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ASSET PURCHASE AND SALE AGREEMENT


between


IRON MOUNTAIN RECORDS MANAGEMENT, INC.
as Buyer


THE FORTRESS-BOSTON CORPORATION
and
THE FORTRESS-MIAMI CORPORATION
as Sellers


and


THE FORTRESS CORPORATION
as Stockholder


As of July 11, 1996


TABLE OF CONTENTS


ARTICLE I....................................................................1
DEFINITIONS.........................................................1


ARTICLE II...................................................................4
SALE AND PURCHASE OF SUBJECT ASSETS.................................4


ARTICLE III..................................................................7
REPRESENTATIONS AND WARRANTIES OF SELLERS AND STOCKHOLDER...........7


ARTICLE IV..................................................................13
REPRESENTATIONS AND WARRANTIES OF BUYER............................13


ARTICLE V...................................................................14
PRE-CLOSING AGREEMENTS.............................................14


ARTICLE VI..................................................................16
CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE...............16


ARTICLE VII.................................................................19
CONDITIONS PRECEDENT TO OBLIGATION OF SELLERS AND STOCKHOLDER......19


ARTICLE VIII................................................................20
THE CLOSING........................................................20


ARTICLE IX..................................................................21
POST-CLOSING MATTERS...............................................21


ARTICLE X...................................................................24
TERMINATION........................................................24


ARTICLE XI..................................................................26
INDEMNIFICATION....................................................26


ARTICLE XII.................................................................30
MISCELLANEOUS PROVISIONS...........................................30


Schedule 1.12A Owned Tangible Assets Schedule 3.4 Consents Schedule 3.5 Encumbrances; Leases Schedule 3.8 Litigation; Claims Schedule 3.9 Permits, Licenses Schedule 3.15 Customers Terminating/Seeking Bids Schedule 3.17 Employee Information Schedule 3.22 Transactions with Interested Persons Exhibit 6.3 Noncompetition and Confidentiality Agreement Exhibit 6.12 Opinion of Seller's Counsel Exhibit 7.4 Opinion of Buyer's General Counsel


ASSET PURCHASE AND SALE AGREEMENT


THIS AGREEMENT ("Agreement") is made as of the 11th day of July, 1996 by and between Iron Mountain Records Management, Inc., a Delaware corporation ("Buyer"), The Fortress-Boston Corporation, a Delaware corporation ("Fortress-Boston"), The Fortress-Miami Corporation, a Florida corporation ("Fortress-Miami"; together with the Fortress-Boston, the "Sellers" and each a "Seller"), and The Fortress Corporation, a Delaware corporation ("Stockholder").


RECITALS


A. Fortress-Boston is engaged in the business of providing records management and storage services in the metropolitan area of Boston, Massachusetts and Fortress-Miami is engaged in the business of providing records management and storage services in the metropolitan areas of Dade and Broward Counties, Florida, each under the trade name "Fortress".


B. Stockholder owns all the issued and outstanding capital stock of Fortress-Boston and Fortress-Miami.


C. Buyer desires to purchase, and Sellers desire to sell, substantially all the assets of the Business (as hereinafter defined) operated by each of them on the terms and subject to the conditions contained in this Agreement, and Stockholder, as ultimate recipient of all or a significant portion of the consideration to be paid by Buyer, is willing to confirm the representations and warranties and covenants of Sellers contained herein.


In consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Sellers, Stockholder and Buyer, intending to be legally bound, agree as follows:


ARTICLE I
DEFINITIONS


For purposes of this Agreement, certain terms used in this Agreement and not otherwise defined herein shall have the meanings designated below:


Section 1.1 Agreement means all or any part of this Agreement, including schedules, exhibits, and appendices, as any of the foregoing may be amended, modified or supplemented in writing from time to time.


Section 1.2 Business means the paper and magnetic media records management and storage business conducted by Fortress-Boston in metropolitan Boston, Massachusetts and the paper and magnetic media records management and storage business conducted by Fortress-Miami in metropolitan Dade and Broward Counties, Florida, each under the trade name "Fortress".


Section 1.3 Closing means the occasion upon which the transactions contemplated by this Agreement are carried out by the delivery of documents, payment of funds and other actions contemplated herein, as described in Article VIII.


