-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ghox43Iqmh3q0Y3fhfknp2Uioe1nkEtsER7ofHzAQiPQ3aPtn/9BS4zSlDwO6bgO ORtCGWkQjR7QABlVyDZodQ== 0000912057-02-010766.txt : 20020415 0000912057-02-010766.hdr.sgml : 20020415 ACCESSION NUMBER: 0000912057-02-010766 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020321 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IRON MOUNTAIN INC/PA CENTRAL INDEX KEY: 0001020569 STANDARD INDUSTRIAL CLASSIFICATION: PUBLIC WAREHOUSING & STORAGE [4220] IRS NUMBER: 232588479 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13045 FILM NUMBER: 02580377 BUSINESS ADDRESS: STREET 1: 745 ATLANTIC AVENUE CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6175354766 MAIL ADDRESS: STREET 1: 745 ATLANTIC AVENUE CITY: BOSTON STATE: MA ZIP: 02111 FORMER COMPANY: FORMER CONFORMED NAME: PIERCE LEAHY CORP DATE OF NAME CHANGE: 19960807 10-K 1 a2073447z10-k.htm 10-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2001

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-13045

IRON MOUNTAIN INCORPORATED
(Exact name of registrant as specified in its charter)

Pennsylvania (State or other jurisdiction of incorporation)		23-2588479 (I.R.S. Employer Identification No.)
745 Atlantic Avenue, Boston, Massachusetts (Address of principal executive offices)		02111 (Zip Code)

617-535-4766
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Name of Exchange on Which Registered
Common Stock, $.01 par value per share ("Common Stock") 9¹/8% Senior Subordinated Notes Due 2007		New York Stock Exchange New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

As of March 1, 2002, the aggregate market value of the Common Stock of the registrant held by non-affiliates of the registrant was $2,155,654,992.48 based on the closing price on the New York Stock Exchange on such date.

Number of shares of the registrant's Common Stock at March 1, 2002: 84,384,049

IRON MOUNTAIN INCORPORATED
2001 FORM 10-K ANNUAL REPORT

Table of Contents

		Page
PART I
Item 1.	Business	1
Item 2.	Properties	11
Item 3.	Legal Proceedings	12
Item 4.	Submission of Matters to a Vote of Security Holders	12
PART II
Item 5.	Market for the Registrant's Common Stock and Related Shareholder Matters	13
Item 6.	Selected Consolidated Financial and Operating Information	13
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	33
Item 8.	Financial Statements and Supplementary Data	33
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	33
PART III
Item 10.	Directors and Executive Officers of the Registrant	34
Item 11.	Executive Compensation	37
Item 12.	Security Ownership of Certain Beneficial Owners and Management	40
Item 13.	Certain Relationships and Related Transactions	42
PART IV
Item 14.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	44

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made statements in this annual report on Form 10-K that constitute "forward-looking statements" as that term is defined in the federal securities laws. These forward-looking statements concern our operations, economic performance and financial condition. The forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements.

Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. Important factors that could cause actual results to differ from expectations include, among others:

•: the cost and availability of appropriate storage facilities;
•: our significant indebtedness and the cost and availability of financing for contemplated growth;
•: changes in customer preferences and demand for our services;
•: rapid and significant changes in technology;
•: uncertainties related to international expansion;
•: difficulties related to the integration of acquisitions;
•: uncertainties related to expansion into digital businesses, including the timing of introduction and market acceptance of our products and services;
•: effects of future changes in regulatory standards and requirements; and
•: other general economic and business conditions.

You should not rely upon forward-looking statements except as statements of our present intentions and of our present expectations which may or may not occur. You should read these cautionary statements as being applicable to all forward-looking statements wherever they appear. We assume no obligation to update or revise the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

PART I

Item 1. Business.

A. Development of Business.

We are the leader in outsourced records and information management services ("RIMS"). We are an international, full-service provider of records and information management and related services, enabling customers to outsource these functions. We have a diversified customer base that includes more than half of the Fortune 500 and numerous commercial, legal, banking, healthcare, accounting, insurance, entertainment, and government organizations. We provide storage for all major media, including paper, which is the dominant form of records storage, magnetic media (including computer tapes), microfilm and microfiche, master audio and videotapes, film and optical disks, X-rays and blueprints. Our principal services provided to our storage customers include courier pick-up and delivery, filing, retrieval and destruction of records, database management, customized reporting and disaster recovery support. We also sell storage materials, including cardboard boxes and magnetic media, and provide confidential destruction, consulting, facilities management, fulfillment and other outsourcing services.

Iron Mountain was founded in 1951 in an underground facility near Hudson, New York. Now in our 51^st year, we have experienced tremendous growth and organizational change particularly since successfully completing the initial public offering of our common stock in February 1996. Since then, we have built ourselves from a regional business with limited product offerings and annual revenues of $104 million for 1995 into the global leader in outsourced records and information management services, providing a full range of services to customers in 124 markets around the world. For the year ended December 31, 2001, we had total revenues of nearly $1.2 billion.

The growth since 1995 has been accomplished primarily through the acquisition of 79 domestic and 17 international records management companies, including two acquisitions completed in the first quarter of 2002. The goal of our current acquisition program is to supplement internal growth by continuing to establish a footprint in targeted international markets and adding fold-in acquisitions both domestically and internationally. Having substantially completed our North American geographic expansion, we shifted our focus from growth through acquisitions to internal revenue growth. In 2001, as a result of this recent shift, internal revenue growth exceeded growth through acquisitions for the first time since we began our acquisition program in 1996. In addition, our capital expenditures, made primarily to support internal growth, exceeded the aggregate acquisition consideration we conveyed in 2001. We expect this trend to continue and to achieve this internal growth through the use of aggressive selling efforts to acquire new customers and by offering a wide range of complementary and ancillary services to expand our new and existing customer relationships.

On February 1, 2000, we completed our most important acquisition to date by merging with Pierce Leahy Corp. in a stock-for-stock merger valued at $1.0 billion, including the assumption of debt and related transaction costs. Since the merger, we have been integrating the cultures, operating systems and procedures, and information technology systems of Iron Mountain and Pierce Leahy. The integration process is continuing and is expected to proceed through 2002. See Note 6 of Notes to Consolidated Financial Statements.

As of December 31, 2001, we provided services to over 150,000 customer accounts in 80 markets in the United States and 44 markets outside of the United States, employed over 11,000 people and operated over 650 records management facilities in the United States, Canada, Europe and Latin America.

B. Description of Business.

The Records and Information Management Services Industry

Overview

Companies in the RIMS industry store and manage information in a variety of media formats, which can broadly be divided into paper and electronic records, and provide a wide range of services related to the records stored. We refer to our general paper storage and management services as "business records management." Paper records are defined to include paper documents, as well as all other non-electronic media such as microfilm and microfiche, master audio and videotapes, film, X-rays and blueprints. Electronic records include various forms of magnetic media such as computer tapes and hard drives and optical disks. We refer to our electronic records storage and management services as "data security services" and "e-Vaulting" (collectively, off-site data protection) and "digital archiving services."

Paper Records

Paper records may be broadly divided into two categories: active and inactive. Active records relate to ongoing and recently completed activities or contain information that is frequently referenced. Active records are usually stored and managed on-site by the organization that originated them to ensure ready availability. Inactive paper records are the principal focus of the RIMS industry. Inactive records consist of those records that are not needed for immediate access but which must be retained for legal, regulatory and compliance reasons or for occasional reference in support of ongoing business operations. Based on industry studies, we believe that inactive records make up approximately 80% of all paper records. A large and growing specialty subset of the paper records market is medical records. These are active and semi-active records that are often stored off-site with and serviced by a RIMS vendor. Special regulatory requirements often apply to medical records.

Electronic Records

Electronic records management focuses on the storage of, and related services for, computer media that are either a back-up copy of recently processed data or archival in nature. Back-up data exists because of the need of many businesses to maintain back-up copies of data in order to be able to operate in the event of a system failure, casualty loss or other disaster. It is customary for data processing groups to rotate back-up tapes to off-site locations on a regular basis and to require multiple copies of such information at multiple sites. We refer to these services as "data security services."

In addition to the management of physical copies of back-up data, we are introducing new services that allow for the direct transfer, storage and retrieval of back-up data between our customers and our secure electronic media storage facilities via public broadband communications networks. We refer to these services as "e-Vaulting."

Archival data is generally retained for legal, regulatory and compliance reasons or for occasional reference in support of ongoing business operations. Historically, archival data, as well as back-up data, has been stored on physical media such as computer tapes or optical disks. We are collaborating with other companies to develop technologies to provide storage and related services for this data electronically in its original digital format. Customers' data will be captured via telecommunication lines or the Internet. Based on the nature of the data, customers can choose to store their data on-line for real-time access, near-line access for a slightly lower cost or off-line on computer tapes or disks for less time-critical data. We refer to these developing services as "digital archiving services."

Growth of Market

We believe that the volume of stored paper and electronic records will continue to increase for a number of reasons, including: (i) the rapid growth of inexpensive document producing technologies such as facsimile, desktop publishing software and desktop printing; (ii) the continued proliferation of data processing technologies such as personal computers and networks; (iii) regulatory requirements; (iv) concerns over possible future litigation and the resulting increases in volume and holding periods of documentation; (v) the high cost of reviewing records and deciding whether to retain or destroy them; (vi) the failure of many entities to adopt or follow policies on records destruction; and (vii) audit requirements to keep back-up copies of certain records in off-site locations.

Despite the growth of new "paperless" technologies, such as the Internet and e-mail, we believe that stored information remains predominantly paper-based. These technologies have prompted the creation of hard copies of such electronic information and have also led to increased demand for data security services, such as the storage and off-site rotation of back-up copies of magnetic media, and outsourcing support services that address the needs of data center operations and disaster recovery programs. In addition, we believe that the proliferation of digital information technologies and distributed data networks has created an emerging need for efficient, cost-effective, high quality solutions for electronic archiving and the management of electronic documents.

Consolidation of a Highly Fragmented Industry

Over the past several years, there has been consolidation in the highly fragmented RIMS industry. Most RIMS companies serve a single local market, and are often either owner-operated or ancillary to another business, such as a moving and storage company. We believe that this trend will continue because of the industry's capital requirements for growth, opportunities for large RIMS providers to achieve economies of scale and customer demands for more sophisticated technology-based solutions.

We believe that the consolidation trend in the industry is also due to, and will continue as a result of, the preference of certain large organizations to contract with one vendor in multiple cities and countries for multiple services. In particular, customers increasingly demand a single, large, sophisticated company to handle all of their important paper and electronic records needs. Large, national and multinational companies are better able to satisfy these demands than smaller competitors. We have made, and intend to continue to make, acquisitions of our competitors, many of whom are small, single city operators.

Description of Our Business

We generate our revenues by providing storage for a variety of information media formats, core records management services and an expanding menu of complementary products and services to a large and diverse customer base. Providing outsourced storage for records and information is the mainstay of our customer relationships and provides the foundation for our revenue growth. The core services, which are a vital part of a comprehensive records management program, are highly recurring in nature and therefore very predictable. Core services consist primarily of the handling and transportation of stored records and information. In our confidential destruction business, core services consist primarily of the scheduled collection and handling of sensitive records. In 2001, our storage and core service revenues represented approximately 86% of our total revenues. In addition to our core services, we offer a wide array of complementary products and services such as performing special project work, selling RIMS-related products, providing fulfillment services and consulting on records management issues. These services address more specific needs and are designed to enhance our customers' overall records management programs. These services complement our core services; however, they are more episodic and discretionary in nature. Revenue generated by our business records and off-site data protection businesses includes both core and complementary components.

Business Records Management

The hard copy business records stored by our customers with us by their nature are not very active. These types of records are stored in cartons packed by the customer. We use bar-coded tracking technologies known as the Safekeeper™ system and the SafekeeperPLUS™ system, which combines the architecture of the Pierce Leahy User Solution® ("PLUS®") system and the enhanced functionality of Safekeeper™, and other procedures to ensure the integrity of the contents of a customer's cartons and to efficiently store and later retrieve a customer's cartons. As a central component of our integration plan for the Pierce Leahy transaction, we developed SafekeeperPLUS™ and continue a city-by-city conversion program that is expected to be completed in 2002. Storage charges are generally billed monthly on a per storage unit basis, usually either per carton or per cubic foot of records, and include the provision of space, racking, computerized inventory and activity tracking and physical security.

Off-Site Data Protection

Data security services consist of the storage and rotation of back-up computer media as part of corporate disaster and business recovery plans. Computer tapes, cartridges and disk packs are transported off-site by our courier operations on a scheduled basis to secure, climate-controlled facilities, where they are available to customers 24 hours a day, 365 days a year, to facilitate data recovery in the event of a disaster. We use various information technology systems such as MediaLink™ and SecureBase™ software to manage this process. We also manage tape library relocation and support disaster recovery testing and execution. We are now in the early stages of offering e-Vaulting as part of our off-site data protection services product line. E-Vaulting allows customers to utilize different levels of electronic transfer, storage and recovery of critical back-up data ranging from real time transfers using storage silos to electronic transfer and off-line storage for less immediate needs.

Healthcare Information Services

Healthcare information services principally include the handling, storage, filing, processing and retrieval of medical records used by hospitals, private practitioners and other medical institutions. Medical records tend to be more active in nature and are typically stored on specialized shelving systems that provide access to individual files. Healthcare information services also include recurring project work and ancillary services. Recurring project work involves the on-site removal of aged patient files and related computerized file indexing. Ancillary healthcare information services include release of information, temporary staffing, contract coding, facilities management and imaging.

Vital Records Services

Vital records contain critical or irreplaceable data such as master audio and video recordings, film, software source code and other highly proprietary information. Vital records may require special facilities or services, either because of the data they contain or the media on which they are recorded. Our charges for providing enhanced security and special climate-controlled environments for vital records are higher than for typical storage functions. We provide the same ancillary services for vital records as we provide for our other storage operations.

Service and Courier Operations

Service and courier operations are an integral part of a comprehensive records management program for all physical media including paper and electronic records. They include adding records to storage, temporary removal of records from storage, refiling of removed records, permanent withdrawals from storage, and destruction of records. Service charges are generally assessed for each procedure on a per unit basis. The Safekeeper and SafekeeperPLUS systems control the service processes from order entry through transportation and invoicing for business records while MediaLink and SecureBase manage the process for the data security services business.

Courier operations consist primarily of the pickup and delivery of records upon customer request. Charges for courier services are based on urgency of delivery, volume and location and are billed monthly. As of December 31, 2001, we were utilizing a fleet of more than 2,000 owned or leased delivery vehicles.

Confidential Destruction

Confidential destruction involves the shredding of sensitive documents for corporate customers that, in many cases, also use our services for management of less sensitive archival records. We believe that customers are motivated by privacy regulation and the desire to protect their proprietary trade secrets. These services typically include the scheduled pick-up of loose office records which customers accumulate in specially designed secure containers we provide. Complementary to our shredding operations is the sale of the resultant waste paper to third-party recyclers. We currently perform these services in 23 markets and seek to expand our presence in this business through acquisitions and internal start-ups.

Intellectual Property Protection Services

We provide intellectual property protection services through our wholly owned subsidiary, DSI Technology Escrow Services, Inc. DSI specializes in third party technology escrow services that protect intellectual property assets such as software source code. In addition, DSI assists in securing intellectual property as collateral for lending, investments and other joint ventures, in managing domain name registrations and transfers, and provide expertise and assistance in complying with the Securities and Exchange Commission (the "Commission") electronic records regulations.

Digital Archiving Services

Our digital archiving services focus on archiving digital information with long-term preservation requirements. These services represent the digital analogy to our paper records management services. Typical digital records include electronic mail, electronic documents retained for legal or compliance purposes and other electronic records documenting business transactions. Digital archiving services are offered for image-based records as well.

The growth rate of mission-critical digital information is accelerating, driven in part by the use of the Internet as a distribution and transaction medium. The rising cost and increasing importance of digital information management, coupled with the increasing availability of telecommunications bandwidth at lower costs, may create meaningful opportunities for us. We are cultivating marketing partnerships with technology providers whose products can interface with our digital archives.

We believe the issues encountered by customers trying to manage their electronic records are similar to the ones they face in their business records management programs and consist primarily of: (i) storage capacity and the preservation of data; (ii) access to and control over the data in a secure environment; and (iii) the need to keep electronic records due to regulatory compliance or for litigation support. Products and services are currently being developed to address these needs and expand the array of services we may offer for electronic records.

Complementary Services and Products

We offer a variety of additional services within all of our business lines, which customers may request or contract for on an individual basis. These services include conducting records inventories, packing records into cartons or other containers, and creating computerized indices of files and individual documents. We also provide services for the management of active records programs. We can provide these services, which generally include document and file processing and storage, both off-site at our own facilities and by supplying our own personnel to perform management functions on-site at the customer's premises.

Other complementary lines of business that we operate include fulfillment services and professional consulting services. Fulfillment services are performed by our wholly owned subsidiary, COMAC, Inc. COMAC stores customer marketing literature and delivers this material to sales offices, trade shows and prospective customers' sites based on current and prospective customer orders. In addition, COMAC assembles custom marketing packages and orders, and manages and provides detailed reporting on customer marketing literature inventories.

We provide professional consulting services to customers, enabling them to develop and implement comprehensive records and information management programs. Our consulting business draws on our experience in RIMS to analyze the practices of such companies and assist them in creating more effective programs of records and information management. Our consultants work with these customers to develop policies for document review, analysis and evaluation and for scheduling of document retention and destruction.

We also sell: (i) a full line of specially designed corrugated cardboard, metal and plastic storage containers; (ii) magnetic media products including computer tapes, cartridges and drives, tape cleaners and supplies and CDs; and (iii) computer room equipment and supplies such as racking systems, furniture, bar code scanners and printers.

The amount of revenues derived from our business records management, off-site data protection, international and other operating segments and other relevant financial data for fiscal years 1999, 2000 and 2001 are set forth in Note 12 of Notes to Consolidated Financial Statements.

Financial Characteristics of Our Business

Our financial model is based on the recurring nature of our revenues. The historical predictability of this revenue stream and the resulting EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) and Adjusted EBITDA¹ allow us to operate with a high degree of financial leverage. Since 1995, we have invested approximately $2.8 billion in acquisitions and capital expenditures for property, plant and equipment to support our growth. Our primary financial goal has always been, and continues to be, to increase consolidated Adjusted EBITDA in relation to capital invested, even as our focus has shifted from growth through acquisitions to internal revenue growth. Adjusted EBITDA is a source of funds for investment in continued growth and for servicing indebtedness. Our business has the following financial characteristics:

1: Adjusted EBITDA is defined as EBITDA adjusted for extraordinary items, other income (expense), merger-related expenses, stock option compensation expense and minority interest. Merger-related expenses are primarily those expenses directly related to our merger with Pierce Leahy that cannot be capitalized and include severance and pay-to-stay payments, costs of exiting certain facilities, system conversion costs and other transaction-related costs. Stock option compensation expense represents non-cash charges resulting from the acceleration and extension of previously granted stock options as part of separation agreements with certain executives.

Adjusted EBITDA and Adjusted EBITDA-based calculations are used by the holders of our publicly issued debt as important criteria for evaluating our business and, as a result, all of our bond indentures contain covenants in which Adjusted EBITDA-based calculations are used as the primary measure of financial performance. In addition, we use Adjusted EBITDA as the basis for evaluating the performance of and as a basis for allocating resources to our internal operating segments. However, you should not consider EBITDA or Adjusted EBITDA to be substitutes for operating or net income (as determined in accordance with generally accepted accounting principles, or GAAP) as indicators of our performance or for cash flow from operations (as determined in accordance with GAAP) as measures of liquidity.

•: Recurring Revenues. We derive a majority of our consolidated revenues from fixed periodic, usually monthly, fees charged to customers based on the volume of records stored. Our revenues

from these fixed periodic storage fees have grown for 52 consecutive quarters. Once a customer places paper records in storage with us and until those records are destroyed or permanently removed, for which we typically receive a service fee, we receive recurring payments for storage fees without incurring additional labor or marketing expenses or significant capital costs. Similarly, contracts for the storage of electronic back-up media consist primarily of fixed monthly payments. In each of the last five years, storage revenues, which are stable and recurring, have accounted for approximately 60% of our total revenues. This stable and growing storage base also provides the foundation for increases in revenues, EBITDA and Adjusted EBITDA.

•: Historically Non-Cyclical Business. We have not experienced any significant reductions of our storage business as a result of past general economic downturns, although we can give no assurance that this would be the case in the future. During this most recent economic slowdown some customers delayed or postponed expenditures for certain complementary records management projects. Additionally, the rate at which customers added new cartons to their inventory with us slowed somewhat, which may be a result of current economic conditions. We believe that companies that have outsourced RIMS programs are less likely during economic downturns to incur the move-out costs and other expenses associated with switching vendors or moving their RIMS programs in-house. However, some customers may cancel or delay certain non-recurring or discretionary expenditures as a means of reducing their short-term costs.
•: Inherent Growth from Existing Paper Records Customers. Our paper records customers have on average generated additional Cartons² at a faster rate than stored Cartons have been destroyed or permanently removed. From January 1, 1996 through December 31, 2001, our annual Net Carton Growth From Existing Customers³ has averaged in excess of 5%. We believe the consistent growth of our paper storage revenues is the result of a number of factors, including: (i) the trend toward increased records retention; (ii) customer satisfaction with our services; and (iii) the costs and inconvenience of moving storage operations in-house or to another provider of RIMS.

2: The term "Carton" is defined as a measurement of volume equal to a single standard storage carton, approximately 1.2 cubic feet. The number of cartons stored does not include storage volumes in our vital records services and data security services, which are described below.
3: The term "Net Carton Growth From Existing Customers" is defined as the increase in net Cartons attributable to existing customers without giving effect to the loss of approximately 1.0 million Cartons in fires attributed to arson in March 1997 in two of our facilities in South Brunswick Township, New Jersey. See "Item 3. Legal Proceedings." This calculation also excludes our Latin American and European operations as well as a portion of our medical records operations.

•: Diversified and Stable Customer Base. As of December 31, 2001, we had over 150,000 customer accounts in a variety of industries. We currently provide services to more than half of the Fortune 500 and numerous commercial, legal, banking, healthcare, accounting, insurance, entertainment, and government organizations. No customer accounted for more than 2% of our consolidated revenues for the year ended December 31, 2001. From January 1, 1996 through December 31, 2001, average annual permanent removals of Cartons, not including destructions, represented approximately 4% of total Cartons stored.
•: Capital Expenditures Related Primarily to Growth. Our RIMS business requires limited annual capital expenditures made in order to maintain our current revenue stream. From January 1, 1996 through December 31, 2001, approximately 90% of our aggregate capital expenditures were growth-related investments, primarily in storage systems, management information systems, new buildings and improvements to existing facilities. These growth-related capital expenditures are primarily discretionary and create additional capacity for increases in revenues, EBITDA and Adjusted EBITDA.

Growth Strategy

Our objective is to maintain our position as the leader in records and information management services. Domestically, we seek to be one of the largest RIMS providers in each of our geographic markets. Internationally, the objectives are to continue to capitalize on our expertise in the RIMS industry and to make additional acquisitions and investments in selected international markets. Our primary avenues of growth are: (i) increased business with existing customers; (ii) additions of new customers; (iii) the introduction of new products and services such as e-Vaulting, digital archiving and confidential destruction; and (iv) selective acquisitions in new and existing markets.

Growth from Existing Customers

Our existing customers storing paper records contribute to storage and storage-related services revenue growth because on average they generate additional Cartons at a faster rate than old Cartons are destroyed or permanently removed. In order to maximize growth opportunities from existing customers, we seek to maintain high levels of customer retention by providing premium customer service through our local management staff.

Through our local account management staff, we leverage existing business relationships with our customers by selling complementary services and products. Services include records tracking, indexing, customized reporting, vital records management and consulting services.

Additions of New Customers

Our sales force is dedicated to two primary objectives: establishing new customer account relationships and expanding new and existing customer relationships by offering a wide array of complementary services and products. In order to accomplish these objectives, the sales force draws on our national marketing organization and senior management. As a result of acquisitions and our decision to recruit additional qualified sales professionals, we have increased the size of our sales force to approximately 390 such professionals as of December 31, 2001.

Introduction of New Products and Services

We continue to expand our menu of products and services. We have significantly increased our presence in the confidential destruction industry and are in the process of developing new e-Vaulting and digital archiving services. These new products and services allow us to further penetrate our existing customer accounts and attract new customers in previously untapped markets.

Growth through Domestic Acquisitions

Our acquisition strategy includes expanding geographically, as necessary, and increasing our presence and scale within existing markets through "fold-in" acquisitions. We have a successful record of acquiring and integrating RIMS companies. See "—Completed Acquisitions." We intend to continue our domestic acquisition program. However, given the small number of large acquisition prospects and our increased revenue base, future acquisitions are expected to be less significant to overall domestic revenue growth than they have been historically.

International Growth Strategy

We also intend to continue to make acquisitions and investments in RIMS businesses outside the United States. We have acquired and invested in, and seek to acquire and invest in, RIMS companies in countries, and, more specifically, markets within such countries, where we believe there is sufficient demand from existing multinational customers or the potential for growth. Since beginning our international expansion program in January 1999, directly and through joint ventures, we have

expanded our operations into Canada, Europe and Latin America. These transactions have taken, and may continue to take, the form of acquisitions of the entire business or controlling or minority investments, with a long-term goal of full ownership. In addition to the criteria we use to evaluate domestic acquisition candidates, we also evaluate the presence in the potential market of our existing clients as well as the risks uniquely associated with an international investment, including those risks described below.

The experience, depth and strength of local management are particularly important in our international acquisition strategy. As a result, we have formed joint ventures with, or acquired significant interests in, target businesses throughout Europe and Latin America. We have a 50.1% controlling interest in each of our Iron Mountain Europe Limited, Iron Mountain South America, Ltd. and Sistemas de Archivo Corporativo (a Mexican limited liability company) subsidiaries. Iron Mountain South America has in some cases bought controlling, yet not full, ownership in local businesses in order to enhance our local market expertise. We believe this strategy, rather than an outright acquisition, may, in certain markets, better position us to expand the existing business, although our long-term goal is to acquire full ownership of each such business. The local partner benefits from our expertise in the RIMS industry and, in certain cases, our technology, and we benefit from our local partner's knowledge of the market, relationships with customers and their presence in the community.

Our international investments are subject to risks and uncertainties relating to the indigenous political, social, regulatory, tax and economic structures of other countries, as well as fluctuations in currency valuation, exchange controls, expropriation and governmental policies limiting returns to foreign investors. At this time, there can be no assurance as to whether any international investment will be successful in achieving our objectives.

The amount of our revenues derived from international operations and other relevant financial data for fiscal years 1999, 2000 and 2001 are set forth in Note 12 of Notes to Consolidated Financial Statements. During 2001, we derived approximately 13% of our revenues from outside of the United States.

Completed Acquisitions

As part of our growth strategy, from January 1, 1999 through December 31, 2001, we acquired 45 RIMS businesses. The following table presents certain information with respect to the acquisitions completed by us between January 1, 1999 and December 31, 2001 (dollars in millions):

				Components of Purchase Price Consideration
	Number	Total Aggregate Revenues Represented (1)		Cash Paid and Debt Assumed and Issued		Fair Value of Common Stock and Options Issued		Total Purchase Price
1999 Acquisitions	17	$	98	$	215	$	46	$	261
2000 Acquisitions (2)	12		401		732		447		1,179
2001 Acquisitions	16		37		83		0		83

(1): Total annual aggregate revenues were calculated in each case by reference to the revenues of each of the acquired businesses during the year in which they were acquired. This calculation includes an estimate of total revenues for the portion of the year of acquisition during which any such acquired business was not included in our results of operations.
(2): The total purchase price for the 2000 Acquisitions includes $1.0 billion for the acquisition of Pierce Leahy on February 1, 2000.

Customers

Our customer base is diversified in terms of revenues and industry concentration. We track customer accounts based on invoices. Accordingly, depending upon how many invoices have been arranged at the request of a customer, one organization may represent multiple customer accounts. As of December 31, 2001, we had over 150,000 customer accounts in a variety of industries. We currently provide services to more than half of the Fortune 500 and numerous commercial, legal, banking, healthcare, accounting, insurance, entertainment, and government organizations. No customer accounted for more than 2% of our consolidated revenues for the year ended December 31, 2001.

Competition; Alternative Technologies

We compete with our current and potential customers' internal records and information management services capabilities. We can provide no assurance that these organizations will begin or continue to use an outside company such as Iron Mountain for their future records and information management services.

We compete with multiple RIMS providers in all geographic areas where we operate. We believe that competition for customers is based on price, reputation for reliability, quality of service and scope and scale of technology and that we generally compete effectively based on these factors.

We also compete with other RIMS providers for companies to acquire. Some of our competitors may possess substantial financial and other resources. If any such competitor were to devote additional resources to the RIMS business and such acquisition candidates or focus their strategy on our markets, our results of operations could be adversely affected.

We derive most of our revenues from the storage of paper documents and storage-related services. This storage requires significant physical space. Alternative storage technologies exist, many of which require significantly less space than paper. These technologies include computer media, microform, CD-ROM and optical disk. To date, none of these technologies has replaced paper as the principal means for storing information. However, we can provide no assurance that our customers will continue to store most of their records in paper format. A significant shift by our customers to storage of data through non-paper based technologies, whether now existing or developed in the future, could adversely affect our business. We are collaborating with other companies to develop e-Vaulting and digital archiving service products designed to address our customers' emerging need for efficient, cost-effective, high quality solutions for electronic archiving and the management of electronic documents.

Employees

As of December 31, 2001, we employed approximately 8,700 full-time employees in the United States. Directly and through majority-owned joint ventures, as of December 31, 2001, we employed approximately 2,600 full-time employees outside of the United States. A small percentage of our employees are represented by unions. These unionized employees are located in California and one city in Canada. As of December 31, 2001, the aggregate number of unionized employees was approximately 365.

All domestic non-union employees are eligible to participate in our benefit programs, which include medical, dental, life, short and long-term disability and accidental death and dismemberment plans. Unionized employees receive these types of benefits through their unions. In addition to base compensation and other usual benefits, all full-time domestic employees participate in some form of incentive-based compensation program that provides payments based on profits, collections or attainment of specified objectives for the unit in which they work. International employees participate

in separate benefit and incentive-based compensation programs. Management believes that we have good relationships with our employees and unions.

Insurance

For strategic risk transfer purposes, we maintain a comprehensive insurance program with insurers that we believe to be reputable and in amounts that we believe to be appropriate. Property insurance is purchased on an all-risk basis, including flood and earthquake, subject to certain policy conditions, sublimits and deductibles, and inclusive of the replacement cost of real and personal property, including leasehold improvements, business income loss and extra expense. Separate policies for California earthquake exposures are maintained at what we believe to be appropriate limits and deductibles for that exposure. Included among other types of insurance carried by us are: workers compensation, general liability, umbrella, automobile, and directors and officers policies.

Our standard form of storage contract sets forth an agreed maximum valuation for each carton or other storage unit held by us, which serves as a limitation of liability for loss or damage, as permitted under the Uniform Commercial Code. In contracts containing such limits, such values are nominal, and we believe that in typical circumstances our liability would be so limited in the event of loss or damage to stored items for which we may be held liable. However, some of our agreements with large volume accounts and some of the contracts assumed in our acquisitions contain no such limits or contain higher limits or supplemental insurance arrangements. See "Item 3. Legal Proceedings" for a description of claims by particular customers seeking to rescind their contracts, including limitations on liability, as a result of the fires experienced at our South Brunswick Township, New Jersey facilities in 1997.

Environmental Matters

Some of our currently and formerly owned or operated properties were previously used by entities other than us for industrial or other purposes that involved the use or storage of hazardous substances or petroleum products or may have involved the generation of hazardous wastes. In some instances these properties included the operation of underground storage tanks or the presence of asbestos-containing materials. Although we have from time to time conducted limited environmental investigations and remedial activities at some of our former and current facilities, we have not undertaken an in-depth environmental review of all of our properties. Under various federal, state and local environmental laws, we may be potentially liable for environmental compliance and remediation costs to address contamination, if any, located at these properties as well as damages arising from such contamination. Environmental conditions for which we might be liable may also exist at properties that we may acquire in the future. In addition, future regulatory action and environmental laws may impose costs for environmental compliance that do not exist today.

We currently transfer a portion of our risk of financial loss due to currently undetected environmental matters by purchasing a pollution liability insurance policy, which covers all owned and leased locations. Coverage is provided for both liability and remediation exposures.

Item 2. Properties.

As of December 31, 2001, we conducted operations through 519 leased and 134 owned facilities containing a total of 41.5 million square feet of space. The leased facilities typically have initial lease terms of ten years with options to renew for an additional five to ten years. In addition, some of the leases contain either a purchase option or a right of first refusal upon the sale of the property. Our facilities are located throughout North America, Europe and Latin America, with the largest number of facilities in California, Florida, Illinois, New Jersey, Texas, Canada and the United Kingdom. We believe that the space available in our facilities is adequate to meet our current needs. See Note 13 of

Notes to Consolidated Financial Statements for information regarding our minimum annual rental commitments.

Item 3. Legal Proceedings.

In March 1997, we experienced three fires, all of which authorities have determined were caused by arson. The fires resulted in damage to one and destruction of our other RIMS facility in South Brunswick Township, New Jersey.

Certain of our customers or their insurance carriers have asserted claims as a consequence of the destruction of, or damage to, their records as a result of the fires, including claims with specific requests for compensation and allegations of negligence or other culpability on the part of Iron Mountain. We and our insurers have denied any liability on the part of Iron Mountain as to all of these claims.

We are presently aware of five pending lawsuits that have been filed against Iron Mountain by certain of our customers and/or their insurers, and of two lawsuits filed by the insurers of abutters of the South Brunswick facility, and of one lawsuit filed by a fire official who claims that he was injured in the course of fighting the first fire. Seven of these eight lawsuits have been consolidated for pre-trial purposes in the Middlesex County, New Jersey, Superior Court. The eighth lawsuit, brought by a single customer, is pending in the Supreme Court for New York County, New York. A ninth lawsuit, also brought by a single customer, was tried before a federal judge in New Jersey in February 2000. After trial, judgment was entered in favor of Iron Mountain; no appeal was filed in this matter.

We have denied liability and asserted affirmative defenses in all of the remaining cases arising out of the fires and, in certain of the cases, have asserted counterclaims for indemnification against the plaintiffs. Discovery is ongoing. We deny any liability as a result of the destruction of, or damage to, customer records or property of abutters as a result of the fires, which were beyond our control. We also deny any liability for the injuries allegedly sustained by the fire official. We intend to vigorously defend ourselves against these and any other lawsuits that may arise.

We were paid by our general liability and property insurance carrier for costs incurred as a result of business interruption and property damage due to the fires, and/or the related defense cost of third party claims. However, our errors and omissions carrier made an initial determination denying coverage as to these third party claims. In November 1998, we filed an action in the United States District Court for the District of Massachusetts seeking a declaration of coverage and other relief. The parties, together with the general liability and property carrier, have entered into a settlement agreement regarding reimbursement of defense costs and agreed to ongoing discussions regarding any remaining coverage issues.

The outcome of these proceedings cannot be predicted with certainty. Based on our present assessment of the situation, after consultation with legal counsel, management does not believe that the outcome of these proceedings will have a material adverse effect on our financial condition or results of operations, although there can be no assurance in this regard.

In addition to the matters discussed above, we are involved in litigation from time to time in the ordinary course of business with a portion of the defense and/or settlement costs being covered by various commercial liability insurance policies purchased by us. In the opinion of management, no other material legal proceedings are pending to which we, or any of our properties, are subject.

Item 4. Submission of Matters to a Vote of Security Holders.

There were no matters submitted to a vote of security holders of Iron Mountain during the fourth quarter of the fiscal year ended December 31, 2001.

PART II

Item 5. Market for the Registrant's Common Stock and Related Shareholder Matters.

Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "IRM." On December 5, 2001, our board authorized and approved a three-for-two stock split effected in the form of a dividend on our common stock. We issued the additional shares of common stock resulting from this stock dividend on December 31, 2001 to all shareholders of record as of the close of business on December 17, 2001.

The following table sets forth the high and low sale prices on the NYSE, for the years 2000 and 2001, giving effect to such stock split:

		Sale Prices
		High		Low
2000
	First Quarter(1)	$	23.25	$	18.50
	Second Quarter		24.54		19.75
	Third Quarter		24.67		20.67
	Fourth Quarter		25.00		19.67
2001
	First Quarter	$	28.43	$	21.08
	Second Quarter		29.97		22.77
	Third Quarter		30.00		26.50
	Fourth Quarter		30.47		25.33

(1): The high and low sale prices on the NYSE for the first quarter of 2000 include only the months of February and March as our merger with Pierce Leahy occurred on February 1, 2000.

The closing price of our common stock on the NYSE on March 1, 2002 was $31.02. As of March 1, 2002, there were 603 holders of record of our common stock. We believe that there are more than 9,400 beneficial owners of our common stock.

Our board currently intends to retain future earnings, if any, for the development of our businesses and does not anticipate paying cash dividends on our common stock in the foreseeable future. Future determinations by our board to pay cash dividends on our common stock would be based primarily upon our financial condition, results of operations and business requirements. Cash dividends, if any, would be payable at the sole discretion of our board out of the funds legally available for that purpose. Some of our credit agreements and indentures contain provisions that limit the amount of cash dividends we may pay and stock repurchases that we may make.

We have not paid dividends on our common stock, other than stock dividends, during the last two years.

Item 6. Selected Consolidated Financial and Operating Information.

The following selected consolidated statements of operations and balance sheet data have been derived from our audited consolidated financial statements. The selected consolidated financial and operating information set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our Consolidated Financial Statements and the Notes thereto included elsewhere in this filing.

On December 5, 2001, our board authorized and approved a three-for-two stock split effected in the form of a dividend on our common stock. We issued the additional shares of common stock resulting from this stock dividend on December 31, 2001 to all shareholders of record as of the close of business on December 17, 2001. All accompanying share and per share amounts have been restated to reflect the stock split.

			Year Ended December 31,
			1997			1998			1999			2000			2001
			(In thousands, except per share data)
Consolidated Statements of Operations Data:
Revenues:
	Storage		$	125,968		$	230,702		$	317,387		$	585,664		$	694,474
	Service and Storage Material Sales			82,797			153,259			202,162			400,707			476,642

		Total Revenues		208,765			383,961			519,549			986,371			1,171,116
Operating Expenses:
	Cost of Sales (excluding depreciation)			106,879			192,113			260,930			482,771			561,936
	Selling, General and Administrative			51,668			95,867			128,948			246,559			306,934
	Depreciation and Amortization			27,107			48,301			65,422			126,810			153,591
	Stock Option Compensation Expense			—			—			—			15,110			—
	Merger-related Expenses			—			—			—			9,133			3,673

		Total Operating Expenses		185,654			336,281			455,300			880,383			1,026,134
Operating Income				23,111			47,680			64,249			105,988			144,982
Interest Expense, Net				27,712			45,673			54,425			117,975			134,742
Other Income (Expense), Net				—			1,384			17			(6,045	)		(18,371	)

Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes and Minority Interest				(4,601	)		3,391			9,841			(18,032	)		(8,131	)
Provision (Benefit) for Income Taxes				(80	)		6,558			10,579			9,125			26,036
Minority Interest in Earnings (Losses) of Subsidiaries				—			—			322			(2,224	)		(1,929	)

Loss from Continuing Operations before Extraordinary Item				(4,521	)		(3,167	)		(1,060	)		(24,933	)		(32,238	)
Income from Discontinued Operations				—			201			241			—			—
Loss on Sale of Discontinued Operations				—			—			(13,400	)		—			—
Extraordinary Charge (net of tax benefit)				—			—			—			(2,892	)		(11,819	)

Net Loss Applicable to Common Shareholders			$	(4,521	)	$	(2,966	)	$	(14,219	)	$	(27,825	)	$	(44,057	)

Net Loss per Common Share — Basic and Diluted:
	Loss from Continuing Operations		$	(0.18	)	$	(0.08	)	$	(0.02	)	$	(0.31	)	$	(0.39	)
	Income from Discontinued Operations			—			0.01			0.01			—			—
	Loss on Sale of Discontinued Operations			—			—			(0.27	)		—			—

Loss Before Extraordinary Charge				(0.18	)		(0.07	)		(0.28	)		(0.31	)		(0.39	)
	Extraordinary Charge (net of tax benefit)			—			—			—			(0.04	)		(0.14	)

Net Loss Applicable to Common Shareholders			$	(0.18	)	$	(0.07	)	$	(0.28	)	$	(0.35	)	$	(0.53	)

Weighted Average Common Shares Outstanding — Basic and Diluted				25,758			41,205			50,018			79,688			83,666

(footnotes on following page)

	Year Ended December 31,
	1997			1998			1999			2000			2001
	(In thousands)
Other Data:
EBITDA	$	50,218		$	97,365		$	129,366		$	228,977		$	282,131
EBITDA as a Percentage of Total Revenues		24.1	%		25.4	%		24.9	%		23.2	%		24.1	%
Adjusted EBITDA(1)	$	50,218		$	95,981		$	129,671		$	257,041		$	302,246
Adjusted EBITDA as a Percentage of Total Revenues		24.1	%		25.0	%		25.0	%		26.1	%		25.8	%
Ratio of Earnings to Fixed Charges		0.9	x(2)		1.1	x		1.1	x		0.9	x(2)		1.0	x(2)

	As of December 31,
	1997		1998		1999		2000		2001
	(In thousands)
Consolidated Balance Sheet Data:
Cash and Cash Equivalents	$	24,510	$	1,715	$	3,830	$	6,200	$	21,359
Total Assets		636,786		967,385		1,317,212		2,659,096		2,859,906
Total Debt		428,018		456,178		612,947		1,355,131		1,496,099
Shareholders' Equity		137,733		338,882		488,754		924,458		885,959

Reconciliation of EBITDA to Adjusted EBITDA
and Income (Loss) Before Provision for
Income Taxes and Minority Interest:

		Year Ended December 31,
		1997			1998			1999			2000			2001
		(In thousands)
EBITDA		$	50,218		$	97,365		$	129,366		$	228,977		$	282,131
	Other Expense (Income)		—			(1,384	)		(17	)		6,045			18,371
	Merger-related Expenses		—			—			—			9,133			3,673
	Stock Option Compensation Expense		—			—			—			15,110			—
	Minority Interests in Earnings (Losses) of Subsidiaries		—			—			322			(2,224	)		(1,929	)

Adjusted EBITDA			50,218			95,981			129,671			257,041			302,246
	Depreciation and Amortization		(27,107	)		(48,301	)		(65,422	)		(126,810	)		(153,591	)
	Stock Option Compensation Expense		—			—			—			(15,110	)		—
	Merger-related Expenses		—			—			—			(9,133	)		(3,673	)
	Interest Expense		(27,712	)		(45,673	)		(54,425	)		(117,975	)		(134,742	)
	Other Income (Expense)		—			1,384			17			(6,045	)		(18,371	)

Income (Loss) Before Provision for Income Taxes and Minority Interest		$	(4,601	)	$	3,391		$	9,841		$	(18,032	)	$	(8,131	)

(1): Adjusted EBITDA is defined as EBITDA adjusted for extraordinary items, other income (expense), merger-related expenses, stock option compensation expense and minority interest. We use Adjusted EBITDA as our internal measurement of financial performance and as the basis for allocating resources to our operating segments. In addition, substantially all of our financing agreements contain covenants in which Adjusted EBITDA-based calculations are used as a measure of financial performance for financial ratio purposes. Adjusted EBITDA and Adjusted EBITDA-based calculations are used by the holders of our publicly issued debt as important criteria for evaluating our business and, as a result, all of our bond indentures contain covenants in

which Adjusted EBITDA-based calculations are used as the primary measure of financial performance. However, you should not consider EBITDA or Adjusted EBITDA to be substitutes for operating or net income (as determined in accordance with generally accepted accounting principles, or GAAP) as indicators of our performance or for cash flow from operations (as determined in accordance with GAAP) as a measure of liquidity. See Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" for discussions of other measures of performance determined in accordance with GAAP and our sources and applications of cash flow.

(2): We reported a loss from continuing operations before provision (benefit) for income taxes and minority interest for the years ended December 31, 1997, 2000 and 2001. We would have needed to generate additional income from operations before provision for income taxes and minority interest of $4,601, $18,032 and $8,131 to cover our fixed charges of $37,489, $154,975 and $177,032, respectively.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with "Item 6. Selected Consolidated Financial and Operating Information" and the Consolidated Financial Statements and Notes thereto and the other financial and operating information included elsewhere in this filing.

This discussion contains "forward-looking statements" as that term is defined in the federal securities laws. These forward-looking statements concern our operations, economic performance and financial condition. The forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements.

•: the cost and availability of appropriate storage facilities;
•: our significant indebtedness and the cost and availability of financing for contemplated growth;
•: changes in customer preferences and demand for our services;
•: rapid and significant changes in technology;
•: uncertainties related to international expansion;
•: difficulties related to the integration of acquisitions;
•: uncertainties related to expansion into digital businesses, including the timing of introduction and market acceptance of our products and services;
•: effects of future changes in regulatory standards and requirements; and
•: other general economic and business conditions.

Critical Accounting Policies

The following "Management's Discussion and Analysis of Financial Condition and Results of Operations", as well as disclosures included elsewhere in this filing, are based upon our audited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the

financial statements and for the period then ended. On an on-going basis, we evaluate the estimates used, including those related to the allowance for doubtful accounts, impairments of tangible and intangible assets, income taxes, purchase accounting related reserves, self-insurance liabilities, incentive compensation liabilities, litigation liabilities and contingencies. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. We use these estimates to assist us in the identification and assessment of the accounting treatment necessary with respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies involve more significant judgments and estimates used in the preparation of the consolidated financial statements.

Accounting for Acquisitions

Part of our growth strategy has included the acquisition of numerous businesses. The purchase price of these acquisitions has been determined after due diligence of the acquired business, market research, strategic planning, and the forecasting of expected future results and synergies. Estimated future results and expected synergies are subject to revisions as we integrate each acquisition and attempt to leverage resources.

Each acquisition has been accounted for using the purchase method as defined under the applicable accounting standards at the date of each acquisition, including, Accounting Principles Board Opinion No. 16, "Accounting for Business Combinations", and more recently, Statement of Financial Accounting Standard ("SFAS") 141, "Business Combinations." Accounting for these acquisitions has resulted in the capitalization of the cost in excess of fair value of the net assets acquired in each of these acquisitions as goodwill. We estimated the fair values of the assets acquired in each acquisition as of the date of acquisition and these estimates are subject to adjustment. These estimates are subject to final assessments of the fair value of property, plant and equipment, intangible assets, operating leases and deferred income taxes. We complete these assessments within one year of the date of acquisition. We are not aware of any information that would indicate that the final purchase price allocations for acquisitions completed in 2001 would differ meaningfully from preliminary estimates.

In connection with each of our acquisitions, we have undertaken certain restructurings of the acquired businesses to realize efficiencies and potential cost savings. Our restructuring activities include the elimination of duplicate facilities, reductions in staffing levels, and other costs associated with exiting certain activities of the businesses we acquire. These activities are included as costs of the acquisition and are recorded as goodwill consistent with the guidance of Emerging Issues Task Force Issue No. 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." While we finalize our plans to restructure the businesses we acquire within one year of the date of acquisition, it may take more than one year to complete all activities related to the restructuring of an acquired business.

