultants.

 

SECTION 10.       DAMAGE TO OR CONDEMNATION OF PROPERTY.

 

10.1         Casualty.  If, prior to the Closing, the Property is  materially destroyed or damaged by fire or other casualty, the Seller shall promptly notify the Purchaser of such fact.  In such event, the Purchaser shall have the right to terminate this Agreement by giving notice to the Seller not later than ten (10) days after the giving of the Seller’s notice (and, if necessary, the Closing Date shall be extended until one day after the expiration of such ten-day period).  If the Purchaser elects to terminate this Agreement as aforesaid, this Agreement shall terminate and be of no further force and effect and no party shall have any liability to the other hereunder.  If less than a material part of the Property shall be affected by fire or other casualty or if the Purchaser shall not elect to terminate this Agreement as aforesaid, there shall be no abatement of the Purchase Price and the Seller shall assign to the Purchaser at the Closing the rights of the Seller to the proceeds, if any, under the Seller’s insurance policies covering the Property with respect to such damage or destruction and there shall be credited against the Purchase Price the amount of any deductible, any proceeds previously received by Seller on account thereof and any deficiency in proceeds.

 

10.2         Condemnation.  If, prior to the Closing, a material part of the Property (including access or parking thereto), is taken by eminent domain (or is the subject of a pending taking which has not yet been consummated), the Seller shall notify the Purchaser of such fact promptly after obtaining knowledge thereof and the Purchaser shall have the right to terminate this Agreement by giving notice to the Seller not later than ten (10) days after the giving of the Seller’s notice (and, if necessary, the Closing Date shall be extended until one day after the expiration of such ten-day period).  If the Purchaser elects to terminate this Agreement as aforesaid, this Agreement shall terminate and be of no further force and effect and no party shall have any liability to the other hereunder.  If less than a material part of the Property shall be affected or if the Purchaser shall not elect to terminate this Agreement as aforesaid, the sale of the Property shall be consummated as herein provided without any adjustment to the Purchase Price

 

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(except to the extent of any condemnation award received by the Seller prior to the Closing) and the Seller shall assign to the Purchaser at the Closing all of the Seller’s right, title and interest in and to all awards, if any, for the taking, and the Purchaser shall be entitled to receive and keep all awards for the taking of the Property or portion thereof.

 

10.3         Survival.  The parties’ obligations, if any, under this Section 10 shall survive the Closing.

 

SECTION 11.       DEFAULT.

 

11.1         Default by the Seller.  If the transaction herein contemplated fails to close as a result of the default of the Seller hereunder, or the Seller having made any representation or warranty herein which shall be untrue or misleading in any material respect, or the Seller having failed to perform any of the material covenants and agreements contained herein to be performed by the Seller, the Purchaser may, as its sole remedy, either (x) terminate this Agreement (in which case, the Seller shall reimburse the Purchaser for all of the fees, charges, disbursements and expenses of the Purchaser’s attorneys), or (y) pursue a suit for specific performance.

 

11.2         Default by the Purchaser.  If the transaction herein contemplated fails to close as a result of the default of the Purchaser hereunder, or the Purchaser having made any representation or warranty herein which shall be untrue or misleading in any material respect, or the Purchaser having failed to perform any of the covenants and agreements contained herein to be performed by it, the Seller may terminate this Agreement (in which case, the Purchaser shall reimburse the Seller for all of the fees, charges, disbursements and expenses of the Seller’s attorneys).

 

SECTION 12.       MISCELLANEOUS.

 

12.1         Allocation of Liability.  It is expressly understood and agreed that the Seller shall be liable to third parties for any and all obligations, claims, losses, damages, liabilities, and expenses to the extent arising out of events, contractual obligations, acts, or omissions of the Seller that occurred in connection with the ownership or operation of the Property during the period in which the Seller owned the Property prior to the Closing and the Purchaser shall be liable to third parties for any and all obligations, claims, losses, damages, liabilities and expenses to the extent arising out of events, contractual obligations, acts, or omissions of the Purchaser

 

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that occur in connection with the ownership or operation of the Property during the period in which the Purchaser owns the Property after the Closing.  The provisions of this Section 12.1 shall survive the Closing.