Section 1.4 Closing Date shall be July 17, 1996, or such other date as the parties may agree, provided that Sellers may elect by written notice to Buyer not later than the close of business on July 15, 1996 that they elect to postpone the Closing for up to thirty (30) days in order to have additional time to obtain consents of landlords to assignment of the Leases, as required by Section 6.4; such notice shall indicate the date to which the Closing has been postponed. In the event that Sellers select a closing date after August 1, 1996, the Effective Time shall be 12:00 a.m. in Boston, Massachusetts on August 1, 1996 and all adjustments to the Purchase Price which are affected by the Effective Time shall be made as of August 1, 1996 instead of July 1, 1996 (including, without limitation, the reference to amounts billable for the month of June, 1996) in Section 2.2A, which shall become amounts billable for the month of July, 1996


Section 1.5 Effective Time means 12:00 a.m. in Boston, Massachusetts on July 1, 1996, or August 1, 1996 in the event Sellers elect to postpone the Closing Date to a date after August 1, 1996.


Section 1.6 Encumbrances means any and all encumbrances, mortgages, security interests, liens, Taxes, claims, liabilities, options, commitments, charges, restrictions or other obligations of whatsoever kind, quantity or nature, whether accrued, absolute, contingent or otherwise, which affect title to the Subject Assets.


Section 1.7 Excluded Assets means (i) Sellers' cash and cash equivalents and sums in checking and depository accounts (including cash representing payments for storage or services provided after the Effective Time), (ii) Sellers' museum quality storage business and all assets related thereto, (iii) corporate records not relating to the Business, (iv) refunds of taxes and insurance premiums, (v) the names "Fortress" and "Museum Quality Storage", and variants thereof except (with respect to "Fortress") to the extent provided in Section 9.2, (vi) abatements, and (vii) Dimensional Parking Technology Corporation's containers located in the parking lot of the Hialeah, Florida Leased Space and a jig related to such containers located at the Bowen Building parking lot.


Section 1.8 Knowledge or the phrases "to the knowledge of" or "to the best of Sellers' or Stockholder's knowledge", when used in reference to either Sellers or Stockholder, means matters actually known by James N. Levis, Ladd M. Levis-Thorne, William Snyder or Denis Holler, after reasonable inquiry of subordinates who would reasonably be expected to know the information in question.


Section 1.9 Information Materials means the written information annexed to this Agreement as Schedule 3.27.


Section 1.10 Leases means: (i) the lease dated November 1, 1989, as amended March 25, 1991 and August ___, 1994 between Property Asset Management, Inc., as successor landlord, and Fortress-Miami as successor to Fortress-Fort Lauderdale, Inc., as tenant, for approximately 21,276 square feet of space at Interstate Commerce Center, N. W. 23rd Avenue, Ft. Lauderdale, Florida.


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(ii) the lease dated as of October 1, 1994 between Triple-A Industries, as landlord, and Fortress-Miami as successor to The Fortress-Miami Corporation, as tenant, for approximately 41,000 square feet of space at 445-455 West 26th Street, Hialeah, Florida;


(iii) the lease dated October 31, 1986, as amended by instrument dated December 28, 1994, between E Street Associates, as landlord, and Fortress-Boston as successor to The Fortress-Boston Corporation, as tenant, for approximately 21,250 square feet of space at 415 E Street, Boston, Massachusetts; and


(iv) the sublease dated February 1, 1994, as amended by amendment dated July 1, 1994 to increase the space subject to the sublease, between Greater Boston Rehabilitation Services, Inc., as sublessor, and Stockholder, as sublessee, for approximately 39,000 square feet of space at 31 Monsignor O'Brien Highway, Cambridge, Massachusetts.


Section 1.11 Leased Space means the space occupied by Sellers pursuant to the Leases.


Section 1.12 Subject Assets means all of Sellers' assets and properties of whatever kind, character and description, and whether tangible, intangible, real, personal or mixed, and wherever located, except for the Excluded Assets. The Subject Assets include the following Tangible Assets and Interests:


A. Tangible Assets means all tangible property used in the Business, such as inventory; computers, computer peripherals and maintenance manuals; word processors; typewriters and other business equipment; vehicles; equipment;; racking and shelving; furniture, furnishings, and office equipment; and supplies. Principal items of Tangible Assets, including vehicles, are listed on Schedule 1.12A. The Tangible Assets also includes the land and improvements thereon located at 1630 Northeast First Avenue, Miami, Florida (the "Bowen Property").