Our acquisitions have resulted in a significant accumulation of goodwill which, for acquisitions prior to July 1, 2001, we amortized over an estimated benefit period of 20 to 30 years. We have not amortized any goodwill for our acquisitions completed after July 1, 2001 and will no longer amortize any goodwill beginning on January 1, 2002, in accordance with SFAS 142, "Goodwill and Other Intangible Assets". Through December 31, 2001, we reviewed our existing goodwill for impairment, consistent with the guidelines of SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" and determined that no amounts of goodwill were impaired using the undiscounted future cash flow methodology of SFAS 121. Effective January 1, 2002, we will review goodwill for impairment consistent with the guidelines of SFAS 142 using a discounted future cash flow approach. The methodology for determining impairment under SFAS 142 is significantly different and could result in different determinations than under SFAS 121. Pursuant to SFAS 142, we will test our goodwill for impairment upon adoption and, if impairment is indicated, record such impairment as a cumulative effect of accounting change. We are currently evaluating the effect that the adoption may have on our consolidated results of operations and financial position.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses resulting from the potential inability of our customers to make required payments or disputes with customers regarding payment terms. When calculating the allowance, we consider our past loss experience, current and prior trends in our aged receivables, current economic conditions, and specific circumstances of individual receivable balances. If the financial condition of our customers were to significantly change, resulting in a significant improvement or impairment of their ability to make payments, an adjustment of the allowance may be required.

Accounting for Synthetic Leases

We participate in several synthetic leasing programs that involve 30 of the 519 leased facilities that we occupy. Under these synthetic lease facilities, special purpose entities are established to acquire properties and subsequently lease those properties to us. The leases are designed and qualify as operating leases for accounting purposes, where the monthly lease expense is recorded as rent expense in our income statement. We do not consolidate the assets or liabilities related to these facilities in our consolidated financial statements.

Synthetic lease facilities require the application of complex lease and special purpose entity accounting rules and interpretations. We are aware that the Financial Accounting Standards Board is currently reviewing these accounting rules and interpretations and is considering their current and future application. In the course of applying these complex accounting rules and interpretations, we have made certain judgments, estimates and assumptions relative to their treatment.

We had properties in our synthetic lease facilities with a lessor's original cost of $74.3 million as of December 31, 2000. During 2001, we added 16 properties to our synthetic lease program with an original cost of $77.6 million bringing the total original cost of properties in our synthetic lease program to $151.9 million as of December 31, 2001. If all of our synthetic leases were accounted for as capital leases rather than operating leases or if these special purpose entities were consolidated in our 2001 historical financial statements: (1) our gross property, plant and equipment and long-term debt would each be increased in an amount equal to $151.9 million as of December 31, 2001; (2) depreciation expense would increase in an amount equal to $2.2 million for the year ended December 31, 2001 for the properties leased pursuant to the synthetic lease facilities; and (3) rent expense for these properties would be reclassified as interest expense in an amount equal to $8.5 million for the year ended December 31, 2001. Consequently, our EBITDA, Adjusted EBITDA, operating income and interest expense would have increased by $8.5 million, $8.5 million, $6.3 million and $8.5 million, respectively. In addition, net income before tax would have decreased by $2.2 million for the year ended December 31, 2001. See "—Liquidity and Capital Resources—Synthetic Leases."

We believe that the following pro forma information will further assist in the understanding of this topic. If we had occupied all 30 properties on January 1, 2001 and all of our synthetic leases were accounted for as capital leases rather than operating leases or if these special purpose entities were consolidated in our financial statements: (1) our gross property, plant and equipment and long-term debt would each be increased in an amount equal to $151.9 million as of December 31, 2001; (2) depreciation expense would increase in an amount equal to $2.9 million for the year ended December 31, 2001 for the properties leased pursuant to the synthetic lease facilities; and (3) rent expense for these properties would be reclassified as interest expense in an amount equal to $11.4 million for the year ended December 31, 2001. Consequently, our EBITDA, Adjusted EBITDA, operating income and interest expense would have increased by $8.5 million, $8.5 million, $5.6 million and $11.4 million, respectively. In addition, net income before tax would have decreased by $5.8 million for the year ended December 31, 2001.

Accounting for Derivative Instruments and Hedging Activities

SFAS No. 133, "Accounting For Derivative Instruments And Hedging Activities", establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. SFAS 133 requires an entity to recognize all derivatives as either assets or liabilities on its balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment; (2) a hedge of the exposure to variable cash flows of a forecasted transaction; or (3) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and resulting designation. Unrealized and realized gains and losses are recognized each period as components of other comprehensive income, assets and liabilities or earnings depending on the nature of such derivatives.

For cash flow hedges, the effective portions of the gains and losses are recorded to other comprehensive income and are recognized in earnings concurrent with the disposition of the hedged risks. For fair value hedges, the gains and losses are recorded in earnings each period along with the change in the fair value of the hedged item. For hedges of foreign currency the accounting treatment generally follows the treatment for cash flow hedges or fair value hedges depending on the nature of the foreign currency hedge.

In order for a derivative contract to be designated as a hedge, the relationship between the hedging instrument and the hedged item or transaction must be highly effective. The effectiveness test is performed at the inception of the hedge and each reporting period thereafter, throughout the period that the hedge is designated. Any amounts determined to be ineffective are recorded currently in earnings.

Although we apply some judgment in the assessment of hedge effectiveness to designate certain derivatives as hedges, the nature of the contracts used to hedge the underlying risks is such that the correlation of the changes in fair values of the derivatives and underlying risks is generally high. We had $10.1 million of interest rate risk management liabilities and had a corresponding amount for unrealized losses to other comprehensive income ($6.1 million, net of tax) primarily related to cash flow hedges at December 31, 2001.

Accounting for Internal Use Software

We develop various software applications for internal use. We account for those costs in accordance with the provisions of Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use". SOP 98-1 requires computer software costs associated with internal use software to be expensed as incurred until certain capitalization criteria are met. SOP 98-1 also defines which types of costs should be capitalized and which should be expensed. Payroll and related costs for employees who are directly associated with, and who devote time to, the development of internal use computer software projects to the extent time is spent directly on the project, are capitalized and depreciated over the estimated useful life of the software. Capitalization begins when the design stage of the application has been completed and it is probable that the project will be completed and used to perform the function intended. Depreciation begins when the software is placed in service. Computer software costs that are capitalized are evaluated for impairment in accordance with SFAS 121.

It may be necessary for us to write-off amounts associated with the development of internal use software if the project cannot be completed as intended. Our expansion into new technology-based service offerings requires the development of internal use software that will be susceptible to rapid and

significant changes in technology. We may be required to write-off unamortized costs if an internal use software program is replaced with an alternative tool prior to the end of the software's estimated useful life. General uncertainties related to expansion into digital businesses, including the timing of introduction and market acceptance of our services, may adversely impact the recoverability of these assets.

Accounting for Investments

We hold investments in companies having operations or technology in areas within our strategic focus. We record an investment impairment charge when we believe an investment has experienced a decline in value that is other than temporary. Future adverse changes in market conditions or poor operating results of underlying investments could result in losses or an inability to recover the carrying value of the investments that may not be reflected in an investment's current carrying value, thereby possibly resulting in an impairment charge in the future.

Overview

Our primary financial objective has been to increase consolidated EBITDA and Adjusted EBITDA, which is a source of funds for investment in continued growth and to service indebtedness. We use Adjusted EBITDA as our internal measurement of financial performance and as the basis for allocating resources to our internal operating segments. In addition, substantially all of our financing agreements contain covenants in which Adjusted EBITDA-based calculations are used as a measure of financial performance for financial ratio purposes. Adjusted EBITDA and Adjusted EBITDA-based calculations are used by the holders of our publicly issued debt as important criteria for evaluating our business and, as a result, all of our bond indentures contain covenants in which Adjusted EBITDA-based calculations are used as the primary measure of financial performance. However, you should not consider EBITDA or Adjusted EBITDA to be substitutes for operating or net income (as determined in accordance with generally accepted accounting principles, or GAAP) as indicators of our performance or for cash flow from operations (as determined in accordance with GAAP) as a measure of liquidity.

We have benefited from our growth in consolidated EBITDA and Adjusted EBITDA. EBITDA has increased from $129.4 million for 1999 to $282.1 million for 2001 (a compound annual growth rate of 47.7%). Adjusted EBITDA has increased from $129.7 million for 1999 to $302.2 million for 2001 (a compound annual growth rate of 52.7%). However, the focus on generating EBITDA and Adjusted EBITDA has negatively affected other measures of our financial performance, such as consolidated net income.

For the years ended December 31, 1999 through 2001, we experienced consolidated net losses of $14.2 million, $27.8 million and $44.1 million, respectively. We attribute such losses in part to significant charges associated with the pursuit of our growth strategy, namely:

•: increases in depreciation expense associated with expansion of storage capacity as well as development and acquisition of information systems assets;
•: increases in goodwill amortization associated with acquisitions accounted for under the purchase method prior to July 1, 2001;
•: increases in interest expense associated with the borrowings used to fund acquisitions;
•: in 2000, charges for non-cash stock option compensation expense and in 2000 and 2001, merger-related expenses, both primarily associated with the integration of the operations of Iron Mountain and Pierce Leahy;

•: in 2001, extraordinary charges for early extinguishment of debt associated with the retirement of our 11¹/8% senior subordinated notes due 2006 and 10¹/8% senior subordinated notes due 2006, or the 11¹/8% notes and the 10¹/8% notes, respectively; and
•: in 2000 and 2001, non-cash foreign currency losses primarily due to a change in the value of the Canadian dollar as compared to the U.S. dollar, as it relates to the U.S. dollar denominated debt and intercompany balances of our principal Canadian subsidiary.

Our revenues consist of storage revenues as well as service and storage material sales revenues. Storage revenues consist of periodic charges related to the storage of materials (either on a per unit or per cubic foot of records basis) and have accounted for approximately 60% of total revenues in each of the last five years. In certain circumstances, based upon customer requirements, storage revenues include periodic charges associated with normal, recurring service activities. Service and storage material sales revenues are comprised of charges for related service activities and courier operations and the sale of storage materials. Related service revenues arise from additions of new records, temporary removal of records from storage, refiling of removed records, destructions of records, permanent withdrawals from storage and sales of specially designed storage containers, magnetic media including computer tapes and related supplies. Courier operations consist primarily of the pickup and delivery of records upon customer request. Customers are generally billed on a monthly basis on contractually agreed-upon terms.

Cost of sales (excluding depreciation) consists primarily of wages and benefits for field personnel, facility occupancy costs, vehicle and other equipment costs and supplies. Of these, wages and benefits and facility occupancy costs are the most significant.

Selling, general and administrative expenses consist primarily of wages and benefits for management, administrative, information technology, sales, account management and marketing personnel, as well as expenses related to communications and data processing, travel, professional fees, bad debts, training, office equipment and supplies.

Our depreciation and amortization charges result primarily from the capital-intensive nature of our business and the acquisitions we have completed. The principal components of depreciation relate to storage systems and related equipment, new buildings and leasehold improvements, equipment for new facilities and computer system hardware and software. Amortization relates primarily to goodwill arising from acquisitions and customer acquisition costs. We have accounted for all of our acquisitions under the purchase method. Since the purchase price for companies in our industry is usually substantially in excess of the fair value of their net assets, these purchases have given rise to significant goodwill and, accordingly, significant levels of amortization. Although amortization is a non-cash charge, it does decrease reported consolidated net income. Because certain of our acquisitions have given rise to nondeductible goodwill, our effective tax rate historically has been higher than the statutory rate. See "—Recent Pronouncements."

We acquired 17 businesses in 1999, 12 in 2000 and 16 in 2001. With the exception of the Pierce Leahy merger in 2000, most acquisitions had lower Adjusted EBITDA margins than the rest of our business. We generally do not realize anticipated synergies relating to acquisitions immediately. We were able to increase our recent Adjusted EBITDA margins through improved overall operating efficiencies, economies of scale and the realization of synergies in connection with earlier acquisitions, as well as the addition of the higher-margin Pierce Leahy business in 2000. This increase was partially offset by additional labor expense due to wage and incentive compensation equalization in conjunction with the Pierce Leahy integration. As a result of the foregoing factors, consolidated Adjusted EBITDA margins were 25.0% for 1999, 26.1% for 2000 and 25.8% for 2001. Included in Adjusted EBITDA for 2001 is $5.4 million (0.5% of consolidated revenue) of development expenses for our new technology-based services.

On December 5, 2001, our board authorized and approved a three-for-two stock split effected in the form of a dividend on our common stock. We issued the additional shares of common stock on December 31, 2001 to all stockholders of record as of the close of business on December 17, 2001. All share and per share amounts have been restated to reflect the stock split.

Results of Operations

The following table sets forth, for the periods indicated, information derived from our consolidated statements of operations, expressed as a percentage of total consolidated revenues.

			Year Ended December 31,
			1999		2000		2001
Revenues:
	Storage		61.1	%	59.4	%	59.3	%
	Service and Storage Material Sales		38.9		40.6		40.7

		Total Revenues	100.0		100.0		100.0
Operating Expenses:
	Cost of Sales (excluding depreciation)		50.2		48.9		48.0
	Selling, General and Administrative		24.8		25.0		26.2
	Depreciation and Amortization		12.6		12.9		13.1
	Stock Option Compensation Expense		—		1.6		—
	Merger-related Expenses		—		0.9		0.3

		Total Operating Expenses	87.6		89.3		87.6
Operating Income			12.4		10.7		12.4
Interest Expense, Net			10.5		12.0		11.5
Other Income (Expense), Net			0.0		(0.5	)	(1.7	)

Income (Loss) from Continuing Operations Before Provision for Income Taxes and Minority Interest			1.9		(1.8	)	(0.8	)
Provision for Income Taxes			2.0		0.9		2.2
Minority Interest in (Losses) Earnings of Subsidiaries			0.1		(0.2	)	(0.2	)

Loss from Continuing Operations before Extraordinary Item			(0.2	)	(2.5	)	(2.8	)
Income from Discontinued Operations			0.1		—		—
Loss on Sale of Discontinued Operations			(2.6	)	—		—
Extraordinary Charge from Early Extinguishment of Debt (net of tax benefit)			—		(0.3	)	(1.0	)

Net Loss			(2.7	)%	(2.8	)%	(3.8	)%

Other Data:
EBITDA from Continuing Operations			24.9	%	23.2	%	24.1	%

Adjusted EBITDA from Continuing Operations			25.0	%	26.1	%	25.8	%

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Consolidated revenues increased $184.7 million, or 18.7%, to $1,171.1 million for the year ended December 31, 2001 from $986.4 million for the year ended December 31, 2000. Internal revenue growth for the year ended December 31, 2001 was 10.5%, comprised of 11.1% for storage revenue and 9.5% for service and storage material sales revenues. We calculate internal revenue growth in local currency for our international operations and as if Pierce Leahy had merged with us on January 1, 2000.

Consolidated storage revenues increased $108.8 million, or 18.6%, to $694.5 million for the year ended December 31, 2001 from $585.7 million for the year ended December 31, 2000. The increase was primarily attributable to: (1) internal revenue growth of 11.1% resulting primarily from net increases in records and other media stored by existing customers and sales to new customers; and (2) acquisitions, particularly the inclusion of Pierce Leahy's revenue for twelve months of 2001 versus eleven months of 2000. The total increase in storage revenues was partially offset by the unfavorable effects of foreign currency translation of $3.8 million as a result of the strengthening of the U.S. dollar against certain currencies, primarily the Canadian dollar and the British pound sterling.

Consolidated service and storage material sales revenues increased $75.9 million, or 19.0%, to $476.6 million for the year ended December 31, 2001 from $400.7 million for the year ended December 31, 2000. The increase was primarily attributable to: (1) internal revenue growth of 9.5% resulting primarily from net increases in service and storage material sales to existing customers and sales to new customers; and (2) acquisitions, particularly the inclusion of Pierce Leahy's revenue for twelve months of 2001 versus eleven months of 2000. The total increase in service and storage material sales revenues was partially offset by the unfavorable effects of foreign currency translation of $3.3 million as a result of the strengthening of the U.S. dollar against certain currencies during 2001, primarily the Canadian dollar and the British pound sterling.

Consolidated cost of sales (excluding depreciation) increased $79.2 million, or 16.4%, to $561.9 million (48.0% of consolidated revenues) for the year ended December 31, 2001 from $482.8 million (48.9% of consolidated revenues) for the year ended December 31, 2000. The dollar increase was primarily attributable to the required costs to support our revenue growth and was partially offset by operating efficiencies at our U.S. and Canadian operations, particularly related to the decrease in rent as a percent of consolidated revenue of 0.7% offset by a 0.2% increase in other facilities costs as a percent of consolidated revenues and a 0.2% increase in utility expenses (primarily, gas and oil charges) as a percent of consolidated revenues. In our U.S. and Canadian operations, facility costs increased $22.1 million and labor costs increased $33.7 million, which represented a decrease of 0.3% and 0.8% of consolidated revenues, respectively. The decrease as a percent of consolidated revenues was offset by relatively lower gross margins in our emerging confidential destruction services business, which increased cost of sales by 0.9% of consolidated revenues.

Consolidated selling, general and administrative expenses increased $60.4 million, or 24.5%, to $306.9 million (26.2% of consolidated revenues) for the year ended December 31, 2001 from $246.6 million (25.0% of consolidated revenues) for the year ended December 31, 2000. The dollar increase was primarily attributable to the required costs to support our revenue growth, while the increase as a percent of consolidated revenues was primarily attributable to: (1) higher overhead levels in our emerging confidential destruction services business (an increase of 0.6% of consolidated revenue) and our Latin American and European operations (an increase of 0.4% of consolidated revenue); (2) higher data communications costs resulting from network deployment and migration activities (an increase of 0.4% of consolidated revenues); and (3) expenditures for our marketing and information technology initiatives related to the development of complementary technology-based service offerings (an increase of 0.5% of consolidated revenues). These increases were partially offset by a decrease in the provision for doubtful accounts for our U.S. and Canadian operations (a decrease of 0.4% of consolidated revenues).

Consolidated depreciation and amortization expense increased $26.8 million, or 21.1%, to $153.6 million (13.1% of consolidated revenues) for the year ended December 31, 2001 from $126.8 million (12.9% of consolidated revenues) for the year ended December 31, 2000. Depreciation expense increased $20.3 million, primarily due to the additional depreciation expense related to the 2000 and 2001 acquisitions, particularly the inclusion of Pierce Leahy's depreciation expense for twelve months of 2001 versus eleven months of 2000 and capital expenditures including storage systems, information systems and expansion of storage capacity in existing facilities. Amortization expense

increased $6.4 million, primarily due to the additional amortization expense related to the goodwill generated by our 2000 and 2001 acquisitions completed prior to July 1, 2001, particularly Pierce Leahy.

Stock option compensation expense of $15.1 million for the year ended December 31, 2000 represents a non-cash charge resulting from the acceleration and extension of previously granted stock options as a part of separation agreements with certain executives. There were no such costs for the year ended December 31, 2001.

Merger-related expenses are certain expenses directly related to our merger with Pierce Leahy that cannot be capitalized and include system conversion costs, costs of exiting certain facilities, severance, relocation and pay-to-stay payments and other transaction-related costs. Merger-related expenses were $3.7 million (0.3% of consolidated revenues) for the year ended December 31, 2001 compared to $9.1 million (0.9% of consolidated revenues) for the same period of 2000.

As a result of the foregoing factors, consolidated operating income increased $39.0 million, or 36.8%, to $145.0 million (12.4% of consolidated revenues) for the year ended December 31, 2001 from $106.0 million (10.7% of consolidated revenues) for the year ended December 31, 2000.

Consolidated interest expense increased $16.8 million, or 14.2%, to $134.7 million for the year ended December 31, 2001 from $118.0 million for the year ended December 31, 2000. The increase was primarily attributable to increased indebtedness related to: (1) $19.6 million of interest expense on the 8⁵/8% senior subordinated notes due 2013, or the 8⁵/8% notes, which were issued in April and September 2001; (2) the inclusion of term debt related to our credit facility for twelve months versus five months of 2000 resulting in an increase of $6.2 million; and (3) the inclusion of Pierce Leahy's debt for twelve months of 2001 versus eleven months of 2000 resulting in an increase of $4.7 million. These increases were partially offset by reduced interest expense of $11.8 million due to the retirement of our 11¹/8% and 10¹/8% senior subordinated notes as well as a decline in the weighted average interest rate on our variable rate debt.

Consolidated other expense was $18.4 million for the year ended December 31, 2001 compared to $6.0 million for the year ended December 31, 2000. The change was partially due to a $6.9 million impairment charge taken on our investment in convertible preferred stock of a technology development company. Additionally, we recorded a non-cash foreign currency loss of $10.4 million, primarily due to the effect of further weakening of the Canadian dollar against the U.S. dollar for the year ended December 31, 2001, versus the same period of 2000, as it relates to Iron Mountain Canada Corporation's 8¹/8% senior notes due 2008, or the 8¹/8% notes, and the intercompany balances with our Canadian and European subsidiaries. In 2000, this amount was $6.3 million.

As a result of the foregoing factors, consolidated loss before provision for income taxes and minority interests decreased $9.9 million to $8.1 million (0.7% of consolidated revenues) for the year ended December 31, 2001 from $18.0 million (1.8% of consolidated revenues) for the year ended December 31, 2000. The provision for income taxes was $26.0 million for the year ended December 31, 2001 compared to $9.1 million for the year ended December 31, 2000. For the year ended December 31, 2001, we recorded approximately $38.9 million of nondeductible goodwill amortization expense.

Consolidated loss before extraordinary item increased $7.3 million to $32.2 million (2.8% of consolidated revenues) for the year ended December 31, 2001 from $24.9 million (2.5% of consolidated revenues) for the year ended December 31, 2000. In 2001, we recorded an extraordinary charge of $11.8 million (net of tax benefit of $8.2 million) related to the early retirement of our 11¹/8% and 10¹/8% notes in conjunction with our underwritten public offerings of the 8⁵/8% notes. In 2000, we recorded an extraordinary charge of $2.9 million (net of tax benefit of $1.9 million) related to the early extinguishment of debt in conjunction with the refinancing of our senior credit facility. The charges

primarily represented call and tender premiums and the write-off of unamortized deferred financing costs associated with the extinguished debt.

As a result of the foregoing factors, consolidated Adjusted EBITDA increased $45.2 million, or 17.6%, to $302.2 million (25.8% of consolidated revenues) for the year ended December 31, 2001 from $257.0 million (26.1% of consolidated revenues) for the year ended December 31, 2000. Excluding the $5.4 million of expenses (0.5% of consolidated revenues) related to the development of our new technology-related service offerings, our Adjusted EBITDA margin for the year ended December 31, 2001 was 26.3% of consolidated revenues. There were no such costs in the same period of 2000.

Adjusted EBITDA as a percent of segment revenue for our business records management segment decreased from 27.4% to 26.8%, primarily due to: (1) increases in cost of sales associated with other facility costs, including utilities and property insurance; (2) increases in selling, general and administrative expenses as a result of divisionalization; (3) higher data communications costs resulting from network deployment and migration activities; and (4) an increase in the provision for doubtful accounts. This decrease was partially offset by increases in gross margin driven by real estate management and labor efficiencies obtained as a result of an increase in scale.

Adjusted EBITDA as a percent of segment revenue for our off-site data protection segment increased from 25.2% to 26.1% primarily due to an increase in gross margin as a result of improved labor, transportation and real estate management, as well as the contribution from the segment's acquisition of two higher margin escrow businesses. This increase was partially offset by: (1) the decentralization of various overhead functions; (2) an increase in spending for sales and marketing; and (3) a decrease in contribution from the segment's higher margin complementary services due to the relatively slower growth in revenue for those services.

The Adjusted EBITDA margin for our international segment increased from 20.5% to 23.7% primarily due to: (1) the inclusion of an additional month in 2001 of our more profitable Canadian business acquired as a part of the Pierce Leahy acquisition; (2) efficiency gains from the economies of scale achieved through the December 2000 acquisition of FACS Record Centre Inc., a Canadian company; and (3) improved margins from our Latin American operations. This increase was partially offset by an increase of $0.7 million in the provision for doubtful accounts at our European operations.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Consolidated revenues increased $466.9 million, or 89.9%, to $986.4 million for the year ended December 31, 2000 from $519.5 million for the year ended December 31, 1999. Total internal revenue growth, calculated as if Pierce Leahy had merged with Iron Mountain on January 1, 1999, was 12.3%.

Consolidated storage revenues increased $268.3 million, or 84.5%, to $585.7 million for the year ended December 31, 2000 from $317.4 million for the year ended December 31,1999. Consolidated storage revenues increased primarily due to acquisitions, particularly the Pierce Leahy acquisition. Pierce Leahy's 1999 storage revenues were $190.1 million. Internal storage revenue growth, calculated as if Pierce Leahy had merged with Iron Mountain on January 1, 1999, was 11.7%. The internal storage revenue growth resulted primarily from net increases in records and other media stored by existing customers and from sales to new customers.

Consolidated service and storage material sales revenues increased $198.5 million, or 98.2%, to $400.7 million for the year ended December 31, 2000 from $202.2 million for the year ended December 31, 1999. Consolidated service and storage material sales revenues increased primarily due to acquisitions, particularly the Pierce Leahy acquisition. Pierce Leahy's 1999 service and storage material sales revenues were $152.2 million. Internal service and storage material sales revenue growth, calculated as if Pierce Leahy had merged with Iron Mountain on January 1, 1999, was 13.3%. The internal revenue growth resulted from increases in service and storage material sales to existing customers and the addition of new customer accounts.

Consolidated cost of sales (excluding depreciation) increased $221.9 million, or 85.0%, to $482.8 million (48.9% of consolidated revenues) for the year ended December 31, 2000 from $260.9 million (50.2% of consolidated revenues) for the year ended December 31, 1999. The dollar increase was primarily attributable to the acquisition of Pierce Leahy. The decrease as a percentage of revenues was primarily attributable to operating efficiencies, particularly related to labor and transportation, gained as a result of an increase in scale, offset by the increased facilities costs of Pierce Leahy, which are typical of a more paper storage-intensive business. Our business records management and international segments are substantially paper-based. Revenues for these segments have increased from 73% to 80% of total revenues from 1999 to 2000.

Consolidated selling, general and administrative expenses increased $117.7 million, or 91.2%, to $246.6 million (25.0% of consolidated revenues) for the year ended December 31, 2000 from $128.9 million (24.8% of consolidated revenues) for the year ended December 31, 1999. The dollar increase was primarily attributable to the Pierce Leahy acquisition. The increase as a percentage of revenues was primarily attributable to increased spending on information technology related to: (1) the conversion of new systems for our off-site data protection business; (2) increased staffing in preparation for systems conversions related to the integration of Pierce Leahy with us; and (3) our efforts to explore complementary digital service offerings. These increases were partially offset by general management overhead efficiencies driven by an increase in scale.

Consolidated depreciation and amortization expense increased $61.4 million, or 93.8%, to $126.8 million (12.9% of consolidated revenues) for the year ended December 31, 2000 from $65.4 million (12.6% of consolidated revenues) for the year ended December 31, 1999. The dollar increase was primarily attributable to the additional depreciation and amortization expense related to the 1999 and 2000 acquisitions, particularly the Pierce Leahy acquisition, and capital expenditures including racking systems, information systems and expansion of storage capacity in existing facilities.

Stock option compensation expense represents a non-cash charge resulting from the acceleration of vesting and extension of exercise periods for previously granted stock options as a part of separation agreements with certain executives relating to the Pierce Leahy merger. Stock option compensation expense was $15.1 million (1.6% of consolidated revenues) for the year ended December 31, 2000.

Merger-related expenses are certain expenses directly related to our merger with Pierce Leahy that cannot be capitalized and include severance, relocation and pay-to-stay payments, costs of exiting certain facilities, system conversion costs and other transaction-related costs. Merger-related expenses were $9.1 million (0.9% of consolidated revenues) for the year ended December 31, 2000.

As a result of the foregoing factors, consolidated operating income increased $41.8 million, or 65.0%, to $106.0 million (10.7% of consolidated revenues) for the year ended December 31, 2000 from $64.2 million (12.4% of consolidated revenues) for the year ended December 31, 1999.

Consolidated interest expense increased $63.6 million, or 116.8%, to $118.0 million for the year ended December 31, 2000 from $54.4 million for the year ended December 31, 1999. The increase was primarily attributable to increased indebtedness related to: (1) the debt assumed as a result of the Pierce Leahy acquisition; (2) the financing of acquisitions and capital expenditures; (3) the increase in our effective interest rate from the same period in 1999; and (4) our debt refinancing on August 14, 2000, resulting in additional principal outstanding and additional commitment fees, which were only partially offset by interest earned on excess cash.

Consolidated other income (expense) was an expense of $6.0 million for the year ended December 31, 2000 compared to income of $0.0 million for the year ended December 31, 1999. The increase in expense was primarily due to a weakening of the Canadian dollar against the U.S. dollar, as it relates to the 8¹/8% notes, and a weakening of the British pound sterling against the U.S. dollar on intercompany balances with our European subsidiaries.

As a result of the foregoing factors, consolidated income (loss) from continuing operations before provision for income taxes and minority interests decreased $27.8 million to a loss of $18.0 million (1.8% of consolidated revenues) for the year ended December 31, 2000 from income of $9.8 million (1.9% of consolidated revenues) for the year ended December 31, 1999. The provision for income taxes was $9.1 million for the year ended December 31, 2000 compared to $10.6 million for the year ended December 31, 1999. Our effective tax rate is higher than statutory rates primarily due to the amortization of the nondeductible portion of goodwill associated with certain acquisitions (the tax laws generally permit deduction of such expenses for asset purchases, but not for acquisitions of stock). For the year ended December 31, 2000, we recorded approximately $35 million in nondeductible goodwill amortization expense.

Consolidated loss from continuing operations increased $23.8 million to $24.9 million (2.5% of consolidated revenues) for the year ended December 31, 2000 from $1.1 million (0.2% of consolidated revenues) for the year ended December 31, 1999.

In addition, in August 2000, we recorded an extraordinary charge of $2.9 million (net of tax benefit of $1.9 million) related to the early extinguishment of debt in conjunction with the refinancing of our senior credit facility. The charge primarily represented the write-off of unamortized deferred financing costs associated with the extinguished debt.

As a result of the foregoing factors, consolidated net loss increased $13.6 million, or 95.7%, to $27.8 million (2.8% of consolidated revenues) for the year ended December 31, 2000 from $14.2 million (2.7% of consolidated revenues) for the year ended December 31, 1999.

Recent Consolidated Quarterly Financial Data

The following table sets forth, for the quarterly periods indicated, information derived from our consolidated statements of operations. The unaudited quarterly information has been prepared on the same basis as the annual financial information and, in management's opinion, includes all adjustments (consisting of normal recurring accruals) necessary to present fairly the information for the quarters presented. The operating results for any quarter are not necessarily indicative of results for the year or for any future period.

			Three Months Ended
			2000								2001
			Mar. 31		June 30		Sept. 30		Dec. 31		Mar. 31		June 30		Sept. 30		Dec. 31
			(In thousands)
Revenues:
	Storage		$	124,939	$	148,445	$	152,959	$	159,321	$	167,865	$	171,891	$	175,012	$	179,706
	Service and Storage Material Sales			87,198		104,120		103,174		106,215		116,057		121,443		116,661		122,481

		Total Revenues		212,137		252,565		256,133		265,536		283,922		293,334		291,673		302,187
Operating Expenses:
	Cost of Sales (excluding depreciation)			104,458		121,973		125,079		131,261		139,820		139,030		139,918		143,168
	Selling, General and Administrative			53,457		64,724		63,783		64,595		70,317		78,686		76,822		81,109
	Depreciation and Amortization			26,303		31,644		34,829		34,034		35,718		37,788		38,921		41,164
	Stock Option Compensation Expense			—		14,939		171		—		—		—		—		—
	Merger-related Expenses			516		3,875		1,262		3,480		801		377		1,049		1,446

		Total Operating Expenses		184,734		237,155		225,124		233,370		246,656		255,881		256,710		266,887

Operating Income			$	27,403	$	15,410	$	31,009	$	32,166	$	37,266	$	37,453	$	34,963	$	35,300

Other Data:
EBITDA			$	53,232	$	43,491	$	63,443	$	68,811	$	64,067	$	82,956	$	60,012	$	75,096

Adjusted EBITDA			$	54,222	$	65,868	$	67,271	$	69,680	$	73,785	$	75,618	$	74,933	$	77,910

Liquidity and Capital Resources

Recent Financings, Sources of Funds and Long-term Obligations

In April 2001, we completed an underwritten public offering of $225.0 million in aggregate principal amount of our 8⁵/8% notes. The 8⁵/8% notes were issued at a price to investors of 100% of par. Our net proceeds of $218.6 million, after paying the underwriters' discounts and commissions and related expenses, were used to fund our offer to purchase and consent solicitation relating to our outstanding 11¹/8% notes, to repay outstanding borrowings under our revolving credit facility and for general corporate purposes, including acquisitions.

In April 2001, we received and accepted tenders for $124.6 million of the outstanding principal amount of our 11¹/8% notes. We recorded an extraordinary charge of $4.8 million (net of tax benefit of $3.3 million) in the second quarter related to the early retirement of the 11¹/8% notes. Subsequently, we redeemed the remaining $5.4 million of principal amount of the 11¹/8% notes, at a redemption price (expressed as a percentage of principal amount) of 105.563% plus accrued and unpaid interest, for a total cost of redemption of $6.0 million.

In September 2001, we completed an underwritten public offering which resulted in the issuance of an additional $210.0 million in aggregate principal amount of our 8⁵/8% notes. The additional notes were issued at a price to investors of 101.50% of par. Our net proceeds of $209.3 million, after paying the underwriters' discounts and commissions and related expenses, were used to fund our offer to purchase and consent solicitation relating to our outstanding 10¹/8% notes and to redeem the remaining 10¹/8% notes, as well as to repay outstanding borrowings under our revolving credit facility and for general corporate purposes, including acquisitions.

In September 2001, we received and accepted tenders for $156.7 million of the $165.0 million aggregate principal amount outstanding of our 10¹/8% notes. We recorded an extraordinary charge of $7.0 million (net of tax benefit of $4.9 million) in the third quarter related to the early retirement of the 10¹/8% notes. Subsequently, we received and accepted tenders for an additional $0.3 million in aggregate principal amount of our 10¹/8% notes and redeemed the remaining $8.0 million of outstanding principal amount of our 10¹/8% notes, at a redemption price (expressed as a percentage of principal amount) of 105.06% plus accrued and unpaid interest, for a total cost of redemption of $9.0 million.

On March 15, 2002, we entered into a new amended and restated revolving credit agreement (the "Amended and Restated Credit Agreement"). The Amended and Restated Credit Agreement replaces our existing credit agreement. The Amended and Restated Credit Agreement has an aggregate principal amount of $650.0 million and includes a $400.0 million revolving credit facility and a term loan facility in the amount of $250.0 million. The revolving credit facility matures on January 31, 2005 while the term loan is to be paid in full on February 15, 2008; however, if our 9¹/8% senior subordinated notes due 2007, or the 9¹/8% notes, are not redeemed or repurchased prior to April 15, 2007 the term loan will mature on April 15, 2007. The interest rate on borrowings under the Amended and Restated Credit Agreement varies depending on our choice of base rates and currency options, plus an applicable margin. This margin applicable to the term loans under the Amended and Restated Credit Agreement is lower than the margin applicable to such loans under our existing credit agreement and will result in reduced interest expense on our borrowings as compared to the previous credit agreement. Restrictive covenants under this agreement are similar to those under our prior credit facility. All intercompany notes are now pledged to secure the Amended and Restated Credit Agreement.

Net cash provided by financing activities was $134.9 million for the year ended December 31, 2001, consisting primarily of net proceeds of $427.9 million from the sale of the 8⁵/8% notes and equity

contributions from minority shareholders of $24.8 million, partially offset by the early retirement of the 11¹/8% notes and the 10¹/8% notes of $312.7 million.

Net cash provided by continuing operations was $160.9 million for the year ended December 31, 2001 compared to $157.6 million for the same period in 2000. The increase was primarily attributable to an increase in operating income and trade payables, partially offset by an increase in trade accounts receivable and prepaid expenses and a decrease in accrued expenses.

At December 31, 2001, we had estimated net operating loss carryforwards of approximately $173 million for federal income tax purposes. As a result of such loss carryforwards, cash paid for income taxes has historically been substantially lower than the provision for income taxes. The preceding net operating loss carryforwards do not include approximately $79 million of potential preacquisition net operating loss carryforwards of Arcus Group, Inc. and certain other foreign acquisitions. Any tax benefit realized related to preacquisition net operating loss carryforwards will be recorded as a reduction of goodwill when, and if, realized. The Arcus Group carryforwards expire in seven years. As a result of these loss carryforwards, we do not expect to pay any significant federal and state income taxes in the next three years.

As of December 31, 2001, the annual maturities of our indebtedness for the years ending December 31, 2002, 2003, 2004, 2005 and 2006 were $35.3 million, $10.3 million, $5.1 million, $298.1 million and $54.6 million, respectively. See Note 4 of Notes to Consolidated Financial Statements. None of our public debt is subject to scheduled mandatory redemption before 2006.

As of December 31, 2001, the minimum future payments under our operating leases for the years ending December 31, 2002, 2003, 2004, 2005 and 2006 were $123.6 million, $111.4 million, $100.4 million, $86.3 million and $68.6 million, respectively. See Note 13 of Notes to Consolidated Financial Statements.

As of February 28, 2002, we had approximately $1,508.9 million of total debt, of which $1,317.8 million or 87.3% of total debt, including the $195.5 million of debt subject to the interest rate swap agreements (see Note 4 of Notes to Consolidated Financial Statements), had fixed interest rates and $191.1 million had variable interest rates.

Capital Investments

As we have sought to increase our EBITDA and Adjusted EBITDA, we have made significant capital investments, consisting primarily of: (i) the purchase and construction of real estate; (ii) other capital expenditures; (iii) acquisitions; and (iv) customer acquisition costs. These investments have been primarily funded through cash flows from operations and borrowings under our revolving credit facilities.

During 2001, total capital expenditures were $197.0 million. A significant portion of our capital expenditures are related to growth and consist primarily of storage systems, management information systems, new buildings and expansion of storage capacity in existing facilities. Approximately 10% of total capital expenditures were expended in order to maintain our then current revenue stream. We currently estimate that our capital expenditures (other than capital expenditures related to future acquisitions, which cannot be presently estimated, and our digital services offerings, which are described separately below) for 2002 will be approximately $175 to $200 million. We expect to fund these expenditures with cash flows from operations and borrowings under the Amended and Restated Credit Agreement.

Cash paid for acquisitions, net of cash acquired, in 2001 was $71.4 million. In addition, in 2001, we incurred costs (net of revenues received for the initial transfer of records) related to the acquisition of large volume accounts (customer acquisition costs) of $8.4 million.

We have been assessing various opportunities in the technology-based services business driven by e-commerce and facilitated by the Internet. Services associated with this business would expand our range of services into the use of the Internet to facilitate the backup, storage and management of customer data. We estimate that we will incur expenses associated with the continuing development of our digital service offerings in the range of $7 million to $9 million during 2002. In addition, we expect the capital expenditures associated with the continuing development of our digital service offerings in 2002 will be in the range of $5 million to $6 million. We intend to fund this effort with cash flows from operations and borrowings under the Amended and Restated Credit Agreement.

Synthetic Leasing

Our synthetic leases contain financial and other covenants, and events of default, that are similar to those contained in our Amended and Restated Credit Agreement. Seven financial institutions have provided over 50% of the capacity under our $400.0 million revolving credit facility. These seven financial institutions also participate in our synthetic lease programs. An event of default under one of our synthetic lease facilities would result in an event of default under our Amended and Restated Credit Agreement, enabling the lenders under the Amended and Restated Credit Agreement to terminate their commitments to lend and accelerate our obligations thereunder. An event of default under one of our synthetic lease facilities would not, directly, result in an event of default under any indenture pursuant to which our publicly traded notes were issued. However, an acceleration of our obligations under our Amended and Restated Credit Agreement would result in an event of default under each indenture, thereby enabling the holders of such notes to accelerate our obligations under the applicable indenture.

Under our synthetic lease facilities, special purpose entities are established to acquire properties and subsequently lease those properties to us. Neither we nor any of our related parties have invested, either via debt obligations or equity, in these special purpose entities. Our obligations under our synthetic lease facilities are considered indebtedness for purposes of financial covenants under the Amended and Restated Credit Agreement. As of December 31, 2001, our synthetic leasing program had a total capacity of $204.3 of which $151.9 million had been utilized for property acquisitions and $52.4 million is currently available for future property acquisitions.

We have entered into these synthetic leases because we believe they afford meaningful benefits. Such benefits include rental payments below those available from traditional landlords and developers, and tax benefits and control provisions normally associated with direct ownership. Each of the leases under our synthetic lease facilities has a five to six and one-half year term for specified records storage warehouses; commencement dates for these leases range from 1998 to 2002. During 2001, we recorded $8.5 million in rent expense on our income statement related to these lease commitments. We had synthetic lease facilities related to properties with a lessor's original cost of $74.3 million and $151.9 million as of December 31, 2000 and December 31, 2001, respectively. If on January 1, 2001, the original cost of properties under synthetic lease facilities had equaled $151.9 million, rent expense for the year ended December 31, 2001 would have been approximately $11.4 million. See "—Critical Accounting Policies—Accounting for Synthetic Leases." At the end of each lease term, we, at our option, may: (1) negotiate a renewal of such lease (which is subject to the agreement of the relevant synthetic lease lessor and its lenders); (2) purchase the properties subject to such lease at a price equal to the lessor's original cost; or (3) allow such lease to expire and cause the properties subject to it to be sold. Our ability to cause the properties to be sold depends upon our compliance with certain terms of the applicable lease. Under certain conditions, we would receive the excess, if any, of the net sales proceeds over the properties' original cost. In the event that the net sales proceeds are less than the properties' original cost, we would make certain contingent rental payments to the lessor equal to that difference, subject to a maximum amount of approximately 85% of the properties' original cost. If any of our synthetic lease facilities are terminated following an event of default under the relevant synthetic

lease documents, or if, at the end of the lease term, we do not either negotiate a renewal of the lease or elect to cause the relevant leased properties to be sold, or if we do elect to cause such leased properties to be sold but fail to satisfy the conditions to such election, we would generally be obligated to pay the lessor's original cost for such leased properties.

Acquisitions

Our liquidity and capital resources may be impacted by our acquisition strategy. Our future interest expense may increase significantly as a result of the additional indebtedness we may incur to finance possible future acquisitions. To the extent that future acquisitions are financed by additional borrowings under the Amended and Restated Credit Agreement or other credit facilities, or the future issuance of debt securities, the resulting increase in debt and interest expense could have a negative effect on such measures of liquidity as the ratio of debt to equity, EBITDA and Adjusted EBITDA to debt and to interest expense.

We have historically financed the cash portion of our acquisitions with borrowings under our revolving credit facilities in conjunction with cash flows provided by operations and with the net proceeds from the issuance of debt securities and common stock.

In connection with our acquisition program, we have undertaken certain restructurings of the acquired businesses. We complete formalized restructuring plans for acquisitions within one year of the date of acquisition. The restructuring activities include reductions in staffing levels, elimination of duplicate facilities and other costs associated with exiting certain activities of the acquired businesses. In connection with these restructuring activities, we established reserves of $3.8 million in 2001 as part of the purchase accounting for our acquisitions. During 2001, we expended $7.8 million for restructuring costs. These expenditures consisted primarily of severance costs and costs related to exiting facilities. In addition, we made $8.2 million of adjustments, which reduced goodwill, primarily as a result of our finalization of certain restructuring plans. At December 31, 2001, we had a total of $16.2 million accrued for restructuring costs for all of our then completed acquisitions. See Note 6 of Notes to Consolidated Financial Statements.

From January 1, 2002 through March 1, 2002, we acquired 2 confidential destruction services businesses for aggregate consideration of approximately $8 million.

Iron Mountain/Pierce Leahy Integration

The process of integrating the operations and headquarters functions of Iron Mountain and Pierce Leahy includes the planning, development and execution of an integration plan with the goal of full integration within three years after the merger. During 2000 and 2001, we completed the integration of the sales, overhead and support functions, and combined the two field operations. We currently estimate that the merger-related expenses to integrate the two companies, the majority of which have been incurred in 2000 and 2001, will total approximately $15 million. These costs consisted primarily of severance and relocation payments to certain employees, transition bonuses, consultants' fees, and system conversion costs. We recorded merger-related expenses of $9.1 million and $3.7 million during 2000 and 2001. As a result of the integration effort, we expect to realize an estimated $15 million in annual operating cost savings within three years after the merger. These cost savings will result primarily from the elimination of redundant corporate expenses, more efficient operations, and utilization of real estate. We intend to fund the integration effort with cash flows from operations and borrowings under the Amended and Restated Credit Agreement.

Future Capital Needs

Over the last year, our focus has shifted from growth through acquisitions to internally generated revenue growth. However, our primary financial goal has always been, and continues to be, to increase

consolidated EBITDA and Adjusted EBITDA in relation to capital invested, even now that our focus has shifted from growth through acquisitions to internal revenue growth. EBITDA and Adjusted EBITDA are sources of funds for investment in continued growth and for servicing indebtedness.

Our ability to generate sufficient cash to fund our needs depends generally on the results of our operations and the availability of financing. We believe that cash flows from operations in conjunction with borrowings from existing and possible future debt financings will be sufficient to meet debt service requirements for the foreseeable future and to make possible future acquisitions and capital expenditures. However, there can be no assurance in this regard or that the terms available for any future financing, if required, would be favorable to us.

Seasonality

Historically, our businesses have not been subject to seasonality in any material respect.

Inflation

Certain of our expenses, such as wages and benefits, occupancy, costs and equipment repair and replacement, are subject to normal inflationary pressures. Although to date we have been able to offset inflationary cost increases through increased operating efficiencies and the negotiation of favorable long-term real estate leases, we can give no assurance that we will be able to offset any future inflationary cost increases through similar efficiencies, leases or increased storage or service charges.

Foreign Currency Exchange Rates

We generally view our investments in foreign businesses with a functional currency other than our reporting currency as long-term. These investments are sensitive to fluctuations in foreign currency exchange rates. The functional currencies of our foreign subsidiaries are principally Canadian dollar, the British pound sterling, the Euro and several Latin American currencies. The effect of a change in foreign exchange rates on our net investment in foreign subsidiaries is reflected in the "Accumulated Other Comprehensive Items" component of shareholders' equity. A 10% depreciation in year-end 2001 functional currencies, relative to the U.S. dollar, would result in a $12.2 million reduction in our shareholders' equity.

Recent Pronouncements

In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard 142, "Goodwill and Other Intangible Assets." Under SFAS 142, goodwill and intangible assets with indefinite lives are no longer amortized, but are reviewed at least annually for impairment. At December 31, 2001, we had net goodwill of $1.5 billion. Pursuant to SFAS 142, we will test our goodwill for impairment upon adoption and, if impairment is indicated, record such impairment as a cumulative effect of accounting change. We are currently evaluating the effect the adoption may have on our consolidated results of operations and financial position. The amortization provisions of SFAS 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, we are required to adopt SFAS 142 effective January 1, 2002. Our impairment review may result in future periodic writedowns; however, the application of the non-amortization provisions of SFAS 142 for goodwill is expected to result in an increase in operating income of approximately $59 million in 2002. We are also reviewing the estimated useful lives of intangible assets which may affect operating income in 2002.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

In December 2000 and January 2001, we entered into certain derivative financial contracts, which are variable-for-fixed swaps of interest payments payable on an aggregate principal amount of $195.5 million of our term loan and certain variable operating lease commitments.