 

12.2         Brokers.  Each of the parties hereto represents to the other parties that it dealt with no broker, finder or like agent in connection with this Agreement or the transactions contemplated hereby.  Each party shall indemnify and hold harmless the other party and its respective legal representatives, heirs, successors and assigns from and against any loss, liability or expense, including reasonable attorneys’ fees, charges and disbursements arising out of any claim or claims for commissions or other compensation for bringing about this Agreement or the transactions contemplated hereby made by any other broker, finder or like agent, if such claim or claims are based in whole or in part on dealings with the indemnifying party.  The provisions of this Section 12.2 shall survive the Closing.

 

12.3         Publicity.  The parties agree that, except as otherwise required by law or the rules of the national securities exchange upon which the applicable party’s shares are listed for trading, and except for the exercise of any remedy hereunder, no party shall, with respect to this Agreement and the transactions contemplated hereby, contact or conduct negotiations with public officials, make any public pronouncements, issue press releases or otherwise furnish information regarding this Agreement or the transactions contemplated to any third party without the consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed.

 

12.4         Notices.  (a)  Any and all notices, demands, consents, approvals, offers, elections and other communications required or permitted under this Agreement shall be deemed adequately given if in writing and the same shall be delivered either in hand, by telecopier with confirmed receipt, or by mail or Federal Express or similar expedited commercial carrier, addressed to the recipient of the notice, postpaid and registered or certified with return receipt requested (if by mail), or with all freight charges prepaid (if by Federal Express or similar carrier).

 

(b)        All notices required or permitted to be sent hereunder shall be deemed to have been given for all purposes of this Agreement upon the date of acknowledged receipt, in the case of a notice by telecopier, and, in all

 

18

 

other cases, upon the date of receipt or refusal, except that whenever under this Agreement a notice is either received on a day which is not a Business Day or is required to be delivered on or before a specific day which is not a Business Day, the day of receipt or required delivery shall automatically be extended to the next Business Day.

 

(c)         All such notices shall be addressed,

 

if to the Seller, to:

 

c/o CommonWealth REIT
 Two Newton Place
 255 Washington Street, Suite 300
 Newton, Massachusetts  02458-1632
 Attn:  Mr. John C. Popeo
 Telecopier No. (617) 928-1305

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
 300 South Grand Avenue, 34th Floor
 Los Angeles, California 90071
 Attn:  Meryl K. Chae, Esq.
 Telecopier No. (213) 621-5035

 

if to the Purchaser, to:

 

Senior Housing Properties Trust
 Two Newton Place
 255 Washington Street, Suite 300
 Newton, Massachusetts  02458-1632
 Attn:  Mr. David J. Hegarty
 Telecopier No. (617) 796-8349

 

with a copy to:

 

Sullivan & Worcester LLP
 One Post Office Square
 Boston, Massachusetts  02109
 Attn:  Nancy S. Grodberg, Esq.
 Telecopier No. (617) 338-2880

 

(d)        By notice given as herein provided, the parties hereto and their respective successors and assigns shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses

 

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effective upon receipt by the other parties of such notice and each shall have the right to specify as its address any other address within the United States of America.

 

12.5         Waivers, Etc.  Subject to the terms of the last paragraph of Section 6, any waiver of any term or condition of this Agreement, or of the breach of any covenant, representation or warranty contained herein, in any one instance, shall not operate as or be deemed to be or construed as a further or continuing waiver of any other breach of such term, condition, covenant, representation or warranty or any other term, condition, covenant, representation or warranty, nor shall any failure at any time or times to enforce or require performance of any provision hereof operate as a waiver of or affect in any manner such party’s right at a later time to enforce or require performance of such provision or any other provision hereof.  This Agreement may not be amended, nor shall any waiver, change, modification, consent or discharge be effected, except by an instrument in writing executed by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification, consent or discharge is sought.

 

12.6         Assignment; Successors and Assigns.  Subject to Section 12.14, this Agreement and all rights and obligations hereunder shall not be assignable, directly or indirectly, by any party without the written consent of the other, except that the Purchaser may assign this Agreement to any entity wholly owned, directly or indirectly, by the Purchaser; provided, however, that, in the event this Agreement shall be assigned to any one or more entities wholly owned, directly or indirectly, by the Purchaser, the Purchaser named herein shall remain liable for the obligations of the “Purchaser” hereunder.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns.  This Agreement is not intended and shall not be construed to create any rights in or to be enforceable in any part by any other persons.