B. Interests means all intangible property used in the Business to the extent assignable (Buyer acknowledges that certain of such items may not be assignable by their terms or their terms may be silent as to assignability), including rights, privileges, benefits and interests under all contracts, agreements, consents, licenses and files and correspondence related thereto; computer software used in the Business (including software licensed to Seller by Infotrac); permits or certificates; agreements, leases and arrangements with respect to intangible or tangible property or interests therein; Sellers' right to occupy the Leased Space (pursuant to the Leases); confidentiality and non-competition agreements with employees and other parties, whether oral or written; consents; agreements with suppliers and customers; deposits held by contract parties, including any lease deposits; accounts receivable; all financial and operating records related to the Business; and any sales agent or sales affiliate agreements used in connection with the Business.


Section 1.13 Taxes means any and all taxes, sums or amounts assessed or assessable, levied and due by any federal, state or county or other local governmental authority or agency, including without limitation, real and personal property taxes, income taxes, whether measured by gross or net income or profit, franchise, excise, sales and use taxes, employee withholding, social security, unemployment taxes and any other taxes required to be paid by Sellers, including interest and penalties in respect thereof whether disputed or not, and whether accrued, contingent, due, absolute,


3


deferred, unknown or other, together with any and all penalties, interests and additions to all such taxes, sums or amounts.


(ARTICLE II COMMENCES ON THE NEXT PAGE)
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ARTICLE II
SALE AND PURCHASE OF SUBJECT ASSETS


Section 2.1 Sale and Transfer. Subject to the terms and conditions set forth in this Agreement, each Seller shall sell, convey, transfer, assign and deliver to Buyer, and Buyer shall purchase and receive from each Seller, at the Closing, free and clear of all Encumbrances, all of the Subject Assets owned by such Seller and the Interests.


Section 2.2 Purchase Price; Assumption of Certain Obligations.


A. Purchase Price. The Purchase Price to be paid by Buyer for all the Subject Assets shall be (i) plus (ii) an amount equal to ninety percent (90%) of the face amount of Sellers' net eligible accounts receivable as of the Effective Time, plus amounts billable for services performed during the month of June, 1996 which are billed to customers on or about July 8, 1996. For purposes of this Agreement, "net eligible accounts receivable" shall mean gross accounts receivable of either Seller which are owed by customers of the Business for work performed by Sellers prior to the Effective Time minus Seller's reasonable bad debt reserve in respect of such accounts receivable.


B. Payment of Purchase Price. The Purchase Price shall be payable to Sellers or Sellers' lenders (allocated between the Sellers as the parties shall agree) at the Closing by wire transfer or certified or bank check of immediately available funds to such account as Stockholder shall designate in writing not less than two business days prior to the Closing Date. Sellers may apply all or a portion of the Purchase Price to retire indebtedness required to obtain releases of any Encumbrances.


C. Limited Assumption of Contracts and Obligations. Buyer shall assume no obligations or liabilities of Sellers other than the following. Buyer shall assume and perform:


(i) all obligations of Sellers arising or accruing after the Closing Date in respect of Sellers' contracts, agreements and arrangements with their customers providing for storage of business records at customary rates;


(ii) Sellers' obligations under routine contracts for goods and services (none of which are for capital expenditures) to be delivered or performed after the Closing Date;


(iii) Sellers' obligations under vehicle and other equipment leases listed on Schedule 3.5 which relate or are properly accruable to periods after the Closing Date; and


(iv) Sellers' obligations under the Leases which relate or are properly accruable to periods after the Closing Date (Buyer shall not assume Fortress-Boston's obligation with respect to past-due rent in respect of the E Street Leased Premises).


D. Sellers to Pay Pre-Closing Expenses. Sellers shall be responsible for and pay when due all costs and expenses of operating the Business accrued or accruable prior to the Effective Time.


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Section 2.3 Allocation. The Purchase Price shall be allocated among the Subject Assets pursuant to a written agreement between the parties which shall be negotiated and agreed upon prior to August 31, 1996 or if later, the date which is forty-five days after the Closing Date; provided that the maximum amount allocated to the Noncompetition and Confidentiality Agreements to be signed by individuals as described in Section 6.3 shall not exceed $500,000 in the aggregate; said $500,000 to be allocated among the individuals as directed by Stockholder.


Section 2.4 Sellers' Employees. Buyer shall not be obligated to offer employment to any employee of Sellers in connection with the acquisition of the Subject Assets, and such acquisition shall not grant any employee of Sellers a right of continued employment with Buyer. For a period of one year after the Closing Date, Sellers and Stockholder shall not offer conflicting employment to any person who accepts employment with Buyer. Notwithstanding the foregoing, Buyer anticipates that it will offer employment to all of Sellers' employees employed in the Business except Dennis Biddle (who will remain in the employ of Sellers), subject to further review of Sellers' operations. Buyer shall notify Sellers on or prior to the Closing Date as to any of Sellers' employees to whom Buyer does not intend to offer employment.