Our investments in Iron Mountain Europe Limited, Iron Mountain South America, Ltd. and other international investments may be subject to risks and uncertainties relating to fluctuations in currency valuation. One of our Canadian subsidiaries, Iron Mountain Canada Corporation, has U.S. dollar denominated debt. Gains and losses due to exchange rate fluctuations related to this debt are recognized in our consolidated statements of operations.

After consideration of the swap contracts mentioned above, as of December 31, 2001, we had $180.6 million of variable rate debt outstanding with a weighted average variable interest rate of 4.4%, and $1,315.5 million of fixed rate debt outstanding. If the weighted average variable interest rate on our variable rate debt had increased by 1%, such increase would have had a negative impact on our net income for the year ended December 31, 2001 of $1.2 million. See Note 4 of Notes to Consolidated Financial Statements for a discussion of our long-term indebtedness, including the fair values of such indebtedness as of December 31, 2001.

Item 8. Financial Statements and Supplementary Data.

See Item 14(a).

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

PART III

Item 10. Directors and Executive Officers of the Registrant.

The Directors and executive officers of the Company are as follows (all information is as of March 1, 2002):

Names of Directors and Executive Officers	Age	Position
C. Richard Reese(1)	56	Chairman of the Board of Directors, Chief Executive Officer and President
John F. Kenny, Jr.	44	Executive Vice President, Chief Financial Officer and Director
Harold E. Ebbighausen	47	Executive Vice President of the Company and President of Iron Mountain Off-Site Data Protection, a division of Iron Mountain Information Management, Inc.
Robert G. Miller	45	Executive Vice President of the Company and President of Iron Mountain Records Management, a division of Iron Mountain Information Management, Inc.
Clarke H. Bailey(1)(3)	47	Director
Constantin R. Boden(2)(3)	65	Director
Kent P. Dauten(2)	46	Director
Eugene B. Doggett	65	Director
B. Thomas Golisano	60	Director
Arthur D. Little(2)(3)	58	Director
J. Peter Pierce	56	Director
Howard D. Ross	50	Director
Vincent J. Ryan(1)(3)	66	Director

(1): Member of the Executive Committee; Mr. Ryan is the Chairman of the Executive Committee.
(2): Member of the Audit Committee; Mr. Boden is the Chairman of the Audit Committee.
(3): Member of the Compensation Committee; Mr. Little is the Chairman of the Compensation Committee.

The Company Board currently consists of eleven Directors. There are three classes of Directors who serve for three year terms and are elected on a staggered basis, one class of Directors standing for election each year. Directors of each class hold office until the third annual meeting of the shareholders of the Company following their election or until their successors are elected and qualified.

The executive officers were elected by the Board of Directors on May 24, 2001. All executive officers hold office at the discretion of the Company Board until the first meeting following the next annual meeting of shareholders and until their successors are chosen and qualified.

Directors and Executive Officers

C. Richard Reese is the Chairman of the Board, a position he has held since November 1995, and the Chief Executive Officer of the Company, a position he has held since 1981, and has been a Director of the Company since 1990. He is also the President of the Company, a position he has held since June 2000 and previously held from 1981 until November 1985. Mr. Reese is a member of the investment committee of Schooner Capital LLC ("Schooner"), a shareholder of the Company. Prior to joining Iron Mountain, Mr. Reese lectured at Harvard Business School in "Entrepreneurship" and

provided consulting services to small-and medium-sized emerging enterprises. Mr. Reese has also served as the President and a Director of Professional Records and Information Services Management ("PRISM"), a trade group of approximately 530 members. He is also a Director of Ardais Corporation, Bird Dog Solutions, Inc. and Presidio Partners, LLC. He holds a Master of Business Administration degree from Harvard Business School.

John F. Kenny, Jr. is an Executive Vice President and the Chief Financial Officer of the Company, positions he has held since May 1997. He has also served as a Director of the Company since March 2000. Mr. Kenny joined Iron Mountain in 1991 and held a number of operating positions before assuming the position of Vice President of Corporate Development in 1995. Prior to 1991, Mr. Kenny was a Vice President of CS First Boston Merchant Bank, New York, with responsibility for risk capital investments. Mr. Kenny has also served as a Director and the Treasurer of PRISM. He holds a Master of Business Administration degree from Harvard Business School.

Harold E. Ebbighausen is an Executive Vice President of the Company and the President of Iron Mountain Off-Site Data Protection, a division of Iron Mountain Information Management, Inc. ("IMIM"), a subsidiary of the Company. Prior to September 10, 2001, the Iron Mountain Off-Site Data Protection was a separate subsidiary known as Arcus Data Security, Inc. Mr. Ebbighausen has been an Executive Vice President of the Company since May 1998, and had been the President of Arcus Data Security, Inc. since July 1998. Mr. Ebbighausen was a Vice President of Data Security Services of Iron Mountain from September 1996 through June 1997. Prior to joining Iron Mountain, Mr. Ebbighausen was Vice President of Data Management Services with INSCI Corporation, a software provider for computer output and data storage solutions to optical and CD technology. Previously, he held a number of field management positions with Anacomp, Inc., a service bureau provider in the micrographics industry.

Robert G. Miller is an Executive Vice President of the Company and the President of Iron Mountain Records Management, a division of IMIM. Mr. Miller was appointed President of Iron Mountain Records Management, Inc., the predecessor of IMIM, in March 2001 and had served as the Senior Vice President and Chief Operating Officer of Iron Mountain Records Management, Inc. from July 2000 until his appointment as President. Prior to July 2000, Mr. Miller was an Executive Vice President of Iron Mountain Records Management, Inc., a position that he had held since December 1996. Mr. Miller joined Iron Mountain in 1988 and held various positions including District Manager from 1988 through 1991 and Regional Vice President from 1991 through 1996. Prior to 1988, Mr. Miller was employed as a District Manager at Bell & Howell Records Management Company.

Clarke H. Bailey is a Director of the Company, a position he has held since January 1998. He is Co-Chairman and Director of Highgate Capital LLC, a private equity firm, and Chairman, Chief Executive Officer and a Director of ShipXact.com, Inc., a private fulfillment and distribution company. Mr. Bailey also serves as Chairman and a Director of Glenayre Technologies, Inc., a manufacturing company in the wireless communications industry. Mr. Bailey was the Chairman and Chief Executive Officer of each of Arcus Group, Inc., United Acquisition Company and Arcus Technology Services, Inc. from 1995 until their acquisition by Iron Mountain in January 1998. He is also a Director of Connectivity Technologies Inc. and Swiss Army Brands, Inc. He holds a Master of Business Administration degree from The Wharton School, University of Pennsylvania.

Constantin R. Boden is a Director of the Company, a position he has held since December 1990. Mr. Boden is the principal of Boden Partners LLC and chairman of the advisory board of Boston Capital Ventures, a risk capital concern. For 34 years, until January 1995, Mr. Boden was employed by The First National Bank of Boston, most recently as Executive Vice President, International Banking. He holds a Master of Business Administration degree from Harvard Business School.

Kent P. Dauten is a Director of the Company, a position he has held since November 1997. He also serves as President of Keystone Capital, Inc., a management and consulting advisory service firm, a

position he has held since March 1994. In February 1995, Mr. Dauten founded HIMSCORP, Inc. (d/b/a Records Masters) and served as its President until its acquisition by Iron Mountain in November 1997. Mr. Dauten currently serves as a Director of Health Management Associates, Inc., a hospital management firm. Mr. Dauten holds a Master of Business Administration degree from Harvard Business School.

Eugene B. Doggett is a Director of the Company, a position he has held since 1990. From 1987 until May 1997, Mr. Doggett was the Chief Financial Officer of Iron Mountain, and from 1990 until May 1998, Mr. Doggett was an Executive Vice President of Iron Mountain. Prior to joining Iron Mountain, he had extensive experience in commercial and investment banking, as well as financial and general management experience at senior levels. He holds a Master of Business Administration degree from Harvard Business School.

B. Thomas Golisano is a Director of the Company, a position he has held since June 1997. Mr. Golisano was Chairman of Safesite Records Management Corporation until its acquisition by Iron Mountain in June 1997. He founded Paychex Inc., a publicly held, national payroll service company, in 1971 and serves as its Chairman, President and Chief Executive Officer. Mr. Golisano serves on the Board of Trustees of Rochester Institute of Technology and on the boards of several privately held companies. He has also served on the boards of numerous non-profit organizations and is the founder of the B. Thomas Golisano Foundation.

Arthur D. Little is a Director of the Company, a position he has held since November 1995. Mr. Little is a principal of A & J Acquisition Company, Inc., which he founded in 1996. Prior to that, he was Managing Director of and also a partner in Narragansett Capital, Inc., a private investment firm. He holds a Bachelor of Arts degree in history from Stanford University.

J. Peter Pierce is a Director of the Company, a position he has held since February 2000. From February 1, 2000 until his resignation in June 2000, he was also the President of the Company. Prior to the merger with Pierce Leahy, Mr. Pierce had been the President and Chief Executive Officer of Pierce Leahy since 1995, and a Director of Pierce Leahy since the early 1970s. Mr. Pierce is the Chairman and Chief Executive Officer of Telespectrum Worldwide, Inc., a publicly held teleservices company. Mr. Pierce is also the founder and principal partner in Pioneer Capital L.P., a venture capital company. Mr. Pierce attended the University of Pennsylvania and served in the United States Marine Corps.

Howard D. Ross is a Director of the Company, a position he has held since February 2000. In 1999, Mr. Ross was involved in the formation, and is currently a partner, of LLR Equity Partners, L.P., a venture capital fund. From 1984 to October 1999, he was a partner at Arthur Andersen LLP. He is also a Director of eResearch Technology, Inc., a provider of clinical testing and software services primarily to the pharmaceutical industry, and of Verticalnet, Inc., a provider of e-commerce software. Mr. Ross holds a Bachelor of Science degree in economics from The Wharton School, University of Pennsylvania, and is a certified public accountant.

Vincent J. Ryan is a Director of the Company, a position he has held for over ten years. Mr. Ryan is the founder of Schooner and its predecessor, Schooner Capital Corporation. Mr. Ryan has served as the Chairman and Chief Executive Officer of Schooner since 1971, and as its President from 1971 to 1985 and from 1996 to 1999. Prior to November 1995, Mr. Ryan served as Chairman of the Iron Mountain Board of Directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's executive officers, Directors and persons who own more than ten percent of a registered class of the Company's equity securities file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the Commission. Such executive officers, Directors and ten percent shareholders are also required by

Commission rules to furnish to the Company copies of all Section 16(a) reports that they file. Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons that they were not required to file a Form 5, the Company believes that, during the fiscal year ended December 31, 2001, the Company's executive officers, Directors and ten percent shareholders complied with all Section 16(a) filing requirements applicable to such persons, except that a Director, J. Peter Pierce, was late in filing 3 reports on Form 4 relating to a total of 15 transactions.

Item 11. Executive Compensation.

The following table provides certain information concerning compensation earned by the Chief Executive Officer and the other three most highly compensated executive officers of the Company measured as of December 31, 2001 (the "Named Executive Officers").

Summary Compensation Table

								Long-Term Compensation
	Annual Compensation							Long-Term Compensation
	Annual Compensation							Number of Shares Underlying Options
Name and Principal Position	Year	Salary		Bonus		Other Annual Compensation		Number of Shares Underlying Options	All Other Compensation(1)
C. Richard Reese Chairman of the Board and Chief Executive Officer	2001 2000 1999	$ $ $	586,154 428,366 358,000	$ $	(2) 428,000 250,000		0 0 0	0 0 0	$ $ $	2,992 3,037 3,200
John F. Kenny, Jr. Executive Vice President and Chief Financial Officer	2001 2000 1999	$ $ $	287,308 257,019 218,300	$ $	(2) 231,000 153,000		0 0 0	75,000 0 40,148	$ $ $	2,992 3,037 3,200
Harold E. Ebbighausen President of Iron Mountain Off-Site Data Protection, a division of IMIM	2001 2000 1999	$ $ $	237,865 210,385 193,300	$ $	(2) 82,000 80,000		0 0 0	0 0 53,536	$ $ $	2,992 3,037 3,200
Robert G. Miller President and Chief Operating Officer of Iron Mountain Records Management, a division of IMIM	2001 2000 1999	$ $ $	256,885 209,423 153,500	$ $	(2) 165,000 61,400	$	0 74,897 0	0 57,995 16,726	$ $ $	2,992 3,037 2,983

(1): Reflects the Company's matching contribution to The Iron Mountain Companies 401(k) Plan for each individual.
(2): The Compensation Committee has not yet met with respect to year 2001 bonuses and accordingly those amounts have not yet been determined.

The following table sets forth certain information concerning the grant of options to purchase Company common stock to the Named Executive Officers during the year ended December 31, 2001.

Option Grants in 2001

							Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term(1)
		Percent of Total Options Granted to Employees in Fiscal Year 2001
Name and Principal Position	Number of Securities Underlying Options Granted			Exercise Price ($/Sh)		Expiration Date
Name and Principal Position	Number of Securities Underlying Options Granted			Exercise Price ($/Sh)		Expiration Date	5%		10%
John F. Kenny, Jr. Executive Vice President and Chief Financial Officer	75,000	15.07	%	$	28.767	11/29/2011	$	3,514,350	$	5,595,975

(1): Potential Realizable Value is based on the assumed growth rates for an assumed ten-year option term. Five percent annual growth results in a Common Stock price per share of $46.858, and ten percent annual growth results in a Common Stock price per share of $74.613, respectively, for such term. The actual value, if any, an executive may realize will depend on the excess of the market price of the Common Stock over the exercise price on the date the option is exercised. There is no assurance that the value realized by an executive will be at or near the amounts reflected in this table.

The following table sets forth certain information with respect to stock options during the year ended December 31, 2001 exercised by, and the unexercised options to purchase common stock held by, the Named Executive Officers.

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values

				Number of Unexercised Options at December 31, 2001		Value of Unexercised In-the-Money-Options at December 31, 2001(1)
Name and Principal Position	Shares Acquired On Exercise	Value Realized		Number of Unexercised Options at December 31, 2001
Name and Principal Position	Shares Acquired On Exercise	Value Realized		Exercisable	Unexercisable	Exercisable		Unexercisable
John F. Kenny, Jr Executive Vice President, Chief Financial Officer	108,523	$	2,564,395	286,625	146,569	$	4,869,633	$	945,064
Harold E. Ebbighausen President of Iron Mountain Off-Site Data Protection, a division of IMIM	19,842	$	273,335	51,790	37,083	$	633,727	$	301,029
Robert G. Miller President and Chief Operating Officer of Iron Mountain Records Management, a division of IMIM	9,000	$	190,865	76,111	56,433	$	1,477,382	$	395,440

(1): Based on a year-end value of $29.4233 per share, less the exercise price.

Director Compensation

Directors who are employees of the Company do not receive additional compensation for serving as Directors. Each Director who is not an employee of the Company receives an annual retainer fee of $12,000 as compensation for his services as a member of the Company Board and $500 for attendance at committee meetings ($1,000 per meeting for the Chairman of the committee). In addition, the Company has a program by which it grants its nonemployee Directors options to purchase $200,000 of the Company's Common Stock every three years. Each option is granted under either the Iron Mountain Incorporated 1995 Stock Incentive Plan or the Iron Mountain Incorporated 1997 Stock Option Plan (the "Stock Incentive Plan" and the "Stock Option Plan," respectively), has an exercise price equal to fair market value (as defined in the Stock Incentive Plan or the Stock Option Plan, as applicable) on the date of grant, vests in equal amounts over a period of three years and has a ten year term. All Directors are reimbursed for out-of-pocket expenses incurred in attending meetings of the Company Board or committees thereof, and for other expenses incurred in their capacities as Directors.

The Company paid a total of $131,000 in cash for Directors fees in respect of services for 2001. In addition, the Company paid $25,000 to Constantin R. Boden for advisory services to Iron Mountain Europe Limited.

Employment Contracts, Termination of Employment and Change of Control Arrangement

The Stock Incentive Plan provides for acceleration of the vesting of options and stock appreciation rights if the Company or any wholly owned subsidiary of the Company is a party to a merger or consolidation (whether or not the Company is the surviving corporation) in any transaction or series of related transactions and there is a "Limited Change of Control" of the Company. A Limited Change of Control occurs if after the merger or consolidation (a) individuals who immediately prior to the merger or consolidation served as members of the Company Board no longer constitute a majority of the Company Board or the board of directors of the surviving corporation and (b) the voting securities of the Company outstanding immediately prior to the merger or consolidation do not represent (either by remaining outstanding or upon conversion into securities of the surviving corporation) more than 50% of the voting power of the securities of the Company or the surviving corporation immediately after the merger or consolidation.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee of the Company Board consists of Mr. Little, who is the Chairman, and Messrs. Boden, Ryan and Bailey. Mr. Ryan is the Chairman of the Board and Chief Executive Officer of Schooner and principal shareholder of Schooner Capital Trust. See "Item 13. Certain Relationships and Related Transactions—Real Estate Transactions."

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information known to us with respect to beneficial ownership of Common Stock by (i) each Director, (ii) the Named Executive Officers, (iii) all Directors and Named Executive Officers of the Company as a group and (iv) each shareholder known by us to be the beneficial owner of more than five percent of the Common Stock. Such information is presented as of March 1, 2002, except as otherwise indicated.

	Amount of Beneficial Ownership(1)
Name	Shares	Percent Owned
Directors and Executive Officers
C. Richard Reese(2)	2,341,436	2.8	%
John F. Kenny, Jr.(3)	342,189	*
Harold E. Ebbighausen(4)	54,310	*
Robert G. Miller(5)	83,216	*
Clarke H. Bailey(6)	93,185	*
Constantin R. Boden(7)	58,459	*
Kent P. Dauten(8)	1,525,319	1.8	%
Eugene B. Doggett(9)	30,229	*
B. Thomas Golisano(10)	1,867,790	2.2	%
J. Peter Pierce(11)	2,596,717	3.1	%
Arthur D. Little(12)	69,626	*
Howard D. Ross(13)	6,217	*
Vincent J. Ryan(14)	7,655,666	9.1	%
All Directors and executive officers as a group (13 persons)(15)	15,412,986	18.3	%
Five Percent Shareholders
Chieftain Capital Management, Inc.(16)	11,167,110	13.3	%
Thomas W. Smith(17)	5,424,064	6.4	%
Thomas N. Tryforos(18)	4,653,259	5.5	%
T. Rowe Price Associates, Inc.(19)	7,311,330	8.6	%

*: Less than 1%
(1): Except as otherwise indicated, the persons named in the table above have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them.
(2): Mr. Reese is a Director, Chairman of the Board, Chief Executive Officer and President of the Company. Includes 39,066 shares of Common Stock held in trusts for the benefit of Mr. Reese's children, as to which Mr. Reese disclaims beneficial ownership. Also includes 1,311,373 shares of Common Stock as to which Mr. Reese shares beneficial ownership with Schooner as a result of a 1988 deferred compensation arrangement, as amended, between Schooner and Mr. Reese relating to Mr. Reese's former services as President of the predecessor corporation to Schooner. Pursuant to such arrangement, upon the earlier to occur of (i) Schooner's sale or exchange of substantially all of the shares of Common Stock held by Schooner or (ii) the cessation of Mr. Reese's employment with the Company, Schooner is required to transfer such shares of Common Stock to Mr. Reese or remit to Mr. Reese cash in an amount equal to the then current fair market value of such shares of Common Stock. Schooner has agreed to vote the shares of Common Stock subject to such arrangement at the direction of Mr. Reese.

(3): Mr. Kenny is an Executive Vice President, Chief Financial Officer and a Director of the Company. Includes 286,625 shares that Mr. Kenny has the right to acquire pursuant to currently exercisable options.
(4): Mr. Ebbighausen is an Executive Vice President of the Company and the President of Iron Mountain Off-Site Data Protection, a division of Iron Mountain Information Management, Inc. Includes 51,790 shares that Mr. Ebbighausen has the right to acquire pursuant to currently exercisable options.
(5): Mr. Miller is an Executive Vice President of the Company and the President and Chief Operating Officer of Iron Mountain Records Management, a division of Iron Mountain Information Management, Inc. All 83,216 shares are shares that Mr. Miller has the right to acquire pursuant to currently exercisable options.
(6): Mr. Bailey is a Director of the Company. Includes 11,479 shares that Mr. Bailey has the right to acquire pursuant to currently exercisable options.
(7): Mr. Boden is a Director of the Company. Includes 11,479 shares that Mr. Boden has the right to acquire pursuant to currently exercisable options.
(8): Mr. Dauten is a Director of the Company. Includes 11,479 shares that Mr. Dauten has the right to acquire pursuant to currently exercisable options.
(9): Mr. Doggett is a Director of the Company. Includes 11,479 shares that Mr. Doggett has the right to acquire pursuant to currently exercisable options.
(10): Mr. Golisano is a Director of the Company. Includes 19,621 shares that Mr. Golisano has the right to acquire pursuant to currently exercisable options.
(11): The information is presented as of December 31, 2001, and is based on a Schedule 13G/A filed with the Commission on March 1, 2002. Mr. Pierce is a Director of the Company. Includes 5,019 shares that Mr. Pierce has the right to acquire pursuant to currently exercisable options. Also includes 2,591,698 shares held in a voting trust pursuant to a Voting Trust Agreement dated June 24, 1997 (as amended or restated from time to time, the "Voting Trust"). Mr. Pierce, as sole trustee of the Voting Trust, holds the power to vote the shares held in the Voting Trust. The beneficial owners of the interests in the Voting Trust have the right to dispose of the shares with respect to which they have beneficial interests. Mr. Pierce directly owns 75,000 shares that are held in the Voting Trust. Mr. Pierce's address is 209 West Lancaster Avenue, Suite 101, Paoli, Pennsylvania 19301.
(12): Mr. Little is a Director of the Company. Includes 56,250 shares held by The Little Family Trust, as to which Mr. Little disclaims beneficial ownership, as well as 11,479 shares that Mr. Little has the right to acquire pursuant to currently exercisable options.
(13): Mr. Ross is a Director of the Company. All 6,217 shares are shares that Mr. Ross has the right to acquire pursuant to currently exercisable options.
(14): Mr. Ryan is a Director of the Company. Includes 11,479 shares that Mr. Ryan has the right to acquire pursuant to currently exercisable options. Also includes (i) 4,104,114 shares of Common Stock held by Schooner, as to which Mr. Ryan has sole voting power and investment power as the Chairman of the Board of Schooner and the principal stockholder of Schooner Capital Trust, the sole member of Schooner; (ii) 9,000 shares held in a trust for the benefit of Mr. Ryan's heirs, as to which Mr. Ryan disclaims beneficial ownership except to the extent of his pecuniary interest therein; and (iii) 102,000 shares held by The Schooner Foundation as to which Mr. Ryan disclaims beneficial ownership. Mr. Ryan's address is c/o Schooner Capital LLC, 745 Atlantic Avenue, Boston, Massachusetts 02111.

(15): Includes 521,361 shares that Directors and executive officers have the right to acquire pursuant to currently exercisable options.
(16): This information is presented as of December 31, 2001, and is based solely on a Schedule 13G/A filed with the Commission on February 15, 2001. The share amounts reported on the 13G/A did not take into account the 3 for 2 stock split effective December 31, 2001. The numbers have been recalculated here. These securities are owned by various individual and institutional investors for which Chieftain Capital Management, Inc. ("Chieftain") serves as independent advisor with power to direct investments and/or sole power to vote the securities. Chieftain has shared voting power and shared dispositive power over all 11,167,110 shares, but disclaims beneficial ownership as to all these shares. The address of Chieftain Capital Management, Inc. is 12 East 49^th Street, New York, New York 10017.
(17): This information is presented as of December 31, 2001, and is based solely on a Schedule 13G/A filed with the Commission on February 14, 2002. The share amounts reported on the 13G/A did not take into account the 3 for 2 stock split effective December 31, 2001. The numbers have been recalculated here. Mr. Smith has sole voting and dispositive power over 803,944 shares and has shared voting and dispositive power over 4,620,120 shares with Mr. Tryforos. The address of Mr. Smith is 323 Railroad Avenue, Greenwich, Connecticut 06830.
(18): This information is presented as of December 31, 2001, and is based solely on a Schedule 13G/A filed with the Commission on February 14, 2002. The share amounts reported on the 13G/A did not take into account the 3 for 2 stock split effective December 31, 2001. The numbers have been recalculated here. Mr. Tryforos has sole voting and dispositive power over 33,139 shares and has shared voting and dispositive power over 4,620,120 shares with Mr. Smith. The address of Mr. Tryforos is 323 Railroad Avenue, Greenwich, Connecticut 06830.
(19): This information is presented as of December 31, 2001, and is based solely on a Schedule 13G/A filed with the Commission on February 22, 2002. The share amounts reported on the 13G/A did not take into account the 3 for 2 stock split effective December 31, 2001. The numbers have been recalculated here. These securities are owned by various individual and institutional investors for which T. Rowe Price Associates, Inc. ("Price Associates") serves as independent advisor with power to direct investments and/or sole power to vote the securities. Price Associates has sole voting power over 1,399,800 shares and sole dispositive power over 7,311,330 shares, but disclaims beneficial ownership as to all of these shares. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202.

Item 13. Certain Relationships and Related Transactions.

Real Estate Transactions

Schooner leases space from the Company at the Company's corporate headquarters. Vincent J. Ryan, a Director of the Company, is the Chairman and Chief Executive Officer of Schooner. The lease is a tenancy-at-will and may be terminated by either the Company or by Schooner at any time. As consideration for the lease, Schooner pays rent to the Company based on its pro rata share of all expenses related to the use and occupancy of the premises. The rent paid by Schooner to the Company under such lease was approximately $101,000 in the year ended December 31, 2001, and Schooner currently pays annual rent of approximately $109,000. The Company believes that the terms of this lease are no less favorable to it than would have been negotiated with an unrelated third party.

The Company leases from three separate limited partnerships certain of its facilities in Suffield, Connecticut, Orlando, Florida and Charlotte, North Carolina. J. Peter Pierce, a Director of the Company, is the general partner of the limited partnerships, and members of the Pierce family and their affiliates own substantial limited partnership interests in each of the limited partnerships. The

leases for the Suffield and Orlando facilities terminate on December 31, 2005 and January 3, 2006, respectively. The lease for the Charlotte facility was renewed during 2001 for a term expiring on September 30, 2011. Each of the leases for the Suffield and Orlando facilities contain two five-year renewal options. The aggregate rental payment by the Company under these leases during 2001 was $513,000. The Company believes that the terms of these leases are no less favorable to the Company than would have been negotiated with unrelated third parties.

Other Transactions

We paid compensation of approximately $230,000 for the year ended December 31, 2001 to Mr. T. Anthony Ryan. Mr. Ryan is Vice President, Real Estate, of the Company and is the brother of Vincent J. Ryan, a Director of the Company. We believe that the terms of Mr. Ryan's employment are no less favorable to it than would be negotiable with an unrelated third party.

We provided an annual pension in the amount of $96,000 to Leo W. Pierce, Sr. for the year ended December 31, 2001. Mr. Pierce formerly served as Chairman Emeritus of the Company and is the father of J. Peter Pierce, a Director of the Company. We will continue to provide a pension to Mr. Pierce in 2002.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a) (1) and (2) Financial Statements and Financial Statement Schedules filed as part of this report:

A. Iron Mountain Incorporated

		Page
Report of Independent Public Accountants		45
Consolidated Balance Sheets, December 31, 2000 and 2001		46
Consolidated Statements of Operations, Years ended December 31, 1999, 2000 and 2001		47
Consolidated Statements of Shareholders' Equity and Comprehensive Loss, Years ended December 31, 1999, 2000 and 2001		48
Consolidated Statements of Cash Flows, Years ended December 31, 1999, 2000 and 2001		49
Notes to Consolidated Financial Statements		50
B. Iron Mountain Europe Limited
Report of the Independent Auditors		84
C. Financial Statement Schedule:
Report of Independent Public Accountants		85
Schedule II — Valuation and Qualifying Accounts		86

(a) (3) Exhibits filed as part of this report:

As listed in the Exhibit Index following the signature page hereof.

(b) Reports on Form 8-K:

On December 13, 2001, the Company filed a Current Report on Form 8-K under Item 5 and 7 to announce the Company's authorization and approval of a 3-for-2 stock split effected in the form of a dividend on the Company's Common Stock, par value $0.01 per share, and to file pro forma information for the nine months ended September 30, 2001 pertaining to the Company's March Debt Issuance and the September Debt Offering, as defined therein, and the related redemptions.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Iron Mountain Incorporated:

We have audited the accompanying consolidated balance sheets of Iron Mountain Incorporated (a Pennsylvania corporation) and its subsidiaries as of December 31, 2000 and 2001, and the related consolidated statements of operations, shareholders' equity and comprehensive loss and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of Iron Mountain Incorporated's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the consolidated financial statements of Iron Mountain Europe Limited as of October 31, 2000 and 2001, which statements reflect total assets and total revenues of 6 percent and 5 percent in 2000, and 8 percent and 6 percent in 2001, respectively, of the related consolidated totals. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for this entity, is based solely on the report of the other auditors.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Iron Mountain Incorporated and its subsidiaries as of December 31, 2000 and 2001 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
February 22, 2002
(Except with respect to Note 17,
as to which the date is March 15, 2002)

IRON MOUNTAIN INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands)

			December 31,
			2000			2001
ASSETS
Current Assets:
	Cash and cash equivalents		$	6,200		$	21,359
	Accounts receivable (less allowances of $15,989 and $17,086 as of 2000 and 2001, respectively)			176,442			219,050
	Deferred income taxes			30,990			31,140
	Prepaid expenses and other			23,036			37,768

		Total Current Assets		236,668			309,317
Property, Plant and Equipment:
	Property, plant and equipment			984,939			1,190,537
	Less—Accumulated depreciation			(152,545	)		(238,306	)

		Net Property, Plant and Equipment		832,394			952,231
Other Assets, net:
	Goodwill			1,525,630			1,529,547
	Customer acquisition costs			27,692			32,884
	Deferred financing costs			14,534			19,928
	Other			22,178			15,999

		Total Other Assets, net		1,590,034			1,598,358

		Total Assets	$	2,659,096		$	2,859,906

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
	Current portion of long-term debt		$	40,789		$	35,256
	Accounts payable			42,531			64,596
	Accrued expenses			153,291			153,105
	Deferred income			53,884			85,894
	Other current liabilities			23,558			20,158

		Total Current Liabilities		314,053			359,009
Long-term Debt, net of current portion				1,314,342			1,460,843
Other Long-term Liabilities				7,920			23,705
Deferred Rent				16,346			17,884
Deferred Income Taxes				38,948			47,213
Commitments and Contingencies (see Note 13)
Minority Interest				43,029			65,293
Shareholders' Equity:
	Common stock			829			843
	Additional paid-in capital			990,578			1,006,836
	Accumulated deficit			(59,383	)		(103,695	)
	Accumulated other comprehensive items			(7,566	)		(18,025	)

		Total Shareholders' Equity		924,458			885,959

		Total Liabilities and Shareholders' Equity	$	2,659,096		$	2,859,906

The accompanying notes are an integral part of these consolidated financial statements.

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except Per Share Data)

			Year Ended December 31,
			1999			2000			2001
Revenues:
	Storage		$	317,387		$	585,664		$	694,474
	Service and storage material sales			202,162			400,707			476,642

		Total Revenues		519,549			986,371			1,171,116
Operating Expenses:
	Cost of sales (excluding depreciation)			260,930			482,771			561,936
	Selling, general and administrative			128,948			246,559			306,934
	Depreciation and amortization			65,422			126,810			153,591
	Stock option compensation expense			—			15,110			—
	Merger-related expenses			—			9,133			3,673

		Total Operating Expenses		455,300			880,383			1,026,134
Operating Income				64,249			105,988			144,982
Interest Expense, Net				54,425			117,975			134,742
Other Income (Expense), Net				17			(6,045	)		(18,371	)

	Income (Loss) from Continuing Operations Before Provision for Income Taxes and Minority Interest			9,841			(18,032	)		(8,131	)
Provision for Income Taxes				10,579			9,125			26,036
Minority Interest in Earnings (Losses) of Subsidiaries				322			(2,224	)		(1,929	)

	Loss from Continuing Operations before Extraordinary Item			(1,060	)		(24,933	)		(32,238	)
Income from Discontinued Operations				241			—			—
Loss on Sale of Discontinued Operations				(13,400	)		—			—
Extraordinary Charge from Early Extinguishment of Debt (net of tax benefit of $1,928 and $8,161)				—			(2,892	)		(11,819	)

		Net Loss	$	(14,219	)	$	(27,825	)	$	(44,057	)

Net Loss per Share—Basic and Diluted:
	Loss from Continuing Operations		$	(0.02	)	$	(0.31	)	$	(0.39	)
	Discontinued Operations			(0.26	)		—			—
	Extraordinary Charge from Early Extinguishment of Debt			—			(0.04	)		(0.14	)

		Net Loss per Share—Basic and Diluted	$	(0.28	)	$	(0.35	)	$	(0.53	)

Weighted Average Common Shares Outstanding—Basic and Diluted				50,018			79,688			83,666

The accompanying notes are an integral part of these consolidated financial statements.

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE LOSS

(In thousands, except share data)

	Common Stock Voting
												Accumulated Other Comprehensive Items
						Additional Paid-in Capital			Accumulated Deficit						Treasury Stock			Total Shareholders' Equity
	Shares		Amount			Additional Paid-in Capital			Accumulated Deficit						Treasury Stock			Total Shareholders' Equity
Balance, December 31, 1998	44,145,308		$	442		$	355,779		$	(17,339	)	$	—		$	—		$	338,882
Shares and options issued in connection with acquisitions, net of issuance costs	2,214,865			22			45,738			—			—			—			45,760
Issuance of shares in secondary public offering, net of issuance costs	8,625,000			86			152,457			—			—			—			152,543
Issuance of shares under employee stock purchase plan and option plans, including tax benefit	430,245			4			6,178			—			—			—			6,182
Acceleration of options in connection with sale of business	—			—			283			—			—			—			283
Currency translation adjustment	—			—			—			—			(1,193	)		—			(1,193	)
Purchase of treasury shares	—			—			—			—			—			(39,484	)		(39,484	)
Net loss	—			—			—			(14,219	)		—			—			(14,219	)

Balance, December 31, 1999	55,415,418			554			560,435			(31,558	)		(1,193	)		(39,484	)		488,754
Shares and options issued in connection with acquisitions, net of issuance costs	28,175,720			282			444,707			—			—			—			444,989
Issuance of shares under employee stock purchase plan and option plans, including tax benefit	1,543,575			15			9,788			—			—			—			9,803
Stock option compensation expense	—			—			15,110			—			—			—			15,110
Currency translation adjustment	—			—			—			—			(6,373	)		—			(6,373	)
Retirement of treasury stock	(2,214,866	)		(22	)		(39,462	)		—			—			39,484			—
Net loss	—			—			—			(27,825	)		—			—			(27,825	)

Balance, December 31, 2000	82,919,847			829			990,578			(59,383	)		(7,566	)		—			924,458
Issuance of shares under employee stock purchase plan and option plans, including tax benefit	1,374,468			14			16,258			—			—			—			16,272
Currency translation adjustment	—			—			—			—			(4,388	)		—			(4,388	)
Transition adjustment charge	—			—			—			—			(214	)		—			(214	)
Unrealized loss on hedging contracts	—			—			—			—			(5,857	)		—			(5,857	)
Adjustment due to differences in consolidation year end	—			—			—			(255	)		—			—			(255	)
Net loss	—			—			—			(44,057	)		—			—			(44,057	)

Balance, December 31, 2001	84,294,315		$	843		$	1,006,836		$	(103,695	)	$	(18,025	)	$	—		$	885,959

		1999			2000			2001
COMPREHENSIVE LOSS:
Net loss		$	(14,219	)	$	(27,825	)	$	(44,057	)
Other Comprehensive Losses:
	Foreign Currency Translation Adjustment		(1,193	)		(6,373	)		(4,388	)
	Transition Adjustment Charge		—			—			(214	)
	Unrealized Loss on Hedging Contracts		—			—			(5,857	)

Comprehensive Loss		$	(15,412	)	$	(34,198	)	$	(54,516	)

The accompanying notes are an integral part of these consolidated financial statements.

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

		Year Ended December 31,
		1999			2000			2001
Cash Flows from Operating Activities:
	Net loss	$	(14,219	)	$	(27,825	)	$	(44,057	)
Adjustments to reconcile net loss to loss from continuing operations before extraordinary item:
	Income from discontinued operations		(241	)		—			—
	Loss on sale of discontinued operations		13,400			—			—
	Extraordinary charge from early extinguishment of debt		—			2,892			11,819

Loss from Continuing Operations before Extraordinary Item			(1,060	)		(24,933	)		(32,238	)
Adjustments to reconcile loss from continuing operations before extraordinary item to cash flows provided by operating activities of continuing operations:
	Minority interest		322			(2,224	)		(1,929	)
	Depreciation and amortization		65,422			126,810			153,591
	Amortization of deferred financing costs and bond discount		1,981			2,595			4,930
	Provision for doubtful accounts		2,733			9,714			8,499
	Loss on impairment of investments		—			—			6,925
	Stock option compensation expense		—			15,110			—
	Foreign currency loss and other, net		238			4,737			10,399
Changes in Assets and Liabilities (exclusive of acquisitions):
	Accounts receivable		(22,996	)		(15,881	)		(24,176	)
	Prepaid expenses and other current assets		(9,691	)		19,332			(5,083	)
	Deferred income taxes		8,989			8,350			11,774
	Accounts payable		2,009			(553	)		12,554
	Accrued expenses and other current liabilities		6,306			8,779			4,648
	Deferred rent		1,203			5,527			1,821
	Deferred income		3,331			686			5,800
	Other assets and long-term liabilities		(2,513	)		(445	)		3,394

Cash Flows Provided by Operating Activities of Continuing Operations			56,274			157,604			160,909
Cash Flows Used in Operating Activities of Discontinued Operations			(836	)		—			—

	Cash Flows Provided by Operating Activities		55,438			157,604			160,909
Cash Flows from Investing Activities:
	Cash paid for acquisitions, net of cash acquired		(212,160	)		(140,940	)		(71,397	)
	Capital expenditures		(98,657	)		(168,706	)		(197,039	)
	Additions to customer acquisition costs		(8,122	)		(12,779	)		(8,420	)
	Investment in convertible preferred stock		—			(6,524	)		(2,000	)
	Proceeds from sale of property and equipment		—			1,320			720

Cash Flows Used in Investing Activities of Continuing Operations			(318,939	)		(327,629	)		(278,136	)
Cash Flows Provided by Investing Activities of Discontinued Operations			7,814			—			—

	Cash Flows Used in Investing Activities		(311,125	)		(327,629	)		(278,136	)
Cash Flows from Financing Activities:
	Net proceeds from sale of senior subordinated notes.		149,460			—			427,924
	Repayment of debt		(249,654	)		(596,744	)		(118,278	)
	Early retirement of senior subordinated notes		—			—			(312,701	)
	Proceeds from borrowings		235,141			404,993			105,595
	Proceeds from term loans		—			350,000			—
	Debt financing and equity contribution from minority shareholder		11,636			11,430			21,216
	Proceeds from secondary equity offering, net of underwriting discount		153,755			—			—
	Repurchase of common stock		(39,484	)		—			—
	Exercise of stock options		3,589			8,180			12,079
	Financing and stock issuance costs		(6,590	)		(5,449	)		(934	)

	Cash Flows Provided by Financing Activities		257,853			172,410			134,901
Effect of exchange rates on cash and cash equivalents			(51	)		(15	)		(2,515	)

Increase in Cash and Cash Equivalents			2,115			2,370			15,159
Cash and Cash Equivalents, Beginning of Year			1,715			3,830			6,200

Cash and Cash Equivalents, End of Year		$	3,830		$	6,200		$	21,359

Supplemental Information:
Cash Paid for Interest		$	46,555		$	98,114		$	133,373

Cash Paid for Income Taxes		$	1,916		$	2,891		$	4,925

The accompanying notes are an integral part of these consolidated financial statements.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001

(In thousands, except share data)

1. Nature of Business

The accompanying financial statements represent the consolidated accounts of Iron Mountain Incorporated, a Pennsylvania corporation, and its subsidiaries (collectively "Iron Mountain" or the "Company"). Iron Mountain is an international full-service provider of records and information management and related services for all media in various locations throughout the United States, Canada, Europe, Mexico and South America to Fortune 500 companies and numerous legal, banking, health care, accounting, insurance, entertainment and government organizations.

2. Summary of Significant Accounting Policies

a. Principles of Consolidation

The accompanying financial statements reflect the financial position and results of operations of Iron Mountain on a consolidated basis. All significant intercompany account balances have been eliminated.

b. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an on-going basis, the Company evaluates the estimates used, including those related to the allowance for doubtful accounts, impairments of tangible and intangible assets, income taxes, purchase accounting related reserves, self-insurance liabilities, incentive compensation liabilities, litigation liabilities and contingencies. The Company bases its estimates on historical experience, actuarial estimates, current conditions and various other assumptions that are believed to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and they are not readily apparent from other sources. The Company uses these estimates to assist in the identification and assessment of the accounting treatment necessary with respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions.

c. Cash and Cash Equivalents

The Company defines cash and cash equivalents to include cash on hand and cash invested in short-term securities which have original maturities at the date of purchase of less than 90 days. Cash and cash equivalents are carried at cost, which approximates fair value.

d. Foreign Currency Translation

Local currencies are considered the functional currencies for most of the Company's operations outside the United States. All assets and liabilities are translated at year-end exchange rates, and revenues and expenses are translated at average exchange rates for the year, in accordance with Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign Currency Translation." Resulting translation adjustments are reflected in the accumulated other comprehensive items component of shareholders' equity. The gain or loss on foreign currency transactions, including those

related to U.S. dollar denominated 8¹/8% senior notes of the Company's Canadian subsidiary and those related to the foreign currency denominated intercompany obligation of the Company's foreign subsidiaries to the Company totaled $10.4 million for the year ended December 31, 2001, and is included in Other Income (Expense), net, on the Company's Consolidated Statements of Operations.

e. Derivative Instruments and Hedging Activities

Effective January 1, 2001, the Company adopted the provisions of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 requires that every derivative instrument be recorded in the balance sheet as either an asset or a liability measured at its fair value. The adoption of SFAS No. 133 resulted in the recognition of a derivative liability and a corresponding transition adjustment charge to accumulated other comprehensive items of approximately $214 as of December 31, 2001.

Periodically, the Company acquires derivative instruments that are intended to hedge either cash flows or values which are subject to exchange or other market price risk, and not for trading purposes. The Company has formally documented its hedging relationships, including identification of the hedging instruments and the hedge items, as well as its risk management objectives and strategies for undertaking each hedge transaction.

The Company has entered into three interest rate swap agreements, which are derivatives as defined by SFAS No. 133 and designated as cash flow hedges. These swap agreements hedge interest rate risk on certain amounts of its Tranche B debt as well as certain variable operating lease commitments. For all qualifying and highly effective cash flow hedges, the changes in the fair value of the derivatives are recorded in other comprehensive income. As a result of these interest rate swap agreements, the Company has recorded a derivative liability of and a corresponding charge to accumulated other comprehensive loss of $9,857 ($5,857, net of tax) for the year ended December 31, 2001.

For the year ended December 31, 2001, the Company recorded net losses of $2,677 resulting from interest rate swap settlements in interest, and $743 in rent expense. All interest rate swap agreements were determined to be highly effective whereby no ineffectiveness was recorded in earnings.

f. Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method with the following useful lives:

Buildings		40 to 50 years
Leasehold improvements		8 to 10 years or the life of the lease, whichever is shorter
Racking		5 to 20 years
Warehouse equipment/vehicles		4 to 20 years
Furniture and fixtures		3 to 10 years
Computer hardware and software		3 to 5 years

Property, plant and equipment consist of the following:

	December 31,
	2000		2001
Land and buildings	$	331,921	$	393,429
Leasehold improvements		62,381		70,434
Racking		364,337		426,776
Warehouse equipment/vehicles		45,532		56,064
Furniture and fixtures		22,574		29,052
Computer hardware and software		96,408		153,546
Construction in progress		61,786		61,236

	$	984,939	$	1,190,537

Minor maintenance costs are expensed as incurred. Major improvements which extend the life, increase the capacity or improve the safety or the efficiency of property owned are capitalized. Major improvements to leased buildings are capitalized as leasehold improvements and depreciated.

The Company develops various software applications for internal use. Payroll and related costs for employees who are directly associated with and who devote time to the development of internal-use computer software projects (to the extent of the time spent directly on the project) are capitalized and depreciated over the useful life of the software. Capitalization begins when the design stage of the application has been completed, it is probable that the project will be completed and the application will be used to perform the function intended. Depreciation begins when the software is placed in service.

Effective January 1, 1999, the Company adopted the provisions of Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 requires computer software costs associated with internal use software to be expensed as incurred until certain capitalization criteria are met. SOP 98-1 also defines which types of costs should be capitalized and which should be expensed. This accounting pronouncement resulted in certain costs being expensed starting in 1999 that would have been capitalized under the previous policy. The computer software costs incurred and capitalized prior to adoption of SOP 98-1 are being depreciated over their useful lives or the useful lives of the related assets, and are evaluated for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of".

g. Goodwill

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method. Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed annually for impairment or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their

useful lives. The amortization provisions of SFAS No. 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, the Company is required to adopt SFAS No. 142 effective January 1, 2002. The Company expects the adoption of SFAS No. 142 will significantly reduce amortization of goodwill and intangibles commencing January 1, 2002; however, impairment reviews may result in future periodic write-downs. The Company is currently evaluating the effect that the adoption of the provisions of SFAS No. 142 will have on its intangible assets.