 

12.7         Severability.  If any provision of this Agreement shall be held or deemed to be, or shall in fact be, invalid, inoperative or unenforceable as applied to any particular case in any jurisdiction or jurisdictions, or in all jurisdictions or in all cases, because of the conflict of any provision with any constitution or statute or rule of public policy or for any other reason, such circumstance shall not have the effect of rendering the provision or provisions in question invalid, inoperative or unenforceable in any other jurisdiction or in any

 

20

 

other case or circumstance or of rendering any other provision or provisions herein contained invalid, inoperative or unenforceable to the extent that such other provisions are not themselves actually in conflict with such constitution, statute or rule of public policy, but this Agreement shall be reformed and construed in any such jurisdiction or case as if such invalid, inoperative or unenforceable provision had never been contained herein and such provision reformed so that it would be valid, operative and enforceable to the maximum extent permitted in such jurisdiction or in such case.

 

12.8         Counterparts Complete Agreement, Etc.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and shall supersede and take the place of any other instruments purporting to be an agreement of the parties hereto relating to the subject matter hereof.

 

12.9         Performance on Business Days.  In the event the date on which performance or payment of any obligation of a party required hereunder is other than a Business Day, the time for payment or performance shall automatically be extended to the first Business Day following such date.

 

12.10       Section and Other Headings.  The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

 

12.11       Time of Essence.  Time shall be of the essence with respect to the performance of each and every covenant and obligation, and the giving of all notices, under this Agreement.

 

12.12       Governing Law.  This Agreement shall be interpreted, construed, applied and enforced in accordance with the laws of The Commonwealth of Massachusetts.

 

12.13       Arbitration.

 

(a)         Any disputes, claims or controversies between the Seller and the Purchaser (i) arising out of or relating to this Agreement, or (ii) brought by or on behalf of any shareholder of  the Seller or the Purchaser (which, for purposes of this Section 12.13, shall mean any shareholder of record or any beneficial owner of shares of the Seller or the Purchaser, or any former shareholder of record or

 

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beneficial owner of shares of the Seller or the Purchaser), either on his, her or its own behalf, on behalf of the Seller or the Purchaser or on behalf of any series or class of shares of the Seller or the Purchaser or shareholders of the Seller or the Purchaser against the Seller or the Purchaser or any trustee, director, officer, manager (including Reit Management & Research LLC or its successor), agent or employee of the Seller or the Purchaser, including disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this arbitration agreement, the declaration of trust, limited liability company agreement, partnership agreement or analogous governing instruments, as applicable, of the Purchaser or the Seller, or the bylaws of the Purchaser or the Seller (all of which are referred to as “Disputes”), or relating in any way to such a Dispute or Disputes, shall on the demand of any party to such Dispute be resolved through binding and final arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in effect, except as those Rules may be modified in this Section 12.13.  For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against trustees, directors, officers or managers of the Seller or the Purchaser and class actions by a shareholder against those individuals or entities and the Seller or the Purchaser.  For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party.

 

(b)        There shall be three arbitrators.  If there are only two parties to the Dispute (with, for purposes of this Section 12.13, any and all parties involved in the Dispute and owned by the same ultimate parent entity treated as one party), each party shall select one arbitrator within 15 days after receipt of a demand for arbitration.  Each party shall be entitled to appoint as its party appointed arbitrator an affiliated or interested person of such party.  If there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the claimants or the respondents, as the case may be, one arbitrator within 15 days after receipt of a demand for arbitration.  The respondents, on the one hand, and the claimants, on the other hand, shall each be entitled to appoint as its party appointed arbitrator an affiliated or

 

22

 

interested person of such party.  If either a claimant (or all claimants) or a respondent (or all respondents) fails to timely select an arbitrator then the party (or parties) who has selected an arbitrator may request the AAA to provide a list of three proposed arbitrators in accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten days from the date the AAA provides such list to select one of the three arbitrators proposed by AAA.  If such party (or parties) fails to select such arbitrator by such time, the party (or parties) who has appointed the first arbitrator shall then have ten days to select one of the three arbitrators proposed by AAA to be the second arbitrator; and, if he/they should fail to select such arbitrator by such time, the AAA shall select, within 15 days thereafter, one of the three arbitrators it had proposed as the second arbitrator.  The two arbitrators so appointed shall jointly appoint the third and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within 15 days of the appointment of the second arbitrator.  If the third arbitrator has not been appointed within the time limit specified herein, then the AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by the AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.

 

(c)         The place of arbitration shall be Boston, Massachusetts unless otherwise agreed by the parties.

 

(d)        There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators.