Section 2.5 Operations between Effective Time and Closing Date. Notwithstanding any other provision in this Agreement to the contrary, provided that the Closing occurs, operation of the Business from the Effective Time to the Closing Date will be at the risk and for the account of Buyer, except that: (i) Sellers shall be solely responsible for any injury, death or damage caused by their employees or agents during such period, and (ii) Sellers have made and shall make no capital expenditures without the consent of Buyer during such period (which shall not be unreasonably withheld). Sellers shall not be responsible for claims or causes of action covered by Sellers' liability insurance, provided that Buyer shall have been identified as an additional insured on Sellers' liability policy; Sellers shall provide a certificate of insurance to such effect. Approximately $30,000 of racking was previously ordered by Sellers; such racking has been delivered, and will be paid for by Sellers. Provided that the Closing occurs, Buyer shall be responsible for and pay when due all expenses of operating the Business accrued or accruable between the Effective Time and the Closing Date, and shall reimburse Sellers for any such costs and expenses paid by Sellers, including sales, general and administrative expenses; and Buyer shall be entitled to all revenue earned in such period. During the portion of such period after the date hereof, in addition to Sellers' obligation to conduct business in the ordinary course, Sellers shall not make any commitment for capital expenditures, and Buyer's personnel shall have the right to observe the conduct of the Business upon 24 hours' notice.


Section 2.6 Post-Closing Adjustment Date. Buyer and Sellers shall make all proration adjustments and payments arising hereunder, to the extent known, on the Closing Date. On September 17, 1996 (or if later, sixty days after the Closing Date), Buyer and Sellers shall make any additional net adjustment by payment of one to the other to effect a final adjustment in the Purchase Price. If any adjustments are at that date not determined, Buyer and Sellers shall agree in writing as to the date and method of settlement of such undetermined amounts.


Section 2.7 Prepaid Storage. Sellers shall grant to Buyer a credit against the Purchase Price equal to payments which Sellers have received prior to the Closing Date in respect of storage and services (if any) to be provided after the Effective Time.


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Section 2.8 Earnest Money Escrow Deposit. On or prior to the date of this Agreement, Buyer, Sellers and Stockholder have executed an Earnest Money Escrow Agreement (the "Escrow Agreement") with the law firm of Warner & Stackpole LLP, as escrow agent (the "Escrow Agent"). On the date when Sellers and Stockholder have executed and delivered a copy of this Agreement to Buyer, Buyer shall deliver to the Escrow Agent an earnest money deposit in the amount of Five Hundred Thousand Dollars ($500,000) to be held and disbursed as provided therein.


Section 2.9 Certain Leased Racking. Stockholder has approximately 50,000 cubic feet of leased racking in the Hialeah Building which is leased from Eaton Financial pursuant to two leases (rack lease numbers 246828 and 268924), one of which has approximately 13 months to expiration and the other of which has approximately 15 months to expiration. In order to enable Stockholder to avoid a significant prepayment penalty, Buyer will not require Stockholder to pay off such leases and purchase the racking as of the Closing Date. Instead, Buyer will have the use of the affected racking from and after the Closing Date. Stockholder will continue making lease payments through the expiration of the leases, will purchase the racking from the lessor upon expiration of the leases, and will transfer, sell and assign the racking to Buyer promptly thereafter, for no additional consideration.


(ARTICLE III COMMENCES ON THE NEXT PAGE)


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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS AND STOCKHOLDERES


Sellers and Stockholder jointly and severally represent and warrant to Buyer as follows as of the date hereof:


Section 3.1 Organization and Good Standing. Each of Fortress-Boston and Stockholder is (or at the Closing Date will be) a corporation duly organized and validly existing under the laws of the State of Delaware and Fortress-Miami is (or at the Closing Date will be) a corporation duly organized and validly existing under the laws of the State of Florida. Certain of Sellers and Stockholder may not be in good standing on the date hereof or the Closing Date because of failure to file certain annual reports, a list of which has been supplied to Buyer. All such annual reports and other filings necessary to place each entity in good standing will have been filed (together with payment of required fees) with the appropriate governmental agencies on or prior to the Closing Date. Sellers and Stockholder shall provide copies of good standing certificates for Fortress-Boston and Stockholder from Delaware and Massachusetts, and for Fortress-Miami from Florida, prior to August 31, 1996. Each of Sellers and Stockholder has all requisite corporate power and authority to own, operate, sell and lease its properties and to carry on its respective business as presently conducted. Each of Sellers and Stockholder has all requisite corporate power and authority to execute and deliver, and perform its corporate obligations under, this Agreement.