Goodwill reflects the cost in excess of fair value of the net assets of companies acquired in purchase transactions. For the 2001 acquisitions closed prior to July 1, 2001, the aggregate purchase price exceeded the underlying fair value of the net assets acquired by $53,103 which has been assigned to goodwill and was being amortized over 20 to 30 years. Amortization of this goodwill will cease on January 1, 2002. For the 2001 acquisitions closed subsequent to June 30, 2001, the aggregate purchase price exceeded the underlying fair value of the net assets acquired by $18,613 which has been assigned to goodwill and has not been amortized. The Company recorded goodwill amortization expense of $53,406 and $59,217 ($44,781 and $50,903, net of tax) for the years ended December 31, 2000 and 2001, respectively. The Company assesses the recoverability of goodwill, as well as other long-lived assets, when there is an indication of possible impairment, based upon expectations of future undiscounted cash flows in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Accumulated amortization of goodwill was $128,662 and $183,022 as of December 31, 2000 and 2001, respectively.

h. Long-Lived Assets

In accordance with SFAS No. 121, the Company reviews long-lived assets and all intangible assets (including goodwill) for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate, to the carrying amount. The operations are generally distinguished by the business segment and geographic region in which they operate. If the operation is determined to be unable to recover the carrying amount of its assets, then intangible assets are written down first, followed by the other long-lived assets of the operation, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets.

i. Customer Acquisition Costs

Costs related to the acquisition of large volume accounts, net of revenues received for the initial transfer of the records, are capitalized and amortized for an appropriate period not to exceed 12 years. If the customer terminates its relationship with the Company, the unamortized cost is charged to expense. However, in the event of such termination, the Company collects, and records as income, permanent removal fees that generally equal or exceed the amount of the unamortized costs. As of December 31, 2000 and 2001, accumulated amortization of those costs was $5,975 and $8,838, respectively. The Company is currently evaluating the effect that the adoption of the provisions of SFAS No. 142 will have on its customer acquisition costs.

j. Deferred Financing Costs

Deferred financing costs are amortized over the life of the related debt using the effective interest rate method. If debt is retired early, the related unamortized deferred financing costs are written off as an extraordinary charge in the period the debt is retired. As of December 31, 2000 and 2001, accumulated amortization of those costs was $5,592 and $4,766, respectively.

k. Investment in Preferred Stock

In May 2000, the Company made a $6,500 investment in the convertible preferred stock of LiveVault Corporation, a technology development company. In September 2001, the Company recorded an impairment charge in other income (expense) of $6,925, including the original investment and certain loans related to such investment. In December 2001, in connection with a recapitalization of this technology development company, the Company made an additional $2,000 investment in the convertible preferred stock of such company. As of December 31, 2000 and 2001, such investment has been included in other assets in the accompanying consolidated balance sheets.

l. Accrued Expenses

Accrued expenses consist of the following:

	December 31,
	2000		2001
Interest	$	33,657	$	29,715
Payroll and vacation		25,492		31,952
Restructuring costs (see Note 6)		28,514		16,225
Incentive compensation		11,701		17,555
Other		53,927		57,658

	$	153,291	$	153,105

m. Revenues

The Company's revenues consist of storage revenues as well as service and storage material sales revenues. Storage revenues consist of periodic charges related to the storage of materials (either on a per unit or per cubic foot of records basis). In certain circumstances, based upon customer requirements, storage revenues include periodic charges associated with normal, recurring service activities. Service and storage material sales revenues are comprised of charges for related service activities, the sale of storage materials and courier operations. In certain circumstances, storage material sales are recorded net of product costs when the Company functions as a sales representative of the product manufacturer and does not receive or take title to the products. Customers are generally billed on a monthly basis on contractually agreed-upon terms.

Storage and service revenues are recognized in the month the respective service is provided. Storage material sales are recognized when shipped to the customer. Amounts related to future storage

for customers where storage fees are billed in advance are accounted for as deferred income and amortized over the applicable period.

n. Deferred Rent

The Company has entered into various leases for buildings used in the storage of records. Certain leases have fixed escalation clauses or other features which require normalization of the rental expense over the life of the lease resulting in deferred rent being reflected in the accompanying consolidated balance sheets. In addition, the Company has assumed various above market leases in connection with certain of its acquisitions. The difference between discounted present value of these lease obligations and the market rate at the date of the acquisition was recorded as a net deferred rent liability and is being amortized over the remaining lives of the respective leases.

o. Stock-based Compensation

Effective January 1, 1996, the Company adopted the provisions of SFAS No. 123, "Accounting for Stock-Based Compensation." The Company has elected to continue to account for stock options at their intrinsic value with disclosure of the effects of fair value accounting on net income (loss) and earnings (loss) per share on a pro forma basis.

During the second and third quarters of 2000, the Company entered into separation agreements with certain executives. The separation agreements for these executives included the acceleration of vesting and extension of the exercise period of previously granted stock options, which resulted in a non-cash charge of $15,110. There were no such costs in 2001. In accordance with Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," compensation is equal to the intrinsic value at the date of measurement, and recorded in the statement of operations as stock option compensation expense.

p. Merger-related Expenses

Merger-related expenses as presented in the accompanying consolidated financial statements relate primarily to non-capitalizable expenses directly related to the merger of the Company and Pierce Leahy Corp. and consist primarily of severance and pay-to-stay payments, cost of exiting certain facilities, system conversion costs and other transaction-related costs.

q. Reclassifications

Certain reclassifications have been made to the 1999 and 2000 financial consolidated statements to conform to the 2001 presentation.

2. Summary of Significant Accounting Policies (Continued)

r. New Accounting Pronouncements

In July, 2001, the FASB issued SFAS No. 141 and SFAS No. 142. See Note 2.g. "Goodwill" for discussions regarding the effect of the adoption of the provisions. In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which supersedes SFAS No. 121, and provisions of APB Opinion No. 30 "Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions", for the disposal of segments of a business. The statement creates one accounting model, based on the framework established in SFAS No. 121, to be applied to all long-lived assets including discontinued operations. SFAS No. 144 will be effective for the Company on January 1, 2002. The Company is currently evaluating the effect of implementing SFAS No. 144.

3. Common Stock Split

On December 5, 2001, the Company's Board of Directors authorized and approved a three-for-two stock split effected in the form of a dividend on the Company's common stock. Such additional shares of common stock were issued on December 31, 2001 to all shareholders of record as of the close of business on December 17, 2001. All share and per share amounts have been restated to reflect the stock split.

4. Debt

Long-term debt consists of the following:

	December 31,
	2000			2001
Revolving Credit Facility due 2005	$	4,000		$	—
Tranche A Term Loan due 2005		150,000			150,000
Tranche B Term Loan due 2006		199,750			198,750
11¹/8% Senior Subordinated Notes due 2006 (the "11¹/8% notes")		131,517			—
10¹/8% Senior Subordinated Notes due 2006 (the "10¹/8% notes")		165,000			—
9¹/8% Senior Subordinated Notes due 2007 (the "9¹/8% notes")		114,216			115,106
8¹/8% Senior Notes due 2008 (the "Subsidiary notes")		120,850			122,758
8³/4% Senior Subordinated Notes due 2009 (the "8³/4% notes")		249,646			249,687
8¹/4% Senior Subordinated Notes due 2011 (the "8¹/4% notes")		149,535			149,580
8⁵/8% Senior Subordinated Notes due 2013 (the "8⁵/8% notes")		—			438,059
Real Estate Mortgages		20,457			19,337
Seller Notes		13,971			12,383
Other		36,189			40,439

Long-term Debt		1,355,131			1,496,099
Less Current Portion		(40,789	)		(35,256	)

Long-term Debt, Net of Current Portion	$	1,314,342		$	1,460,843

a. Revolving Credit Facility and Term Loans

On August 14, 2000, the Company entered into an amended and restated revolving credit agreement. The credit agreement, as amended, replaced the Company's prior credit facility, increased the aggregate principal amount available to $750 million and included two tranches of term debt. Tranches A and B represent term loans to the Company in principal amounts of $150,000 and $200,000, respectively. The Tranche A term loan and the revolving credit component of the credit agreement mature on January 31, 2005, while the Tranche B term loan matures on February 28, 2006. The interest rate on borrowings under the credit agreement varies depending on the Company's choice of base rates, plus an applicable margin. Restrictive covenants under this agreement are similar to those under the Company's prior credit facility. As of December 31, 2001, the Company had outstanding borrowings of $348,750 under the credit agreement, and the interest rates in effect ranged from 4.15% to 4.84%.

In December 2000, the Company entered into an interest rate swap contract to hedge the risk of changes in market interest rates on the Company's Tranche B term loan. The instrument is a variable-for-fixed swap of quarterly interest payments payable on certain amounts of the Tranche B term loan through 2006. The notional value of the swap equals $99,500 and has a fixed rate of 5.9% and a variable rate based on periodic three-month LIBOR rates. In January 2001, the Company entered into a second interest rate swap contract on the Tranche B term loan. The notional value of the second swap equals $96,000 and has a fixed rate of 5.5% and a variable rate based on periodic three-month LIBOR rates.

The credit agreement specifies certain minimum or maximum relationships between Adjusted EBITDA (as defined therein) and interest, total debt and fixed charges. There are restrictions on dividends declared by the Company, sales or pledging of assets, investments and changes in business and ownership. Cash dividends are effectively prohibited. The Company was in compliance with all debt covenants as of December 31, 2001. Loans under the credit agreement are secured by pledges of the capital stock of all of the Company's domestic subsidiaries.

b. Publicly Issued Notes

As of December 31, 2001, the Company has four series of senior subordinated notes issued to the public, that are obligations of the parent company, Iron Mountain Incorporated (the "Parent notes"):

•: $120,000 principal amount of notes maturing on July 15, 2007 and bearing interest at a rate of 9¹/8% per annum, payable semi-annually in arrears on January 15 and July 15;
•: $250,000 principal amount of notes maturing on September 30, 2009 and bearing interest at a rate of 8³/4% per annum, payable semi-annually in arrears on March 31 and September 30;
•: $150,000 principal amount of notes maturing on July 1, 2011 and bearing interest at a rate of 8¹/4% per annum, payable semi-annually in arrears on January 1 and July 1; and
•: $435,000 principal amount of notes maturing on April 1, 2013 and bearing interest at a rate of 8⁵/8% per annum, payable semi-annually in arrears on April 1 and October 1.

The Parent notes are fully and unconditionally guaranteed, on a senior subordinated basis, by substantially all of the Company's direct and indirect wholly owned domestic subsidiaries (the "Guarantors"). These guarantees are joint and several obligations of the Guarantors. In addition, the 9¹/8% notes are secured by a second lien on 65% of the stock of Iron Mountain Canada Corporation ("Canada Company"). The remainder of the Company's subsidiaries do not guarantee the Parent notes.

In addition, Canada Company, the Company's principal Canadian subsidiary, has publicly issued $135,000 principal amount of senior notes that mature on May 15, 2008 and bear interest at a rate of 8¹/8% per annum, payable semi-annually in arrears on May 15 and November 15. The Subsidiary notes are general unsecured obligations of Canada Company, ranking pari passu in right of payment to all of Canada Company's existing and future senior indebtedness. The Subsidiary notes are fully and unconditionally guaranteed, on a senior subordinated basis, by Iron Mountain and the Guarantors. In addition, several of the non-guarantors that are organized under the laws of Canadian provinces fully and unconditionally guarantee the Subsidiary notes on a senior basis. As with the Parent Notes, these guarantees are joint and several.

During 2001, the Company completed an underwritten public offering of $435,000 in aggregate principal amount of 8⁵/8% notes and redeemed the 11¹/8% notes of $130,000 due 2006 and 10¹/8% notes of $165,000 due 2006.

The 9¹/8% notes and the Subsidiary notes were assumed in the Pierce Leahy merger and were recorded at their fair market value on the date of merger. The resulting net discount is being amortized over the remaining period to maturity using the effective interest rate method.

Each of the indentures for the notes provides that the Company may redeem the outstanding notes, in whole or in part, upon satisfaction of certain terms and conditions. In any redemption, the Company is also required to pay all accrued but unpaid interest on the outstanding notes.

The following table presents the various redemption dates and prices of the public notes. The redemption dates reflect the date at or after which the notes may be redeemed at the Company's option at a premium redemption price. After these dates, the notes may be redeemed at 100% of face value through maturity:

	9¹/8% notes		8³/4% notes		8¹/4% notes		8⁵/8% notes		Subsidiary notes
Redemption Date	July 15,		September 30,		July 1,		April 1,		May 15,
2002	104.563	%	104.375	%	—		—		—
2003	103.042	%	102.916	%	—		—		104.063	%
2004	101.521	%	101.458	%	104.125	%	—		102.708	%
2005	—		—		102.750	%	—		101.354	%
2006	—		—		101.375	%	104.313	%	—
2007	—		—		—		102.875	%	—
2008	—		—		—		101.438	%	—

Prior to September 30, 2002, the 8³/4% notes are redeemable at the Company's option, in whole or in part, at a specified make-whole price.

Prior to July 1, 2004, the 8¹/4% notes are redeemable at the Company's option, in whole or in part, at a specified make-whole price. Until July 1, 2002, the Company may under certain conditions redeem up to 35% of the 8¹/4% notes with the net proceeds of one or more public equity offerings, at a redemption price of 108.25% of the principal amount.

The Company may under certain conditions redeem up to 35% of the Subsidiary notes with the net proceeds of one or more public equity offerings, at a redemption price of 108.125% of the principal amount.

In addition, until April 1, 2004, the Company may under certain conditions redeem up to 35% of the 8⁵/8% notes with the net proceeds of one or more public equity offerings, at a redemption price of 108.625% of the principal amount.

Each of the indentures for the notes provides that the Company or, in the case of the Subsidiary notes, Canada Company must repurchase, at the option of the holders, the notes at 101% of their principal amount, plus accrued and unpaid interest, upon the occurrence of a "Change of Control," which is defined in each respective indenture. Except for required repurchases upon the occurrence of a Change of Control or in the event of certain asset sales, each as described in the respective indenture, the Company is not required to make sinking fund or redemption payments with respect to any of the notes.

The indentures for the notes contain restrictive covenants similar to those contained in the Amended Credit Agreement.

h. Real Estate Mortgages

In connection with the purchase of real estate and acquisitions, the Company assumed several mortgages on real property. The mortgages bear interest at rates ranging from 6.6% to 8.5% and are payable in various installments through 2025.

i. Seller Notes

In connection with the merger with Pierce Leahy in 2000, the Company assumed debt related to certain existing notes as a result of certain acquisitions which Pierce Leahy completed in 1999. The notes bear interest at rate of 4.75% per year. The outstanding balance on the seller notes at December 31, 2001 is due on demand through 2009 and is classified as a current portion of long-term debt.

j. Other

Other long-term debt includes various notes and obligations assumed by the Company as a result of certain acquisitions completed by the Company during the years 1998 through 2001. At December 31, 2001, the Company's 50.1% owned subsidiary, IM Europe, had various agreements with its local banks that provide for $33,921 of credit and carried an average effective interest rate of 5.89%.

Maturities of long-term debt are as follows:

Year	Amount
2002	$	35,256
2003		10,334
2004		5,130
2005		298,114
2006		54,630
Thereafter		1,092,635

	$	1,496,099

Based on the borrowing rates currently available to the Company for loans with similar terms and average maturities, the Company has estimated the following fair values for its long-term debt as of December 31:

	2000				2001
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Revolving Credit Facility	$	4,000	$	4,000	$	—	$	—
Tranche A Term Loan		150,000		150,000		150,000		150,000
Tranche B Term Loan		199,750		199,750		198,750		198,750
11¹/8% notes		131,517		136,500		—		—
10¹/8% notes		165,000		170,800		—		—
9¹/8% notes		114,216		118,800		115,106		126,000
8³/4% notes		249,646		245,600		249,687		257,500
8¹/4% notes		149,535		141,400		149,580		151,875
8⁵/8% notes		—		—		438,059		448,050
Subsidiary notes		120,850		128,600		122,758		136,350
Real estate mortgage		20,457		20,457		19,337		19,337
Seller Notes		13,971		13,971		12,383		12,383
Other		36,189		36,189		40,439		40,439

5. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors

The following financial data summarizes the consolidating Company on the equity method of accounting as of December 31, 2001 and 2000 and for the years ended December 31, 2001 and 2000. The Guarantor column includes all subsidiaries that guarantee the Parent notes and the Subsidiary notes. The Canada Company column includes Canada Company and the Company's other Canadian subsidiaries that guarantee the Subsidiary notes, but do not guarantee the Parent notes. The Parent and the Guarantors also guarantee the Canada Company notes. The subsidiaries that do not guarantee either the Parent notes or the Subsidiary notes are referred to in the table as the "non-guarantors."

			December 31, 2001
			Parent		Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	11,395		$	1,696		$	8,268		$	—		$	21,359
	Accounts Receivable			—		181,640			14,415			22,995			—			219,050
	Intercompany Receivable (Payable)			685,601		(560,699	)		(92,555	)		(32,347	)		—			—
	Other Current Assets			—		64,378			460			4,094			(24	)		68,908

		Total Current Assets		685,601		(303,286	)		(75,984	)		3,010			(24	)		309,317
Property, Plant and Equipment, Net				—		778,804			72,839			100,588			—			952,231
Other Assets:
	Long-term Intercompany Receivable			45,193		—			—			—			(45,193	)		—
	Long-term Notes Receivable from Affiliates			1,086,823		—			—			—			(1,086,823	)		—
	Investment in Subsidiaries			379,816		82,434			—			—			(462,250	)		—
	Goodwill, Net			—		1,261,598			115,832			141,463			10,654			1,529,547
	Other			31,419		40,660			11,754			1,085			(16,107	)		68,811

		Total Other Assets		1,543,251		1,384,692			127,586			142,548			(1,599,719	)		1,598,358

		Total Assets	$	2,228,852	$	1,860,210		$	124,441		$	246,146		$	(1,599,743	)	$	2,859,906

Liabilities and Shareholders' Equity
	Total Current Liabilities		$	34,526	$	233,111		$	16,786		$	74,610		$	(24	)	$	359,009
	Long-term Debt, Net of Current Portion			1,308,367		1,289			125,075			26,112			—			1,460,843
	Long-term Intercompany Payable			—		45,193			—			—			(45,193	)		—
	Long-term Notes Payable to Affiliates			—		1,086,823			—			—			(1,086,823	)		—
	Other Long-term Liabilities			—		98,481			887			5,541			(16,107	)		88,802
	Minority Interest			—		—			—			(1,352	)		66,645			65,293
	Shareholders' Equity			885,959		395,313			(18,307	)		141,235			(518,241	)		885,959

		Total Liabilities and Shareholders' Equity	$	2,228,852	$	1,860,210		$	124,441		$	246,146		$	(1,599,743	)	$	2,859,906

			December 31, 2000
			Parent		Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	191	$	3,336		$	302		$	2,371		$	—		$	6,200
	Accounts Receivable			7,060		140,095			12,370			16,917			—			176,442
	Intercompany Receivable (Payable)			795,522		(658,022	)		(98,386	)		(45,060	)		5,946			—
	Other Current Assets			531		46,605			827			6,063			—			54,026

		Total Current Assets		803,304		(467,986	)		(84,887	)		(19,709	)		5,946			236,668
Property, Plant and Equipment, Net				99,549		586,504			66,953			79,388			—			832,394
Other Assets:
	Long-term Intercompany Receivable			344,300		—			—			—			(344,300	)		—
	Long-term Notes Receivable from Affiliates			607,600		124,100			—			—			(731,700	)		—
	Investment in Subsidiaries			370,830		49,626			—			—			(420,456	)		—
	Goodwill, Net			—		1,255,302			138,663			121,096			10,569			1,525,630
	Other			20,986		42,956			11,036			1,834			(12,408	)		64,404

		Total Other Assets		1,343,716		1,471,984			149,699			122,930			(1,498,295	)		1,590,034

		Total Assets	$	2,246,569	$	1,590,502		$	131,765		$	182,609		$	(1,492,349	)	$	2,659,096

Liabilities and Shareholders' Equity
	Total Current Liabilities		$	26,921	$	189,362		$	12,429		$	79,378		$	5,963		$	314,053
	Long-term Debt, Net of Current Portion			1,170,884		3,513			124,834			15,111			—			1,314,342
	Long-term Intercompany Payable			—		344,300			—			—			(344,300	)		—
	Long-term Notes Payable to Affiliates			124,100		607,600			—			—			(731,700	)		—
	Other Long-term Liabilities			206		73,693			113			1,610			(12,408	)		63,214
	Minority Interest			—		—			—			(1,636	)		44,665			43,029
	Shareholders' Equity			924,458		372,034			(5,611	)		88,146			(454,569	)		924,458

		Total Liabilities and Shareholders' Equity	$	2,246,569	$	1,590,502		$	131,765		$	182,609		$	(1,492,349	)	$	2,659,096

			Year Ended December 31, 2001
			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	604,546		$	33,475		$	56,453		$	—		$	694,474
	Service and Storage Material Sales			—			407,133			34,549			34,960			—			476,642

		Total Revenues		—			1,011,679			68,024			91,413			—			1,171,116
Operating Expenses:
	Cost of Sales (excluding depreciation)			—			478,446			35,093			48,397			—			561,936
	Selling, General and Administrative			83			270,201			11,867			24,783			—			306,934
	Depreciation and Amortization			—			131,342			10,136			12,113			—			153,591
	Merger-related Expenses			—			3,644			—			29			—			3,673

		Total Operating Expenses		83			883,633			57,096			85,322			—			1,026,134

Operating Income (Loss)				(83	)		128,046			10,928			6,091			—			144,982
Interest Expense, Net				17,755			92,823			16,244			7,920			—			134,742
Equity in the Losses of Subsidiaries				7,489			2,117			—			—			(9,606	)		—
Other Expense, Net				(6,911	)		(2,887	)		(8,204	)		(369	)		—			(18,371	)

	Income (Loss) Before Provision (Benefit) for Income Taxes and Minority Interest			(32,238	)		30,219			(13,520	)		(2,198	)		9,606			(8,131	)
Provision (Benefit) for Income Taxes				—			24,238			(111	)		1,909			—			26,036
Minority Interest in Losses of Subsidiaries				—			—			—			(1,929	)		—			(1,929	)

	Income (Loss) before Extraordinary Item			(32,238	)		5,981			(13,409	)		(2,178	)		9,606			(32,238	)
Extraordinary Charge from Early Extinguishment of Debt (net of tax benefit of $8,161)				(11,819	)		—			—			—			—			(11,819	)

	Net Income (Loss)		$	(44,057	)	$	5,981		$	(13,409	)	$	(2,178	)	$	9,606		$	(44,057	)

			Year Ended December 31, 2000
			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	3,191		$	518,136		$	24,338		$	39,999		$	—		$	585,664
	Service and Storage Material Sales			17,570			333,228			25,240			28,724			(4,055	)		400,707

		Total Revenues		20,761			851,364			49,578			68,723			(4,055	)		986,371
Operating Expenses:
	Cost of Sales (excluding depreciation)			11,173			408,336			24,149			39,113			—			482,771
	Selling, General and Administrative			5,350			215,547			12,522			17,195			(4,055	)		246,559
	Depreciation and Amortization			3,329			107,748			6,172			9,561			—			126,810
	Stock Option Compensation Expense			—			14,940			—			170			—			15,110
	Merger-related Expenses			—			8,420			273			440			—			9,133

		Total Operating Expenses		19,852			754,991			43,116			66,479			(4,055	)		880,383

Operating Income				909			96,373			6,462			2,244			—			105,988
Interest Expense, Net				41,857			55,999			12,576			7,543			—			117,975
Equity in the (Earnings) Losses of Subsidiaries				(7,565	)		2,766			—			—			4,799			—
Other Expense, Net				—			(397	)		(5,590	)		(58	)		—			(6,045	)

	Income (Loss) Before Provision (Benefit) for Income Taxes and Minority Interest			(33,383	)		37,211			(11,704	)		(5,357	)		(4,799	)		(18,032	)
Provision (Benefit) for Income Taxes				(8,007	)		18,697			(1,860	)		295			—			9,125
Minority Interest in Losses of Subsidiaries				—			—			—			(2,224	)		—			(2,224	)

	Income (Loss) before Extraordinary Item			(25,376	)		18,514			(9,844	)		(3,428	)		(4,799	)		(24,933	)
Extraordinary Charge from Early Extinguishment of Debt (net of tax benefit of $1,928)				(2,449	)		(443	)		—			—			—			(2,892	)

	Net Income (Loss)		$	(27,825	)	$	18,071		$	(9,844	)	$	(3,428	)	$	(4,799	)	$	(27,825	)

			Year Ended December 31, 2001
			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
	Cash Flows Provided by (Used in) Operating Activities		$	(92,031	)	$	235,765		$	8,867		$	8,308		$	—		$	160,909
Cash Flows from Investing Activities:
	Cash paid for acquisitions, net of cash acquired			—			(50,467	)		(177	)		(20,753	)		—			(71,397	)
	Capital expenditures			—			(164,335	)		(10,330	)		(22,374	)		—			(197,039	)
	Investment in convertible preferred stock			—			(2,000	)		—			—			—			(2,000	)
	Intercompany loans to subsidiaries			(20,204	)		(15,836	)		—			—			36,040			—
	Investment in subsidiaries			(6,866	)		(6,866	)		—			—			13,732			—
	Additions to customer acquisition costs			—			(7,292	)		(319	)		(809	)		—			(8,420	)
	Proceeds from sales of property and equipment			—			87			21			612			—			720

		Cash Flows Used in Investing Activities		(27,070	)		(246,709	)		(10,805	)		(43,324	)		49,772			(278,136	)
Cash Flows from Financing Activities:
	Repayment of debt			(110,869	)		(1,066	)		(2,590	)		(3,753	)		—			(118,278	)
	Early Rretirement of senior subordinated notes			(312,701	)		—			—			—			—			(312,701	)
	Proceeds from borrowings			103,411			73			—			2,111			—			105,595
	Net Proceeds from sale of senior subordinated notes			427,924			—			—			—			—			427,924
	Debt financing and equity contribution from minority shareholder			—			—			—			21,216			—			21,216
	Intercompany loans from parent			—			13,130			7,016			15,894			(36,040	)		—
	Equity contribution from parent			—			6,866			—			6,866			(13,732	)		—
	Proceeds from exercise of stock options			12,079			—			—			—			—			12,079
	Debt financing and stock issuance costs			(934	)		—			—			—			—			(934	)

		Cash Flows Provided by Financing Activities		118,910			19,003			4,426			42,334			(49,772	)		134,901
Effect of exchange rates on cash and cash equivalents				—			—			(1,094	)		(1,421	)		—			(2,515	)

Increase (Decrease) in cash and cash equivalents				(191	)		8,059			1,394			5,897			—			15,159
Cash and cash equivalents, beginning of period				191			3,336			302			2,371			—			6,200

Cash and cash equivalents, end of period			$	—		$	11,395		$	1,696		$	8,268		$	—		$	21,359

			Year Ended December 31, 2000
			Parent			Guarantors			Canada Company			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
Cash Flows Provided by (Used in) Operating Activities			$	(101,411	)	$	260,901		$	(3,721	)	$	1,835		$	—		$	157,604
Cash Flows from Investing Activities:
	Cash paid for acquisitions, net of cash acquired			(4,885	)		(85,343	)		(35,558	)		(15,154	)		—			(140,940	)
	Capital expenditures			(19,629	)		(127,255	)		(6,896	)		(14,926	)		—			(168,706	)
	Investment in convertible preferred stock			—			(6,524	)		—			—			—			(6,524	)
	Intercompany loans to subsidiaries			(259,462	)		(14,620	)		—			—			274,082			—
	Investment in subsidiaries			(3,047	)		(3,047	)		—			—			6,094			—
	Additions to customer acquisition costs			—			(11,181	)		(1,509	)		(89	)		—			(12,779	)
	Proceeds from sales of property and equipment			—			1,133			—			187			—			1,320

		Cash Flows Used in Investing Activities		(287,023	)		(246,837	)		(43,963	)		(29,982	)		280,176			(327,629	)
Cash Flows from Financing Activities:
	Repayment of debt			(402,384	)		(174,200	)		(7,026	)		(13,134	)		—			(596,744	)
	Proceeds from borrowings			397,085			971			1,149			5,788			—			404,993
	Proceeds from term loans			350,000			—			—			—			—			350,000
	Debt financing and equity contribution from minority shareholder			—			—			—			11,430			—			11,430
	Intercompany loans from parent			41,241			157,146			53,867			21,828			(274,082	)		—
	Equity contribution from parent			—			3,047			—			3,047			(6,094	)		—
	Proceeds from exercise of stock options			8,180			—			—			—			—			8,180
	Debt financing and stock issuance costs			(5,497	)		48			—			—			—			(5,449	)

		Cash Flows Provided by (Used in) Financing Activities		388,625			(12,988	)		47,990			28,959			(280,176	)		172,410
Effect of exchange rates on cash and cash equivalents				—			—			(4	)		(11	)		—			(15	)

Increase in cash and cash equivalents				191			1,076			302			801			—			2,370
Cash and cash equivalents, beginning of period				—			2,260			—			1,570			—			3,830

Cash and cash equivalents, end of period			$	191		$	3,336		$	302		$	2,371		$	—		$	6,200

6. Acquisitions

On February 1, 2000, the Company completed its acquisition of Pierce Leahy in a stock-for-stock merger valued at $1.0 billion. The total consideration for this transaction was comprised of: (i) 18.8 million shares of the Company's common stock with a fair value of $421.2 million; (ii) 1.6 million options to acquire the Company's common stock with a fair value of $25.3 million; (iii) assumed debt with a fair value of $584.9 million; and (iv) $4.3 million of capitalized transaction costs.

The Company purchased substantially all of the assets and assumed certain liabilities of 17, 12 and 16 records management businesses during 1999, 2000 and 2001, respectively. Each of these acquisitions was accounted for using the purchase method of accounting, and accordingly, the results of operations for each acquisition have been included in the consolidated results of the Company from their respective acquisition dates. Consideration for the various acquisitions included: (i) cash, which was provided through the Company's credit facilities, the Company's 1999 equity offering and the issuance of the 10¹/8%, 8³/4%, 8¹/4% and 8⁵/8% notes; (ii) issuances of the Company's common stock and options to purchase the Company's common stock; and (iii) certain net assets of businesses previously acquired.

A summary of the consideration paid and the allocation of the purchase price of the acquisitions is as follows:

		1999			2000			2001
Cash Paid		$	212,160		$	146,243		$	72,222
Fair Value of Common Stock Issued			46,000			421,220			—
Fair Value of Options Issued			—			25,291			—
Fair Value of Debt Assumed/Issued			—			584,906			10,352
Fair Value of Certain Net Assets of Businesses Previously Acquired			2,489			1,063			—

	Total Consideration		260,649			1,178,723			82,574

Fair Value of Assets Acquired			110,206			436,206			19,504
Liabilities Assumed			(92,044	)		(125,650	)		(10,019	)

	Fair Value of Net Assets Acquired		18,162			310,556			9,485

Recorded Goodwill		$	242,487		$	868,167		$	73,089

Allocation of the purchase price for the 2001 acquisitions was based on estimates of the fair value of net assets acquired, and is subject to adjustment. The purchase price allocations of certain 2001 transactions are subject to finalization of the assessment of the fair value of property, plant and equipment, operating leases and deferred income taxes. The Company is not aware of any information that would indicate that the final purchase price allocations will differ significantly from preliminary estimates.

In connection with the acquisitions completed in 1999, 2000 and 2001, the Company has undertaken certain restructurings of the acquired businesses. The restructuring activities include certain reductions in staffing levels, elimination of duplicate facilities and other costs associated with exiting

certain activities of the acquired businesses. These restructuring activities were recorded as costs of the acquisitions and were provided in accordance with Emerging Issues Task Force Issue No. 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." The Company finalizes its restructuring plans for each business no later than one year from the date of acquisition. Unresolved matters at December 31, 2001 primarily include completion of planned abandonments of facilities and severances for certain 2000 and 2001 acquisitions.

The following is a summary of reserves related to such restructuring activities:

	1999			2000			2001
Reserves, beginning of the year	$	10,482		$	9,340		$	28,514
Reserves established		4,234			31,409			3,751
Expenditures		(4,843	)		(7,539	)		(7,805	)
Adjustments to goodwill, including currency effect		(533	)		(4,696	)		(8,235	)

Reserves, end of the year	$	9,340		$	28,514		$	16,225

At December 31, 2000 the restructuring reserves related to acquisitions consisted of lease losses on abandoned facilities ($18,370), severance costs for approximately 17 people ($3,151) and move and other exit costs ($6,993).

At December 31, 2001 the restructuring reserves related to acquisitions consisted of lease losses on abandoned facilities ($10,129), severance costs for approximately 31 people ($980) and move and other exit costs ($5,116). These accruals are expected to be used within one year of the date of this balance sheet except for lease losses of $5,848 and severance contracts of $547, both of which are based on contracts that extend beyond one year.

7. Capital Stock and Stock Options

a. Capital Stock

The following table summarizes the number of shares authorized, issued and outstanding for each issue of the Company's capital stock as of December 31:

			Number of Shares
			Authorized		Issued and Outstanding
Equity Type	Par Value		Authorized		Issued and Outstanding
Equity Type	Par Value		2000	2001	2000	2001
Preferred stock	$	.01	10,000,000	10,000,000	—	—
Common stock		.01	150,000,000	150,000,000	82,919,847	84,294,315

b. Stock Options

A total of 9,266,271 shares of common stock have been reserved for grants of options and other rights under the Company's various stock incentive plans and employee stock purchase plan.

During 2000, the Company assumed the two existing stock option plans of Pierce Leahy, resulting in 2.5 million additional stock options outstanding. The options were accounted for as additional purchase price at their fair value.

The following is a summary of stock option transactions, including those issued to employees of acquired companies, during the applicable periods, excluding transactions under the employee stock purchase plan:

	Options		Weighted Average Exercise Price
Options outstanding, December 31, 1998	3,249,479		8.81
Granted	663,065		21.38
Exercised	(394,922	)	7.24
Canceled	(135,414	)	13.51

Options outstanding, December 31, 1999	3,382,208		11.27
Granted	840,737		22.27
Issued in Connection With Acquisitions	2,467,140		7.33
Exercised	(1,354,976	)	4.71
Canceled	(286,566	)	17.8

Options outstanding, December 31, 2000	5,048,543		12.55
Granted	497,757		26.38
Exercised	(1,188,316	)	6.94
Canceled	(73,592	)	19.28

Options outstanding, December 31, 2001	4,284,392		15.63

Except for the options granted in connection with acquisitions, the stock options were granted with exercise prices equal to the market price of the stock at the date of grant. The majority of options become exercisable ratably over a period of five years unless the holder terminates employment. The number of shares available for grant at December 31, 2001 was 1,589,640.

Effective January 1, 1996, the Company adopted the provisions of SFAS No. 123. The Company has elected to continue to account for stock options issued to employees at their intrinsic value with disclosure of fair value accounting on net loss and loss per share on a pro forma basis. Had the Company elected to recognize compensation cost based on the fair value of the options granted at

grant date as prescribed by SFAS No. 123, net loss and net loss per share would have been increased to the pro forma amounts indicated in the table below:

	Year Ended December 31,
	1999			2000			2001
Loss from continuing operations before extraordinary items, as reported	$	(1,060	)	$	(24,933	)	$	(32,238	)
Loss from continuing operations before extraordinary items, pro forma		(2,486	)		(27,877	)		(36,175	)
Net loss, as reported		(14,219	)		(27,825	)		(44,057	)
Net loss, pro forma		(15,645	)		(30,769	)		(47,994	)
Loss from continuing operations before extraordinary items — basic and diluted, as reported		(0.02	)		(0.31	)		(0.39	)
Loss from continuing operations before extraordinary items — basic and diluted, pro forma		(0.05	)		(0.35	)		(0.43	)
Net loss per share — basic and diluted, as reported		(0.28	)		(0.35	)		(0.53	)
Net loss per share — basic and diluted, pro forma		(0.31	)		(0.39	)		(0.57	)

The weighted average fair value of options granted in 1999, 2000 and 2001 was $8.21, $8.66 and $8.74 per share, respectively. The values were estimated on the date of grant using the Black-Scholes option pricing model. The following table summarizes the weighted average assumptions used for grants in the year ended December 31:

Assumption	1999		2000		2001
Expected volatility	31.5	%	31.5	%	27.0	%
Risk-free interest rate	5.69		5.99		4.65
Expected dividend yield	None		None		None
Expected life of the option	5.0 years		5.0 years		5.0 years

The following table summarizes additional information regarding options outstanding and exercisable at December 31, 2001:

		Outstanding			Exercisable
Range of Exercise Prices	Number	Weighted Average Remaining Contractual Life (in Years)	Weighted Average Exercise Price		Number	Weighted Average Exercise Price
$0.50 to $0.58	33,759	5.2	$	0.58	33,759	$	0.58
$2.88 to $3.84	552,792	3.5		3.12	552,792		3.12
$4.42 to $6.07	126,476	4.7		5.54	126,476		5.54
$6.83 to $7.29	641,450	4.5		6.94	641,450		6.94
$11.44 to $16.69	824,881	5.8		14.39	553,239		14.30
$18.11 to $24.68	1,852,438	8.3		22.14	546,561		21.77
$27.41 to $28.77	252,596	9.7		28.41	—		—

	4,284,392	6.6		15.63	2,454,277		10.88

8. Income (Loss) Per Share—Basic and Diluted

In accordance with SFAS No. 128, basic income (loss) per share is calculated by dividing income (loss) available to shareholders by the weighted average number of shares outstanding. The calculation of diluted income (loss) per share is consistent with that of basic income (loss) per share but gives effect to all dilutive potential shares (that is, securities such as options, warrants or convertible securities) that were outstanding during the period, unless the effect is antidilutive.

Because their effect is antidilutive, 3,382,208, 5,048,543 and 4,284,392 shares of potential common stock underlying outstanding options have been excluded from the above calculation for the years ended December 31, 1999, 2000 and 2001, respectively.

9. Discontinued Operations

In June 1999, in order to focus on its records and information management services business, the Company decided to sell its information technology staffing business, Arcus Staffing Resources, Inc. was acquired in January 1998 as part of the acquisition of Arcus Group, Inc.. Effective November 1, 1999, the Company completed the sale of substantially all of the assets of Arcus Staffing. The terms of the sale included contingent payments for a period of 18 months. In accordance with the provisions of APB No. 30, the sale of Arcus Staffing was accounted for as a discontinued operation. Accordingly, the Arcus Staffing operations were segregated from the Company's continuing operations and reported as a separate line item on the Company's consolidated statement of operations. Revenue and net income from discontinued operations for the ten months ended October 31, 1999 were $35,455 and $241, respectively.

In 1999, the Company recorded an estimated loss on the sale of Arcus Staffing of $13,400, comprised of a write-off of goodwill, a deferred tax benefit and estimated expenses directly related to

the transaction partially offset by the estimated income from operations of Arcus Staffing through the date of disposition. The Company will continue to assess the adequacy of the remaining liabilities as certain contingencies are resolved.

10. Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax and financial reporting basis of assets and liabilities.

The components of income (loss) from continuing operations before provision for income taxes and minority interest are:

	1999		2000			2001
Domestic	$	7,606	$	(13,121	)	$	(5,176	)
Foreign		2,235		(4,911	)		(2,955	)

	$	9,841	$	(18,032	)	$	(8,131	)

The Company has estimated federal net operating loss carryforwards which begin to expire in 2005 through 2021 of $173,324 at December 31, 2001 to reduce future federal income taxes, if any. The preceding net operating loss carryforwards do not include potential preacquisition net operating loss carryforwards of Arcus Group and certain other foreign acquisitions. Any tax benefit related to these loss carryforwards will be recorded as a reduction of goodwill, if and when realized. The Company also has estimated state net operating loss carryforwards of $215,222. The state net operating loss carryforwards are subject to a valuation allowance of approximately 56%. Additionally, the Company has alternative minimum tax credit carryforwards of $587, which have no expiration date and are available to reduce future income taxes, if any.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

		December 31,
		2000			2001
Deferred Tax Assets:
	Accrued liabilities	$	18,228		$	16,372
	Deferred rent		6,907			7,306
	Net operating loss carryforwards		57,546			75,838
	AMT credit		587			587
	Valuation Allowance		(4,588	)		(9,420	)
	Unrealized loss on hedging contracts		—			4,000
	Other		22,893			21,646

			101,573			116,329
Deferred Tax Liabilities:
	Other assets, principally due to differences in amortization		(19,507	)		(31,967	)
	Plant and equipment, principally due to differences in depreciation		(79,291	)		(87,375	)
	Customer acquisition costs		(10,733	)		(13,060	)

			(109,531	)		(132,402	)

	Net deferred tax liability	$	(7,958	)	$	(16,073	)

The Company receives a tax deduction upon exercise of non-qualified stock options by employees for the difference between the exercise price and the market price of the underlying common stock on the date of exercise, which is included in the net operating loss carryforwards above. During the year, the Company recognized $8,880 of tax benefit related to the exercise of non-qualified stock options, the value of which was included as part of the purchase price of certain businesses.

This benefit was used to reduce goodwill of acquired companies in 2001. In addition, $5,985 of tax benefit related to the exercise of options (unrelated to acquisitions) was credited to equity during the year.

The Company and its U.S. subsidiaries file a consolidated federal income tax return. The provision for income tax consists of the following components:

	Year Ended December 31,
	1999		2000		2001
Federal—deferred	$	6,304	$	5,404	$	14,695
State—current		645		1,301		1,072
State—deferred		2,041		2,018		8,359
Foreign		1,589		402		1,910

	$	10,579	$	9,125	$	26,036

A reconciliation of total income tax expense and the amount computed by applying the federal income tax rate of 34%, 35% and 35% to income (loss) before income taxes for the years ended December 31, 1999, 2000 and 2001, respectively, is as follows:

		Year Ended December 31,
		1999		2000			2001
Computed "expected" tax provision (benefit)		$	3,346	$	(6,311	)	$	(2,846	)
Increase in income taxes resulting from:
	State taxes (net of federal tax benefit)		1,726		2,157			3,601
	Nondeductible goodwill amortization		5,025		11,002			15,481
	Foreign currency loss		—		1,621			2,585
	Increase in valuation allowance		—		—			4,832
	Foreign tax rate and tax law differential		104		586			598
	Other, net		378		70			1,785

		$	10,579	$	9,125		$	26,036

11. Quarterly Results of Operations (Unaudited)

Quarter Ended	March 31			June 30			Sept. 30			Dec. 31
2000
Revenues	$	212,137		$	252,565		$	256,133		$	265,536
Gross profit		107,679			130,592			131,054			134,275
Income (Loss) before extraordinary item		(5,383	)		(28,245	)		4,599			4,096
Net income (loss)		(5,383	)		(28,245	)		1,707			4,096
Income (Loss) per share before extraordinary item—basic		(0.07	)		(0.34	)		0.06			0.05
Income (Loss) per share before extraordinary item—diluted		(0.07	)		(0.34	)		0.05			0.05
Net income (loss) per share—basic and diluted		(0.07	)		(0.34	)		0.02			0.05
2001
Revenues	$	283,922		$	293,334		$	291,673		$	302,187
Gross profit		144,102			154,304			151,755			159,019
Income (Loss) before extraordinary item		3,199			(4,966	)		(15,770	)		(14,701	)
Net income (loss)		3,199			(9,746	)		(22,809	)		(14,701	)
Income (Loss) per share before extraordinary item—basic and diluted		0.04			(0.06	)		(0.19	)		(0.17	)
Net income (loss) per share—basic and diluted		0.04			(0.12	)		(0.27	)		(0.17	)

12. Segment Information

During the fourth quarter of 2000, the Company began to operate in nine operating segments, based on their economic environment, geographic area, the nature of their services and the nature of their processes:

•: Business Records Management—the storage of paper documents, as well as all other non-electronic media such as microfilm and microfiche, master audio and videotapes, film, X-rays and blueprints, including healthcare information services, vital records services and service and courier operations
•: Off-Site Data Protection—the storage and rotation of back-up computer media as part of corporate disaster and business recovery plans, including service and courier operations
•: Confidential Destruction—the collection, handling and disposal of sensitive documents for corporate customers
•: Fulfillment—the storage of customer marketing literature and delivery to sales offices, trade shows and prospective customers' sites based on current and prospective customer orders; the assembly of custom marketing packages and orders; the management and detailed reporting on customer marketing literature inventories
•: Digital Archiving Services—storage and related services for electronic records conveyed via telecommunication lines and the Internet

•: Europe—records and information management services and off-site data protection services throughout Europe
•: Canada—records and information management services throughout Canada
•: South America—records and information management services throughout South America
•: Mexico—records and information management services throughout Mexico

The Europe, Canada, South America and Mexico operating segments do not individually meet the quantitative thresholds for a reporting segment, but have been aggregated and reported as one reporting segment, "International," given their similar economic characteristics, products, customers and processes. The Confidential Destruction, Fulfillment and Digital Archiving Services operating segments do not meet the quantitative thresholds for a reportable segment and thus are included in the "Corporate and Other" category. Adjusted EBITDA has been regularly evaluated by the chief operating decision maker in deciding resource allocation and performance assessment. Adjusted EBITDA is defined as EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) adjusted for extraordinary items, other income (expense), merger-related expenses, stock option compensation expense and minority interest. Corporate items include non-operating overhead, corporate general and administrative expenses, non-allocated operating expenses and intersegment eliminations. Corporate assets are principally cash and cash equivalents, prepaid items, certain non-operating fixed assets, certain non-allocated goodwill, deferred income taxes, certain non-trade receivables, certain intersegment receivables, and deferred financing costs. The accounting policies of the reportable segments are the same as those described in Note 2 of Notes to Consolidated Financial Statements, with the exception of: (i) certain costs allocated by Corporate to the other segments, primarily domestic and Canadian segments, based on allocation rates set at the beginning of each year; and (ii) certain non-cash charges (such as deferred lease amortization) maintained at Corporate.

An analysis of the Company's business segment information to the respective information in the consolidated financial statements is as follows:

	Business Records Management		Off-Site Data Protection		International		Corporate & Other(1)			Total Consolidated
1999
Revenue	$	343,969	$	143,057	$	31,618	$	905		$	519,549
Adjusted EBITDA		90,018		36,975		7,348		(4,670	)		129,671
Total Assets		668,555		319,416		163,174		166,067			1,317,212
2000
Revenue		669,993		167,607		116,687		32,084			986,371
Adjusted EBITDA		183,776		42,162		23,973		7,130			257,041
Total Assets		1,645,528		329,867		469,653		214,048			2,659,096
2001
Revenue		769,970		190,532		157,499		53,115			1,171,116
Adjusted EBITDA		206,705		49,804		37,314		8,423			302,246
Total Assets		2,101,559		347,720		515,925		(105,298	)		2,859,906

(1): Total assets include the intersegment elimination amounts of $699,296, $1,337,712 and $1,643,835 as of December 31, 1999, 2000 and 2001, respectively.

The Company's consulting business, previously analyzed as part of Business Records Management, is now analyzed within the Corporate & Other category. In addition, certain allocations from Corporate & Other to Business Records Management and Off-Site Data Protection have been changed. To the extent practicable, the prior period numbers shown above have been adjusted to reflect both such changes.

A reconciliation of EBITDA to Adjusted EBITDA and income (loss) from continuing operations before provision for income taxes and minority interest on a consolidated basis is as follows:

		1999			2000			2001
EBITDA		$	129,366		$	228,977		$	282,131
	Other Expense (Income)		(17	)		6,045			18,371
	Merger-related Expenses		—			9,133			3,673
	Stock Option Compensation Expense		—			15,110			—
	Minority Interests in Earnings (Losses) of Subsidiaries		322			(2,224	)		(1,929	)

Adjusted EBITDA			129,671			257,041			302,246
	Depreciation and Amortization		(65,422	)		(126,810	)		(153,591	)
	Stock Option Compensation Expense		—			(15,110	)		—
	Merger-related Expenses		—			(9,133	)		(3,673	)
	Interest Expense		(54,425	)		(117,975	)		(134,742	)
	Other Income (Expense), Net		17			(6,045	)		(18,371	)

Income (Loss) from Continuing Operations Before Provision for Income Taxes and Minority Interest		$	9,841		$	(18,032	)	$	(8,131	)

Information as to the Company's operations in different geographical areas is as follows:

		1999		2000		2001
Revenues:
United States		$	487,931	$	869,684	$	1,013,617
International			31,618		116,687		157,499

	Total Revenues	$	519,549	$	986,371	$	1,171,116

Long-lived Assets:
United States		$	1,029,542	$	1,989,839	$	2,118,828
International			144,006		432,589		431,761

	Total Long-lived Assets	$	1,173,548	$	2,422,428	$	2,550,589

13. Commitments and Contingencies

a. Leases

The Company leases most of its facilities under various operating leases. A majority of these leases have renewal options of five to ten years and have either fixed or Consumer Price Index escalation clauses. The Company also leases equipment under operating leases, primarily computers which have an average lease life of three years. Trucks and office equipment are also leased and have remaining lease lives ranging from one to seven years. Rent expense was $59,113, $111,001 and $126,871 for the years ended December 31, 1999, 2000 and 2001, respectively.