 

(e)         In rendering an award or decision (the “Award”), the arbitrators shall be required to follow the laws of the Commonwealth of Massachusetts.  Any arbitration proceedings or Award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Award shall be in writing and may, but shall not be required to, briefly state the findings of fact and conclusions of law on which it is based.

 

(f)         Except to the extent expressly provided by

 

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Section 12.2 or as otherwise agreed by the parties, each party involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action, award any portion of the Seller’s or the Purchaser’s award to the claimant or the claimant’s attorneys.  Except to the extent expressly provided by Section 12.2 or as otherwise agreed by the parties, each party (or, if there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third appointed arbitrator.

 

(g)        An Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between such parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators.  Judgment upon the Award may be entered in any court having jurisdiction.  To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any award made except for actions relating to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction.

 

(h)        Any monetary award shall be made and payable in U.S. dollars free of any tax, deduction or offset.  Each party against which the Award assesses a monetary obligation shall pay that obligation on or before the 30th day following the date of the Award or such other date as the Award may provide.

 

(i)          This Section 12.13 is intended to benefit and be enforceable by the shareholders, trustees, directors, officers, managers (including Reit Management & Research LLC or its successor), agents or employees of any party and the parties and shall be binding on the shareholders of any party and the parties, as applicable, and shall be in addition to, and not in substitution for, any other rights

 

24

 

to indemnification or contribution that such individuals or entities may have by contract or otherwise.

 

12.14       Like Kind Exchange.  At either party’s request, the non-requesting party will take all actions reasonably requested by the requesting party in order to effectuate all or any part of the transactions contemplated by this Agreement as a forward or reverse like-kind exchange for the benefit of the requesting party in accordance with Section 1031 of the Internal Revenue Code and, in the case of a reverse exchange, Rev. Proc. 2000-37, including executing an instrument acknowledging and consenting to any assignment by the requesting party of its rights hereunder to a qualified intermediary or an exchange accommodation titleholder.  In furtherance of the foregoing and notwithstanding anything contained in this Agreement to the contrary, the requesting party may assign its rights under this Agreement to a “qualified intermediary” or an “exchange accommodation titleholder” in order to facilitate, at no cost or expense to the other, a forward or reverse like-kind exchange under Section 1031 of the Internal Revenue Code; provided, however, that such assignment will not relieve the requesting party of any of its obligations hereunder.  The non-requesting party will also agree to issue all closing documents, including the deed or other operative conveyance instrument, to the applicable qualified intermediary or exchange accommodation titleholder if so directed by the requesting party prior to Closing.  Notwithstanding the foregoing, in no event shall the non-requesting party incur or be subject to any liability that is not otherwise provided for in this Agreement.

 

12.15       Recording.  This Agreement may not be recorded without the prior written consent of both parties.

 

12.16       Non-liability of Trustees of Seller.  The Declaration of Trust establishing the Seller, dated September 12, 1996, as amended and supplemented, as filed with the State Department of Assessments and Taxation of Maryland, provides that no trustee, officer, shareholder, employee or agent of the Seller shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, the Seller.  All persons dealing with the Seller in any way shall look only to the assets of the Seller for the payment of any sum or the performance of any obligation.

 

12.17       Non-liability of Trustees of Purchaser.  The Amended and Restated Declaration of Trust establishing Senior Housing Properties Trust, dated September 20, 1999, as amended and supplemented, as filed with the State Department Of Assessments

 

25

 

and Taxation of Maryland, provides that no trustee, officer, shareholder, employee or agent of Senior Housing Properties Trust shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, Senior Housing Properties Trust.  All persons dealing with Senior Housing Properties Trust in any way shall look only to the assets of Senior Housing Properties Trust for the payment of any sum or the performance of any obligation.

 

12.18       Waiver and Further Assurances.  The Purchaser hereby acknowledges that it is a sophisticated purchaser of real properties and that it is aware of all disclosures the Seller is or may be required to provide to the Purchaser in connection with the transactions contemplated hereby pursuant to any law, rule or regulation (including those of Massachusetts and those of the state in which the Property is located).  The Purchaser hereby acknowledges that, prior to the execution of this Agreement, the Purchaser has had access to all information necessary to acquire the Property and the Purchaser acknowledges that the Seller has fully and completely fulfilled any and all disclosure obligations with respect thereto.  The Purchaser hereby fully and completely discharges the Seller from any further disclosure obligations whatsoever relating to the Property.  In addition to the actions recited herein and contemplated to be performed, executed, and/or delivered by the Seller and the Purchaser, the Seller and the Purchaser agree to perform, execute and/or deliver or cause to be performed, executed and/or delivered at the Closing or after the Closing any and all such further acts, instruments, deeds and assurances as may be reasonably required to establish, confirm or otherwise evidence the Seller’s satisfaction of any disclosure obligations or to otherwise consummate the transactions contemplated hereby.