Each of Fortress-Boston and Stockholder is (or at the Closing Date will be) duly qualified to transact business and in good standing in the Commonwealth of Massachusetts and in each other jurisdiction in which the nature of property owned or leased by it or the conduct of its business requires it to be qualified, and Fortress-Miami is (or at the Closing Date will be) duly qualified to transact business and in good standing in each jurisdiction in which the nature of property owned or leased by it or the conduct of its business requires it to be qualified, except (as to each entity) where the failure to be duly qualified to transact business or in good standing would not have a material adverse effect on its business or assets.


Section 3.2 Authorization. The execution and delivery of this Agreement and performance by Sellers and Stockholder of their respective obligations hereunder, and all transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action. This Agreement has been, and the other agreements and documents required to be delivered by Sellers and Stockholder in accordance with the provisions hereof (the "Sellers' Documents") will be, duly executed and delivered on behalf of Sellers and Stockholder, by duly authorized officers of each; and this Agreement constitutes, and Sellers' Documents when executed and delivered will constitute, the valid and binding obligations of such of Sellers and Stockholder which sign such Sellers' Documents, enforceable in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization or similar laws from time to time in effect affecting creditors' rights generally and by legal and equitable limitations on the availability of specific remedies.


Section 3.3 Compliance With Other Instruments. Neither the execution and delivery by Sellers and Stockholder of this Agreement and the Sellers' Documents, nor the consummation by Sellers and Stockholder of the transactions contemplated hereby and thereby, will, with or without the giving of notice or passage of time, or both, be contrary to or violate, breach, or constitute a default under, or permit the termination or acceleration of maturity of, or result in the imposition of any


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lien, claim or encumbrance upon any property or asset of Sellers or Stockholder pursuant to any provision of, any note, bond, indenture, mortgage, deed of trust, evidence of indebtedness or lease agreement, other agreement or instrument or any judgment, order, injunction or decree by which Sellers or Stockholder are bound, to which any of them is a party, or to which the assets of Sellers or Stockholder are subject; nor is the effectiveness or enforceability of this Agreement or such other documents adversely affected by any provision of the corporate charter or by-laws of Sellers or Stockholder.


Section 3.4 No Governmental or Other Authorization Required. To the best of Sellers' knowledge, no authorization or approval of, or filing with, any governmental agency, authority or other body or any other third persons will be required in connection with Sellers' or Stockholder's execution and delivery of this Agreement or the consummation by Sellers and Stockholder of the transactions contemplated hereby and thereby other than (i) the consent of the landlords pursuant to the Leases and (ii) as set forth in Schedule 3.4.


Section 3.5 Title to Subject Assets; Sufficiency. Sellers have good title to all the Subject Assets; to the best of their knowledge, title to the Subject Assets is free and clear of all Encumbrances except as set forth on Schedule 3.5, which lists Encumbrances of which Sellers have knowledge and identifies leased equipment and vehicles. Neither Seller is a party to, nor are the Subject Assets subject to, any judgment, judicial order, writ, injunction or decree that materially adversely affects the Subject Assets or the use thereof by Sellers. The Subject Assets include all assets regularly used by Sellers in the operation of the Business.


Section 3.6 Contracts and Other Interests. To the best of Sellers' knowledge, all material contracts for goods and services (contracts requiring payment by Sellers of more than $500 per month) and all customer contracts in respect of Sellers' customers whose business averaged in excess of 2,000 cubic feet of storage per month for the six months ended December 31, 1995 are in full force and effect, valid and enforceable in accordance with their respective terms against the other parties thereto. Sellers have received no notice of default of either Seller under any such material contracts and customer contracts, nor, to the best of Sellers' knowledge, are material amendments pending with respect to any material contracts or customer contracts to which either Seller is a party. To the best of Sellers' knowledge, Sellers have no oral agreements with customers which require Sellers to provide storage or services at no charge or at rates significantly below the average rates for such services set forth in Sellers' written customer contracts, except for immaterial discounts and/or free services provided as incentives to certain accounts, and except for Fortress-Boston's contract with the Massachusetts Department of Employment and Training.


Section 3.7 Taxes. Sellers have filed all federal, state and local inco
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