 

[Signature page follows.]

 

26

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as a sealed instrument as of the date first above written.

 

	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
HUB PROPERTIES TRUST, a Maryland real estate investment trust
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John C. Popeo
    
	
 
    	
Name:
    	
John C. Popeo
    
	
 
    	
Its:
    	
Treasurer
    
	
 
    	
 
    
	
 
    	
PURCHASER:
    
	
 
    	
 
    
	
 
    	
SENIOR HOUSING PROPERTIES TRUST, a Maryland real estate investment trust
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David J. Hegarty
    
	
 
    	
Name:
    	
David J. Hegarty
    
	
 
    	
Its:
    	
President
    

 

27

 

SCHEDULE A

 

Land

 

[See attached legal description.]

 

	
  

  	
  3043 WALTON
  ROAD PLYMOUTH MEETING, PA Legal Description ALL THAT CERTAIN tract of land
  situate in the Township of Plymouth, County of Montgomery, Commonwealth of
  Pennsylvania, as shown as Tract 1 and Tract 2 on Plan of Survey prepared for
  Preferred Real Estate Investments, Inc., by Urwiler and Walter, Inc., dated
  November 29, 1995, last revised January 24, 1996, bounded and described
  as follows, to wit:- BEGINNING at a point in the centerline of Walton Road
  (as widened to 40 feet from its centerline), said point being located
  Southwest 411 feet more or less from the centerline of Township Line Road,
  said point being in line of lands of Stanley and Mildred Wannop; THENCE
  (1) extending along said Walton Road centerline South 45 degrees 29
  minutes 30 seconds West 255.64 feet to a point in line of lands of Hatfield
  Township Industrial Development Authority Child Care Centers; THENCE
  (2) extending along said Hatfield Township Industrial Development
  Authority Child Care Centers North 41 degrees 57 minutes 40 seconds West
  350.35 feet to a point (1” solid pin); THENCE (3) continuing along said
  lands of Hatfield Township Industrial Development Authority Child Care
  Centers South 45 degrees 29 minutes 30 seconds West 194.75 feet to a point,
  said point being in line of lands of United Food and Comm. Workers Local 1357
  AFL-CIO W.W. Young, II; THENCE (4) extending along W.W. Young, II,
  lands and along a 25 foot wide sanitary sewer easement North 41 degrees 49
  minutes 40 seconds West 754.18 feet to a point in line of lands of Valley
  Square Associates; THENCE (5) extending along said Valley Square
  Associates’ lands and along a 20 foot wide sanitary sewer easement North 46
  degrees 05 minutes 30 seconds East 303.16 feet to a point (1/2” rebar), said
  point being in line of lands of Four Valley Square Associates; THENCE
  (6) extending along said Four Valley Square Associates’ lands North 45
  degrees 38 minutes East 145.32 feet to a point (iron pin found), said point
  being in line of lands of David E. Albrecht; THENCE (7) continuing along
  said Albrecht lands and partly along a 20 foot wide sanitary sewer easement,
  and along lands of Patrick J. and Lisa C. Delaney, Tompkins Rubber Co., other
  lands of Tompkins Rubber Co., and lands of Stanley and Mildred Wannop South
  41 degrees 57 minutes 40 seconds East 1100.91 feet to a point in the
  centerline of Walton Road aforesaid, said point being the point and place of
  BEGINNING. BEING COUNTY TAX PARCEL NUMBER - 49-00-12904-00-7 and MONTGOMERY
  COUNTY COMMISSIONERS REGISTRY 49-00-12904-00-7 PLYMOUTH 3043 WALTON RD
  WALROAD ASSOCIATES LP B 028 U 110 L 3330 DATE: 01/23/98 DB5216PG0182

  

 

	
  

  	
  Legal
  Description (continued) BEING AS TO PART (TRACT 1) THE SAME PREMISES
  WHICH C & D CHARTER POWER SYSTEMS, INC., A DELAWARE
  CORPORATION, FORMERLY C & D POWER SYSTEMS, INC., A DELAWARE
  CORPORATION BY DEED DATED JANUARY 26, 1996 AND RECORDED IN THE OFFICE FOR THE
  RECORDING OF DEEDS IN AND FOR THE COUNTY OF MONTGOMERY, COMMONWEALTH OF
  PENNSYLVANIA IN DEED BOOK 5140 PAGE 5, GRANTED AND CONVEYED UN WALROAD
  ASSOCIATES, L.P., ITS SUCCESSORS AND ASSIGNS, IN FEE. BEING AS TO
  PART (TRACT 2) THE SAME PREMISES WHICH GERTRUDE C. FORD, WIDOW, BY DEED
  DATED MARCH 29. 1996 AND RECORDED IN THE OFFICE FOR THE RECORDING OF
  DEEDS IN AND FOR THE COUNTY OF MONTGOMERY, COMMONWEALTH OF PENNSYLVANIA IN
  DEED BOOK 5145 PAGE 2039, GRANTED AND CONVEYED UNTO WALROAD ASSOCIATES, L.P.,
  ITS SUCCESSORS AND ASSIGNS, IN FEE. BEING PART OF THE SAME PREMISES
  WHICH WALROAD ASSOCIATES, L.P. BY DEED OF CONSOLIDATION, DATED MAY 22,
  1996 AND RECORDED MAY 23, 1996 IN THE OFFICE FOR THE RECORDING OF
  DEEDS, IN AND FOR THE COUNTY OF MONTGOMERY, COMMONWEALTH OF
  PENNSYLVANIA IN DEED BOOK 5148 PAGE 2250, GRANTED AND CONVEYED UNTO
  WALROAD ASSOCIATES, L.P., ITS SUCCESSORS AND ASSIGNS, IN FEE. [SEAL]
  DB5216PG0183 

  

 

 

SCHEDULE B

 

Rent Roll

 

[See attached copy.]

 

INDEX

Lease

 

1.                                       Right of Entry Agreement dated November 11, 2008, by and between Hub Properties Trust (“Owner”) and Reliance Globalcom Services, Inc. (“Operator”).

 

 

INDEX

Lease

 

1.                                       Letter Agreement, dated November 11, 2004, from Jennifer B. Clark, Senior Vice President, Hub Properties Trust agreed to by Iris Davis Brownstein, General Counsel and Corporate Secretary, Health Advocate, Inc.

 

2.                                       Office Lease, dated November 24, 2004, by and between Hub Properties Trust (“Landlord”) and Health Advocate, Inc. (“Tenant”).

 

3.                                       First Amendment to Office Lease, dated March 15, 2007, by and between Hub Properties Trust (“Landlord”) and Health Advocate, Inc. (“Tenant”).   Re: Expansion and extension of lease

 

4.                                       Second Amendment to Office Lease,  dated January 30, 2008, by and between Hub Properties Trust (“Landlord”) and Health Advocate, Inc. (“Tenant”).

 

5.                                       Third Amendment to Office Lease, dated May 28, 2009, by and between Hub Properties Trust (“Landlord”) and Health Advocate, Inc. (“Tenant”).   Re: Expansion to Ste. 100

 

6.                                       Fourth Amendment to Office Lease, dated March 31, 2010, by and between Hub Properties Trust (“Landlord”) and Health Advocate, Inc. (“Tenant”).   Re: Expansion to Ste. 200.

 

 

SCHEDULE C

 

Form of Deed

 

	
  

  	
  002369 LAWYERS
  TITLE INSURANCE CORPORATION Two Penn Center Plaza, Suite 1230 Philadelphia,
  PA 19102 STATE TAX AFFIDAVIT FILED SPECIAL WARRANTY DEED THIS INDENTURE made
  as of the 15th day of January, 1998, BETWEEN WALROAD ASSOCIATES, L.P., a
  Pennsylvania limited partnership having an address at 555 North Lane,
  Suite 6101, Conshohocken, Pennsylvania 19428 (hereinafter called the
  “Grantor”), of the one part, and HUB PROPERTIES TRUST, a Maryland real estate
  investment trust, having an address at 400 Centre Street, Newton,
  Massachusetts 02158 (hereinafter called the “Grantee”), of the other part.
  WITNESSETH that the said Grantor for and in consideration of the sum of One
  Dollar ($1.00) lawful money of the United States of America, unto it well and
  truly paid by the said Grantee, at or before the sealing and delivery hereof,
  the receipt whereof is hereby acknowledged, has granted, bargained and sold,
  released and confirmed, and by these presents does grant, bargain and sell,
  release and confirm unto the said Grantee, its successors and assigns. ALL
  THAT certain parcel of land and improvements thereon SITUATE in the Township
  of Plymouth, County of Montgomery, State of Pennsylvania, as more
  particularly described on Exhibit “A” attached hereto and made a part
  hereof. UNDER AND SUBJECT to all easements, rights, reservations and
  agreements of record. TOGETHER with all and singular the buildings and
  improvements, ways, streets, alleys, driveways, passages, waters,
  water-courses, rights, liberties, privileges, hereditaments and
  appurtenances, whatsoever unto the hereby granted premises belonging, or in
  any wise appertaining, and the reversions and remainders, rents, issues, and
  profits thereof; and all the estate, right, title, interest, property, claim
  and demand whatsoever of it, the said Grantor, as well at law as in equity,
  of, in, and to the same. TO HAVE AND TO HOLD the said lot or piece of ground
  described above, with the buildings and improvements thereon erected,
  hereditaments and premises hereby granted, or mentioned and intended so to
  be, with the appurtenances, unto the said Grantee, its successors and
  assigns, to and for the only proper use and behoof of the said Grantee, its
  successors and assigns forever. UNDER AND SUBJECT as aforesaid. REALTY TRANS
  TAX PAID STATE 87,300.00 LOCAL 87,300.00 PER DB5216PG0178 

  

 

	
  

  	
  AND the said
  Grantor, for itself and its successors, does covenant, promise and agree, to
  and with the said Grantee, its successors and assigns, by these presents,
  that it the said Grantor and its successors, all and singular the
  hereditaments and premises hereby granted or mentioned and intended so to be,
  with the appurtenances, unto the said Grantee, its successors and assigns,
  against it, the said Grantor and its successors, and against all and every
  person and persons whomsoever lawfully claiming or to claim the same or any
  part thereof, by, from or under it, them or any of them, shall and will,
  SUBJECT as aforesaid, WARRANT and forever DEFEND. IN WITNESS WHEREOF, the
  party of the first part has caused this Indenture to be signed in its name
  and its behalf by its duly authorized general partner. Dated the day and year
  first above written. WALROAD ASSOCIATES, L.P., a Pennsylvania limited
  partnership By: WALROAD DEVELOPERS, L.P., its general partner Attest: By:
  WALROAD INC., its general partner /s/ MICHAEL FINK MICHAEL FINK, SECRETARY
  By: /s/ MICHAEL G. O’NEILL Name: MICHAEL G. O’NEILL Title: PRESIDENT
  [ILLEGIBLE DB5216PG0179

  

 

	
  

  	
  COMMONWEALTH OF
  PENNSYLVANIA : :ss. COUNTY OF MONTGOMERY: On this the 13th day of January,
  1998, before me, a Notary Public for the Commonwealth of Pennsylvania, the
  undersigned officer, personally appeared Michael G. O’Neill, who acknowledged
  himself to be the (Vice) President of Walroad, Inc., the general partner
  of the general partner of the within-named Grantor, and that he, as such
  officer, being authorized to do so, executed the foregoing instrument for the
  purposes therein contained by signing the name of such corporation by himself
  as Vice President. IN WITNESS WHEREOF, I hereunto set my hand and
  official seal. Notary Public DB5216PG0180

  

 

	
  

  	
  The address of
  the above-named Grantee is: HUB PROPERTIES TRUST 400 Centre Street Newton,
  Massachusetts 02158 On behalf of the Grantee: /s/ THIS DEED REGISTERED AT
  PLYMOUTH TOWNSHIP DATE 1/21/98 BY DB5216PG0181

  

 

	
  

  	
  [3043 Walton
  Road] Exhibit A Legal Description ALL THAT CERTAIN tract of land situate
  in the Township of Plymouth. County of Montgomery Commonwealth of
  Pennsylvania, as shown as Tract 1 and Tract 2 on Plan of Survey prepared for
  Preferred Real Estate Investments, Inc., by Urwiler and Walter, Inc.,
  dated November 29, 1995, last revised January 24, 1996, bounded and
  described as follows, to wit:-
  BEGINNING at a point in the centerline of Walton Road (as widened to 40 feet
  from its centerline), said point being located Southwest 411 feet more or
  less from the centerline of Township Line Road. said point being in line of
  lands of Stanley and Mildred Wannop; THENCE (1) extending along said
  Walton Road centerline South 45 degrees 29 minutes 30 seconds West 255.64
  feet to a point in line of lands of Hatfield Township Industrial Development
  Authority Child Care Centers; THENCE (2) extending along said Hatfield
  Township Industrial Development Authority Child care Centers North 41 degrees
  57 minutes 40 seconds West 350.35 feet to a point (1” solid pin); THENCE
  (3) continuing along said lands of Hatfield Township Industrial
  Development Authority Child Care Centers South 45 degrees 29 minutes 30
  seconds West 194.75 feet to a point, said point being in line of lands of
  United Food and Comm. Workers Local 1357 AFL-CIO W.W. Young. Lit; THENCE
  (4) extending along W.W. Young. II, lands and along a 25 foot wide
  sanitary sewer easement North 41 degrees 49 minutes 40 seconds West 754.18
  feet to a point in line of lands of Valley Square Associates; THENCE
  (5) extending along said Valley Square Associates’ lands and along a 20
  foot wide sanitary sewer easement North 46 degrees 05 minutes 30 seconds East
  303.16 feet to a point (1/2” rebar). said point being in line of lands of
  Four Valley Square Associates; THENCE (6) extending along said Four
  Valley Square Associates’ lands North 45 degrees 38 minutes East 145.32 feet
  to a point (iron pin found). said point being in line of lands of David E. Albrecht: THENCE
  (7) continuing along said Albrecht lands and partly along a 20 foot wide
  sanitary sewer easement, and along lands of Patrick J. and Lisa C. Delaney,
  Tompkins Rubber Co., other lands of Tompkins Rubber Co., and lands of Stanley
  and Mildred. Wannop South 41 degrees 57 minutes 40 seconds East 1100.91 feet
  to a point in the centerline of Walton Road aforesaid, said point being the
  point and place of BEGINNING. BEING COUNTY TAX PARCEL NUMBER -
  49-00-12904-00-7 and MONTGOMERY COUNTY COMMISSIONERS REGISTRY 49-00-12904-00-7
  PLYMOUTH 3043 WALTON RD WALROAD ASSOCIATES LP B 028 U 110 L 3330 DATE:
  01/28/98 DB5216PG0182 

  

 

	
  

  	
  [3043 Walton
  Road] Exhibit A Legal Description (continued) BEING AS TO
  PART (TRACT 1) THE SAME PREMISES WHICH C & D CHARTER POWER
  SYSTEMS, INC., A DELAWARE CORPORATION, FORMERLY C & D POWER SYSTEMS,
  INC., A DELAWARE CORPORATION BY DEED DATED JANUARY 26, 1996 AND RECORDED IN
  THE OFFICE FOR THE RECORDING OF DEEDS IN AND FOR THE COUNTY OF MONTGOMERY,
  COMMONWEALTH OF PENNSYLVANIA IN DEED BOOK 5140 PAGE 5, GRANTED AND CONVEYED
  UN WALROAD ASSOCIATES, L.P., ITS SUCCESSORS AND ASSIGNS, IN FEE. BEING AS TO
  PART (TRACT 2) THE SAME PREMISES WHICH GERTRUDE C. FORD, WIDOW. BY DEED
  DATED MARCH 29, 1996 AND RECORDED
  IN THE OFFICE FOR THE RECORDING OF DEEDS, IN AND FOR THE COUNTY OF
  MONTGOMERY, COMMONWEALTH OF PENNSYLVANIA IN DEED BOOK 5145 PAGE 2039, GRANTED
  AND CONVEYED UNTO WALROAD ASSOCIATES. L.P., ITS SUCCESSORS AND ASSIGNS, IN
  FEE. BEING PART OF THE SAME PREMISES WHICH WALROAD ASSOCIATES, L.P. BY DEED
  OF CONSOLIDATION, DATED MAY 22, 1996 AND RECORDED MAY 23, 1996 IN
  THE OFFICE FOR THE RECORDING OF DEEDS. IN AND FOR THE COUNTY OF MONTGOMERY,
  COMMONWEALTH OF PENNSYLVANIA IN DEED BOOK 5148 PAGE 2250, GRANTED AND
  CONVEYED UNTO WALROAD ASSOCIATES, L.P., ITS SUCCESSORS AND ASSIGNS, IN
  FEE. [SEAL] DB5216PG0183

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