Minimum future lease payments are as follows:

Year	Operating
2002	$	123,624
2003		111,354
2004		100,432
2005		86,262
2006		68,643
Thereafter		306,246

Total minimum lease payments	$	796,561

The Company uses synthetic leases that involve some of the facilities that the Company occupies. Under these leases, special purpose entities are established to acquire properties and subsequently lease those properties to the Company. Seven financial institutions have provided over 50% of the capacity under our $400.0 million revolving credit facility (see Note 17). These seven financial institutions also participate in our synthetic lease programs. Neither the Company nor any of our related parties have invested, either via debt obligations or equity, in these special purpose entities. The leases are designed and qualify as operating leases for accounting purposes, where the monthly lease expense is recorded as rent expense in the Company's consolidated statements of operations. The Company does not consolidate the assets or debt related to these facilities in the Company's consolidated balance sheets.

Included in the lease commitments disclosed in the preceding paragraph are synthetic lease agreements signed in 1998 to 2001. Each of the leases under the Company's synthetic leases have a five to six and one-half year term for specified records storage warehouses and include 30 of 519 leased facilities the Company occupies. During 2001, the Company recorded $8.5 million in rent expense on its income statement related to these lease commitments. The Company's synthetic lease facilities included properties with a lessor's original cost of $74.3 million and $151.9 million as of December 31, 2000 and December 31, 2001, respectively. If on January 1, 2001, the original cost of the Company's properties under synthetic lease facilities had equaled $151.9 million, rent expense for the year ended December 31, 2001 would have been approximately $11.4 million. At the end of each lease term, the Company, at its option, may: (i) negotiate a renewal of the lease (which is subject to the agreement of the relevant synthetic lease lessor and its lenders); (ii) purchase the properties subject to such lease at a price equal to the lessor's original cost; or (iii) allow the lease to expire and cause the properties to be sold. The Company's ability to cause the properties to be sold depends upon its compliance with

certain terms of the lease. Under certain conditions, the Company would receive the excess, if any, of the net sales proceeds over the properties' original cost. In the event that the net sales proceeds are less than the properties' original cost, the Company would make certain contingent rental payments to the lessor equal to that difference, subject to a maximum amount of approximately 85% of the properties' original cost. If any of the Company's synthetic lease facilities are terminated following an event of default under the relevant synthetic lease documents, or if, at the end of the lease term, the Company does not either negotiate a renewal of the lease or elect to cause the relevant leased properties to be sold, or if the Company does elect to cause such leased properties to be sold but fail to satisfy the conditions to such election, the Company would generally be obligated to pay the lessor's original cost for such leased properties.

b. Facility Fire

In March 1997, the Company experienced three fires, all of which authorities have determined were caused by arson. These fires resulted in damage to one and destruction of the Company's other records management facility in South Brunswick Township, New Jersey.

Some of the Company's customers or their insurance carriers have asserted claims as a consequence of the destruction of or damage to their records as a result of the fires, some of which allege negligence or other culpability on the part of the Company. The Company has received notices of claims and lawsuits filed by customers and abutters seeking damages against the Company and to rescind their written contracts with the Company. The Company denies any liability as a result of the destruction of or damage to customer records as a result of the fires, which were beyond its control, and intends to vigorously defend itself against these and any other lawsuits that may arise. The Company is also pursuing coverage of these claims and lawsuits with its various insurers. The claims process is lengthy and its outcome cannot be predicted with certainty.

Based on its present assessment of the situation, management, after consultation with legal counsel, does not believe that the fires will have a material adverse effect on the Company's financial condition or results of operations, although there can be no assurance in this regard.

c. Other Litigation

The Company is presently involved as a defendant in various litigation which has occurred in the normal course of business. Management believes it has meritorious defenses in all such actions, and in any event, the amount of damages, if such matters were decided adversely, would not have a material adverse effect on the Company's financial condition or results of operations.

14. Related Party Transactions

The Company leases space to an affiliated company, Schooner Capital LLC ("Schooner"), for its corporate headquarters located in Boston, Massachusetts. For the years ended December 31, 1999, 2000 and 2001, Schooner paid the Company rent totaling $94, $96 and $101, respectively. The Company leases facilities from three separate limited partnerships, whose general partner is a related party. The aggregate rental payment by the Company for such facilities during 2000 and 2001 was

$1,684 and $513, respectively. In the opinion of management, all of these leases were entered into at market prices and terms.

The Company has an agreement with Leo W. Pierce, Sr., former Chairman Emeritus of the Company and the father of J. Peter Pierce, a Director of the Company that requires pension payments of $8 per month until his death. The total benefit is recorded in accrued expenses in the accompanying consolidated balance sheets.

At December 31, 2001, the Company has outstanding loans to an officer with an aggregate principal amount of $331. These notes bear interest at a variable rate. This liability was assumed in connection with the Company's merger with Pierce Leahy.

Effective December 1, 2000, the Company sold its wholly owned UK subsidiary Datavault Limited (acquired in the Pierce Leahy merger) to its 50.1% owned subsidiary, Iron Mountain Europe, in exchange for approximately $18 million of Iron Mountain Europe stock and debt of approximately $14 million. In connection with this transaction, the Company's 49.9% partner in Iron Mountain Europe contributed approximately $18 million dollars to Iron Mountain Europe in exchange for additional shares. The transaction was accounted for as a transfer between entities under common control and no gain or loss was recorded on the sale.

15. Employee Benefit Plans

a. Iron Mountain Companies 401(k) Plan

The Company has a defined contribution plan, which generally covers all non-union U.S. employees meeting certain service requirements. Eligible employees may elect to defer from 1% to 20% of compensation per pay period up to the amount allowed by the Internal Revenue Code. The Company makes matching contributions based on the amount of an employee's contribution according to a schedule as described in the plan document. The Company has expensed $1,890, $2,646 and $2,280 for the years ended December 31, 1999, 2000 and 2001, respectively.

b. Employee Stock Purchase Plan

On March 23, 1998, the Company introduced an employee stock purchase plan (the "Plan"), participation in which is available to substantially all employees who meet certain service eligibility requirements. The Plan was approved by the shareholders of the Company on May 28, 1998 and commenced operations on October 1, 1998. The Plan provides a way for eligible employees of the Company to become shareholders of the Company on favorable terms. The Plan provides for the purchase of up to 562,500 shares of the Company's common stock by eligible employees through successive offering periods. At the start of each offering period, participating employees are granted options to acquire the Company's common stock. During each offering period, participating employees accumulate after-tax payroll contributions, up to a maximum of 15% of their compensation, to pay the exercise price of their options. At the end of the offering period, outstanding options are exercised, and each employee's accumulated contributions are used to purchase common stock of the Company. The price for shares purchased under the Plan is 85% of their market price at either the beginning or the

end of the offering period, whichever is lower. There were 76,360, 139,869 and 186,152 shares purchased under the Plan for the years ended December 31, 1999, 2000 and 2001, respectively.

16. Noncash Transactions

The Company used the following as part of the consideration paid for certain acquisitions:

	1999		2000		2001
Fair Value of Common Stock Issued	$	46,000	$	421,220	$	—
Fair Value of Options Issued		—		25,291		—
Fair Value of Debt Assumed and Issued		—		584,906		10,352
Fair Value of Certain Net Assets of Businesses Previously Acquired		2,489		1,063		—

See Note 6 for liabilities assumed in acquisitions.

17. Subsequent Event

On March 15, 2002, the Company entered into a new amended and restated revolving credit agreement (the "Amended and Restated Credit Agreement"). The Amended and Restated Credit Agreement replaces the Company's existing credit agreement. The Amended and Restated Credit Agreement has an aggregate principal amount of $650,000 and includes a $400,000 revolving credit facility and a term loan facility in the amount of $250,000. The revolving credit facility matures on January 31, 2005 while the term loan is to be paid in full on February 15, 2008; however, if the 9¹/8% senior subordinated notes are not redeemed or repurchased prior to April 15, 2007 the term loan will mature on April 15, 2007. The interest rate on borrowings under the Amended and Restated Credit Agreement varies depending on the Company's choice of base rates and currency options, plus an applicable margin. Restrictive covenants under this agreement are similar to those under the Company's prior credit facility. All intercompany notes are now pledged to secure the Amended and Restated Credit Agreement.

REPORT OF THE INDEPENDENT AUDITORS

To the Board of Directors of
Iron Mountain Europe Limited:

We have audited the consolidated balance sheets of Iron Mountain Europe Limited as of October 31, 2000 and 2001, and the related consolidated statements of operations, stockholders' equity and comprehensive loss and cash flows (not presented separately herein) for the two years ended October 31, 2001 and the ten months ended October 31, 1999. These consolidated financial statements are the responsibility of the management of Iron Mountain Europe Limited. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Iron Mountain Europe Limited at October 31, 2000 and 2001 and the consolidated results of their operations and their consolidated cash flows (not presented separately herein) for the two years ended October 31, 2001 and the ten months ended October 31, 1999, in conformity with generally accepted accounting principles in the United States.

RSM ROBSON RHODES
Chartered Accountants
Birmingham, England
February 22, 2002

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Iron Mountain Incorporated:

We have audited, in accordance with auditing standards generally accepted in the United States, the consolidated financial statements of Iron Mountain Incorporated (a Pennsylvania corporation) for each of the three years in the period ended December 31, 2001 and have issued our report thereon dated February 22, 2002 (except with respect to Note 17, as to which the date is March 15, 2002). Our audits were made for the purpose of forming an opinion on those basic financial statements taken as a whole. The supplemental schedule listed in the accompanying index is the responsibility of Iron Mountain Incorporated's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and regulations under the Securities Exchange Act of 1934 and is not a required part of the basic financial statements. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
February 22, 2002
(Except with respect to Note 17,
as to which the date is March 15, 2002)

Schedule II

IRON MOUNTAIN INCORPORATED

Valuation and Qualifying Accounts

(In thousands)

Year Ended December 31,	Balance at Beginning of the Year	Charged to Expense	Other Additions(1)	Deductions		Balance at End of the Year
Allowance for doubtful accounts and credit memos:
1999	3,316	2,733	336	(645	)	5,740
2000	5,740	9,714	4,051	(3,516	)	15,989
2001	15,989	8,499	846	(8,248	)	17,086

Year Ended December 31,	Balance at Beginning of the Year	Additions	Deductions		Adjustments(2)		Balance at End of the Year
Reserve for restructuring activities:
1999	10,482	4,234	(4,843	)	(533	)	9,340
2000	9,340	31,409	(7,539	)	(4,696	)	28,514
2001	28,514	3,751	(7,805	)	(8,235	)	16,225

(1): Includes allowance of businesses acquired during the year as described in Note 6 of Notes to Consolidated Financial Statements.
(2): The adjustments represent changes to goodwill as a result of management's finalizing its restructuring plan within one year of each acquisition.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		IRON MOUNTAIN INCORPORATED
		By:	/s/ C. RICHARD REESE C. Richard Reese Chairman of the Board, Chief Executive Officer and President

Dated: March 20, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/ C. RICHARD REESE C. Richard Reese	Chairman, and Chief Executive Officer, President and Director	March 20, 2002
/s/ JOHN F. KENNY, JR. John F. Kenny, Jr.	Executive Vice President, Chief Financial Officer and Director	March 20, 2002
/s/ CLARKE H. BAILEY Clarke H. Bailey	Director	March 20, 2002
Constantin R. Boden	Director	March , 2002
/s/ KENT P. DAUTEN Kent P. Dauten	Director	March 20, 2002
/s/ EUGENE B. DOGGETT Eugene B. Doggett	Director	March 20, 2002
/s/ B. THOMAS GOLISANO B. Thomas Golisano	Director	March 20, 2002
/s/ ARTHUR D. LITTLE Arthur D. Little	Director	March 20, 2002
/s/ J. PETER PIERCE J. Peter Pierce	Director	March 20, 2002
/s/ HOWARD D. ROSS Howard D. Ross	Director	March 20, 2002
/s/ VINCENT J. RYAN Vincent J. Ryan	Director	March 20, 2002

INDEX TO EXHIBITS

Certain exhibits indicated below are incorporated by reference to documents we have filed with the Securities and Exchange Commission (the "Commission"). Exhibit numbers in parentheses refer to the exhibit numbers in the applicable filing (which are identified in the footnotes appearing at the end of this index). Each exhibit marked by a pound sign (#) is a management contract or compensatory plan.

Exhibit No.	Item	Exhibit
2.1	Purchase Agreement, dated November 13, 2000, by and among Iron Mountain Canada Corporation, Iron Mountain Records Management, Inc. ("IMRM"), FACS Records Storage Income Fund, FACS Records Centre Inc. and 3796281 Canada Inc.	(2.1)⁽²⁰⁾
2.2	Asset Purchase and Sale Agreement, dated February 18, 2000, by and among IMRM, Data Storage Center, Inc., DSC of Florida, Inc., DSC of Massachusetts, Inc., and Suddath Van Lines, Inc.	(2.1)⁽¹⁷⁾
2.3	Amendment No. 1 to Asset Purchase and Sale Agreement, dated May 1, 2000, by and among IMRM, Data Storage Center, Inc., DSC of Florida, Inc., DSC of Massachusetts, Inc., Suddath Van Lines, Inc. and Suddath Family Trust U/A 11/8/79.	(2.1)⁽¹⁸⁾
2.4	Agreement and Plan of Merger, dated as of October 20, 1999, by and between the Company and Pierce Leahy.	(2.1)⁽¹¹⁾
3.1	Amended and Restated Articles of Incorporation of the Company.	(Annex D)⁽¹⁵⁾
3.2	Amended and Restated Bylaws of the Company.	(Annex E)⁽¹⁵⁾
3.3	Declaration of Trust of IM Capital Trust I, dated as of December 10, 2001 among the Company, The Bank of New York, The Bank of New York (Delaware) and John P. Lawrence, as trustees.	(4.15)⁽²³⁾
3.4	Certificate of Trust of IM Capital Trust I.	(4.17)⁽²³⁾
4.1	Indenture for 8¹/4% Senior Subordinated Notes due 2011, dated April 26, 1999, by and among the Company, certain of its subsidiaries and The Bank of New York, as trustee.	(10.1)⁽⁹⁾
4.2	Indenture for 8³/4% Senior Subordinated Notes due 2009, dated October 24, 1997, by and among the Company, certain of its subsidiaries and The Bank of New York, as trustee.	(4.1)⁽²⁾
4.3	Indenture for 8¹/8% Senior Notes due 2008, dated as of April 7, 1998, by and among Iron Mountain Canada Corporation, as issuer, the Company and The Bank of New York, as trustee.	(4.1(c))⁽¹⁴⁾
4.4	Indenture for 9¹/8% Senior Subordinated Notes due 2007, dated as of July 7, 1997, by and between the Company, as issuer, and The Bank of New York, as trustee.	(10.5)⁽¹³⁾
4.5	Indenture for 8⁵/8% Senior Subordinated Notes due 2008, dated as of April 3, 2001, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	(4.1)⁽²¹⁾
4.6	First Supplemental Indenture, dated as of April 3, 2001, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	(4.2)⁽²¹⁾

4.7	Second Supplemental Indenture, dated as of September 14, 2001, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	Filed herewith as Exhibit 4.7
4.8	Form of stock certificate representing shares of Common Stock, $.01 par value per share, of the Company.	(4.1)⁽¹⁶⁾
9.0	Amended and Restated Voting Trust Agreement, dated as of February 28, 1998, by and among certain shareholders of the Company. (#)	(9.0)⁽¹³⁾
10.1	Stockholders' Agreement, dated as of September 26, 1997, by and among the Company and certain stockholders of Arcus Group, Inc. (#)	(10.16)⁽³⁾
10.2	Stockholders' Agreement, dated as of September 17, 1997, by and between the Company and Kent P. Dauten. (#)	(10.13)⁽⁴⁾
10.3	Employment Agreement, dated as of February 1, 2000, by and between the Company and J. Peter Pierce. (#)	(10.5)⁽¹⁷⁾
10.4	Letter Agreement, dated as of June 27, 2000, by and between the Company and J. Peter Pierce. (#)	(10.6)⁽²⁰⁾
10.5	Iron Mountain Incorporated Executive Deferred Compensation Plan, as amended. (#)	(10.7)⁽²⁰⁾
10.6	Nonqualified Stock Option Plan of Pierce Leahy Corp. (#)	(10.3)⁽¹²⁾
10.7	Iron Mountain Incorporated 1997 Stock Option Plan, as amended. (#)	(10.9)⁽²⁰⁾
10.8	Iron Mountain/ATSI 1995 Stock Option Plan. (#)	(10.2)⁽⁵⁾
10.9	Iron Mountain Incorporated 1995 Stock Incentive Plan, as amended. (#)	(10.3)⁽⁸⁾
10.10	Fifth Amended and Restated Credit Agreement dated as of March 15, 2002 among the Company, certain lenders party thereto and JPMorgan Chase Bank, as Administrative Agent.	Filed herewith as Exhibit 10.10
10.11	Amended and Restated Registration Rights Agreement, dated as of June 12, 1997, by and among the Company and certain stockholders of the Company. (#)	(10.1)⁽¹⁾
10.12	Registration Rights Agreement Joinder, dated as of February 1, 2000, by and among the Company and certain shareholders of the Company. (#)	(10.21)⁽¹⁷⁾
10.13	Strategic Alliance Agreement, dated as of January 4, 1999, by and among the Company, Iron Mountain (U.K.) Limited, Britannia Data Management Limited and Mentmore Abbey plc.	(10.2)⁽⁷⁾
10.14	Lease Agreement, dated as of October 1, 1998, between Iron Mountain Statutory Trust—1998 and IMRM.	(10.20)⁽⁶⁾
10.15	Unconditional Guaranty, dated as of October 1, 1998, from the Company to Iron Mountain Statutory Trust—1998.	(10.21)⁽⁶⁾
10.16	Amendment and Consent to Unconditional Guaranty, dated as of July 1, 1999, between the Company and Iron Mountain Statutory Trust—1998 and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	(10.1)⁽¹⁰⁾
10.17	Amendment No. 2 and Consent to Unconditional Guaranty, dated as of October 22, 1999, between the Company and Iron Mountain Statutory Trust—1998, and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	Filed herewith as Exhibit 10.17

10.18	Amendment No. 3 and Consent to Unconditional Guaranty, dated as of January 31, 2000, between the Company and Iron Mountain Statutory Trust—1998, and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	Filed herewith as Exhibit 10.18
10.19	Amendment No. 4 and Consent to Unconditional Guaranty, dated as of August 15, 2000, between the Company and Iron Mountain Statutory Trust—1998, and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	(10.3)⁽¹⁹⁾
10.20	Amended and Restated Agency Agreement, dated October 1, 1998, by and between Iron Mountain Statutory Trust—1998 and IMRM.	(10.1)⁽⁶⁾
10.21	Lease Agreement, dated as of July 1, 1999, by and between Iron Mountain Statutory Trust—1999 and IMRM.	(10.2)⁽¹¹⁾
10.22	Agency Agreement, dated as of July 1, 1999, by and between Iron Mountain Statutory Trust—1999 and IMRM.	(10.1)⁽¹¹⁾
10.23	Unconditional Guaranty, dated as of July 1, 1999, from the Company to Iron Mountain Statutory Trust—1999.	(10.3)⁽¹¹⁾
10.24	Amendment No. 1 and Consent to Unconditional Guaranty, dated as of October 22, 1999, between the Company and Iron Mountain Statutory Trust—1999, and consented to by the lenders listed therein and Wachovia Capital Investments, Inc., as Agent Bank for such lenders.	Filed herewith as Exhibit 10.24
10.25	Amendment No. 2 and Consent to Unconditional Guaranty, dated as of January 31, 2000, between the Company and Iron Mountain Statutory Trust—1999, and consented to by the lenders listed therein and Wachovia Capital Investments, Inc., as Agent Bank for such lenders.	Filed herewith as Exhibit 10.25
10.26	Amendment No. 3 and Consent to Unconditional Guaranty, dated as of August 16, 2000, between the Company and Iron Mountain Statutory Trust—1999, and consented to by the lenders listed therein and Wachovia Capital Investments, Inc., as Agent Bank for such lenders.	(10.2)⁽¹⁹⁾
10.27	Master Lease and Security Agreement, dated as of May 22, 2001, between Iron Mountain Statutory Trust—2001, as Lessor, and IMRM, as Lessee.	(10.1)⁽²²⁾
10.28	Amendment No. 1 to Master Lease and Security Agreement, dated as of November 1, 2001 between Iron Mountain Statutory Trust—2001, as Lessor, and IMRM, as Lessee.	Filed herewith as Exhibit 10.28
10.29	Unconditional Guaranty, dated as of May 22, 2001, from the Company, as Guarantor, to Iron Mountain Statutory Trust—2001, as Lessor.	(10.2)⁽²²⁾
10.30	Master Construction Agency Agreement, dated as of May 22, 2001, between Iron Mountain Statutory Trust—2001, as Lessor, and Iron Mountain Records Management, Inc., as Construction Agent.	(10.3)⁽²²⁾
12	Statement re: Computation of Ratios.	Filed herewith as Exhibit 12
21	Subsidiaries of the Company.	Filed herewith as Exhibit 21
23.1	Consent of Arthur Andersen LLP (Iron Mountain Incorporated, Pennsylvania).	Filed herewith as Exhibit 23.1

23.2		Consent of RSM Robson Rhodes (Iron Mountain Europe Limited).		Filed herewith as Exhibit 23.2
99		Letter from the Company regarding Arthur Andersen LLP.		Filed herewith as Exhibit 99

(1): Filed as an Exhibit to Iron Mountain/DE's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, filed with the Commission, File No. 0-27584.
(2): Filed as an Exhibit to Iron Mountain/DE's Current Report on Form 8-K dated October 30, 1997, filed with the Commission, File No. 0-27584.
(3): Filed as an Exhibit to Iron Mountain/DE's Registration Statement No. 333-41045, filed with the Commission on November 26, 1997.
(4): Filed as an Exhibit to Iron Mountain/DE's Registration Statement No. 333-44185, filed with the Commission on January 13, 1998.
(5): Filed as an Exhibit to Iron Mountain/DE's Current Report on Form 8-K dated March 9, 1998, filed with the Commission, File No. 0-27584.
(6): Filed as an Exhibit to Iron Mountain/DE's Registration Statement No. 333-67765, filed with Commission on November 23, 1998.
(7): Filed as an Exhibit to Iron Mountain/DE's Current Report on Form 8-K dated January 19, 1999, filed with the Commission, File No. 0-27584.
(8): Filed as an Exhibit to Iron Mountain/DE's Current Report on Form 8-K dated April 16, 1999, filed with the Commission, File No. 0-27584.
(9): Filed as an Exhibit to Iron Mountain/DE's Current Report of Form 8-K dated May 11, 1999, filed with the Commission, File No. 0-27584.
(10): Filed as an Exhibit to Iron Mountain/DE's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, filed with the Commission, File No. 0-27584.
(11): Filed as an Exhibit to Iron Mountain/DE's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, filed with the Commission, File No. 1-14937.
(12): Filed as an Exhibit to Pierce Leahy's Registration Statement No. 333-9963, filed with the Commission on August 12, 1996.
(13): Filed as an Exhibit to Pierce Leahy's Annual Report on Form 10-K for the year ended December 31, 1997, filed with the Commission, File No. 333-09963.
(14): Filed as an Exhibit to Pierce Leahy's Registration Statement No. 333-58569, filed with the Commission on June 6, 1998.
(15): Filed as an Annex or Exhibit to Amendment No. 1 to Pierce Leahy's Registration Statement No. 333-91577, filed with the Commission on December 13, 1999.
(16): Filed as an Exhibit to the Company's Current Report on Form 8-K dated February 1, 2000, filed with the Commission, File No. 1-13045.
(17): Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 1999, filed with the Commission, File No. 1-13045.

(18): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, filed with the Commission, File No. 1-13045.
(19): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, filed with the Commission, File No. 1-13045.
(20): Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, filed with the Commission, File No. 1-13045.
(21): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, filed with the Commission, File No. 1-13045.
(22): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, filed with the Commission, File No. 1-13045.
(23): Filed as an Exhibit to the Company's Registration Statement No. 333-75068, filed with the Commission on December 31, 2001.

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FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
IRON MOUNTAIN INCORPORATED 2001 FORM 10-K ANNUAL REPORT
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
PART I
PART II
PART III
Summary Compensation Table
Option Grants in 2001
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
PART IV
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
IRON MOUNTAIN INCORPORATED CONSOLIDATED BALANCE SHEETS (In thousands)
IRON MOUNTAIN INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except Per Share Data)
IRON MOUNTAIN INCORPORATED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE LOSS (In thousands, except share data)
IRON MOUNTAIN INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2001 (In thousands, except share data)
REPORT OF THE INDEPENDENT AUDITORS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Schedule II IRON MOUNTAIN INCORPORATED Valuation and Qualifying Accounts (In thousands)
SIGNATURES
INDEX TO EXHIBITS
EX-4.7 3 a2073447zex-4_7.txt EXHIBIT 4.7 EXHIBIT 4.7 SECOND SUPPLEMENTAL INDENTURE SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of September 14, 2001, among Iron Mountain Incorporated (the "Company"), Iron Mountain Off-Site Data Protection, Inc., Arcus Data Security, LLC, COMAC, Inc., DSI Technology Escrow Services, Inc., IM Billerica, Inc., Iron Mountain Records Management, Inc., Iron Mountain Global, Inc., Iron Mountain Global, LLC, Iron Mountain Records Management of Michigan, Inc., Iron Mountain Consulting Services, LLC, Iron Mountain/National Underground Storage, LLC, Iron Mountain Confidential Destruction LLC (collectively the "Guarantors"), each of which is a direct or indirect wholly owned subsidiary of the Company, and The Bank of New York, 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 April 3, 2001 as supplemented by the First Supplemental Indenture, dated April 3, 2001 (as so supplemented, the "Indenture"), providing for the issuance of an aggregate principal amount of $225,000,000 of 8-5/8% Senior Subordinated Notes due 2013 (the "Notes"); and WHEREAS, Section 2.1 of the Indenture provides that the Company shall pay principal and interest on the Notes in accordance with the terms of the Notes; and WHEREAS, the Global Note dated April 3, 2001 issued by the Company to the Trustee states that interest payments shall occur every six months on April 1 and October 1, and that the record date for the purpose of determining the Holders of record for any such interest payment shall be March 15 and September 15, respectively; and WHEREAS, the Company desires to set a special Record Date solely with respect to the October 1, 2001 interest payment; 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 Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 1. SPECIAL RECORD DATE: The Record Date for purposes of determining the Holders of the Notes entitled to an interest payment on October 1, 2001 shall be September 24, 2001 (the "Special Record Date"). 2. AMENDMENT TO GLOBAL NOTE: Section 1 of the Global Note dated April 3, 2001 is hereby amended to provide an additional sentence at the end of such section stating as follows: "Notwithstanding the foregoing, solely with respect to the October 1, 2001 interest payment date, the record date shall be September 24, 2001." 3. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 4. NEW YORK LAW TO GOVERN. The internal law of the State of New York shall govern and be used to construe this Supplemental Indenture. 5. 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. 6. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 7. EFFECT OF SUPPLEMENTAL INDENTURE. Except as amended by this Supplemental Indenture, the terms and provisions of the Indenture shall remain in full force and effect. 8. TRUSTEE. The Trustee assumes no responsibility for the correctness of the recitals herein contained, which shall be taken as the statements of the Company and the Trustee shall not be responsible or accountable in any way whatsoever for or with respect to the validity or execution or sufficiency of this Supplemental Indenture, and the Trustee makes no representation with respect thereto. 9. INDEMNIFICATION OF TRUSTEE. The Company agrees to indemnify the Trustee and to hold the Trustee harmless from and against any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees and court costs) at any time asserted against or incurred by the Trustee by reason of, arising out of or in connection with the execution of this Supplemental Indenture, except for the Trustee's own negligent action, its own negligent failure to act, or its own willful misconduct. [Remainder of page intentionally left blank.] 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. IRON MOUNTAIN INCORPORATED By: /s/ C. Richard Reese -------------------------------------- C. Richard Reese Chairman and Chief Executive Officer IRON MOUNTAIN RECORDS MANAGEMENT, INC., IRON MOUNTAIN RECORDS MANAGEMENT OF MICHIGAN, INC., IM BILLERICA, INC., DSI TECHNOLOGY ESCROW SERVICES, INC., IRON MOUNTAIN OFF-SITE DATA PROTECTION, INC., IRON MOUNTAIN GLOBAL, INC., COMAC, INC. By: /s/ C. Richard Reese -------------------------------------- C. Richard Reese Chairman and Chief Executive Officer IRON MOUNTAIN / NATIONAL UNDERGROUND STORAGE, LLC, IRON MOUNTAIN CONSULTING SERVICES, LLC, and IRON MOUNTAIN CONFIDENTIAL DESTRUCTION LLC By: IRON MOUNTAIN RECORDS MANAGEMENT, INC., its sole Member By: /s/ C. Richard Reese ---------------------------------- C. Richard Reese Chairman and Chief Executive Officer IRON MOUNTAIN GLOBAL, LLC, By: IRON MOUNTAIN GLOBAL, INC. its sole Member By: /s/ C. Richard Reese ---------------------------------- C. Richard Reese Chairman and Chief Executive Officer ARCUS DATA SECURITY, LLC, By: IRON MOUNTAIN OFF-SITE DATA PROTECTION, INC., its sole Member By: /s/ C. Richard Reese ---------------------------------- C. Richard Reese Chairman and Chief Executive Officer THE BANK OF NEW YORK, as Trustee By: /s/ Kisha Holder -------------------------------------- Name: Kisha Holder Title: Assistant Treasurer EX-10.10 4 a2073447zex-10_10.txt EXHIBIT 10.10 EXHIBIT 10.10 EXECUTION COPY ================================================================================ IRON MOUNTAIN INCORPORATED FIFTH AMENDED AND RESTATED CREDIT AGREEMENT Dated as of March 15, 2002 --------------------------------- $650,000,000 --------------------------------- FLEET NATIONAL BANK as Documentation Agent JPMORGAN CHASE BANK, as Administrative Agent J.P. MORGAN BANK CANADA, as Canadian Administrative Agent J.P. MORGAN SECURITIES INC., as Arranger and Book Manager ================================================================================ TABLE OF CONTENTS

iii

iv SCHEDULES SCHEDULE I - Commitments SCHEDULE II - Subsidiaries; Investments in Joint Ventures and Other Persons SCHEDULE III - Credit Agreements, Indentures, Leases SCHEDULE IV - Existing Letters of Credit SCHEDULE V - Subsidiary Borrowers EXHIBITS EXHIBIT A-1 - Form of Revolving Credit Note EXHIBIT A-2 - Form of Term Note EXHIBIT B - Subsidiary Guaranty EXHIBIT C - Company Guaranty EXHIBIT D - Company Pledge Agreement EXHIBIT E - Subsidiary Pledge Agreement EXHIBIT F - Canadian Borrower Pledge Agreement EXHIBIT G-1 - Form of Opinion of Special New York Counsel to the Company EXHIBIT G-2 - Form of Opinion of Special Pennsylvania Counsel to the Company EXHIBIT H - Form of Opinion of Special New York Counsel to the Administrative Agent EXHIBIT I - Election to Participate EXHIBIT J - Election to Terminate EXHIBIT K - Exemption Certificate EXHIBIT L - Form of Acknowledgment and Confirmation of Guarantee or Security Document EXHIBIT M - Form of Second Amended and Restated Pledge and Intercreditor Agreement ANNEXES ANNEX A - Canadian Borrower Provisions v FIFTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 15, 2002, among: IRON MOUNTAIN INCORPORATED, a corporation duly organized and validly existing under the laws of the Commonwealth of Pennsylvania (together with its successors and as more fully defined below, the "COMPANY"); IRON MOUNTAIN CANADA CORPORATION, a company organized and existing under the laws of the Province of Nova Scotia (formerly known as Pierce Leahy Canada Company) (the "CANADIAN BORROWER"); each of the lenders that is listed under the caption "US$ LENDERS" on the signature pages hereto and each lender or financial institution that becomes a "US$ LENDER" after the date hereof pursuant to Section 12.06 hereof (individually, together with its successors, a "US$ LENDER" and, collectively, together with their respective successors, the "US$ LENDERS"); each of the lenders that is listed under the caption "US$-CANADIAN LENDERS" on the signature pages hereto and each lender or financial institution that becomes a "US$-CANADIAN LENDER" after the date hereof pursuant to Section 12.06 hereof (individually, together with its successors, a "US$-CANADIAN LENDER" and, collectively, together with their respective successors, the "US$-CANADIAN LENDERS"); each of the lenders that is listed under the caption "MULTI-CURRENCY LENDERS" on the signature pages hereto and each lender or financial institution that becomes a "MULTI-CURRENCY LENDER" after the date hereof pursuant to Section 12.06 hereof (individually, together with its successors, a "MULTI-CURRENCY LENDER" and, collectively, together with their respective successors, the "MULTI-CURRENCY LENDERS"); each of the lenders that is listed under the caption "CANADIAN LENDERS" on the signature pages hereto and each lender or financial institution that becomes a "CANADIAN LENDER" after the date hereof pursuant to Section 12.06 hereof (individually, together with its successors, a "CANADIAN LENDER" and, collectively, together with their respective successors, the "CANADIAN LENDERS"); each of the lenders that is listed under the caption "TERM LENDERS" on the signature pages hereto and each lender or financial institution that becomes a "TERM LENDER" after the date hereof pursuant to Section 12.06 hereof (individually, together with its successors, a "TERM LENDER" and, collectively, together with their respective successors, the "TERM LENDERS"); FLEET NATIONAL BANK, as Documentation Agent, J.P. MORGAN SECURITIES INC. (formerly known as Chase Securities Inc.), as arranger and book manager, J.P. MORGAN BANK CANADA (formerly known as The Chase Manhattan Bank of Canada), as Canadian Administrative Agent (in such capacity, together with its successors in such capacity, the "CANADIAN ADMINISTRATIVE AGENT") and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), as agent for the Lenders (in such capacity, together with its successors in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company, certain of the Lenders and the Administrative Agent are parties to the Fourth Amended and Restated Credit Agreement, dated as of August 14, 2000 (the "EXISTING CREDIT AGREEMENT"), providing, subject to the terms thereof, for extensions of credit to be made by said Lenders to the Company; WHEREAS, the Company has requested that the Existing Credit Agreement be amended to (a) provide for a new term loan facility in the aggregate principal amount of 2 $250,000,000, the proceeds of which (together with other funds available to the Company) will be used to prepay in full the Tranche A Term Loans and Tranche B Term Loans outstanding under the Existing Credit Agreement, (b) to continue and make adjustments in the existing revolving credit facility and (c) to provide for certain other modifications as more fully set forth herein; and the Lenders and the Administrative Agent are willing, upon and subject to the terms and conditions hereof, so to amend the Existing Credit Agreement; WHEREAS, in order to carry out such amendment and the subsequent review and interpretation of the Existing Credit Agreement as so amended, the parties hereto desire to amend and restate the Existing Credit Agreement as set forth herein; NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the parties hereto hereby agree that on the Effective Date (as hereinafter defined) the Existing Credit Agreement shall be amended and restated to read in its entirety as follows: Section 1 DEFINITIONS AND ACCOUNTING MATTERS. 1.01. CERTAIN DEFINED TERMS. As used herein, the following terms shall have the following meanings and the terms defined in Annex A hereto shall have the meanings given to them therein (all terms defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa): "ABR LOANS" shall mean Loans which bear interest at a rate based upon the Alternate Base Rate. "ACCOUNTS RECEIVABLE FINANCING" shall mean any accounts receivable sale arrangement, credit facility or conditional purchase contract or similar arrangement providing financing secured directly or indirectly by the accounts receivable and related records, collateral and rights of the Company or its Subsidiaries; PROVIDED that any such transaction shall be consummated pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent, as evidenced by its written approval thereof (such approval not to be unreasonably withheld). "ACKNOWLEDGMENT AND CONFIRMATION OF GUARANTEE OR SECURITY DOCUMENT" shall mean an Acknowledgment and Confirmation of Guarantee or Security Document, in substantially the form of Exhibit L hereto, as said acknowledgment and confirmation shall be modified and supplemented and in effect from time to time. "ACQUIRED DEBT" shall mean, with respect to the Company or any Subsidiary, Indebtedness of any other Person, existing at the time such other Person merged with or into or became a Subsidiary of the Company or any Subsidiary thereof in connection with a Permitted Acquisition occurring after the Effective Date, provided that (i) such Indebtedness was not created by such other Person in contemplation of such acquisition and (ii) the aggregate outstanding principal amount of such Indebtedness shall not at any time exceed $15,000,000. 3 "ACQUISITION" shall mean an acquisition of assets of, or all or substantially all of the Capital Stock of, another business by the Company and/or one or more of its Subsidiaries. "ACQUISITION CONSIDERATION" shall mean, with respect to any Acquisition, the aggregate amount of consideration paid by the Company and its Subsidiaries in connection therewith, inclusive of (a) Stock Consideration and (b) other consideration on account of (i) any expenses incurred in connection with such Acquisition, (ii) liabilities under agreements not to compete incurred in connection with such Acquisition, (iii) the principal amount of Indebtedness assumed in connection with such Acquisition and (iv) Additional Expenditures related to such Acquisition. "ADDITIONAL EXPENDITURES" shall mean, with respect to any Acquisition, amounts expended or to be expended by the Company and its Subsidiaries within twelve months after the date of such Acquisition to acquire or construct facilities and equipment that are not part of the assets acquired pursuant to such Acquisition but which are deemed by the Company to be essential for the integration or restructuring of the assets so acquired. "ADJUSTED EBITDA" shall mean, for any period, EBITDA for such period, minus the tax provision for such period currently payable. "ADMINISTRATIVE QUESTIONNAIRE" shall mean an administrative questionnaire in a form supplied by the Administrative Agent. "AFFILIATE" shall mean, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person and, if such Person is an individual, any member of the immediate family (including parents, siblings, spouse, children, stepchildren, nephews, nieces and grandchildren) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "CONTROL" (including, with correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), PROVIDED that, in any event, any Person which owns directly or indirectly more than 5% of the securities having ordinary voting power for the election of directors or other governing body of a corporation or more than 5% of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person. Notwithstanding the foregoing, (a) no individual shall be deemed to be an Affiliate of a corporation solely by reason of his or her being an officer or director of such corporation and (b) Subsidiaries shall be deemed not to be Affiliates of the Company or any of the other Subsidiaries. "ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a 4 change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. "APPLICABLE COMMITMENT FEE RATE" shall mean, at any time, the percentage per annum set forth in the schedule below opposite the Pricing Level in effect at such time:

For purposes of this definition, the "Pricing Level" in effect at any time shall be the level (either Level 1, Level 2, Level 3, Level 4, Level 5 or Level 6) indicated in the schedule set forth in the definition of "Applicable Margin" in this Section 1.01 corresponding to the Applicable Leverage Ratio in effect at such time. "APPLICABLE L/C PERCENTAGE" shall mean, at any time, the Applicable Margin in effect at such time with respect to Eurocurrency Loans that are Revolving Loans (irrespective of whether at the time any Eurocurrency Loan is outstanding). "APPLICABLE LENDING OFFICE" for each Lender and for each Type of Loan, the lending office of such Lender (or of an affiliate of such Lender) designated for such Type of Loan in the Administrative Questionnaire of such Lender or such other lending office 5 of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Company as the office by which its Loans of such Type are to be made and maintained. "APPLICABLE LEVERAGE RATIO" shall mean, at any time, the Leverage Ratio as at the end of the most recent fiscal quarter of the Company in respect of which financial statements have been delivered by the Company pursuant to either Section 9.01(a) or 9.01(b) hereof; PROVIDED, that no change in the Applicable Leverage Ratio will take effect until the date five Business Days following receipt by the Administrative Agent of the applicable financial statements. "APPLICABLE MARGIN" shall mean (a) with respect to the Term Loans, (i) 1.25% in the case of ABR Loans and (ii) 2.25% in the case of Eurocurrency Loans and (b) with respect to Loans other than Term Loans, the rate for the respective Type of Loan set forth below opposite the level (either Level 1, Level 2, Level 3, Level 4, Level 5 or Level 6) indicated in the schedule set forth below corresponding to the Applicable Leverage Ratio in effect at such time:

"BANKRUPTCY CODE" shall mean the United States Bankruptcy Code, as now or hereafter in effect, or any successor statute. "BASIC DOCUMENTS" shall mean this Agreement, the Notes, the Letter of Credit Documents, the Company Guaranty, the Subsidiary Guaranty, the Security Documents and the Acknowledgment and Confirmation of Guarantee or Security Document entered into pursuant to the terms hereof. "BOARD" shall mean the Board of Governors of the Federal Reserve System of the United States of America. "BORROWER" shall mean the Company or any Subsidiary Borrower (other than the Canadian Borrower), as the context may require, and their respective successors, and "Borrowers" means all of the foregoing. As the context may require, the terms "Borrower" and "Borrowers" include the Company in its capacity as guarantor of the obligations of the other Borrowers hereunder. When used with reference to a Loan, references to the "Borrower" are to the particular Borrower to which such Loan is made or proposed to be made. "BORROWING DATE" shall mean any Business Day specified by any Borrower as a date on which such Borrower requests the relevant Lenders to make Loans hereunder. "BUSINESS DAY" shall mean any day other than a day on which commercial banks are authorized or required to close in New York City or Boston, Massachusetts and, where such term is used in the definition of "Quarterly Date" in this Section 1.01 or if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a conversion of or into, or an Interest Period for, a Eurocurrency Loan or a notice with respect to any such borrowing, payment, prepayment, conversion or Interest Period, which is also a day on which dealings in Dollar deposits are carried out in the London interbank market. "CALCULATION DATE" shall mean any Business Day as the Administrative Agent shall elect, but in any event, at least once each calendar month. So long as no Event of Default has occurred and is continuing, the Administrative Agent shall, to the extent practicable, select the FIRST day of each Interest Period applicable to Multi-Currency Loans as Calculation Dates. "CANADIAN BORROWER PLEDGE AGREEMENT" shall mean the pledge agreement, dated as of February 1, 2000, between the Canadian Borrower and the Canadian Administrative 7 Agent, as the same shall be modified and supplemented and in effect from time to time. The Canadian Borrower Pledge Agreement as in effect on the Effective Date is attached as Exhibit F hereto. "CANADIAN COMMITMENTS" shall have the meaning assigned to such term in Annex A hereto. "CANADIAN DOLLARS" shall have the meaning assigned to such term in Annex A hereto. "CANADIAN LENDERS" shall have the meaning assigned to such term in the Preamble hereto. "CANADIAN PENSION PLAN" shall mean any plan, program, arrangement or understanding that is a pension plan for the purposes of any applicable pension benefits or tax laws of Canada (whether or not registered under any such laws) which is maintained or contributed to by (or to which there is or may be an obligation to contribute of), any Company or any Subsidiary of the Company in respect of any person's employment in Canada or a province or territory thereof with the Company or any Subsidiary of the Company and all related agreements, arrangements and understandings in respect of, or related to, any benefits to be provided thereunder or the effect thereof on any other compensation or remuneration of any employee. "CANADIAN SECURITY DOCUMENTS" shall mean the Canadian Borrower Pledge Agreement and all other security documents hereafter delivered to the Canadian Administrative Agent granting a Lien on the stock of the Canadian Borrower or any other Canadian Subsidiary to secure the obligations and liabilities of the Canadian Borrower hereunder and under any of the other Loan Documents or to secure any guarantee by any Canadian Subsidiary of any such obligations and liabilities. "CANADIAN SUBSIDIARY" shall mean a Subsidiary incorporated under the laws of Canada or any province or territory thereof. "CAPITAL EXPENDITURES" shall mean capital expenditures by the Company or any of its Subsidiaries during the relevant period determined in accordance with GAAP. "CAPITAL LEASE OBLIGATIONS" shall mean, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP (including Statement of Financial Accounting Standards No. 13 of the Financial Accounting Standards Board) and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP (including such Statement No. 13). "CAPITAL STOCK" shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or 8 non-voting) of such Person's capital stock or other ownership interests, including, without limitation, all common stock and all preferred stock. "CASUALTY EVENT" shall mean, with respect to any property of any Person, any loss of or damage to, or any condemnation or other taking of, such property for which such Person or any of its Subsidiaries receives insurance proceeds, or proceeds of a condemnation award or other compensation. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. "CHANGE OF CONTROL" shall mean that: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Principal Stockholders (or any of them), is or becomes the "beneficial owner" (as defined in Rules 1 3d-3 and 1 3d-5 under the Exchange Act), directly or indirectly, of more than 50% of the voting power of all classes of Voting Stock of the Company, or (b) in any consecutive 25-month period, individuals who at the beginning of such period constituted the Board of Directors of the Company (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 at least 66-2/3% of the directors 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 (c) the Company shall be required pursuant to the provisions of the Senior Subordinated Debt Documents (or any other agreement or instrument relating to or providing for any other Subordinated Indebtedness) to redeem or repurchase, or make an offer to redeem or repurchase, all or any portion of the Senior Subordinated Debt (or such Subordinated Indebtedness, as the case may be) as a result of a change of control (however defined). "CODE" shall mean the Internal Revenue Code of 1986, as amended, or any successor statute. "COLLATERAL ACCOUNT" shall mean a cash collateral account in the name and under the control of the Administrative Agent (and the Multi-Currency Payment Agent) maintained in accordance with the terms of the Security Documents. "COMMITMENT PERIOD" shall mean the period from and including the Effective Date to but not including the Commitment Termination Date. "COMMITMENTS" shall mean the US$ Commitments, the US$-Canadian Commitments, the Multi-Currency Commitments, the Canadian Commitments (for all purposes other than Sections 2, 3, 4, 5 and 6 hereof) and the Term Commitments. 9 "COMMITMENT TERMINATION DATE" shall mean January 31, 2005 (or, if such day is not a Business Day, the next preceding Business Day) or, in the case of the Term Loans (and for the purposes of Sections 9.08 and 12.05), the Facility Termination Date. "COMPANY" shall mean Iron Mountain Incorporated, a Pennsylvania Corporation. "COMPANY GUARANTY" shall mean the guaranty, dated as of February 1, 2000, as said agreement shall be modified and supplemented and in effect from time to time, pursuant to which the Company guarantees the obligations of the Canadian Borrower and all other Borrowers under the Basic Documents. The Company Guaranty as in effect on the Effective Date is attached hereto as Exhibit C. "COMPANY PLEDGE AGREEMENT" shall mean the pledge agreement, dated as of February 1, 2000, between the Company and the Administrative Agent, as the same shall be modified and supplemented and in effect from time to time. The Company Pledge Agreement as in effect on the Effective Date is attached hereto as Exhibit D. "CONSOLIDATED NET TANGIBLE ASSETS" shall mean at any date the assets of the Company and its Subsidiaries determined on such date on a consolidated basis, LESS goodwill and other intangible assets. "CONTROLLED GROUP" shall mean all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Company, are treated as a single employer under Section 414 of the Code. "CURRENCY EXCHANGE AGREEMENT" shall mean a currency exchange agreement or similar arrangement between the Company and one or more of the Lenders. "C$ LOAN" shall have the meaning assigned to such term in Annex A hereto. "DEFAULT" shall mean an Event of Default or an event which with notice or lapse of time or both would, unless cured or waived, become an Event of Default. "DE MINIMUS EXCLUDED SUBSIDIARY" shall mean an Excluded Subsidiary designated as such by the Company, PROVIDED, that after giving effect to such designation, the aggregate net tangible assets of the Excluded Subsidiaries so designated does not exceed 1% of Consolidated Net Tangible Assets. "DOLLAR EQUIVALENT" shall mean, on any date of determination, with respect to any amount in any Multi-Currency, the equivalent in Dollars of such amount, determined by the Administrative Agent or the Canadian Administration Agent using the Exchange Rate with respect to such Multi-Currency then in effect, in the case of any such Multi-Currency as determined pursuant to Section 2.09. "DOLLARS", "US$" and "$" shall mean lawful money of the United States of America. 10 "EBITDA" shall mean, for any period, the sum (without duplication), determined on a consolidated basis for the Company and its Subsidiaries, of (a) net income for such period PLUS (b) to the extent deducted in determining net income for such period, the sum of (i) depreciation and amortization (including deferred financing costs, organization costs, goodwill and non-compete amortization) for such period, (ii) other non-cash expenses for such period, (iii) Interest Expense for such period, (iv) provision for income taxes for such period, (v) extraordinary, unusual or non-recurring charges or other items (including without limitation losses arising from any natural disasters) for such period determined in accordance with GAAP, (vi) non-compete expenses for such period to the extent not capitalized in accordance with GAAP and (vii) losses on sales of fixed assets not in the ordinary course of business for such period after giving effect to any related charges for, reductions of or provisions for taxes thereon MINUS (c) to the extent included in the calculation of net income for such period, the sum of (i) other income (including interest income) for such period, (ii) extraordinary, unusual or non-recurring gains or other items for such period determined in accordance with GAAP and (iii) gains on sales of fixed assets not in the ordinary course of business for such period after giving effect to any related charges for, reductions of or provisions for taxes thereon. For the purposes of calculating the ratios set forth in Sections 9.09, 9.10 and 9.11 there may, at the Company's option (such option to be consistently applied with respect to each transaction), be included in EBITDA for any relevant period, on a PRO FORMA basis (adjusted to give effect to expenses that will not be ongoing), the net income (and the additions and subtractions thereto referred to above) for such period of any Person (or assets) acquired after the commencement of such period in connection with any Permitted Acquisition or any acquisition pursuant to Section 9.14(viii)(b) hereof having Acquisition Consideration, in the case of any such Permitted Acquisition, or an aggregate amount of consideration paid, in the case of such acquisition pursuant to Section 9.14(viii)(b) hereof, of more than $500,000. The net income (and the related additions and subtractions) of the Person or assets acquired pursuant to such acquisition for such period shall be calculated by reference to the most recent available quarterly financial statements of the acquired business, annualized. "EFFECTIVE DATE" shall have the meaning assigned to such term in Section 7.01 hereof. "ELECTION TO PARTICIPATE" shall mean an election to participate substantially in the form of Exhibit I hereto. "ELECTION TO TERMINATE" shall mean an election to terminate substantially in the form of Exhibit J hereto. "ENVIRONMENTAL LAWS" shall mean any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, codes, plans, injunctions, permits, concessions, grants, franchises, licenses or other governmental restrictions, contracts, indemnities, assumptions of liability or agreements relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances 11 or wastes into the environment including, without limitation, ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof. "ENVIRONMENTAL LIABILITIES" shall mean all liabilities of the Company and each Subsidiary, whether vested or unvested, contingent or fixed, actual or potential which arise under or relate to Environmental Laws. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. "EUROCURRENCY BASE RATE" shall mean, (a) with respect to any Eurocurrency Loans denominated in Dollars, Canadian Dollars or euros the rate per annum determined on the basis of the rate for deposits in the relevant currency for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen or, with respect to Canadian Dollars only, Page 3740 of the Telerate screen as of 11:00 a.m., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 or Page 3740, as applicable, of the Telerate screen (or otherwise on such screen), the "EUROCURRENCY BASE RATE" shall be determined by reference to such other comparable publicly available service for displaying eurocurrency rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered currency deposits in the relevant currency at or about 11:00 a.m., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurocurrency market where its eurocurrency and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein and (b) with respect to Eurocurrency Loans denominated in Pounds Sterling, the rate per annum determined by the Administrative Agent to be the average of the rates quoted by the Reference Lenders at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on the day two Business Days prior to the first day of the Interest Period for such Loans for the offering by the Reference Lenders to leading banks in the Paris interbank market of deposits in Pounds Sterling having a term comparable to such Interest Period and in an amount comparable to the principal amount of the respective Eurocurrency Loans of the Reference Lenders to which such Interest Period relates. If any Reference Lender is not participating in any Eurocurrency Loans during the Interest Period therefor (pursuant to Section 6.04 hereof or for any other reason), the Eurocurrency Base Rate for such Loans for such Interest Period shall be determined by reference to the amount of the Loan which such Reference Lender would have made had it been participating in such Loans. If any Reference Lender does not furnish a timely quotation, the Administrative Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Lender or Lenders or, if none of such quotations is available on a timely basis, the provisions of Section 6.02 shall apply. 12 "EUROCURRENCY LOANS" shall mean Loans the interest on which is determined on the basis of rates referred to in the definition of "Eurocurrency Base Rate" in this Section 1.01. "EUROCURRENCY RATE" shall mean, for any Eurocurrency Loans, a rate per annum (rounded upwards, if necessary, to the nearest 1/32 of 1%) determined by the Administrative Agent to be equal to (i) the Eurocurrency Base Rate for such Loans for the Interest Period for such Loans divided by (ii) 1 minus the Reserve Requirement for such Loans. "EUROS" shall mean the single currency of the European Union as constituted by the Treaty on the European Union. "EVENTS OF DEFAULT" shall have the meaning assigned to such term in Section 10.01 hereof. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended from time to time. "EXCHANGE RATE" shall mean with respect to any Multi-Currency on a particular date, the rate at which such Multi-Currency may be exchanged into Dollars in London on a spot basis, as set forth on the display page of the Reuters System applicable to such Multi-Currency as reasonably determined by the Administrative Agent. In the event that such rate does not appear on any Reuters display page, the Exchange Rate with respect to such Multi-Currency shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Company or, in the absence of such agreement, such Exchange Rate shall instead be determined by reference to the Administrative Agent's spot rate of exchange quoted to prime banks in London in the London interbank market where its foreign currency exchange operations in respect of such Multi-Currency are then being conducted, at or about noon, local time, at such date for the purchase of Dollars with such Multi-Currency, for delivery on a spot basis; PROVIDED, HOWEVER, that if at the time of any such determination, for any reason, no such spot rate is being quoted and no other methods for determining the Exchange Rate can be determined as set forth above, the Administrative Agent may use any reasonable method it deems applicable to determine such rate, and such determination shall be conclusive absent manifest error. "EXCLUDED SUBSIDIARY" shall mean any Subsidiary of the Company principally engaged in the records and information management business or related activities organized outside of the United States of America. "EXCLUDED SUBSIDIARY MATERIAL ADVERSE CHANGE" shall mean the occurrence of a material adverse change in the business, assets, property, condition (financial or otherwise) or prospects of the Excluded Subsidiaries, taken as a whole. "EXISTING CREDIT AGREEMENT" shall have the meaning assigned to such term in the Recitals. 13 "EXISTING FACILITY" shall mean any Facility owned by the Company or any of its Subsidiaries on the Effective Date. "EXISTING LETTERS OF CREDIT" shall mean, collectively, all letters of credit identified on Schedule IV hereto and outstanding on the Effective Date. "EXISTING LOANS" shall have the meaning assigned to such term in Section 2.01(b) hereof. "FACILITY" shall mean any facility, or part of a facility (including, without limitation, related office buildings, parking lots or other related real property), now or hereafter owned by the Company or any of its Subsidiaries, in each case including, without limitation, the land on which such facility is located, all buildings and other improvements thereon, including leasehold improvements, all fixtures, furniture, equipment, inventory and other tangible personal property located in or used in connection with such facility and all accounts receivable and other intangible personal property (other than motor vehicles) related to the ownership, lease or operation of such facility, all whether now existing or hereafter acquired. "FACILITY TERMINATION DATE" shall mean April 15, 2007 or February 15, 2008, as provided in Section 4.01(b) (or, if such day is not a Business Day, the next preceding Business Day). "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. "FIXED CHARGES" shall mean for any period the sum of (i) Scheduled Amortization for such period PLUS (ii) Interest Expense for such period PLUS (iii) 50% of the total Capital Expenditures (total Capital Expenditures being calculated for this purpose to exclude replacement Capital Expenditures made with the proceeds of insurance) for such period PLUS (iv) the aggregate amount of non-compete expenses for such period to the extent not capitalized in accordance with GAAP. "FOREIGN SUBSIDIARY BORROWER" shall mean the Canadian Borrower and any other Subsidiary Borrower which is organized and existing under the laws of any jurisdiction outside the United States of America. "FUNDED INDEBTEDNESS" shall mean, without duplication, (a) Indebtedness (other than in respect of Synthetic Lease Obligations) that matures or otherwise becomes due more than one year after the incurrence thereof or is extendible, renewable or refundable, at the option of the obligor, to a date more than one year after the incurrence thereof 14 (including the current portion thereof), (b) Indebtedness outstanding hereunder and (c) Synthetic Lease Obligations and any Guarantees by the Company thereof. "GAAP" shall mean generally accepted accounting principles as in effect from time to time in the United States of America consistently applied. "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "GUARANTY" by any Person shall mean any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise, other than agreements to purchase goods at an arm's length price in the ordinary course of business) or (ii) entered into for the purpose of assuring in any other manner the holder of such Indebtedness of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part), PROVIDED that the term Guaranty shall not include endorsements for collection or deposit in the ordinary course of business. The term "GUARANTEE" used as a verb has a corresponding meaning. "HAZARDOUS SUBSTANCES" shall mean any toxic, caustic or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, including any substance regulated under Environmental Laws. "HEDGING AGREEMENT" shall mean any Interest Rate Agreement, Currency Exchange Agreement or security agreement between the Company and one or more of the Lenders or between the Company and one or more financial institutions other than a Lender as approved by the Administrative Agent. "INDEBTEDNESS" shall mean, as to any Person (determined without duplication): (i) indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase or acquisition price of property or services (including amounts payable under agreements not to compete and other similar arrangements), other than accounts payable (other than for borrowed money) incurred in the ordinary course of business and accrued expenses incurred in the ordinary course of business; (ii) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (iii) Capital Lease Obligations and Synthetic Lease Obligations of such Person; 15 (iv) obligations of such Person to redeem or otherwise retire shares of Capital Stock of such Person; (v) for purposes of Section 10.01(b) only, indebtedness of such Person under any Hedging Agreement; (vi) indebtedness of others of the type described in clauses (i) through (v) above secured by a Lien on the property of such Person, whether or not the respective obligation so secured has been assumed by such Person; (vii) indebtedness of others of the type described in clauses (i) through (v) above Guaranteed by such Person; and (viii) Accounts Receivable Financings and Permitted Mortgage Financings of such Person. Notwithstanding anything to the contrary contained in clause (i) of the preceding sentence, indebtedness of any Person in respect of amounts payable under an agreement not to compete shall be the amount carried on the balance sheet of such Person in respect of such agreement in accordance with GAAP. "INTEREST EXPENSE" shall mean, for any period, the sum (determined without duplication) of the aggregate amount of interest accruing during such period on Indebtedness of the Company and its Subsidiaries (on a consolidated basis), including the interest portion of rental or similar payments under Capital Lease Obligations and Synthetic Leases and any capitalized interest, and excluding amortization of debt discount and expense and interest paid in kind. "INTEREST PERIOD" shall mean, with respect to any Eurocurrency Loans, the period commencing on the date such Loans are made or converted from ABR Loans or the last day of the next preceding Interest Period with respect to such Loans and ending on the numerically corresponding day in the first, second, third, sixth or (if acceptable to all Lenders) twelfth calendar month thereafter, as the Company may select as provided in Section 5.05 hereof, except that each such Interest Period which commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest Period would otherwise end after the Commitment Termination Date, such Interest Period shall end on the Commitment Termination Date; (ii) each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day); 16 (iii) notwithstanding clause (i) above, no Interest Period shall have a duration of less than one month and, if the Interest Period for any Eurocurrency Loan would otherwise be a shorter period, such Loans shall not be available hereunder for such period; and (iv) each Interest Period with respect to Revolving Loans in effect under the Existing Credit Agreement on the Effective Date shall continue in effect hereunder. "INTEREST RATE AGREEMENT" shall mean (i) an interest rate swap agreement, interest rate cap agreement or similar arrangement between the Company and one or more of the Lenders or (ii) an interest rate swap agreement, interest rate cap agreement or similar arrangement between the Company and one or more financial institutions (other than a Lender) approved by the Administrative Agent (which approval shall not be unreasonably withheld) pursuant to which the Company is not required in the absence of default to make any payments other than initial fees. "INVESTMENTS" shall have the meaning assigned to such term in Section 9.14 hereof. "ISSUING BANK" shall mean JPMorgan Chase Bank or any Affiliate thereof or, with respect to any Existing Letter of Credit, any other Lender so designated with the consent of such other Lender, JPMorgan Chase Bank and the Company. "JPMORGAN CHASE BANK" shall mean JPMorgan Chase Bank and its successors. "LENDERS" shall mean the US$ Lenders, the US$-Canadian Lenders, the Multi-Currency Lenders, the Canadian Lenders (for all purposes other than Sections 3, 4, 5 (other than 5.08(b), 5.08(c) and 5.09) and 6 hereof) and the Term Lenders. "LETTER OF CREDIT DOCUMENTS" shall mean, with respect to any Letter of Credit, collectively, any application therefor and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations, each as the same may be modified and supplemented and in effect from time to time. "LETTER OF CREDIT LIABILITY" shall mean, without duplication, at any time and in respect of any Letter of Credit, the sum of (a) the undrawn stated amount of such Letter of Credit PLUS (b) the aggregate unpaid principal amount of all Reimbursement Obligations at such time due and payable in respect of all drawings made under such Letter of Credit. For purposes of this Agreement, a Lender (other than the Issuing Bank) shall be deemed to hold a Letter of Credit Liability in an amount equal to its participation interest in the related Letter of Credit under Section 2.08 hereof or Annex A hereto, as the case may be, and the Issuing Bank shall be deemed to hold a Letter of Credit Liability in an amount equal to its retained interest in the related Letter of Credit after giving effect to 17 the acquisition by the Lenders other than the Issuing Bank of their participation interests under said Section 2.08. "LETTERS OF CREDIT" shall have the meaning assigned to such term in Section 2.08 hereof and, unless the content otherwise requires, refers to Canadian Letters of Credit as defined in Annex A hereto. "LEVERAGE RATIO" shall have the meaning assigned to such term in Section 9.09 hereof. "LIEN" shall mean, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, the Company and each of its Subsidiaries shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. "LIQUID INVESTMENTS" shall mean: (i) certificates of deposit maturing within 90 days of the acquisition thereof denominated in Dollars and issued by (X) a Lender or (Y) a bank or trust company having combined capital and surplus of at least $500,000,000 and which has (or which is a Subsidiary of a bank holding company which has) publicly traded debt securities rated A or higher by Standard & Poor's Ratings Services or A-2 or higher by Moody's Investors Service, Inc.; (ii) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with (x) any Lender or (y) any bank or trust company meeting the qualifications specified in clause (i)(Y) above; (iii) obligations issued or guaranteed by the United States of America, with maturities not more than one year after the date of issue; (iv) commercial paper with maturities of not more than 90 days and a published rating of not less than A-2 and P-2 (or the equivalent rating); and (v) investments in money market funds substantially all of whose assets are comprised of securities and other obligations of the types described in clauses (i) through (iv) above. "LOANS" shall mean the US$ Loans, the US$-Canadian Loans, the Multi-Currency Loans, the Swingline Loans, the C$ Loans (for all purposes other than Sections 3,4,5 and 6 hereof) and the Term Loans. "MAJORITY LENDERS" shall mean Lenders having at least 51% of (a) the aggregate amount of (i) the Revolving Commitments and (ii) the Term Loan Commitments (or, if the Term Loans have been made, the aggregate unpaid principal amount of the Term 18 Loans) or (b) if the Revolving Commitments shall have terminated, the aggregate unpaid principal amount of the Loans and Letter of Credit Liabilities. "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the business, assets, property, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole, (b) the validity or enforceability of any of the Basic Documents, (c) the rights and remedies of the Lenders and the Administrative Agent or the Multi-Currency Payment Agent under any of the Basic Documents or the Senior Subordinated Debt Documents or (d) the timely payment of the principal of or interest on the Loans or the Reimbursement Obligations or other amounts payable in connection therewith. "MERGING SUBSIDIARY" shall have the meaning assigned to such term in Section 9.04 hereof. "MULTI-CURRENCY" shall mean each of Pounds Sterling, euros, Dollars or Canadian Dollars. "MULTI-CURRENCY COMMITMENT" shall mean, as to each Multi-Currency Lender, the obligation of such Multi-Currency Lender to make Multi-Currency Loans, and to issue or participate in Letters of Credit pursuant to Section 2.08 hereof, in an aggregate principal or stated amount at any one time outstanding up to but not exceeding the amount set forth opposite such Multi-Currency Lender's name on Schedule I hereto under the caption "Multi-Currency Commitment"(expressed in Dollars) or, in the case of a Person that is party to an assignment permitted under Section 12.06 hereof after the Effective Date, as specified in the respective instrument of assignment pursuant to which such assignment is effected (as the same may be reduced at any time or from time to time pursuant to Section 2.02 or 3.02 hereof). The original aggregate amount of the Multi-Currency Commitments is $150,000,000. "MULTI-CURRENCY LOAN" shall have the meaning assigned to such term in Section 2.01. "MULTI-CURRENCY LOANS (DOLLAR EQUIVALENT)" shall mean the Dollar Equivalent of the relevant Multi-Currency Loans. "MULTI-CURRENCY PAYMENT AGENT" shall mean the London branch office of JPMorgan Chase Bank. "MULTI-CURRENCY PERCENTAGE" shall mean, with respect to any Multi-Currency Lender at any time, the ratio (expressed as a percentage) of (a) the amount of the Multi-Currency Commitment of such Multi-Currency Lender at such time to (b) the aggregate amount of the Multi-Currency Commitments of all of the Multi-Currency Lenders at such time. "MULTIEMPLOYER PLAN" shall mean at any time an employee pension benefit plan within the meaning of Section 4001 (a)(3) of ERISA to which the Company or any member of the Controlled Group is then making or accruing an obligation to make 19 contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the Controlled Group during such five year period. "NET CASH PROCEEDS" shall mean, in each case as set forth in a statement in reasonable detail delivered to the Administrative Agent: (a) with respect to the disposition of any asset by the Company or any of its Subsidiaries, the excess, if any, of (i) the cash received in connection with such disposition over (ii) the sum of (A) the principal amount of any Indebtedness which is secured by such asset and which is required to be repaid in connection with the disposition thereof, PLUS (B) the reasonable out-of-pocket expenses incurred by the Company or such Subsidiary, as the case may be, in connection with such disposition, PLUS (C) provision for taxes, including income taxes, attributable to the disposition of such asset; (b) with respect to the issuance of any Indebtedness of the Company or any its Subsidiaries (including, without limitation (x) any Accounts Receivable Financing permitted under the terms of Section 9.08 hereof and (y) any Permitted Mortgage Financing of Existing Facilities but excluding any Permitted Mortgage Financing of Facilities acquired after the Effective Date), the gross proceeds received by the Company or such Subsidiary from such issuance less all reasonable legal expenses, discounts and commissions and other fees and expenses incurred or to be incurred and all federal, state, local and foreign taxes assessed or to be assessed in connection therewith; and (c) in the case of any Casualty Event, the aggregate amount of proceeds of insurance, condemnation awards and other compensation received by the Company and its Subsidiaries in respect of such Casualty Event net of (i) reasonable expenses incurred by the Company and its Subsidiaries in connection therewith and (ii) contractually required repayments of Indebtedness to the extent secured by a Lien on such property and any income and transfer taxes payable by the Company or any of its Subsidiaries in respect of such Casualty Event. In the case of any Accounts Receivable Financing, the gross proceeds therefrom shall be determined on the basis of the gross proceeds received in cash from unrelated financing parties at the time of the first transaction under such Accounts Receivable Financing or any new tranche thereof. "1997 SENIOR SUBORDINATED DEBT" shall mean Indebtedness of the Company in respect of the 8-3/4% Senior Subordinated Notes of the Company due September 30, 2009 issued pursuant to the 1997 Senior Subordinated Debt Indenture. "1999 SENIOR SUBORDINATED DEBT" shall mean Indebtedness of the Company in respect of the 8-1/4% Senior Subordinated Notes of the Company due July 1, 2011 issued pursuant to the 1999 Senior Subordinated Debt Indenture. 20 "1997 SENIOR SUBORDINATED DEBT INDENTURE" shall mean the indenture dated as of October 24, 1997 among the Company, certain of its Subsidiaries and The Bank of New York, as Trustee, as the same may be amended or modified, without prejudice to the provisions of Section 9.19 hereof. "1999 SENIOR SUBORDINATED DEBT INDENTURE" shall mean the indenture dated as of April 26, 1999 among the Company, certain of its Subsidiaries and The Bank of New York, as Trustee, as the same may be amended or modified, without prejudice to the provisions of Section 9.19 hereof. "NOTES" shall mean the promissory notes provided for by Section 2.06 hereof and all promissory notes delivered in substitution or exchange therefor, in each case as the same shall be modified and supplemented and in effect from time to time. "OBLIGOR" shall mean, collectively, the Company, the Canadian Borrower, each other Borrower and each of the Subsidiary Guarantors. "PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "PERMITTED ACQUISITION" has the meaning set forth in Section 9.12. "PERMITTED INDEBTEDNESS" shall mean, without duplication: (i) Seller Indebtedness; (ii) Indebtedness secured by Permitted Mortgages; (iii) Indebtedness in respect of agreements not to compete; (iv) Capitalized Lease Obligations; (v) Indebtedness consisting of reimbursement obligations in respect of letters of credit issued by any bank for the account of the Company or any of its Subsidiaries, the aggregate amount available to be drawn under which may not exceed $5,000,000 at any time; (vi) Indebtedness in respect of any Hedging Agreement permitted under Section 9.25 hereof; (vii) Indebtedness of the Company in an aggregate outstanding principal amount not at any time exceeding $20,000,000; (viii) any Guaranty by the Company of Indebtedness of Excluded Subsidiaries in an aggregate outstanding principal amount not at any time exceeding $10,000,000; 21 (ix) any guaranty by the Company of Indebtedness incurred pursuant to the foregoing clauses (ii), (iii), (iv) or (v) by a Subsidiary of the Company; (x) Acquired Debt of the Company or any Subsidiary; (xi) Indebtedness of the Company to any Subsidiary or of any Subsidiary to any other Subsidiary; and (xii) Indebtedness of any Excluded Subsidiary to any minority shareholder or partner in such Excluded Subsidiary, PROVIDED, that such Indebtedness is not Funded Indebtedness and the principal amount of such Indebtedness is no more than proportional to the Indebtedness of such Excluded Subsidiary to the Company and its other Subsidiaries (based upon the respective ownership interests in such Excluded Subsidiary); PROVIDED, that Permitted Indebtedness incurred pursuant to the foregoing clauses (i) and (iii) may be incurred only in connection with Permitted Acquisitions. "PERMITTED MORTGAGE" means any mortgage subjecting property of any Subsidiary of the Company to a Lien where (i) the outstanding Capital Stock of such Subsidiary has been pledged to the Administrative Agent for the benefit of the Lenders pursuant to the Company Pledge Agreement, the Canadian Borrower Pledge Agreement, the Subsidiary Pledge Agreement or another pledge agreement that is in form and substance reasonably acceptable to the Administrative Agent, (ii) the Company shall agree, for the benefit of the Administrative Agent and the Lenders, not to permit any Subsidiary owning any interest in such property to create, incur or suffer to exist any Indebtedness other than Indebtedness permitted hereunder (determined without giving effect to clause (ii) of the definition of "Permitted Indebtedness" in this Section 1.01) and other Indebtedness secured by such mortgage, (iii) such mortgage (and the other documentation, if any, relating thereto) does not contain any cross-default provisions referring to any other indebtedness of the Company or its Subsidiaries (except in the case of Permitted Mortgage Financings of Existing Facilities) and (iv) such mortgage (and the other documentation, if any, relating thereto) does not contain any covenants subjecting the Company or its Subsidiaries to financial tests of any nature (except in the case of Permitted Mortgage Financings of Existing Facilities). "PERMITTED MORTGAGE FINANCING" shall mean any financing (or series of related financings) by the Company or any of its Subsidiaries after the Effective Date that is secured by a mortgage on one or more Facilities, PROVIDED that (a) the proceeds of such financing (except to the extent that Permitted Mortgage Financings of Facilities acquired after the Effective Date are excluded by the definition of "Net Cash Proceeds" herein) are applied to the prepayment of Loans as provided in Section 3.02(b) hereof, (b) such financings are otherwise permitted by the terms of Section 9.08 hereof and (c) in the case of each such mortgage financing by a Subsidiary of the Company, each such mortgage created thereby is a Permitted Mortgage. 22 "PERSON" shall mean an individual, a corporation, a company, a voluntary association, a partnership, a limited liability company, a trust, an unincorporated organization or a government or any agency, instrumentality or political subdivision thereof. "PIERCE MERGER" shall mean the merger on February 1, 2000 of Iron Mountain Incorporated, a Delaware corporation ("OLD IMI") with and into the Company, with the Company as the surviving corporation. "PIERCE 1997 SENIOR SUBORDINATED NOTES" shall mean the 9-1/8% Senior Subordinated Notes due 2007 of the Company in an aggregate original principal amount of US$120,000,000 issued pursuant to the Pierce 1997 Senior Subordinated Notes Indenture, as the same may be amended, supplemented or otherwise modified from time to time in accordance with Section 9.19 hereof. "PIERCE 1998 SENIOR NOTES" shall mean the 8-1/8% Senior Notes due 2008 of Iron Mountain Canada Corporation in an aggregate original principal amount of US$135,000,000 issued pursuant to the Pierce 1998 Senior Notes Indenture, as the same may be amended, supplemented or otherwise modified from time to time in accordance with subsection 9.19 hereof. "PIERCE 1997 SENIOR SUBORDINATED NOTES INDENTURE": the Senior Subordinated Notes Indenture, dated as of July 7, 1997 between the Company and The Bank of New York, as trustee, as amended, supplemented or otherwise modified from time to time in accordance with Section 9.19 hereof. "PIERCE 1998 SENIOR NOTES INDENTURE": the Senior Notes Indenture, dated as of April 7, 1998 between the Canadian Borrower, the Company and The Bank of New York, as trustee, as amended, supplemented or otherwise modified from time to time in accordance with Section 9.19 hereof. "PLAN" shall mean an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (a) maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group or (b)maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which the Company or any member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions. "POST-DEFAULT RATE" shall mean a rate equal to the sum of 2% PLUS the higher of (i) the rate of interest applicable to ABR Loans and (ii) in the case of any Loan, the rate of interest (if any) otherwise applicable to such Loan. "POUNDS STERLING" shall mean the lawful currency of the United Kingdom "PRIME RATE" shall mean the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its prime rate in effect at its principal office in 23 New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. "PRINCIPAL STOCKHOLDERS" shall mean each of Vincent J. Ryan, Schooner Capital Corporation, C. Richard Reese, Eugene B. Doggett, J. Peter Pierce, Leo W. Pierce, Sr., B. Thomas Golisano, Kent P. Dauten and their respective Affiliates. "QUARTERLY DATES" shall mean the last Business Day of each March, June, September and December. "RCRA" means the Resource Conservation and Recovery Act, as amended. "RECOVERY EVENT" shall mean any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of the Company or any of its Subsidiaries. "REFERENCE LENDERS" shall mean each of JPMorgan Chase Bank and such two other Lenders as the Administrative Agent may from time to time designate with the consent of the Company, such consent not to be unreasonably withheld. "REFUNDED SWINGLINE LOANS" shall have the meaning given thereto in Section 3.03(b). "REGULATION D" shall mean Regulation D of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time. "REGULATORY CHANGE" shall mean, with respect to any Lender, any change on or after the date of this Agreement in United States federal, state or foreign laws or regulations, including Regulation D, or the adoption or making on or after such date of any interpretations, directives or requests applying to a class of lenders including such Lender of or under any United States federal or state, or any foreign, laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof. "REIMBURSEMENT OBLIGATIONS" shall mean, at any time, the obligations of the Company or the Canadian Borrower, as the case may be, then outstanding to reimburse amounts paid by the Issuing Bank or the Canadian Issuing Bank, as the case may be, in respect of any drawings under a Letter of Credit. "REINVESTMENT DEFERRED AMOUNT" shall mean with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by the Company or any of its Subsidiaries in connection therewith that are not applied to prepay or reduce the Commitments pursuant to Section 3.02(c). "REINVESTMENT EVENT" shall mean any disposition of assets or Recovery Event in respect of which, so long as no Event of Default has occurred and is continuing, the Company has determined that it (directly or indirectly through a Subsidiary) intends and 24 expects to use all or a specified portion of the Net Cash Proceeds of such disposition of assets or Recovery Event to acquire or construct assets useful in its business. "REINVESTMENT PREPAYMENT AMOUNT" shall mean with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant Reinvestment Prepayment Date to acquire or construct assets useful in the Company's business. "REINVESTMENT PREPAYMENT DATE" shall mean with respect to any Reinvestment Event, the earlier of (a) the date occurring 365 days after such Reinvestment Event and (b) the date on which the Company shall have determined not to, or shall have otherwise ceased to, acquire or construct assets useful in the Company's business with all or any portion of the relevant Reinvestment Deferred Amount. "RELEASE" shall have the meaning set forth in 42 U.S.C. Section 9601(22), but shall not include any "federally permitted release" as defined in 42 U.S.C. Section 9601(10). The term "Released" shall have a corresponding meaning. "RESERVE REQUIREMENT" shall mean, for any Eurocurrency Loans, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained under Regulation D by member banks of the Federal Reserve System in New York City with deposits exceeding one billion Dollars against "Eurocurrency liabilities" (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by such member banks by reason of any Regulatory Change against (i) any category of liabilities which includes deposits by reference to which the Eurocurrency Rate is to be determined as provided in the definition of "Eurocurrency Base Rate" in this Section 1.01 or (ii) any category of extensions of credit or other assets which include Eurocurrency Loans. "RESIDUAL ASSURANCES" shall mean any commitment or undertaking by the Company required as a condition to any financing made available by any Person to an Affiliate of the Company to finance the costs of construction or acquisition by such Affiliate of records management facilities (including the acquisition of real estate for development purposes), where such facility is intended to be leased to the Company or a Subsidiary of the Company, which commitment or undertaking is intended to provide such Person with an additional assurance that it will receive a minimum return under such financing (and which does not constitute a Guaranty of the principal amount of such financing); provided that no payment under any such commitment or undertaking may be made prior to February 1, 2002, and that such commitment or undertaking shall be entered into on terms and pursuant to documentation in all respects reasonably satisfactory to the Administrative Agent. "RESTRICTED PAYMENT" shall mean dividends (in cash, property or obligations) on, or other payments or distributions on account of, or the setting apart of money for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any shares of any class of Capital Stock of the Company, or any payment 25 in respect of any option or warrant to purchase any shares of any class of Capital Stock of the Company or the exchange or conversion of any shares of any class of Capital Stock of the Company for or into any obligations of or shares of any other class of Capital Stock of the Company or any other property, but excluding dividends payable solely in, or exchanges or conversions for or into, shares of common stock of the Company. "REVOLVING COMMITMENTS" shall mean the US$ Commitments, the US$-Canadian Commitments, the Multi-Currency Commitments, the Swingline Commitment and, for all purposes other than Sections 2, 3, 4, 5 and 6, the Canadian Commitments. "REVOLVING LENDERS" shall mean the US$ Lenders, the US$-Canadian Lenders, the Multi-Currency Lenders, the Swingline Lender and, for all purposes other than Sections 3, 4, 5 (other than 5.08(b), 5.08(c) and 5.09) and 6 hereof, the Canadian Lenders. "REVOLVING LOANS" shall mean the US$ Loans, the US$-Canadian Loans, the Multi-Currency Loans, the Swingline Loans and, for all purposes other than Sections 3, 4, 5 and 6 hereof, the C$ Loans. "SCHEDULED AMORTIZATION" shall mean, for any period, the sum (calculated without duplication) of all payments of principal of Indebtedness of the Company (other than Indebtedness hereunder) scheduled to be made during such period. "SECURITY DOCUMENTS" shall mean, collectively, the Company Pledge Agreement, the Canadian Borrower Pledge Agreement, the Subsidiary Pledge Agreement and all Uniform Commercial Code financing statements and similar items required by said agreements to be filed with respect to the security interests in personal property created pursuant thereto. "SELLER INDEBTEDNESS" shall mean Indebtedness incurred after the date hereof and payable to sellers in connection with Permitted Acquisitions that by its terms is subordinated to the payment of the principal of and interest on the Loans and Reimbursement Obligations. "SENIOR DEBT" shall mean at any time, the aggregate principal amount of Funded Indebtedness outstanding MINUS the aggregate principal amount of Subordinated Indebtedness outstanding. "SENIOR SUBORDINATED DEBT" shall mean, collectively, the 1997 Senior Subordinated Debt, the 1999 Senior Subordinated Debt, the 2001 Senior Subordinated Notes, the Pierce 1997 Senior Subordinated Notes, the Pierce 1998 Senior Notes and any other subordinated Indebtedness permitted under Section 9.08(iii) hereof. "SENIOR SUBORDINATED DEBT DOCUMENTS" shall mean all documents and agreements executed and delivered in connection with the original issuance of the Senior Subordinated Debt, including the Senior Subordinated Debt Indentures and the promissory notes evidencing Indebtedness thereunder, in each case as the same may be amended or modified, without prejudice to the provisions of Section 9.19 hereof. 26 "SENIOR SUBORDINATED DEBT INDENTURES" shall mean, collectively, the 1997 Senior Subordinated Debt Indenture, the 1999 Senior Subordinated Indenture, the 2001 Senior Subordinated Notes Indenture, the Pierce 1997 Senior Subordinated Notes Indenture and the Pierce 1998 Senior Notes Indenture and documentation for subordinated indebtedness permitted under 9.08(iii) hereof. "SPE" shall mean any special purpose entity formed by the Company for the purposes of engaging in an Accounts Receivable Financing permitted under the terms of this Agreement. "STATUTORY RESERVE RATE" shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which JPMorgan Chase Bank is subject for new negotiable nonpersonal time deposits in dollars of over $100,000 with maturities approximately equal to three months. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "STOCK CONSIDERATION" shall mean, with respect to any Acquisition, the aggregate amount of consideration paid by the Company and its Subsidiaries in connection therewith consisting of the Company's common stock or with proceeds of the issuance of the Company's common stock within twelve months prior to the date of such Acquisition. For purposes hereof, the amount of Stock Consideration paid by the Company in respect of any Acquisition where the Stock Consideration consists of the Company's common stock shall be deemed to be equal to the fair market value of the Company's common stock so paid, determined in good faith by the Company at the time of such Acquisition. "STOCK REPURCHASES" shall have the meaning assigned to such term in Section 9.15(ii). "SUBORDINATED INDEBTEDNESS" shall mean, collectively, (a) Senior Subordinated Debt and (b) Seller Indebtedness. "SUBSIDIARY" shall mean, with respect to any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership, limited liability company or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. 27 "SUBSIDIARY BORROWER" shall mean any wholly-owned Subsidiary of the Company listed on Schedule V hereto or hereafter named as such, in either case, as to which an Election to Participate shall have been delivered to the Administrative Agent and as to which an Election to Terminate shall not have been delivered to the Administrative Agent. Each such Election to Participate and Election to Terminate shall be duly executed on behalf of such Subsidiary and the Company in such number of copies as the Administrative Agent may request. The delivery of an Election to Terminate shall not affect any obligation of a Subsidiary Borrower theretofore incurred. The Administrative Agent shall promptly give notice to the Lenders of the receipt of any Election to Participate or Election to Terminate. "SUBSIDIARY GUARANTOR" shall mean (i) each of the Subsidiaries of the Company listed in Part 1 of Schedule II hereto other than those Subsidiaries identified in Part 1 of Schedule II as not being a Subsidiary Guarantor and (ii) each other Subsidiary of the Company that from time to time becomes a party to the Subsidiary Guaranty or otherwise guarantees the obligations of the Company hereunder pursuant to Section 9.21. "SUBSIDIARY GUARANTY" shall mean the subsidiary guaranty, dated as of February 1, 2000, between the Subsidiary Guarantors and the Administrative Agent, as said agreement shall be modified and supplemented and in effect from time to time and pursuant to which the Subsidiary Guarantors guarantee the obligations of the Company under the Basic Documents and any Hedging Agreements with any Lender or any Affiliate thereof. The Subsidiary Guaranty as in effect on the Effective Date is attached as Exhibit B hereto. "SUBSIDIARY PLEDGE AGREEMENT" shall mean the pledge agreement, dated as of February 1, 2000, between the Subsidiary Guarantors and the Administrative Agent, as the same shall be modified and supplemented and in effect from time to time. The Subsidiary Pledge Agreement as in effect on the Effective Date is attached as Exhibit E hereto. "SWINGLINE COMMITMENT" shall mean the obligation of the Swingline Lender to make Swingline Loans pursuant to Section 2.01(c) in an aggregate principal at any one time not to exceed $20,000,000. "SWINGLINE LENDER" shall mean a single US$ lender within the syndicate, in its capacity as the lender of Swingline Loans. The Swingline Lender shall be designated by the Company from time to time with the consent of the Administrative Agent. "SWINGLINE LOANS" shall have the meaning given thereto in Section 2.01(c). "SWINGLINE PARTICIPATION AMOUNT" shall have the meaning given thereto in Section 3.03(c). "SYNTHETIC LEASE" shall mean a lease of property or assets designed to permit the lessee (i) to claim depreciation on such property or assets under U.S. tax law and (ii) to treat such lease as an operating lease or not to reflect the leased property or assets on the lessee's balance sheet under GAAP. 28 "SYNTHETIC LEASE OBLIGATIONS" shall mean, with respect to any Synthetic Lease, at any time, an amount equal to the higher of (x) the aggregate termination value or purchase price or similar payments in the nature of principal payable thereunder and (y) the then aggregate outstanding principal amount of the notes or other instruments issued by, and the amount of the equity investment, if any, in, the lessor under such Synthetic Lease. "TERM LENDERS" shall have the meaning assigned to such term in the Preamble. "TERM LOANS" shall have the meaning assigned to such term in Section 2.01. "TERM COMMITMENT" shall mean, as to each Term Lender, the obligation of such Term Lender to make Term Loans, in an aggregate principal or stated amount at any one time outstanding up to but not exceeding the amount set forth opposite such Term Lender's name on Schedule I hereto under the caption "Term Commitment" or, in the case of a Person that is party to an assignment permitted under Section 12.06 hereof after the Effective Date, as specified in the respective instrument of assignment pursuant to which such assignment is effected (as the same may be reduced at any time or from time to time pursuant to Section 3.02 hereof). The original aggregate amount of the Term Commitments is $250,000,000. "2001 SENIOR SUBORDINATED DEBT" shall mean the Indebtedness of the Company in respect of the 8-5/8% Senior Subordinated Notes of the Company due April 1, 2013 issued pursuant to the 2001 Senior Subordinated Debt Indenture. "2001 SENIOR SUBORDINATED DEBT INDENTURE" shall mean the Indenture dated as of April 3, 2001, as supplemented by a First Supplemental Indenture dated as of April 3, 2001, among the Company and The Bank of New York, as Trustee, as the same may be amended or modified, without prejudice to the provisions of Section 9.19 hereof. "TYPE" shall have the meaning assigned to such term in Section 1.03 hereof. "UNFUNDED LIABILITIES" shall mean, with respect to any Plan, at any time, the amount (if any) by which (a) the present value of all benefits under such Plan exceeds (b) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of the Company or any member of the Controlled Group to the PBGC or such Plan under Title IV of ERISA. "US$ COMMITMENT" shall mean, as to each US$ Lender, the obligation of such US$ Lender to make US$ Loans, and to issue or participate in Letters of Credit and Swingline Loans pursuant to Section 2.08 hereof, in an aggregate principal or stated amount at any one time outstanding up to but not exceeding the amount set forth opposite such US$ Lender's name on Schedule I hereto under the caption "US$ Commitment" or, in the case of a Person that is party to an assignment permitted under Section 12.06 hereof after the Effective Date, as specified in the respective instrument of assignment pursuant to which such assignment is effected (as the same may be reduced at any time or 29 from time to time pursuant to Section 2.02 or 3.02 hereof). The original aggregate amount of the US$ Commitments is $200,000,000. "US$ COMMITMENT PERCENTAGE" shall mean, with respect to any US$ Lender at any time, the ratio (expressed as a percentage) of (a) the amount of the US$ Commitment of such US$ Lender at such time to (b) the aggregate amount of the US$ Commitments of all of the US$ Lenders at such time. "US$ LOANS" shall have the meaning assigned to such term in Section 2.01. "US$-CANADIAN COMMITMENT" shall mean, as to each US$-Canadian Lender, the obligation of such US$-Canadian Lender to make US$-Canadian Loans in an aggregate principal or stated amount at any one time outstanding up to but not exceeding the amount set forth opposite such US$-Canadian Lender's name on Schedule I hereto under the caption "US$-Canadian Commitment" or, in the case of a Person that is party to an assignment permitted under Section 12.06 hereof after the Effective Date, as specified in the respective instrument of assignment pursuant to which such assignment is effected (as the same may be reduced at any time or from time to time pursuant to Section 2.02 or 3.02 hereof). The original aggregate amount of the US$-Canadian Commitments is $50,000,000 minus the original aggregate amount of the Canadian Commitments. "US$-CANADIAN COMMITMENT PERCENTAGE" shall mean, with respect to any US$-Canadian Lender at any time, the ratio (expressed as a percentage) of (a) the amount of the US$-Canadian Commitment of such US$-Canadian Lender at such time to (b) the aggregate amount of the US$-Canadian Commitments of all of the US$-Canadian Lenders at such time. "US$-CANADIAN LOANS" shall have the meaning assigned to such term in Section 2.01. "US SUBSIDIARY" means any Subsidiary Borrower which is organized and existing under the laws of any jurisdiction inside the United States of America. "VOTING STOCK" shall mean, with respect to any Person, 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 such 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). "WHOLLY-OWNED SUBSIDIARY" shall mean as to any Person, a Subsidiary of such Person all of whose outstanding shares of Capital Stock (except directors' qualifying shares) are directly or indirectly owned by such Person. 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be delivered hereunder shall be prepared, in accordance 30 with GAAP; provided that if any change in GAAP proposed after the Effective Date in itself materially affects the calculation of any financial covenant in Section 9, the Company may by notice to the Administrative Agent, or the Administrative Agent (at the request of the Majority Lenders) may by notice to the Company, require that such covenant thereafter be calculated in accordance with GAAP as in effect, and applied by the Company, immediately before such change in GAAP occurs. If such notice is given, the compliance certificates delivered pursuant to Section 9.01 after such change occurs shall be accompanied by reconciliations of the difference between the calculation set forth therein and a calculation made in accordance with GAAP as in effect from time to time after such change occurs. To enable the ready determination of compliance with the covenants set forth in Section 9 hereof, the Company will not change from December 3 l in each year the date on which its fiscal year ends, nor from March 31, June 30 and September 30 the dates on which the first three fiscal quarters in each fiscal year end. 1.03. TYPES OF LOANS. Loans hereunder are distinguished by "Type". The "Type" of a Loan refers to the determination of whether such Loan is a Eurocurrency Loan or an ABR Loan. Section 2 LOANS, ETC. 2.01. US$ LOANS; US$-CANADIAN LOANS; MULTI-CURRENCY LOANS; C$ LOANS; SWINGLINE LOANS; TERM LOANS. (a) Subject to the terms and conditions of this Agreement, (i) each US$ Lender severally agrees to continue and make loans to the Borrowers in Dollars ("US$ LOANS") during the Commitment Period in an aggregate principal amount at any one time outstanding up to but not exceeding the amount of the US$ Commitment of such US$ Lender as in effect from time to time, PROVIDED that in no event shall the aggregate outstanding principal amount of all US$ Loans and Swingline Loans, together with the aggregate amount of all Letter of Credit Liabilities under the US$ Commitments outstanding, exceed the aggregate amount of the US$ Commitments as in effect from time to time, (ii) each US$-Canadian Lender severally agrees to continue and make loans to the Borrowers in Dollars or Canadian Dollars ("US$-CANADIAN LOANS") during the Commitment Period in an aggregate principal amount at any one time outstanding up to but not exceeding the amount of the US$-Canadian Commitment of such US$-Canadian Lender as in effect from time to time, PROVIDED that in no event shall the aggregate outstanding principal amount of all US$-Canadian Loans, together with the aggregate outstanding principal amount of all C$ Loans and the aggregate amount of all Letter of Credit Liabilities under the Canadian Commitments, exceed the aggregate amount of the US$-Canadian Commitments as in effect from time to time, (iii) each Multi-Currency Lender severally agrees to continue and make loans to the Borrowers in any Multi-Currency ("MULTI-CURRENCY LOANS") during the Commitment Period in an aggregate principal amount at any one time outstanding up to but not exceeding the amount of the Multi-Currency Commitment of such Multi-Currency Lender as in effect from time to time, PROVIDED that in no event shall the aggregate outstanding principal amount of all Multi-Currency Loans, together with the aggregate amount of all Letter of Credit Liabilities under the Multi-Currency Commitments outstanding, exceed the aggregate amount of the Multi-Currency Commitments as in effect from time to time, (iv) each Canadian Lender severally agrees to continue and make C$ Loans to the Canadian Borrower in Canadian Dollars during the Commitment Period and the Canadian Issuing Bank agrees to make available 31 Canadian Letters of Credit in accordance with the terms and provisions of Annex A hereto, and (v) each Term Lender severally agrees to make a term loan to the Company in Dollars ("TERM LOANS") on the Effective Date in an amount not to exceed the amount of the Term Commitment of such Term Lender. Subject to the terms and conditions of this Agreement, during the Commitment Period, the Borrowers may (x) borrow, repay and reborrow the US$ Loans, the Dollar-denominated US$-Canadian Loans and the Dollar-denominated Multi-Currency Loans by means of ABR Loans and Eurocurrency Loans and (y) convert the US$ Loans, the Dollar-denominated US$-Canadian Loans, the Dollar-denominated Multi-Currency Loans or the Term Loans of one Type into Loans of the other Type (as provided in Section 3.02(a) hereof) or continue Eurocurrency Loans for subsequent Interest Periods. Unless otherwise provided herein, all Multi-Currency Loans and all US$-Canadian Loans, other than Dollar-denominated Multi-Currency Loans and Dollar-denominated US$-Canadian Loans, shall be made, maintained and continued as Eurocurrency Loans. (b) The Loans outstanding under the Existing Credit Agreement on the Effective Date other than the Tranche A Term Loans and the Tranche B Term Loans thereunder (which shall be prepaid in full on the Effective Date) shall continue to be outstanding and shall be continued under this Agreement (such Loans to be continuing, the "EXISTING LOANS"). (c) The Swingline Lender agrees to make a portion of the credit otherwise available to the Company under the US$ Commitments from time to time during the Commitment Period by making swing line loans ("SWINGLINE LOANS") to the Company in an aggregate principal amount at any one time outstanding up to but not exceeding the amount of the Swingline Commitment (notwithstanding that the Swingline Loans outstanding at any time, when aggregated with the Swingline Lender's other outstanding Revolving Loans, may exceed the Swingline Commitment then in effect), PROVIDED that in no event shall the aggregate outstanding principal amount of all US$ Loans and Swingline Loans, together with the aggregate amount of all Letter of Credit Liabilities under the US$ Commitments outstanding, exceed the aggregate amount of the US$ Commitments as in effect from time to time. During the Commitment Period, the Company may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swingline Loans shall be ABR Loans only. For purposes of calculating the commitment fee payable in respect of the US$ Commitments under Section 2.03, the Swingline Loans shall not be treated as usage of the US$ Commitments. Swingline Loans shall be Dollar-denominated Loans only. 2.02. REDUCTIONS OF COMMITMENTS. (a) MANDATORY. The US$ Commitments, the US$-Canadian Commitments and Multi-Currency Commitments shall terminate on the Commitment Termination Date. In addition, the US$ Commitments, the US$-Canadian Commitments and Multi-Currency Commitments shall be reduced as provided in Section 3.02(c). (b) OPTIONAL. The Company shall have the right to terminate or reduce the unused US$ Commitments, US$-Canadian Commitments and Multi-Currency Commitments (for which purpose use of the US$ Commitments and Multi-Currency Commitments shall be deemed to include the aggregate amount of Letter of Credit Liabilities under the US$ Commitment or the Multi-Currency Commitment, as the case may be) at any time or from time to time, provided that 32 (i) the Company shall give notice of each such termination or reduction to the Administrative Agent as provided in Section 5.05 hereof and (ii) each partial reduction shall be in an aggregate amount at least equal to $1,000,000. (c) NO REINSTATEMENT. US$ Commitments, US$-Canadian Commitments and Multi-Currency Commitments once terminated or reduced may not be reinstated. 2.03. FEES. The Company shall pay to the Administrative Agent for the account of each US$ Lender, US$-Canadian Lender or Multi-Currency Lender commitment fees in Dollars on the daily average unused amount of such Lender's US$ Commitment, US$-Canadian Commitment or Multi-Currency Commitment, as the case may be, (for which purpose, (i) the aggregate amount of any Letter of Credit Liabilities under the US$ Commitments or the Multi-Currency Commitments shall be deemed to be a PRO RATA (based on the US$ Commitments or the Multi-Currency Commitments, as the case may be) use of each Lender's US$ Commitment or Multi-Currency Commitment, as the case may be, and (ii) the daily average amount of each US$-Canadian Lender's US$-Canadian Commitment shall be determined after giving effect to the allocation of the Canadian Commitments and the US$-Canadian Commitments pursuant to subsection 2.6 of Annex A hereto) for the period from the Effective Date to and including the earlier of the date the Revolving Commitments are terminated and the Commitment Termination Date, at a rate per annum equal to the Applicable Commitment Fee Rate in effect from time to time. Accrued commitment fees under this Section 2.03 shall be payable on the Quarterly Dates and on the earlier of the date the Revolving Commitments are terminated and the Commitment Termination Date. The Company shall pay to JPMorgan Chase Bank on the Effective Date syndication, agency and additional commitment fees in the amounts heretofore mutually agreed in writing. The Company shall pay to the Administrative Agent on the Effective Date and on each anniversary thereof, so long as any of the Commitments are in effect and until payment in full of all Loans hereunder, all interest thereon and all other amounts payable hereunder, an annual agency fee in the amount heretofore mutually agreed in writing. 2.04. LENDING OFFICES. The Loans of each Type made by each Lender shall be made and maintained at such Lender's Applicable Lending Office for Loans of such Type. 2.05. SEVERAL OBLIGATIONS: REMEDIES INDEPENDENT. The failure of any Lender to make any Loan to be made by it on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan on such date, but neither the Administrative Agent nor any Lender shall be responsible for the failure of any other Lender to make a Loan to be made by such other Lender. The amounts payable by the Borrowers at any time hereunder and under the Notes to each Lender shall be a separate and independent debt and each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and the Notes, and it shall not be necessary for any other Lender or the Administrative Agent to consent to, or be joined as an additional party in, any proceedings for such purposes. 2.06. NOTES. The Loans made by each Lender under its US$ Commitment, US$-Canadian Commitment, Multi-Currency Commitment or Term Commitment shall be evidenced by a single promissory note of the relevant Borrower (each, a "NOTE") in substantially the form of Exhibit A-1 (in the case of Revolving Loans) or Exhibit A-2 (in the case of Term Loans) hereto, dated the Effective Date, payable to such Lender in a principal amount equal to 33 such Commitment as in effect on the Effective Date and otherwise duly completed. Each Lender is hereby authorized by the Company to endorse on the schedule (or a continuation thereof) attached to each Note of such Lender, to the extent applicable, the date, amount and Type of and the Interest Period (if any) for each Loan made by such Lender to any Borrower under the relevant Commitment, and the date and amount of each payment or prepayment of principal of such Loan received by such Lender, provided that any failure by such Lender to make any such endorsement shall not affect the obligations of the relevant Borrower under such Note or hereunder in respect of such Loan. 2.07. USE OF PROCEEDS. The proceeds of the Loans shall be used in part to prepay existing term loans and for the general corporate purposes of the Company and its Subsidiaries, including, without limitation, the making of Permitted Acquisitions and capital expenditures and the refinancing of existing Indebtedness of the Company and its Subsidiaries. The proceeds of the Term Loans shall be used on the Effective Date to prepay existing term loans. Neither the Administrative Agent nor any Lender shall have any responsibility as to the use of any of the proceeds of any of the Loans or Letters of Credit. 2.08. LETTERS OF CREDIT. Subject to the terms and conditions of this Agreement, the US$ Commitments and the Multi-Currency Commitments may be utilized, upon the request of any Borrower, in addition to the Loans provided for by Section 2.01 hereof or in Annex A hereto, as the case may be, for the issuance by the Issuing Bank of standby letters of credit (collectively with the Existing Letters of Credit, "LETTERS OF CREDIT") for the account of the relevant Borrower or, in the event that the Borrower is the Company, for the account of such of its Subsidiaries as the Company may specify, PROVIDED that in no event shall (i) the aggregate amount of all Letter of Credit Liabilities under the US$ Commitments or the Multi-Currency Commitments, together with the aggregate outstanding principal amount of the US$ Loans or the Multi-Currency Loans, as the case may be, exceed the aggregate amount of the US$ Commitments or the Multi-Currency Commitments, as the case may be, as in effect from time to time, (ii) the aggregate outstanding amount of all Letter of Credit Liabilities under the US$ Commitments and the Multi-Currency Commitments exceed $75,000,000 and (iii) the expiration date of any Letter of Credit extend beyond the earlier of the Commitment Termination Date and the date one year following the issuance of such Letter of Credit (provided that any Letter of Credit with a one-year tenor may provide for the renewal thereof for additional one-year periods, which periods shall in any event not extend beyond the Commitment Termination Date). On the Effective Date, all Existing Letters of Credit shall automatically, without any action on the part of any Person, be deemed to be Letters of Credit issued and outstanding hereunder (with the Existing Letters of Credit denominated in Dollars being deemed to be issued under the US$ Commitments and the Existing Letters of Credit denominated in other currencies being deemed to be issued under the Multi-Currency Commitments). The following additional provisions shall apply to Letters of Credit: (a) Each Borrower shall give the Administrative Agent (or if the Letter of Credit is to be issued under the Multi-Currency Commitments, the Multi-Currency Payment Agent) at least three Business Days' irrevocable prior notice (effective upon receipt) specifying the Business Day (which shall be no later than 5 days preceding the Commitment Termination Date) on which each Letter of Credit is to be issued and the 34 account party or parties therefor and describing in reasonable detail the proposed terms of such Letter of Credit (including the beneficiary thereof) and the nature of the transactions or obligations proposed to be supported thereby. Any Letter of Credit to be issued in a currency other than Dollars shall be issued under the Multi-Currency Commitments. Upon receipt of any such notice, the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, shall advise the Issuing Bank of the contents thereof. (b) On each day during the period commencing with the issuance by the Issuing Bank of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the US$ Commitment or Multi-Currency Commitment of each Lender shall be deemed to be utilized for all purposes of this Agreement in an amount equal to such Lender's US$ Commitment Percentage or Multi-Currency Commitment Percentage, as the case may be, of the then undrawn stated amount of such Letter of Credit. Each Lender (other than the Issuing Bank) agrees that, upon the issuance of any Letter of Credit hereunder, it shall automatically acquire a participation in the Issuing Bank's rights and obligations under such Letter of Credit in an amount equal to such Lender's US$ Commitment Percentage or Multi-Currency Commitment Percentage, as the case may be, of such rights and obligations, and each Lender (other than the Issuing Bank) thereby shall automatically absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be unconditionally obligated to the Issuing Bank to pay and discharge when due, its US$ Commitment Percentage or Multi-Currency Commitment Percentage of the Issuing Bank's obligation to pay drawings under such Letter of Credit. (c) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment under such Letter of Credit, the Issuing Bank shall promptly notify the relevant Borrower (through the Administrative Agent or the Multi-Currency Payment Agent, as the case may be) of the amount to be paid by the Issuing Bank as a result of such demand and the date on which payment is to be made by the Issuing Bank to such beneficiary in respect of such demand. Notwithstanding the identity of the account party of any Letter of Credit, the relevant Borrower hereby unconditionally agrees to pay and reimburse the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, for account of the Issuing Bank for the amount of each demand for payment under such Letter of Credit that is in substantial compliance with the provisions of such Letter of Credit at or prior to the date on which payment is to be made by the Issuing Bank to the beneficiary thereunder, without presentment, demand, protest or other formalities of any kind. (d) Forthwith upon its receipt of a notice referred to in paragraph (c) of this Section 2.08, the relevant Borrower shall advise the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, whether or not such Borrower intends to borrow hereunder to finance its obligation to reimburse the Issuing Bank for the amount of the related demand for payment and, if it does, submit a notice of such borrowing as provided in Section 5.05 hereof. (e) Each Lender (other than the Issuing Bank) shall pay to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, for account of the 35 Issuing Bank at an account in New York, New York specified by the Administrative Agent (or the Multi-Currency Payment Agent, as the case may be) in Dollars and in immediately available funds the amount of such Lender's US$ Commitment Percentage or Multi-Currency Commitment Percentage, as the case may be, of any payment under a Letter of Credit issued under the US$ Commitments or the Multi-Currency Commitments, as the case may be, upon notice by the Issuing Bank (through the Administrative Agent) to such Lender requesting such payment and specifying such amount. Each such Lender's obligation to make such payment to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, for account of the Issuing Bank under this paragraph (e), and the Issuing Bank's right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever (other than gross negligence or wilful misconduct of the Issuing Bank), including, without limitation, the failure of any other Lender to make its payment under this paragraph (e), the financial condition of the Company or the Borrowers (or any other account party), any failure to satisfy any condition precedent to any Loan, the existence of any Default or the termination of the Commitments. Each such payment to the Issuing Bank shall be made without any offset, abatement, withholding or reduction whatsoever. If any Lender shall default in its obligation to make any such payment to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, for account of the Issuing Bank, for so long as such default shall continue the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, may at the request of the Issuing Bank withhold from any payments received by the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, under this Agreement or any Note for account of such Lender the amount so in default and, to the extent so withheld, pay the same to the Issuing Bank in satisfaction of such defaulted obligation. (f) Upon the making of each payment by a Lender to the Issuing Bank pursuant to paragraph (e) above in respect of any Letter of Credit, such Lender shall, automatically and without any further action on the part of the Administrative Agent (or the Multi-Currency Payment Agent, as the case may be), the Issuing Bank or such Lender, acquire (i) a participation in an amount equal to such payment in the Reimbursement Obligation owing to the Issuing Bank hereunder and under the Letter of Credit Documents relating to such Letter of Credit and (ii) a participation in a percentage equal to such Lender's US$ Commitment Percentage or Multi-Currency Percentage, as the case may be, in any interest or other amounts payable by the relevant Borrower hereunder and under such Letter of Credit Documents in respect of such Reimbursement Obligation (other than the commissions, charges, costs and expenses payable to the Issuing Bank pursuant to paragraph (g) of this Section 2.08). Upon receipt by the Issuing Bank from or for account of the relevant Borrower of any payment in respect of any Reimbursement Obligation or any such interest or other amount (including by way of setoff or application of proceeds of any collateral security) the Issuing Bank shall promptly pay to the Administrative Agent (or the Multi-Currency Payment Agent, as the case may be) for account of each Lender entitled thereto such Lender's US$ Commitment Percentage or Multi-Currency Percentage, as the case may be, of such payment, each such payment by the Issuing Bank to be made in the same money and funds in which received by the Issuing Bank. In the event any payment received by the Issuing Bank and so paid to the Lenders hereunder is rescinded or must otherwise be returned by the 36 Issuing Bank, each Lender shall, upon the request of the Issuing Bank (through the Administrative Agent or the Multi-Currency Payment Agent, as the case may be), repay to the Issuing Bank (through the Administrative Agent or the Multi-Currency Payment Agent, as the case may be) the amount of such payment paid to such Lender, with interest at the rate specified in paragraph (j) of this Section 2.08. (g) The Company shall pay to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, for account of the Lenders (ratably in accordance with their respective US$ Commitment Percentages or Multi-Currency Percentages, as the case may be) a letter of credit fee in Dollars in respect of each Letter of Credit in an amount equal to the Applicable L/C Percentage of the daily average undrawn stated amount of such Letter of Credit for the period from and including the date of issuance of such Letter of Credit (i) in the case of a Letter of Credit that expires in accordance with its terms, to and including such expiration date and (ii) in the case of a Letter of Credit that is drawn in full or is otherwise terminated other than on the stated expiration date of such Letter of Credit, to but excluding the date such Letter of Credit is drawn in full or is terminated (such fee to be non-refundable, to be paid in arrears on each Quarterly Date and on the Commitment Termination Date and on the date of expiry or termination or full utilization of such Letter of Credit and to be calculated for any day after giving effect to any payments made under such Letter of Credit on such day). In addition, the Company shall pay to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, for account of the Issuing Bank a fronting fee in Dollars in respect of each Letter of Credit in an amount equal to 0.25% per annum of the daily average undrawn stated amount of such Letter of Credit for the period from and including the date of issuance of such Letter of Credit (i) in the case of a Letter of Credit that expires in accordance with its terms, to and including such expiration date and (ii) in the case of a Letter of Credit that is drawn in full or is otherwise terminated other than on the stated expiration date of such Letter of Credit, to but excluding the date such Letter of Credit is drawn in full or is terminated (such fee to be non-refundable, to be paid in arrears on each Quarterly Date and on the Commitment Termination Date and to be calculated for any day after giving effect to any payments made under such Letter of Credit on such day) plus all commissions, charges, costs and expenses in the amounts customarily charged by the Issuing Bank from time to time in like circumstances with respect to the issuance of each Letter of Credit and drawings and other transactions relating thereto. (h) Promptly following the end of each calendar month, the Issuing Bank shall deliver (through the Administrative Agent or the Multi-Currency Payment Agent, as the case may be) to each Lender and each Borrower a notice describing the aggregate amount of all Letters of Credit outstanding at the end of such month. Upon the request of any Lender from time to time, the Issuing Bank shall deliver any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The issuance by the Issuing Bank of each Letter of Credit shall, in addition to the conditions precedent set forth in Section 7 hereof, be subject to the conditions precedent that (i) such Letter of Credit shall be in such form, contain such terms and 37 support such transactions as shall be satisfactory to the Issuing Bank consistent with its then current practices and procedures with respect to letters of credit of the same type, (ii) such Letter of Credit shall be denominated in Dollars or a Multi-Currency and (iii) the relevant Borrower shall have executed and delivered such applications, agreements and other instruments relating to such Letter of Credit as the Issuing Bank shall have reasonably requested consistent with its then current practices and procedures with respect to letters of credit of the same type, provided that in the event of any conflict between any such application, agreement or other instrument and the provisions of this Agreement or any Security Document, the provisions of this Agreement and the Security Documents shall control. (j) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to paragraph (e) or (f) of this Section 2.08 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent or the Multi-Currency Payment Agent, as the case may be) on such amount from and including such due date to but excluding the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate or, in the case of any amount payable in a currency other than Dollars, the rate determined by the Administrative Agent or the Multi-Currency Payment Agent (in the case of Letters of Credit issued under the Multi-Currency Commitments) in its discretion as the appropriate rate for interbank settlements, PROVIDED that if such Lender shall fail to make such payment to the Issuing Bank within three Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate then payable by the relevant Borrower on such amount. (k) The issuance by the Issuing Bank of any modification or supplement to any Letter of Credit hereunder shall be subject to the same conditions as are applicable under this Section 2.08 to the issuance of new Letters of Credit, and no such modification or supplement shall be issued hereunder unless either (i) the respective Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such modified or supplemented form or (ii) each Lender shall have consented thereto. The Company hereby indemnifies and holds harmless each Lender (including the Issuing Bank, the Administrative Agent and the Multi-Currency Payment Agent) from and against any and all claims and damages, losses, liabilities, costs or expenses that such Lender, the Administrative Agent or the Multi-Currency Payment Agent may incur (or that may be claimed against such Lender, the Administrative Agent or the Multi-Currency Payment Agent by any Person whatsoever) by reason of or in connection with the execution and delivery or transfer of or payment or refusal to pay by the Issuing Bank under any Letter of Credit; PROVIDED that the Company shall not be required to indemnify any Lender, the Administrative Agent or the Multi-Currency Payment Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (x) the willful misconduct or gross negligence of the Issuing Bank in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (y) in the case of the Issuing Bank, its failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of such Letter of Credit. Nothing in this Section 2.08 is intended to limit the 38 other obligations of any Borrower, any Lender, the Administrative Agent or the Multi-Currency Payment Agent under this Agreement. 2.09. CURRENCY FLUCTUATIONS, ETC. (a) Not later than 1:00 p.m., New York City time, on each Calculation Date, the Multi-Currency Payment Agent shall (i) determine the Exchange Rate as of such Calculation Date with respect to (x) each Multi-Currency for which there are at such time outstanding Multi-Currency Loans or Letters of Credit issued under the Multi-Currency Commitments and (y) the Canadian Dollar if there are at such time outstanding non-Dollar-denominated US$-Canadian Loans, and (ii) give notice thereof to the Multi-Currency Lenders which have committed to make Multi-Currency Loans in each such Multi-Currency, to the US$-Canadian Lenders which have committed to make US$-Canadian Loans in Canadian Dollars and to the Company. The Exchange Rates so determined shall become effective on the first Business Day immediately following the relevant Calculation Date (a "Reset Date") and shall remain effective until the next succeeding Reset Date. (b) Not later than 5:00 p.m., New York City time, on each Reset Date, the Multi-Currency Payment Agent shall (i) determine (x) the Dollar Equivalent of the Multi-Currency Loans or Letter of Credit Liabilities under the Multi-Currency Commitments in each Multi-Currency then outstanding (after giving effect to any Multi-Currency Loans to be made or repaid on such date) and (y) the Dollar Equivalent of the non-Dollar-denominated US$-Canadian Loans or Letter of Credit Liabilities under the US$-Canadian Commitments and denominated in Canadian Dollars then outstanding (after giving effect to any non-Dollar-denominated US$-Canadian Loans to be made or repaid on such date)and (ii) notify the Multi-Currency Lenders or the US$-Canadian Lenders, as the case may be, and the Company of the results of such determination. (c) If on any Reset Date, the Dollar Equivalent of the aggregate principal amount of Multi-Currency Loans and Letters of Credit issued under the Multi-Currency Commitments outstanding exceeds 105% of the aggregate principal amount of the Multi-Currency Commitments, then the Company shall, within three Business Days after notice thereof from the Multi-Currency Payment Agent, prepay (in any Multi-Currency as selected by the Company) Multi-Currency Loans in an aggregate amount such that, after giving effect thereto, the Dollar Equivalent of all such Multi-Currency Loans, together with Letters of Credit issued under the Multi-Currency Commitments, shall be equal to or less than such aggregate amount of Multi-Currency Commitments (and in the event that after such prepayment, the Dollar Equivalent of the outstanding stated amount of the Letters of Credit issued under the Multi-Currency Commitments is more than such aggregate amount of the Multi-Currency Commitments, the Company shall provide cash cover for the difference by paying to the Multi-Currency Payment Agent immediately available funds in an amount equal to such difference, which funds shall be retained by the Multi-Currency Payment Agent in the Collateral Account as such collateral security for such Letter of Credit Liabilities). If any such prepayment occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Company shall pay to the Multi-Currency Lenders such amounts, if any, as may be required pursuant to Section 6.05. 39 (d) If on any Reset Date, the Dollars Equivalent of the aggregate principal amount outstanding ("Outstanding Amount") of Dollar-denominated, non-Dollar-denominated US$-Canadian Loans and Canadian Letters of Credit exceeds 105% of the aggregate principal amount of the US$-Canadian Commitments, then the Company shall, within three Business Days after notice thereof from the Multi-Currency Payment Agent, prepay (in Dollars or Canadian Dollars as selected by the Company) US$-Canadian Loans or Canadian Letters of Credit in an aggregate amount such that, after giving effect thereto, the Dollar Equivalent of all such US$-Canadian Loans and Canadian Letters of Credit shall be equal to or less than such aggregate amount of US$-Canadian Commitment. If any such prepayment occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Company shall pay to the US$-Canadian Lenders such amounts, if any, as may be required pursuant to Section 6.05. Section 3 BORROWINGS, CONVERSIONS AND PREPAYMENTS. 3.01. PROCEDURE FOR US$ LOAN BORROWING, US$-CANADIAN LOAN BORROWING, TERM LOAN BORROWING AND MULTI-CURRENCY BORROWING. (a) Each Borrower shall give the Administrative Agent or the Multi-Currency Payment Agent notice of each US$ Loan, US$-Canadian Loan, Multi-Currency Loan and Term Loan to be made hereunder as provided in Section 5.05 hereof. (b) Not later than 12:00 p.m. New York time on the date specified for each borrowing in Dollars hereunder, each US$ Lender, US$-Canadian Lender, Multi-Currency Lender or Term Lender shall make available the amount of the US$ Loan, US$-Canadian Loan or Term Loan to be made by it on such date to the Administrative Agent, at an account in New York, New York specified by the Administrative Agent, in immediately available funds, for account of such Borrower. The amount so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to the Borrower by depositing the same, in immediately available funds, in an account of the Borrower designated by the Borrower and maintained with JPMorgan Chase Bank in New York, New York. (c) Not later than 11:00 a.m. London time on the date specified for each such borrowing hereunder, each Multi-Currency Lender or, if a US$-Canadian Loan is being made in Canadian Dollars, each US$-Canadian Lender, shall make available the amount of the Multi-Currency Loan or US$-Canadian Loan, as the case may be, to be made by it on such date to the Multi-Currency Payment Agent, at an account in London specified by the Multi-Currency Payment Agent, in immediately available funds, for account of such Borrower. The amount so received by the Multi-Currency Payment Agent shall, subject to the terms and conditions of this Agreement, be made available to the Borrower by depositing the same, in immediately available funds, in an account of the Borrower designated by the Borrower. 3.02. PREPAYMENTS AND CONVERSIONS. (a) OPTIONAL PREPAYMENTS AND CONVERSIONS. Each Borrower shall have the right to prepay Loans and to convert Loans in Dollars of one Type into Loans of the other Type, at any time or from time to time, provided, that the relevant Borrower shall give the Administrative Agent or the Multi-Currency Payment Agent, notice of each such prepayment as 40 provided in Section 5.05 hereof. Any prepayment of Term Loans hereunder may not be reborrowed. (b) MANDATORY PREPAYMENTS. (i) If on any date, the Company or any Subsidiary of the Company shall receive Net Cash Proceeds from any issuance subsequent to the Effective Date of Indebtedness, other than Indebtedness incurred pursuant to Section 9.08 hereof (except Section 9.08(vii)), or any Accounts Receivable Financing (it being understood that this Section 3.02(b) shall not constitute a waiver of any provision of Section 9.08), then the Borrowers shall prepay the Loans (and/or provide cover for Letter of Credit Liabilities as specified in paragraph (d) below) in an amount equal to such Net Cash Proceeds (less any prepayments of the C$ Loans under Section 3.4(b) of Annex A hereto), but, the Revolving Commitments shall not be subject to automatic reduction. (ii) Amounts to be applied in connection with prepayments made pursuant to this Section 3.02(b) shall be applied, FIRST, to the prepayment of the Term Loans (which may not be reborrowed) and, SECOND, to the prepayment of the Revolving Loans. Each prepayment of the Loans under this Section 3.02(b) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. (c) COMMITMENT REDUCTIONS; TERM LOAN PREPAYMENTS. (i) If on any date, the Company or any Subsidiary of the Company shall receive Net Cash Proceeds from any disposition of assets or any Recovery Event, then, unless such disposition of assets or Recovery Event shall be a Reinvestment Event, the Revolving Commitments shall be reduced or the Term Loans prepaid, as the case may be, by an amount equal to such Net Cash Proceeds to the extent such Net Cash Proceeds, together with all other such Net Cash Proceeds from dispositions of assets or Recovery Events that are not Reinvestment Events, exceeds $15,000,000 in the then-current fiscal year of the Company; PROVIDED, that notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds from dispositions of assets and Recovery Events that may be excluded from the foregoing requirement for a Reinvestment Event shall not exceed 10% of the Consolidated Net Tangible Assets of the Company as at the end of the immediately preceding fiscal year and (ii) on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the reduction of the Revolving Commitments or the prepayment of the Term Loans, as the case may be. (ii) Amounts to be applied in connection with prepayments and Revolving Commitment reductions made pursuant to this Section 3.02(c) shall be applied, FIRST, to the prepayment of the Term Loans (which may not be reborrowed) and, SECOND, to reduce permanently the Revolving Commitments. Each prepayment of the Loans under this Section 3.02(c) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. To the extent that, after giving effect to any such reduction of the Revolving Commitments, the aggregate principal amount of the US$ Loans, the US$-Canadian Loans or the Multi-Currency Loans and the aggregate amount of Letter of Credit Liabilities under the US$ Commitments, US$-Canadian Commitments or the Multi-Currency Commitments, as the case may be, would exceed such Commitments, the Borrowers shall, first, prepay Loans thereunder and, second, provide cover for Letter of Credit Liabilities thereunder as specified in paragraph (d) below, in an aggregate amount equal to such excess. The Company shall notify the 41 Administrative Agent promptly upon the occurrence of any event giving rise to a prepayment or Commitment reduction under this Section 3.02(c). (d) COVER FOR LETTER OF CREDIT LIABILITIES. In the event that the US$ Loans or the Multi-Currency Loans have been repaid in full, amounts payable under Section 3.02(b) or 3.02(c) shall be applied to provide cash cover for outstanding Letters of Credit under the US$ Commitments or the Multi-Currency Commitments, as the case may be, in which event the Company shall effect the same by paying to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, immediately available funds in an amount equal to the required amount, which funds shall be retained by the Administrative Agent or the Multi-Currency Payment Agent in the Collateral Account on behalf of the Lenders as collateral security for such Letter of Credit Liabilities until such time as the Letters of Credit under such Commitments shall have been terminated and all of the Letter of Credit Liabilities paid in full. 3.03. PROCEDURE FOR SWINGLINE BORROWING; REFUNDING OF SWINGLINE LOANS. (a) NOTICE AND BORROWING OF SWINGLINE LOANS. Whenever the Company desires that the Swingline Lender make Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be received by the Swingline Lender not later than 11:00 a.m., New York City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Commitment Period). Each borrowing under the Swingline Commitment shall be in an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not later than 3:00 p.m., New York City time, on the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall make available to the Administrative Agent at the Applicable Lending Office an amount in immediately available funds equal to the amount of the Swingline Loan to be made by the Swingline Lender. The Administrative Agent shall make the proceeds of such Swingline Loan available to the Company on such Borrowing Date by depositing such proceeds in the account of the Company with the Administrative Agent on such Borrowing Date in immediately available funds. (b) REFUNDED SWINGLINE LOANS. The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the Company (which hereby irrevocably directs the Swingline Lender to act on its behalf), on one Business Day's notice given by the Swingline Lender no later than 12:00 Noon, New York City time, request each US$ Lender to make, and each US$ Lender hereby agrees to make, a US$ Loan, in an amount equal to such US$ Lender's US$ Commitment Percentage of the aggregate amount of the Swingline Loans (the "REFUNDED SWINGLINE LOANS") outstanding on the date of such notice, to repay the Swingline Lender. Each US$ Lender shall make the amount of such US$ Loan available to the Administrative Agent at the Applicable Lending Office in immediately available funds, not later than 10:00 a.m., New York City time, one Business Day after the date of such notice. The proceeds of such US$ Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swingline Loans. The Company irrevocably authorizes the Swingline Lender, on one Business Day's notice given by the Swingline Lender no later than 12:00 Noon, New York City time, to charge the Company's accounts with the Administrative Agent (up to the amount available in 42 each such account) in order to pay the amount of such Refunded Swingline Loans to the extent amounts received from the US$ Lenders are not sufficient to repay in full such Refunded Swingline Loans. (c) SWINGLINE PARTICIPATION AMOUNT. If prior to the time a US$ Loan would have otherwise been made pursuant to Section 3.03(b), one of the events described in Section 10.01(f) shall have occurred and be continuing with respect to the Company or if for any other reason, as determined by the Swingline Lender in its sole discretion, US$ Loans may not be made as contemplated by Section 3.03(b), each US$ Lender shall, on the date such US$ Loan was to have been made pursuant to the notice referred to in Section 3.03(b), purchase for cash an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender an amount (the "SWINGLINE PARTICIPATION AMOUNT") equal to (i) such US$ Lender's US$ Commitment Percentage TIMES (ii) the sum of the aggregate principal amount of Swingline Loans then outstanding that were to have been repaid with such US$ Loans. (d) DISTRIBUTION OF SWINGLINE PARTICIPATION AMOUNT. Whenever, at any time after the Swingline Lender has received from any US$ Lender such Lender's Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender's PRO RATA portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); PROVIDED, HOWEVER, that in the event that such payment received by the Swingline Lender is required to be returned, such US$ Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender. (e) OBLIGATION ABSOLUTE. Each US$ Lender's obligation to make the Loans referred to in Section 3.03(b) and to purchase participating interests pursuant to Section 3.03(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such US$ Lender or the Company may have against the Swingline Lender, the Company or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 7; (iii) any adverse change in the condition (financial or otherwise) of the Company; (iv) any breach of this Agreement or any other Basic Document by the Company, any other Obligor or any other US$ Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. (f) NO AMENDMENT, WAIVER OR CONSENT. No amendment, waiver or consent shall be made with respect to this Section 3.03 and Section 2.01(c) without the consent of the Swingline Lender and the Administrative Agent. Section 4 PAYMENTS OF PRINCIPAL AND INTEREST. 4.01. REPAYMENT OF LOANS. 43 (a) The Borrowers hereby promise to pay to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, for the account of each Revolving Lender the entire outstanding principal amount of such Lender's Revolving Loans, and each Revolving Loan shall mature, on the Commitment Termination Date. (b) The aggregate principal amount of the Term Loans shall mature and be payable in consecutive quarterly installments, on the dates and in the amounts set forth below:

PROVIDED, HOWEVER, that if on or prior to April 15, 2007 the $120,000,000 9-1/8% Senior Subordinated Notes due July 15, 2007 shall not have been redeemed, repurchased or defeased in full in a manner in accordance with this Agreement, the Term Loans shall mature and, to the extent then outstanding, be payable in full on April 15, 2007. 4.02. INTEREST. Each Borrower will pay to the Administrative Agent or, in the case of Multi-Currency Loans or non-Dollar-denominated US$-Canadian Loans, to the Multi-Currency Payment Agent, for the account of each Lender interest on the unpaid principal amount of each Loan made by such Lender to such Borrower for the period commencing on the date of such Loan to but excluding the date such Loan shall be paid in full, at the following rates per annum: (a) if such Loan is an ABR Loan, the Alternate Base Rate PLUS the Applicable Margin; and 44 (b) if such Loan is a Eurocurrency Loan, the Eurocurrency Rate PLUS the Applicable Margin. Notwithstanding the foregoing, each Borrower hereby promises to pay to the Administrative Agent or, in the case of Multi-Currency Loans or non-Dollar-denominated US$-Canadian Loans, to the Multi-Currency Payment Agent, for account of each Lender interest at the applicable Post-Default Rate (x) on any principal of any Loan made by such Lender to such Borrower, on any Reimbursement Obligation held by such Lender and on any other amount payable by such Borrower hereunder or under the Note held by such Lender to or for account of such Lender (but, if such amount is interest, only to the extent legally enforceable), that shall not be paid in full when due (whether at stated maturity, by acceleration, by mandatory prepayment or otherwise), for the period from and including the due date thereof to but excluding the date the same is paid in full and (y) during any period when an Event of Default shall have occurred under Section 10.01(a) hereof and for so long as such Event of Default shall be continuing, on any principal of any Loan made by such Lender to such Borrower. Accrued interest on each Loan shall be payable (i) if such Loan is an ABR Loan, on each Quarterly Date, (ii) if such Loan is a Eurocurrency Loan, on the last day of each Interest Period for such Loan (and, if such Interest Period exceeds three months' duration, quarterly, commencing on the first quarterly anniversary of the first day of such Interest Period), and (iii) in any event, upon the payment, prepayment or conversion thereof, but only on the principal so paid or prepaid or converted; PROVIDED that interest payable at the Post-Default Rate shall be payable from time to time on demand of the Administrative Agent (or the Multi-Currency Payment Agent, in the case of Multi-Currency Loans or non-Dollar-denominated US$-Canadian Loans,) or the Majority Lenders. Promptly after the determination of any interest rate provided for herein or any change therein, the Administrative Agent shall notify the Lenders and each Borrower thereof. Notwithstanding the foregoing provisions of this Section 4.02, if at any time the rate of interest set forth above on any Loan of any Lender (the "Stated Rate" for such Loan) exceeds the maximum non-usurious interest rate permissible for such Lender to charge commercial borrowers under applicable law (the "Maximum Rate" for such Lender), the rate of interest charged on such Loan of such Lender hereunder shall be limited to the Maximum Rate for such Lender. In the event the Stated Rate for any Loan of a Lender that has theretofore been subject to the preceding paragraph at any time is less than the Maximum Rate for such Lender, the principal amount of such Loan shall bear interest at the Maximum Rate for such Lender until the total amount of interest paid to such Lender or accrued on its Loans hereunder equals the amount of interest which would have been paid to such Lender or accrued on such Lender's Loans hereunder if the Stated Rate had at all times been in effect. In the event, upon payment in full of all amounts payable hereunder, the total amount of interest paid to any Lender or accrued on such Lender's Loans under the terms of this Agreement is less than the total amount of interest which would have been paid to such Lender or accrued on such Lender's Loans if the Stated Rate had, at all times, been in effect, then the relevant Borrower shall, to the extent permitted by applicable law, pay to the Administrative 45 Agent or, in the case of Multi-Currency Loans or non-Dollar-denominated US$-Canadian Loans, to the Multi-Currency Payment Agent, for the account of such Lender an amount equal to the difference between (a) the lesser of (i) the amount of interest which would have accrued on such Lender's Loans if the Maximum Rate for such Lender had at all times been in effect or (ii) the amount of interest which would have accrued on such Lender's Loans if the Stated Rate had at all times been in effect and (b) the amount of interest actually paid to such Lender or accrued on its Loans under this Agreement. In the event any Lender ever receives, collects or applies as interest any sum in excess of the Maximum Rate for such Lender, such excess amount shall be applied to the reduction of the principal balance of its Loans or to other amounts (other than interest) payable hereunder, and if no such principal is then outstanding, such excess or part thereof remaining shall be paid to such Borrower. Section 5 PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC. 5.01. PAYMENTS. (a) Except to the extent otherwise provided herein, all payments of principal, interest, Reimbursement Obligations and other amounts to be made by any Borrower under the US$ Commitments, the US$-Canadian Commitments, the Multi-Currency Commitments or the Term Commitments and under the corresponding Notes shall (except in the case of payments of principal and interest on Multi-Currency Loans or Letter of Credit Liabilities incurred under the Multi-Currency Commitments or non-Dollar-denominated US$-Canadian Loans) be made in Dollars, in immediately available funds, to the Administrative Agent at an account in New York, New York specified by the Administrative Agent, not later than 11:00 a.m. New York time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). The Administrative Agent, or any Lender for whose account any such payment is made, may (but shall not be obligated to) debit the amount of any such payment which is not made by such time to any ordinary deposit account of such Borrower with the Administrative Agent or such Lender, as the case may be. The relevant Borrower shall, at the time of making each such payment, specify to the Administrative Agent the Loans or other amounts payable by such Borrower hereunder to which such payment is to be applied (and in the event that it fails to so specify, or if an Event of Default has occurred and is continuing, the Administrative Agent may apply such payment for the benefit of the Lenders as it may elect in its sole discretion, but subject to the other terms and conditions of this Agreement, including without limitation, Section 5.02 hereof). Each payment received by the Administrative Agent under the US$ Commitments, the US$-Canadian Commitments, the Multi-Currency Commitments or the Term Commitments or under any corresponding Note (except in the case of payment of principal and interest on Multi-Currency Loans or Letter of Credit Liabilities incurred under the Multi-Currency Commitments or non-Dollar-denominated US$-Canadian Loans) for the account of a Lender shall be paid promptly to such Lender, in immediately available funds, for the account of such Lender's Applicable Lending Office. If the due date of any such payment would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall be payable for any principal so extended for the period of such extension. (b) Except to the extent otherwise provided herein, all payments of principal and interest on (i) Multi-Currency Loans and Letter of Credit Liabilities incurred under the 46 Multi-Currency Commitments, (ii) non-Dollar-denominated US$-Canadian Loans and (iii) under corresponding Notes to be made by any Borrower shall be made in the currency of the applicable Loan or Letter of Credit for which payment is being made, in immediately available funds, to the Multi-Currency Payment Agent at an account in London specified by the Multi-Currency Payment Agent, not later than 11:00 a.m. London time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). The Multi-Currency Payment Agent, or any Lender for whose account any such payment is made, may (but shall not be obligated to) debit the amount of any such payment which is not made by such time to any ordinary deposit account of such Borrower with the Multi-Currency Payment Agent or such Lender, as the case may be. The relevant Borrower shall, at the time of making each such payment, specify to the Multi-Currency Payment Agent the Loans or other amounts payable by such Borrower hereunder to which such payment is to be applied (and in the event that it fails to so specify, or if an Event of Default has occurred and is continuing, the Multi-Currency Payment Agent may apply such payment for the benefit of the Lenders as it may elect in its sole discretion, but subject to the other terms and conditions of this Agreement, including without limitation, Section 5.02 hereof). Each such payment received by the Multi-Currency Payment Agent for the account of a Lender shall be paid promptly to such Lender, in immediately available funds, for the account of such Lender's Applicable Lending Office. If the due date of any such payment would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall be payable for any principal so extended for the period of such extension. (c) All payments made by each Borrower hereunder and under the Notes shall be made without set-off, deduction or counterclaim. 5.02. PRO RATA TREATMENT. (a) With respect to the US$ Lenders, except to the extent otherwise provided herein: (i) each borrowing from the US$ Lenders under Section 2.01 hereof shall be made from the US$ Lenders, each payment of commitment fees under Section 2.03 hereof shall be made for the account of the US$ Lenders, and each termination or reduction of the US$ Commitments under Section 2.02 hereof shall be applied to the US$ Commitments of the US$ Lenders, PRO RATA according to the US$ Lenders' respective percentages of the US$ Commitments, (ii) each payment by a Borrower of principal of or interest on US$ Loans of a particular Type (other than payments in respect of Loans of individual Lenders provided for by Section 6 hereof) shall be made to the Administrative Agent for the account of the US$ Lenders PRO RATA in accordance with the respective unpaid principal amounts of such US$ Loans held by the US$ Lenders and (iii) each conversion of US$ Loans of a particular Type (other than conversions of Loans of individual Lenders pursuant to Section 6.04 hereof) shall be made PRO RATA among the US$ Lenders in accordance with the respective principal amounts of such US$ Loans held by the US$ Lenders. (b) With respect to the US$-Canadian Lenders, except to the extent otherwise provided herein: (i) each borrowing from the US$-Canadian Lenders under Section 2.01 hereof shall be made from the US$-Canadian Lenders and each termination or reduction of the US$-Canadian Commitments under Section 2.02 hereof shall be applied to the US$-Canadian 47 Commitments of the US$-Canadian Lenders, PRO RATA according to the US$-Canadian Lenders' respective percentages of the US$-Canadian Commitments, (ii) each payment by a Borrower of principal of or interest on US$-Canadian Loans of a particular Type (other than payments in respect of Loans of individual Lenders provided for by Section 6 hereof) shall be made to the Administrative Agent for the account of the US$-Canadian Lenders PRO RATA in accordance with the respective unpaid principal amounts of such US$-Canadian Loans held by the US$-Canadian Lenders and (iii) each conversion of US$-Canadian Loans of a particular Type (other than conversions of Loans of individual Lenders pursuant to Section 6.04 hereof) shall be made PRO RATA among the US$-Canadian Lenders in accordance with the respective principal amounts of such US$-Canadian Loans held by the US$-Canadian Lenders. (c) With respect to the Multi-Currency Lenders, except to the extent otherwise provided herein: (i) each borrowing from the Multi-Currency Lenders under Section 2.01 hereof shall be made from the Multi-Currency Lenders, each payment of commitment fees under Section 2.03 hereof shall be made for the account of the Multi-Currency Lenders, and each termination or reduction of the Multi-Currency Commitments under Section 2.02 hereof shall be applied to the Multi-Currency Commitments of the Multi-Currency Lenders, PRO RATA according to the Multi-Currency Lenders' respective percentages of the Multi-Currency Commitments and (ii) each payment by a Borrower of principal of or interest on Multi-Currency Loans (other than payments in respect of Loans of individual Lenders provided for by Section 6 hereof) shall be made to the Multi-Currency Payment Agent, in each case for the account of the Multi-Currency Lenders and PRO RATA in accordance with the respective unpaid principal amounts of such Multi-Currency Loans (whether denominated in Dollars or other currency) held by the Multi-Currency Lenders. (d) Any reduction of the Commitments under Section 2.02(b) or 3.02(c) and any mandatory prepayment under Section 3.02(b) shall be applied ratably to the US$ Commitments, US$-Canadian Commitments and the Multi-Currency Commitments. (e) With respect to the Term Lenders, except to the extent otherwise provided herein: (i) the borrowing from the Term Lenders under Section 2.01 hereof shall be made from the Term Lenders, PRO RATA according to the Term Lenders' respective percentages of the Term Commitments, (ii) each payment (or prepayment) by the Company of principal or interest on Term Loans of a particular Type (other than payments in respect of Loans of individual Lenders provided for by Section 6 hereof) shall be made to the Administrative Agent for the account of the Term Lenders, PRO RATA in accordance with the respective unpaid principal amounts of such Term Loans held by the Term Lenders and (iii) each conversion of Term Loans of a particular Type (other than conversions of Loans of individual Lenders pursuant to Section 6.04 hereof) shall be made PRO RATA among the Term Lenders, in each case, in accordance with the respective principal amounts of such Term Loans held by the Term Lenders. (f) Each prepayment by the Company of the Term Loans as provided by Section 3.02 hereof shall be applied PRO RATA to the Term Loans and to the installments of the Term Loans, PRO RATA according to the then outstanding amounts thereof. 5.03. COMPUTATIONS. Interest and fees shall be computed on the basis of a year of 360 days (or 365 or 366 days, as the case may be, in the case of (a) ABR Loans the interest 48 rate payable on which is then based on the Prime Rate and (b) Multi-Currency Loans denominated in Pounds Sterling) and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. 5.04. MINIMUM AND MAXIMUM AMOUNTS; TYPES. (a) US$ LOANS; DOLLAR-DENOMINATED US$-CANADIAN LOANS; DOLLAR-DENOMINATED MULTI-CURRENCY LOANS; AND TERM LOANS. Except for prepayments made pursuant to Section 3.02(b) hereof, each borrowing, conversion and prepayment of principal of US$ Loans, Dollar-denominated US$-Canadian Loans, Dollar-denominated Multi-Currency Loans and Term Loans shall be in an aggregate principal amount equal to (a) in the case of Eurocurrency Loans, $1,000,000 or a larger multiple of $100,000, and (b) in the case of ABR Loans, $500,000 or a larger multiple of $100,000 (borrowings, conversions or prepayments of Loans of different Types or, in the case of Eurocurrency Loans, having different Interest Periods, at the same time hereunder to be deemed separate borrowings, conversions and prepayments for purposes of the foregoing, one for Type or Interest Period); provided that (i) any Loan may be in the aggregate amount of the unused portion of the relevant Commitments, (ii) Loans may be prepaid in full and (ii) any borrowing or prepayment of Loans that are ABR Loans may be in an aggregate principal amount equal to $100,000 or a larger multiple of $100,000. (b) NON-DOLLAR-DENOMINATED MULTI-CURRENCY LOANS AND NON-DOLLAR-DENOMINATED US$-CANADIAN LOANS. Each Multi-Currency Loan other than a Dollar-denominated Multi-Currency Loan shall be a Eurocurrency Loan, and each US$-Canadian Loan other than a Dollar-denominated US$-Canadian Loan shall be a Eurocurrency Loan. Except for prepayments made pursuant to Section 3.02(b) hereof, each borrowing, conversion and prepayment of principal of non-Dollar-denominated Multi-Currency Loans and non-Dollar-denominated US$-Canadian Loans shall be in an aggregate principal amount which is an integral multiple of 100,000 units of the relevant Multi-Currency or 100,000 Canadian Dollars, as the case may be, and equal to or greater than an amount the Dollar Equivalent of which is $1,000,000. 5.05. CERTAIN NOTICES. (a) US$ LOANS AND DOLLAR-DENOMINATED US$-CANADIAN LOANS. Notices to the Administrative Agent of terminations or reductions of US$ Commitments and US$-Canadian Commitments, of borrowings, conversions and prepayments of US$ Loans and Dollar-denominated US$-Canadian Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by the Administrative Agent (i) in the case of a notice of borrowing of US$ Loans as ABR Loans, not later than 10:00 a.m. New York Time on the relevant Borrowing Date and (ii) in the case of any other notice, not later than 11:00 a.m. New York time on the number of Business Days prior to the date of the relevant termination, reduction, borrowing, conversion and/or prepayment specified below:

Each such notice of termination or reduction shall specify the amount thereof to be terminated or reduced. Each such notice of borrowing, conversion or prepayment shall specify the amount and Type of the Loans to be borrowed, converted or prepaid (subject to Sections 3.02(a) and 5.04 hereof), the date of borrowing, conversion or prepayment (which shall be a Business Day) and, in the case of Eurocurrency Loans, the duration of the Interest Period therefor (subject to the definition of Interest Period). Each such notice of duration of an Interest Period shall specify the Loans to which such Interest Period is to relate. The Administrative Agent shall promptly notify the affected Lenders of the contents of each such notice. In the event that a Borrower fails to select the duration of any Interest Period for any Eurocurrency Loans within the time period and otherwise as provided in this Section 5.05, such Loans (if outstanding as Eurocurrency Loans and denominated in Dollars) will be automatically converted into ABR Loans on the last day of the then current Interest Period for such Loans or (if outstanding as ABR Loans) will remain as, or (if not then outstanding) will be made as, ABR Loans. Each Borrower shall give a copy of each notice to be given by it pursuant to this Section 5.05(a) with respect to dollar-denominated US$-Canadian Loans or Commitments, to the Multi-Currency Payment Agent. (b) MULTI-CURRENCY LOANS AND NON-DOLLAR-DENOMINATED US$-CANADIAN LOANS. Notices to the Multi-Currency Payment Agent of terminations or reductions of Multi-Currency Commitments and US$-Canadian Commitments, of borrowings and prepayments of Multi-Currency Loans and non-Dollar-denominated US$-Canadian Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by the Multi-Currency Payment Agent not later than 9:00 a.m. London time on the number of Business Days prior to the date of the relevant termination, reduction, borrowing and/or prepayment specified below:

50 Loans and non-Dollar denominated US$- Canadian Loans - -------------------------------------------------------------------------------- Prepayments required pursuant 1 to Section 3.02(b) - --------------------------------------------------------------------------------

Each such notice of termination or reduction shall specify the amount thereof to be terminated or reduced. Each such notice of borrowing or prepayment shall specify the amount of the Loans to be borrowed or prepaid (subject to Sections 3.02(a) and 5.04 hereof), the date of borrowing or prepayment (which shall be a Business Day), the duration of the Interest Period therefor (subject to the definition of Interest Period) and the currency of Loans to be borrowed. Each such notice of duration of an Interest Period shall specify the Loans to which such Interest Period is to relate. The Multi-Currency Payment Agent shall promptly notify the affected Lenders of the contents of each such notice. Each Borrower shall give a copy of each notice to be given by it pursuant to this Section 5.05(b) with respect to non-Dollar-denominated US$-Canadian Loans or Commitments to the Administrative Agent. (c) TERM LOANS. Notices to the Administrative Agent of borrowing, conversions and prepayments of Term Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by the Administrative Agent not later than 11:00 a.m. New York time on the number of Business Days prior to the date of the relevant termination, reduction, borrowing, conversion and/or prepayment specified below:
- -------------------------------------------------------------------------------- NUMBER OF NOTICE BUSINESS DAYS PRIOR - -------------------------------------------------------------------------------- Borrowing or prepayment of 1 ABR Loans - -------------------------------------------------------------------------------- Borrowing or prepayment of, 3 conversion of or into, or duration of Interest Period for Dollar-denominated Eurocurrency Loans - -------------------------------------------------------------------------------- Prepayments required pursuant 1 to Section 3.02(b) or 3.02(c) - --------------------------------------------------------------------------------
Each such notice of termination or reduction shall specify the amount thereof to be terminated or reduced. Each such notice of borrowing, conversion or prepayment shall specify the amount and Type of the Loans to be borrowed, converted or prepaid (subject to Sections 3.02(a) and 5.04 hereof), the date of borrowing, conversion or prepayment (which shall be a Business Day) and, in the case of Eurocurrency Loans, the duration of the Interest Period therefor (subject to the definition of Interest Period). Each such notice of duration of an Interest Period shall specify the Loans to which such Interest Period is to relate. The Administrative Agent shall promptly notify 51 the affected Lenders of the contents of each such notice. In the event that a Borrower fails to select the duration of any Interest Period for any Eurocurrency Loans within the time period and otherwise as provided in this Section 5.05, such Loans (if outstanding as Eurocurrency Loans) will be automatically converted into ABR Loans on the last day of the then current Interest Period for such Loans or (if outstanding as ABR Loans) will remain as, or (if not then outstanding) will be made as, ABR Loans. 5.06. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, shall have been notified by a US$ Lender, US$-Canadian Lender, Multi-Currency Lender, Term Lender or a Borrower (the "PAYOR") prior to the date on which such Lender is to make payment to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, of the proceeds of a Loan to be made by it hereunder or the Borrower is to make a payment to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, for the account of one or more of the Lenders, as the case may be (such payment being herein called the "REQUIRED PAYMENT"), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not be required to), make the amount thereof available to the intended recipient on such date and, if the Payor has not in fact made the Required Payment to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, the recipient of such payment shall, on demand, pay to the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, the amount made available to it together with interest thereon in respect of the period commencing on the date such amount was so made available by the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, until the date the Administrative Agent or the Multi-Currency Payment Agent, as the case may be, recovers such amount at a rate per annum equal to the Federal Funds Effective Rate for such period or, in the case of an amount payable in a currency other than Dollars, the rate determined by the Administrative Agent in its discretion of the appropriate rate for interbank settlements. 5.07. SHARING OF PAYMENTS; WAIVER OF ENFORCEMENT WITHOUT CONSENT. ETC. (a) Each Borrower agrees that, in addition to (and without limitation of) any right of set-off, banker's lien or counterclaim a Lender may otherwise have, each Lender shall be entitled, at its option, to offset balances held by it or its affiliates for the account of the such Borrower at any of their offices, in Dollars or in any other currency, against any principal of or interest on any of such Lender's Loans or Reimbursement Obligations to such Borrower hereunder, or any other obligation of such Borrower hereunder, which is not paid when due (regardless of whether such balances are then due to such Borrower), in which case it shall promptly notify the Company, the relevant Borrower and the Administrative Agent (or the Multi-Currency Payment Agent, as the case may be) thereof, provided that such Lender's failure to give such notice shall not affect the validity thereof. Each Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any Person purchasing a participation in the Loans to such Borrower made, or other obligations held, by another Person, whether or not acquired pursuant to the foregoing arrangements, may exercise all rights of set-off, banker's lien, 52 counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of such Loans or other obligations in the amount of such participation. (b) If a Lender shall obtain payment of any principal of or interest on any Loan made by it under this Agreement, or on any other obligation then due to such Lender hereunder, through the exercise of any right of set-off, banker's lien, counterclaim or similar right, or otherwise, it shall promptly notify the Administrative Agent (or the Multi-Currency Payment Agent, as the case may be) and purchase from the other Lenders participations in the Loans made, or other obligations held, by the other Lenders in such amounts, and make such other adjustments from time to time as shall be equitable to the end that all the Lenders shall share the benefit of such payment (net of any expenses which may be incurred by such Lender in obtaining or preserving such benefit) pro rata in accordance with the unpaid principal and interest on the Loans or other obligations then due to each of them. To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored (including the payment of interest to the extent that the Lender obligated to return such funds is obligated to return interest). (c) Nothing contained herein shall require any Lender to exercise any right of set-off, banker's lien, counterclaim or similar right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of any Borrower. (d) This Section 5.07 is for the benefit of the Lenders only and does not constitute a waiver of any rights against any Borrower or any of their Subsidiaries or against any property held as security for any obligations hereunder or under any other Basic Document. 5.08. WITHHOLDING TAX EXEMPTION. (a) At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of any Lender, each Lender that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver, to the extent it has not so delivered under the Existing Credit Agreement, to each of the Company and the Administrative Agent two duly completed copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI (or any subsequent versions thereof or successors thereto), or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a statement substantially in the form of Exhibit K (any such certificate an "EXEMPTION CERTIFICATE") and a Form W-8BEN (or any subsequent versions thereof or successors thereto), certifying in either case that such Lender is entitled to receive payments under this Agreement and the Notes without deduction or withholding of any United States federal income taxes. Each Lender which so delivers a Form W-8BEN or Form W-8ECI further undertakes to deliver to each of the Company and the Administrative Agent (or the Multi-Currency Payment Agent, in the case of Multi-Currency Lenders) two additional copies of such form (or a successor form) on or before the date that such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Company or the Administrative Agent (or the Multi-Currency Payment Agent, as the case may be), in each case 53 certifying that such Lender is entitled to receive payments under this Agreement and the Notes without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender advises the Company and the Administrative Agent (or the Multi-Currency Payment Agent, as the case may be) that it is not capable of receiving payments without any deduction or withholding of United States federal income tax. (b) Each Lender that is not incorporated or organized under the laws of the jurisdiction under which a Foreign Subsidiary Borrower is incorporated or organized shall, upon request by such Foreign Subsidiary Borrower, deliver to such Foreign Subsidiary Borrower or the applicable Governmental Authority, any form or certificate required in order that any payment by such Foreign Subsidiary Borrower under this Agreement or any Notes to such Lender may be made free and clear of, and without deduction or withholding for or on account of any tax (or to allow any such deduction or withholding to be at a reduced rate) imposed on such payment under the laws of the jurisdiction under which such Foreign Subsidiary Borrower is incorporated or organized, PROVIDED that such Lender is legally entitled to complete, execute and deliver such form or certificate and such completion, execution or submission would not materially prejudice the legal position of such Lender. (c) All payments made by a Borrower or the Canadian Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent, the Multi-Currency Payment Agent, the Canadian Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent, the Multi-Currency Payment Agent, the Canadian Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent, the Multi-Currency Payment Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("NON-EXCLUDED TAXES") or other taxes are required to be withheld from any amounts payable to the Administrative Agent, the Multi-Currency Payment Agent, the Canadian Administrative Agent or any Lender hereunder, the amounts so payable to the Administrative Agent, the Multi-Currency Payment Agent, the Canadian Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent, the Multi-Currency Payment Agent, the Canadian Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and other taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, PROVIDED, HOWEVER, that the relevant Borrower or the Canadian Borrower shall not be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender's failure to comply with the requirements of paragraph (a) or (b) of this Section or (ii) that are United States withholding taxes imposed on amounts payable to such Lender at the time the Lender becomes a 54 party to this Agreement, except to the extent that such Lender's assignor (if any) was entitled, at the time of assignment, to receive additional amounts from such Borrower or the Canadian Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph. 5.09. JUDGMENT CURRENCY. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due from any Borrower or the Canadian Borrower hereunder or under any of the Notes or the C$ Notes in the currency expressed to be payable herein (the "specified currency") into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the specified currency with other such currency at the Administrative Agent's New York Office on the Business Day that is on or immediately following the day on which final judgment is given. The obligations of each Borrower or the Canadian Borrower in respect of any sum due to any Lender, the Administrative Agent, the Multi-Currency Payment Agent or the Canadian Administrative Agent hereunder or under any Note or C$ Note shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender, the Administrative Agent, the Multi-Currency Payment Agent or the Canadian Administrative Agent, as the case may be, of any sum adjudged to be so due in such other currency such Lender, the Administrative Agent, the Multi-Currency Payment Agent or the Canadian Administrative Agent as the case may be, may in accordance with normal banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Lender, the Administrative Agent, the Multi-Currency Payment Agent or the Canadian Administrative Agent, as the case may be, in the specified currency, each Borrower and the Canadian Borrower agrees, to the fullest extent it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender, the Administrative Agent, the Multi-Currency Payment Agent or the Canadian Administrative Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds the sum originally due to any Lender, the Administrative Agent the Multi-Currency Payment Agent or the Canadian Administrative Agent, as the case may be, in the specified currency, such Lender or the Administrative Agent, or the Multi-Currency Payment Agent, or the Canadian Administrative Agent, as the case may be, agrees to remit such excess to the appropriate Borrower or the Canadian Borrower. Section 6 YIELD PROTECTION AND ILLEGALITY. 6.01. ADDITIONAL COSTS. (a) Each Borrower shall pay to the Administrative Agent for the account of each Lender from time to time such amounts as such Lender may determine to be necessary to compensate it for any costs incurred by such Lender which such Lender determines are attributable to its making or maintaining of any Eurocurrency Loans hereunder to such Borrower or its obligation to make any of such Loans hereunder to such Borrower, or any reduction in any amount receivable by such Lender in respect of any of such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "ADDITIONAL COSTS"), in each case resulting from any Regulatory Change which: 55 (i) changes the basis of taxation of any amounts payable to such Lender under this Agreement or its Notes in respect of any of such Loans (other than changes which affect taxes measured by or imposed on the overall net income of such Lender or of its Applicable Lending Office by the jurisdiction in which such Lender has its principal office or such Applicable Lending Office); or (ii) imposes or modifies any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Lender (including any of such Loans or any deposits referred to in the definition of "Eurocurrency Base Rate" in Section 1.01 hereof); or (iii) imposes any other condition affecting this Agreement (or any of such extensions of credit or liabilities). Each Lender will notify the relevant Borrower through the Administrative Agent of any event occurring after the date of this Agreement which will entitle such Lender to compensation pursuant to this Section 6.01(a) (an "ADDITIONAL COST EVENT") as promptly as practicable after it obtains knowledge thereof and determines to request such compensation, and (if so requested by the Company through the Administrative Agent) will designate a different Applicable Lending Office for the Eurocurrency Loans of such Lender if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Lender, be disadvantageous to such Lender (provided that such Lender shall have no obligation to so designate an Applicable Lending Office located in the United States of America) PROVIDED, that a Borrower shall not be obligated to compensate such Lender for any such Additional Costs incurred more than 180 days prior to the time the Lender first notifies such Borrower of such Additional Cost Event. Each Lender will furnish the relevant Borrower with a statement setting forth the calculations and the basis therefor, in each case in reasonable detail, and amount of each request by such Lender for compensation under this Section 6.01(a). If any Lender requests compensation from a Borrower under this Section 6.01(a), the relevant Borrower may, by notice to such Lender through the Administrative Agent, suspend the obligation of such Lender to make additional Eurocurrency Loans to such Borrower until the Regulatory Change giving rise to such request ceases to be in effect (in which case the provisions of Section 6.04 hereof shall be applicable). (b) Without limiting the effect of the foregoing provisions of this Section 6.01, in the event that, by reason of any Regulatory Change, any Lender either (i) incurs Additional Costs based on or measured by the excess above a specified level of the amount of a category of deposits or other liabilities of such Lender which includes deposits by reference to which the interest rate on Eurocurrency Loans is determined as provided in this Agreement or a category of extensions of credit or other assets of such Lender which includes Eurocurrency Loans or (ii) becomes subject to restrictions on the amount of such a category of liabilities or assets which it may hold, then, if such Lender so elects by notice to the relevant Borrower (with a copy to the Administrative Agent), the obligation of such Lender to make Eurocurrency Loans hereunder shall be suspended until the date such Regulatory Change ceases to be in effect (in which case the provisions of Section 6.04 hereof shall be applicable). 56 (c) Determinations and allocations by any Lender for purposes of this Section 6.01 of the effect of any Regulatory Change on its costs of maintaining its obligations to make Loans or of making or maintaining Loans or on amounts receivable by it in respect of Loans, and of the additional amounts required to compensate such Lender in respect of any Additional Costs, shall be conclusive absent manifest error, provided that such determinations and allocations are made on a reasonable basis. (d) If any Lender demands compensation under this Section, the relevant Borrower may, at any time upon at least three (3) Business Days' prior notice to such Lender through the Administrative Agent, convert in full the then outstanding Eurocurrency Loans of such Lender (in which case the relevant Borrower shall be obligated, if such conversion is made on a day that is not the last day of the then current Interest Period applicable to such affected Eurocurrency Loan, to reimburse such Lender, in accordance with Section 6.05, for any resulting loss or expense incurred by it) to an ABR Loan. 6.02. LIMITATION ON TYPES OF LOANS. Anything herein to the contrary notwithstanding, if, with respect to any Loans that are Eurocurrency Loans: (a) the Administrative Agent determines (which determination shall be conclusive) that quotations of interest rates for the relevant deposits referred to in the definition of "Eurocurrency Base Rate" in Section 1.01 hereof are not being provided by the Reference Lenders in the relevant amounts or for the relevant maturities for purposes of determining the rate of interest for such Loans for Interest Periods therefor as provided in this Agreement; or (b) the Majority Lenders determine (which determination shall be conclusive) and notify the Administrative Agent that the relevant rates of interest referred to in the definition of "Eurocurrency Base Rate" in Section 1.01 thereof upon the basis of which the rates of interest for such Loans are to be determined do not accurately reflect the cost to such Lenders of making or maintaining such Loans for Interest Periods therefor; then the Administrative Agent shall promptly notify the relevant Borrower and each Lender thereof, and so long as such condition remains in effect, the Lenders shall be under no obligation to make Eurocurrency Loans or to convert ABR Loans into Eurocurrency Loans and the relevant Borrower shall, on the last day(s) of the then current Interest Period(s) for the outstanding Eurocurrency Loans, either prepay such Loans or convert such Loans into ABR Loans in accordance with Section 3.02 hereof. 6.03. ILLEGALITY. Notwithstanding any other provision of this Agreement to the contrary, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to (a) honor its obligation to make Eurocurrency Loans hereunder, or (b) maintain Eurocurrency Loans hereunder, then such Lender shall promptly notify the relevant Borrower thereof through the Administrative Agent and such Lender's obligation to make Eurocurrency Loans hereunder shall be suspended until such time as such Lender may again make and maintain Eurocurrency Loans (in which case the provisions of Section 6.04 hereof shall be applicable). 57 6.04. SUBSTITUTE ABR LOANS. If the obligation of any Lender to make Eurocurrency Loans shall be suspended pursuant to Section 6.01, 6.02 or 6.03 hereof, all Loans in Dollars which would otherwise be made by such Lender as Eurocurrency Loans shall be made instead as ABR Loans (and, if an event referred to in Section 6.01 (b)or 6.03 hereof has occurred and such Lender so requests by notice to the relevant Borrower with a copy to the Administrative Agent, each Dollar-denominated Eurocurrency Loan of such Lender then outstanding shall be automatically converted into an ABR Loan on the date specified by such Lender in such notice) and, to the extent that Eurocurrency Loans are so made as (or converted into) ABR Loans, all payments of principal which would otherwise be applied to such Eurocurrency Loans shall be applied instead to such ABR Loans. 6.05. COMPENSATION. Each Borrower shall pay to the Administrative Agent for the account of each Lender, upon the request of such Lender through the Administrative Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost or expense incurred by it as a result of: (a) any payment, prepayment or conversion (including, without limitation, an automatic conversion pursuant to Section 10.02 hereof) of a Eurocurrency Loan made by such Lender to such Borrower on a date other than the last day of an Interest Period for such Loan; (b) any failure by a Borrower to borrow a Eurocurrency Loan to be made by such Lender to such Borrower on the date for such borrowing specified in the relevant notice of borrowing under Section 5.05 hereof; (c) any failure by a Borrower to prepay a Eurocurrency Loan on the date specified in a notice of prepayment; or (d) any substitution of a Lender under Section 6.07 hereof on a date other than the last day of an Interest Period for each Loan of such Lender; but excluding, in any event, loss of margin for the period after any such payment, prepayment or conversion or failure to borrow; PROVIDED that such Lender shall have delivered to the relevant Borrower a certificate as to the amount of such loss and expense along with the calculation and the basis therefor, in each case in reasonable detail. 6.06. CAPITAL ADEQUACY. If any Lender shall determine that the adoption of any applicable law, rule, regulation or treaty regarding capital adequacy after the date hereof, or any change therein after the date hereof, or any change after the date hereof in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Lender or any Person controlling such Lender (a "PARENT") as a consequence of its obligations hereunder to a level below that which such Lender (or its Parent) could have achieved but for such adoption, change or compliance (taking into consideration its policies with respect to capital adequacy) by an 58 amount deemed by such Lender to be material, then from time to time, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the relevant Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. A statement of any Lender claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive absent manifest error; provided that the determination thereof is made on a reasonable basis; and provided further that a Borrower shall not be obligated to compensate such Lender for any such reduction occurring more than 180 days prior to the time such Lender first notifies such Borrower of such adoption, implementation, change or compliance. In determining such amount, such Lender may use any reasonable averaging and attribution methods. 6.07. SUBSTITUTION OF LENDER. If (i) the obligation of any Lender to make Eurocurrency Loans or the right of a Borrower to convert ABR Loans of any Lender to Eurocurrency Loans has been suspended pursuant to Section 6.03, or (ii) any Lender has demanded compensation under Section 6.01, 6.06 or 6.09, the relevant Borrower shall have the right, with the assistance of the Administrative Agent, to seek a substitute bank or banks (which may be one or more of the Lenders) satisfactory to such Borrower and the Administrative Agent to purchase the Notes and assume the Commitments and Loans of such Lender. Any such Lender shall be obligated to sell the Notes, Loans and Commitments for cash without recourse to such substitute bank or banks and to execute and deliver an appropriately completed assignment and assumption agreement reasonably satisfactory to the Administrative Agent and the relevant Borrower and any other document or perform any act reasonably necessary to effect the assumption of the rights and obligations of such substitute bank or banks. 6.08. ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT. Without limiting the obligations of the Borrowers under Section 6.01 hereof (but without duplication), if as a result of any Regulatory Change or any risk-based capital guideline or other requirement heretofore or hereafter issued by any government or governmental or supervisory authority implementing at the national level the Basle Accord there shall be imposed, modified or deemed applicable any tax, reserve, special deposit, capital adequacy or similar requirement against or with respect to or measured by reference to Letters of Credit issued or to be issued hereunder and the result shall be to increase the cost to any Lender or Lenders of issuing (or purchasing participations in) or maintaining its obligation hereunder to issue (or purchase participations in) any Letter of Credit hereunder or reduce any amount receivable by any Lender hereunder in respect of any Letter of Credit (which increases in cost, or reductions in amount receivable, shall be the result of such Lender's or Lenders' reasonable allocation of the aggregate of such increases or reductions resulting from such event), then, upon demand by such Lender or Lenders (through the Administrative Agent), the relevant Borrower shall pay immediately to the Administrative Agent for account of such Lender or Lenders, from time to time as specified by such Lender or Lenders (through the Administrative Agent), such additional amounts as shall be sufficient to compensate such Lender or Lenders (through the Administrative Agent) for such increased costs or reductions in amount. A statement as to such increased costs or reductions in amount incurred by any such Lender or Lenders, showing calculations and the basis therefor in reasonable detail, submitted by such Lender or Lenders to the relevant Borrower, shall be conclusive in the absence of manifest error as to the amount thereof. 59 6.09. FOREIGN BORROWER COSTS. (a) If the cost to any Lender of making or maintaining any Loan to a Foreign Subsidiary Borrower is increased, or the amount of any sum received or receivable by any Lender (or its Applicable Lending Office) is reduced, by an amount deemed by such Lender to be material, by reason of the fact that such Borrower is organized under the laws of, or principally conducts its business in, a jurisdiction or jurisdictions outside the United States of America, such Borrower shall indemnify such Lender for such increased cost or reduction within 15 days after demand by such Lender (with a copy to the Administrative Agent). A certificate of such Lender claiming compensation under this subsection (a) and setting forth the additional amount or amounts to be paid to it hereunder, together with calculations in reasonable detail supporting such amounts, shall be conclusive in the absence of clearly demonstrable error. No such compensation may be claimed (x) in respect of any Loan for any period prior to the date 90 days before the date of notice by such Lender to the Company of its intention to make claims therefor or (y) to the extent such Lender was aware of such cost or reduction at the time the related Loan was made. (b) Each Lender will promptly notify the Company and the Administrative Agent of any event of which it has knowledge that will entitle such Lender to additional interest or payments pursuant to the foregoing subsection (a) and will designate a different Applicable Lending Office, if, in the judgment of such Lender, such designation will avoid the need for, or reduce the amount of, such compensation and will not be otherwise disadvantageous to such Lender. Section 7 CONDITIONS PRECEDENT. 7.01. EFFECTIVE DATE. This Agreement shall become effective on the date (the "EFFECTIVE DATE") on which the Administrative Agent shall notify the Company and the Lenders that it has received (i) the executed counterparts of this Agreement in form and substance satisfactory to the Administrative Agent signed by the Company, the other Borrowers, the Canadian Borrower, the Majority Lenders (as defined in the Existing Credit Agreement after giving effect to the prepayment of the Tranche A Term Loans and Tranche B Term Loans thereunder), the Term Lenders and all Lenders agreeing to a transfer of a portion of their commitments under the US$ Commitments to the Multi-Currency Commitments and (ii) the following documents and other evidence, each of which shall be satisfactory to the Administrative Agent (and to the extent specified below, to each Lender) in form and substance (provided that this Agreement shall not become effective unless the Effective Date occurs on or before April 15, 2002): (a) CORPORATE DOCUMENTS. Certified copies of the charter and by-laws (or equivalent documents) of each Obligor and of all corporate authority for each Obligor (including, without limitation, board of director resolutions and evidence of the incumbency, including specimen signatures, of officers) with respect to the execution, delivery and performance of such of the Basic Documents to which such Obligor is intended to be a party and each other document to be delivered by such Obligor from time to time in connection herewith and the extensions of credit hereunder (and the Administrative Agent and each Lender may conclusively rely on such certificate until it receives notice in writing from such Obligor to the contrary). 60 (b) OFFICER'S CERTIFICATE. A certificate, dated the Effective Date, of a senior officer of the Company to the effect set forth in the first sentence of Section 7.02 hereof. (c) OPINIONS OF SPECIAL COUNSELS TO THE OBLIGORS. (i) An opinion, dated the Effective Date, of Sullivan & Worcester LLP, special New York counsel to the Obligors, substantially in the form of Exhibit G-1 hereto and covering such other matters as the Administrative Agent or any Lender may reasonably request and (ii) an opinion, dated the Effective Date, of Ballard Spahr Andrews & Ingersoll, LLP, special Pennsylvania counsel to the Obligors substantially in the form of Exhibit G-2 hereto and covering such other matters as the Administrative Agent or any Lender may reasonably request. (d) OPINION OF SPECIAL NEW YORK COUNSEL TO THE ADMINISTRATIVE AGENT. An opinion, dated the Effective Date, of Simpson Thacher & Bartlett, special New York counsel to the Administrative Agent, substantially in the form of Exhibit H hereto. (e) NOTES. The Notes, duly completed and executed for each Lender. (f) COUNTERPARTS. This Agreement, duly executed and delivered by the Company, the Canadian Borrower and each of the Lenders. (g) ACKNOWLEDGMENT AND CONFIRMATION OF GUARANTEE OR SECURITY DOCUMENT. The Acknowledgment and Confirmation of Guarantee or Security Document, duly executed and delivered by the Company, each Subsidiary Guarantor, the Canadian Borrower and the Administrative Agent. (h) ACCRUED FEES. Evidence that all fees (including without limitation commitment fees) and other costs and expenses under the Credit Agreement (including the Existing Credit Agreement) accrued to the Effective Date shall have been paid in full. (i) COSTS. Evidence of payment by the Company of such fees as the Company shall have agreed to pay or deliver to any Lender or the Administrative Agent in connection herewith, including, without limitation, the reasonable fees and expenses of Simpson Thacher & Bartlett, special New York counsel to the Administrative Agent, in connection with the negotiation, preparation, execution and delivery of this Agreement and the Notes and the other Basic Documents and the extensions of credit hereunder (to the extent that statements for such fees and expenses have been delivered to the Company). (j) OTHER DOCUMENTS. Such other documents as the Administrative Agent or any Lender or special New York counsel to the Administrative Agent may reasonably request. (k) DESIGNATION OF INDEBTEDNESS AS "SENIOR DEBT" OR "SENIOR INDEBTEDNESS" UNDER THE SENIOR SUBORDINATED DEBT DOCUMENTS. Evidence that the Indebtedness of the Company and the Canadian Borrower hereunder and under the Guarantees of such Indebtedness by the Subsidiaries of the Company under the Subsidiary Guaranty, or, in the case of the Canadian Borrower, Guarantees of such Canadian Borrower's Indebtedness hereunder by the Company under the Company Guaranty, has been 61 designated as "Senior Debt" or "Senior Indebtedness", as the case may be (and, accordingly, "Designated Senior Debt" or "Designated Senior Indebtedness", as the case may be) under the Senior Subordinated Debt Indentures and the other Senior Subordinated Debt Documents. (l) PREPAYMENT OF TRANCHE A AND TRANCHE B TERM LOANS. Evidence that the Tranche A Term Loans and Tranche B Term Loans under the Existing Credit Agreement have been paid in full. 7.02. INITIAL AND SUBSEQUENT LOANS. The obligation of each Lender to make any Loan to be made by it hereunder, and the obligation of the Issuing Bank to issue any Letter of Credit hereunder, is subject to the conditions precedent that, as of the date of such Loan or such issuance, and before and after giving effect thereto: (a) no Default shall have occurred and be continuing; (b) the representations and warranties made by each of the Company, the Canadian Borrower, any other Borrower and the Subsidiary Guarantors in each Basic Document to which it is a party shall be true on and as of the date of the making of such Loan or such issuance, with the same force and effect as if made on and as of such date; provided that the representations and warranties set forth in Section 8.10 hereof need be true only as of the Effective Date (except to the extent such representations and warranties relate to an earlier date, in which event they shall be true on and as of such earlier date); and (c) the borrowing of such Loan by the Company, the Canadian Borrower or any other Borrower hereunder or the issuance of such Letter of Credit, as the case may be, and the related incurrence of obligations by the Company, the Canadian Borrower or any other Borrower does not violate the provisions of any Senior Subordinated Debt Indenture or any other Senior Subordinated Debt Document. Each notice of borrowing by the Company, the Canadian Borrower or any other Borrower hereunder shall constitute a certification by the Company, the Canadian Borrower or such other Borrower to the effect set forth in the preceding sentence (both as of the date of such notice and, unless the Company, the Canadian Borrower or such other Borrower otherwise notifies the Administrative Agent prior to the date of such borrowing or issuance, as of the date of such borrowing or issuance). 7.03. FIRST LOAN TO A SUBSIDIARY BORROWER. The obligation of each Lender to make a Loan on the occasion of the first borrowing by each Subsidiary Borrower is subject to the receipt by the Administrative Agent of all documents which it may reasonably request relating to the existence of such Subsidiary Borrower, the corporate or other legal authority for and the validity of its Election to Participate, this Agreement and the Notes of such Subsidiary Borrower, and for any other matters relevant thereto, all in form and substance reasonably satisfactory to the Administrative Agent. 62 Section 8 REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to the Lenders and the Administrative Agent, as of the Effective Date and on the date of each Loan and of the issuance of each Letter of Credit, as follows: 8.01. CORPORATE EXISTENCE. Each of the Company and its Subsidiaries: (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; (b) has all requisite power, and has all governmental licenses, authorizations, consents, permits and approvals (including any license, authorization, consent, permit and approval required under any Environmental Law) necessary to own its assets and carry on its business as now being or as proposed to be conducted (except such licenses, authorizations, consents and approvals the lack of which, in the aggregate, will not have a Material Adverse Effect); and (c) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify would have a Material Adverse Effect. 8.02. INFORMATION. (a) The Company has heretofore furnished to each of the Lenders the consolidated balance sheets of the Company and its Subsidiaries as at December 31, 2000 and the related consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries, respectively, for the fiscal year ended on said date, with the opinion thereon of Arthur Andersen L.L.P. Pursuant to Section 9.01(a), the Company shall furnish to each of the Lenders the consolidated balance sheets of the Company and its Subsidiaries as at December 31, 2001 and the related consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries, respectively, for the fiscal year ended on said date, with the opinion thereon of Arthur Andersen L.L.P. All such financial statements are complete and correct and fairly present the consolidated financial condition of the Company and its Subsidiaries as at said dates and the consolidated results of their operations for the fiscal years ended on said dates, all in accordance with generally accepted accounting principles and practices applied on a consistent basis. (b) The Company has disclosed to the Lenders in writing any and all facts (other than general economic conditions) which materially and adversely affect or may materially and adversely affect (to the extent it can reasonably foresee) the business, assets, property, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole, or the ability of the Company, the Canadian Borrower, any other Borrower or any of the Subsidiary Guarantors to perform its obligations under each Basic Document to which it is a party or the ability of the Company or any Subsidiary of the Company to conduct its activities or operations in the normal course of business at any of its owned or leased properties. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of the Obligors to the Administrative Agent or any Lender in connection with the negotiation, preparation or delivery of this Agreement and the other Basic Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading; PROVIDED, that with respect to any such information, report, financial statement, exhibit or schedule to the extent that it was based upon or constitutes a forecast or projection, the 63 Company represents only that it acted in good faith and utilized reasonable assumptions and due care in the preparation of such information, report, financial statement, exhibit or schedule. All written information furnished after the date hereof by the Company and its Subsidiaries to the Administrative Agent and the Lenders and required in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. (c) Since September 30, 2001, there has been no material adverse change in the business, assets, property, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole or, to the knowledge of the Company, in the ability of the Company, the Canadian Borrower, any other Borrower or any of the Subsidiary Guarantors to perform its obligations under each Basic Document to which it is a party. 8.03. LITIGATION. There are no legal or arbitral proceedings or any proceedings by or before any Governmental Authority or agency, now pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries in which there is a reasonable possibility of an adverse decision which could have a Material Adverse Effect or, to the knowledge of the Company, which could have a material adverse effect on the ability of the Company, the Canadian Borrower, any other Borrower or any of the Subsidiary Guarantors to perform its obligations under each Basic Document to which it is a party. 8.04. NO BREACH. None of the execution and delivery of the Basic Documents, the consummation of the transactions therein contemplated or compliance with the terms and provisions thereof will conflict with or result in a breach of, or require any consent under, the certificate of incorporation, LLC operating agreement or partnership agreements, or by-laws of the Company or any of its Subsidiaries, or any applicable law or regulation, or any order, writ, injunction or decree of any court or Governmental Authority, or any Basic Document, any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which it is bound or to which it is subject, or constitute a default under any such lease, agreement or instrument, or (except for the Liens created pursuant to, or permitted by, this Agreement and the Security Documents) result in the creation or imposition of any Lien upon any of the revenues or assets of the Company or any of its Subsidiaries pursuant to the terms of any such agreement or instrument. 8.05. CORPORATE ACTION. Each of the Company, the Canadian Borrower and the Subsidiary Guarantors has all necessary corporate or limited liability company power and authority to execute, deliver and perform its obligations under the Basic Documents to which it is a party; the execution, delivery and performance by the Company, the Canadian Borrower and the Subsidiary Guarantors of the Basic Documents to which they are parties have been duly authorized by all necessary corporate or limited liability company action; and this Agreement has been duly and validly executed and delivered by each of the Company and the Canadian Borrower and constitutes its legal, valid and binding obligation and each of the other Basic Documents to which the Company, the Canadian Borrower or any of the Subsidiary Guarantors is to be a party constitute its legal, valid and binding obligation, in each case enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, 64 insolvency,reorganization or moratorium or other similar laws relating to the enforcement of creditors' rights generally and by general equitable principles. 8.06. APPROVALS. Each of the Company, the Canadian Borrower and the Subsidiary Guarantors has obtained all authorizations, approvals and consents of, and has made all filings and registrations with, any governmental or regulatory authority or agency necessary for the execution, delivery or performance by it of any Basic Document to which it is a party, or for the validity or enforceability thereof, except for filings and recordings of the Liens created pursuant to, or permitted by, the Security Documents. 8.07. REGULATIONS U AND X. None of the Company or any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U or X of the Board of Governors of the Federal Reserve System) and no part of the proceeds of any Loan hereunder will be used to purchase or carry any such margin stock. 8.08. ERISA AND THE CANADIAN PENSION PLANS. (a) The Company and each member of the Controlled Group have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance in all material respects with the presently applicable provisions of ERISA and the Code, and have not incurred any liability to the PBGC or a Plan under Title IV of ERISA (other than to make contributions or premium payments in the ordinary course). (b) Each Canadian Pension Plan is in substantial compliance with all applicable pension benefits and tax laws; no Canadian Pension Plan has any unfunded liabilities (either on a "going concern" or on a "winding up" basis and determined in accordance with all applicable laws and using assumptions and methods that are appropriate in the circumstances and in accordance with generally accepted actuarial principles and practices in Canada), all contributions (including any special payments to amortize any unfunded liabilities) required to be made in accordance with all applicable laws and the terms of each Canadian Pension Plan have been made. 8.09. TAXES. Each of the Company and its Subsidiaries has filed all United States Federal income tax returns and all other material tax returns which are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except to the extent the same may be contested as permitted by Section 9.02 hereof. The charges, accruals and reserves on the books of such Persons in respect of taxes and other governmental charges are, in the opinion of the Company, adequate. 8.10. SUBSIDIARIES; AGREEMENTS; ETC. (a) Schedule II hereto is a complete and correct list on the Effective Date hereof of all Subsidiaries of the Company and of all equity Investments held by the Company or any of its Subsidiaries in any joint venture or other Person. Except for the Liens created by the Security Documents and except as otherwise provided on Schedule III hereof, on the Effective Date, the Company owns, free and clear of Liens, except for Liens permitted hereunder, all outstanding shares of such Subsidiaries and all such shares are validly issued, fully paid and 65 non-assessable and the Company (or the respective Subsidiary of the Company) also owns, free and clear of Liens, all such Investments. (b) None of the Subsidiaries of the Company (other than the Excluded Subsidiaries) is, on the date hereof, subject to any indenture, agreement, instrument or other arrangement of the type described in Section 9.21(d) hereof (other than the Senior Subordinated Debt Indentures). 8.11. INVESTMENT COMPANY ACT. None of the Company or its Subsidiaries is an investment company within the meaning of the Investment Company Act of 1940, as amended, or, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company, within the meaning of said Act. 8.12. PUBLIC UTILITY HOLDING COMPANY ACT. None of the Company or its Subsidiaries is a "holding company", or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. 8.13. OWNERSHIP AND USE OF PROPERTIES. Each of the Company and its Subsidiaries will at all times have legal title to or ownership of, or the right to use pursuant to enforceable and valid agreements or arrangements, all tangible property, both real and personal, and all franchises, licenses, copyrights, patents and know-how which are material to the operation of its business as proposed to be conducted. 8.14. ENVIRONMENTAL COMPLIANCE. (i) No notice, notification, demand, request for information, citation, summons, complaint or order has been issued, no complaint has been filed, no penalty has been assessed and no investigation or review is pending or, to the Company's knowledge, threatened by any governmental or other entity with respect to any (A) alleged violation by the Company or any Subsidiary of any Environmental Law, (B) alleged failure by the Company or any Subsidiary to have any environmental permit, certificate, license, approval, registration or authorization required in connection with the conduct of its business or (C) generation, treatment, storage, recycling, transportation or disposal or Release (each a "Regulated Activity") of any Hazardous Substances except for such as would not have a Material Adverse Effect; (ii) neither the Company nor any Subsidiary has engaged in any Regulated Activity other than as a generator (as such term is used in RCRA) in compliance with all applicable Environmental Laws; and (iii) neither the Company nor any Subsidiary has assumed from any third party, or indemnified any third party for, any Environmental Liability, except for Environmental Liabilities of the Company and its Subsidiaries (without duplication) that relate to or result from any matter referred to in this clause which do not exceed in the aggregate, at any time, $6,000,000. 8.15. SOLVENCY. At the Effective Date and after giving effect to the consummation of the transactions contemplated by this Agreement, the Company will (i) have capital, cash flows and sources of working capital financing sufficient to carry on its business and transactions and all business and transactions in which it is about to engage, (ii) be able to pay its debts as they mature, and (iii) have assets (tangible and intangible) whose fair salable 66 value exceeds its total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities). 8.16. SENIOR DEBT. The Indebtedness of the Company to the Lenders hereunder and under the Company Guaranty and the Guarantees of such Indebtedness by the Subsidiaries of the Company under the Subsidiary Guaranty constitute "Senior Debt" (or similar debt) and, to the extent applicable and after giving effect to appropriate notices to be delivered on the Effective Date, "Designated Senior Debt", under and as defined in, and for all purposes of, Indebtedness of the Company under, and the Guarantees of such Indebtedness by the Subsidiaries of the Company, under the Senior Subordinated Debt Indentures and the other Senior Subordinated Debt Documents. Section 9 COVENANTS. The Company agrees that, so long as any of the Commitments are in effect and until payment in full of all Loans hereunder, all interest thereon and all other amounts payable hereunder, unless the Majority Lenders shall agree otherwise pursuant to Section 12.05 hereof: 9.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company shall deliver: (a) to the Administrative Agent (and the Administrative Agent will deliver such materials to each Lender), as soon as available and in any event within 105 days after the end of each fiscal year of the Company, consolidated statements of income, retained earnings and cash flow of the Company and its Subsidiaries for such year and the related consolidated balance sheet as at the end of such year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and accompanied by an opinion thereon (without qualification arising out of the scope of audit) of Arthur Andersen L.L.P. or other independent certified public accountants of recognized national standing, which opinion shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Company and its Subsidiaries as at the end of, and for, such fiscal year, and stating (or indicating in a footnote to such financial statements) that, in making the examination necessary for their above-described opinion (but without any special or additional procedures for that purpose), they obtained no knowledge, except as specifically stated, of any Default; (b) to the Administrative Agent (and the Administrative Agent will deliver such materials to each Lender), as soon as available and in any event within 60 days after the end of each fiscal quarter of the Company (or, in the case of the last fiscal quarter in each fiscal year, within 105 days) consolidated statements of income, retained earnings and cash flow of the Company and its Subsidiaries for such fiscal quarter and for the portion of the fiscal year ended at the end of such fiscal quarter, and the related consolidated balance sheet as at the end of such fiscal quarter, setting forth in each case in comparative form the corresponding figures from the Company's operating budget for such fiscal year and accompanied, in each case, by a certificate of the chief financial officer or vice president-treasurer of the Company which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Company in accordance with GAAP (except for the absence 67 of footnotes) consistently applied as at the end of, and for, such fiscal quarter (subject to normal year-end audit adjustments); (c) to the Administrative Agent (and the Administrative Agent will deliver such materials to each Lender that has requested the same), within 30 days after the beginning of each fiscal year of the Company commencing with fiscal year 2001, a copy of the consolidated operating budget, including, without limitation, projection of the anticipated cash flow, of the Company and its Subsidiaries for such fiscal year, such budget to be accompanied by a certificate of the chief financial officer or vice president-treasurer of the Company specifying the assumptions on which such budget was prepared, stating that such officer has no reason to question the reasonableness of any material assumptions on which such budget was prepared and providing such other details as the Administrative Agent may reasonably request; (d) to the Administrative Agent (and the Administrative Agent will deliver such materials to each Lender that has requested the same), promptly upon the mailing thereof to the shareholders or creditors of the Company generally, copies of all financial statements, reports and proxy statements so mailed; (e) to the Administrative Agent (and the Administrative Agent will deliver such materials to each Lender that has requested the same), promptly upon the filing thereof, copies of all registration statements (other than any registration statements on Form S-8 or its equivalent) and any reports which the Company shall have filed with the Securities and Exchange Commission; (f) to the Administrative Agent (and the Administrative Agent will deliver such materials to each Lender), if and when the Company or any member of the Controlled Group (i) gives or is required to give notice to the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to administer the Plan, a copy of such notice; (g) to the Administrative Agent (and the Administrative Agent will deliver such materials to each Lender that has requested the same), promptly following the delivery thereof to the Company or to the Board of Directors or management of the Company, a copy of any management letter or similar written report by independent public accountants with respect to the financial condition, operations, business or prospects of the Company; (h) to the Administrative Agent (and the Administrative Agent will deliver such notice to each Lender), promptly after management of the Company knows or has 68 reason to know that any Default has occurred and is continuing, a notice of such Default, describing the same in reasonable detail; The Company will furnish to the Administrative Agent (and the Administrative Agent will deliver such notice to each Lender), at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate of its chief executive officer, chief financial officer or vice president-treasurer (i) to the effect that, to the best of such Person's knowledge after due inquiry, no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail) and (ii) setting forth in reasonable detail the computations necessary to determine the Applicable Leverage Ratio and to determine whether it was in compliance with Sections 9.08 through 9.15, 9.17 and 9.19 hereof as of the end of the respective fiscal quarter or fiscal year. Any financial statement or other document required to be delivered pursuant to this Section 9.01 shall be deemed to have been delivered on the date on which the Company posts such financial statement or other document on the Intralinks website on the Internet at www.intralinks.com; PROVIDED that the Company shall give prompt notice of any such posting to the Administrative Agent (who shall then give prompt notice of any such posting to the Lenders). Notwithstanding the foregoing, the Company shall deliver paper copies of any financial statement or other document referred to in this Section 9.01 to the Administrative Agent if the Administrative Agent or any Lender requests the Company to deliver such paper copies until written notice to cease delivering such paper copies is given by the Administrative Agent or such Lender as the case may be. 9.02. TAXES AND CLAIMS. The Company will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any property belonging to it, prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, might become a Lien upon the property of the Company or such Subsidiary, provided that neither the Company nor such Subsidiary shall be required to pay any such tax, assessment, charge, levy or claim the payment of which is being contested in good faith and by proper proceedings if it maintains adequate reserves with respect thereto. 9.03. INSURANCE. The Company will maintain, and will cause each of its Subsidiaries to maintain, insurance with responsible companies in such amounts and against such risks as is usually carried by owners of similar businesses and properties in the same general areas in which the Company and its Subsidiaries operate, provided that in any event the Company shall maintain or cause to be maintained: (1) PROPERTY INSURANCE -- insurance against loss or damage covering all of the tangible real and personal property and improvements of the Company and its Subsidiaries, by reason of any Peril (as defined below), in amounts as shall be reasonable and customary, but in no event less than the functional replacement cost of all such real and personal property and improvements. Such policy shall include insurance against loss of operating income earned from the operation of the business of the Company and its Subsidiaries, by reason of any Peril affecting the operation thereof, and insurance against any other insurable loss of operating income by reason of any business interruption affecting the Company to the extent covered by standard business interruption policies in the States in which the Properties are located. 69 (2) EARTHQUAKE INSURANCE -- insurance against loss or damage covering all of the tangible real and personal property and improvements of the Company and its Subsidiaries, by reason of any earthquake peril, in amounts as shall be reasonable, customary and commercially available in the property/casualty insurance markets. Such insurance shall be written by financially responsible companies selected by the Company, having an A.M. Best rating of "A-" or better and in a financial size category acceptable to the Majority Lenders, or by other companies acceptable to the Majority Lenders. For purposes hereof, the term "Peril" shall mean, collectively, (i) earthquake outside California, (ii) fire, smoke, lightning, flood, windstorm, hail, explosion, riot and civil commotion, vandalism and malicious mischief and (iii) all other perils covered by the "all-risk" endorsement then in use in the States in which the Properties are located. 9.04. MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. The Company will preserve and maintain, and will cause each of its Subsidiaries to preserve and maintain, its legal existence and all of its rights, privileges and franchises necessary or desirable in the normal conduct of its business, and will conduct its business in a regular manner; PROVIDED that nothing herein shall prevent (i) the merger and dissolution of any Subsidiary of the Company into the Company or any Wholly-Owned Subsidiary of the Company so long as the Company or such Wholly-Owned Subsidiary is the surviving corporation (and, if such Subsidiary is not an Excluded Subsidiary prior to such merger or dissolution, the surviving corporation (if not the Company) is not an Excluded Subsidiary and is a Subsidiary Guarantor) (ii) the merger of any Subsidiary of the Company (a "Merging Subsidiary") with any Person (other than the Company or a Wholly-Owned Subsidiary of the Company) provided that (A) such merger is permitted under Section 9.12(vi) hereof and (B) the surviving entity is either (x) a Wholly-Owned Subsidiary (and, if such Merging Subsidiary is not an Excluded Subsidiary prior to such merger, the surviving entity is not an Excluded Subsidiary and is a Subsidiary Guarantor), or (y) an Excluded Subsidiary (PROVIDED that such Merging Subsidiary is an Excluded Subsidiary prior to such merger), or (iii) the abandonment of any right, privilege or franchise (including any lease) not material in the aggregate to the business of the Company and its Subsidiaries. Nothing in this Agreement shall, or shall be deemed to, prohibit or restrict the merger of the Company with or into another corporation for the sole purpose of changing the Company's domicile from Pennsylvania to Delaware, so long as the surviving corporation of such merger, if such surviving corporation is not the Company, shall expressly assume all of the obligations of the Company under this Agreement and the other Basic Documents to which it is a party and expressly agree to be bound by all other provisions applicable to the Company under this Agreement and the other Basic Documents to which it is a party in a manner reasonably satisfactory to the Administrative Agent. 9.05. MAINTENANCE OF AND ACCESS TO PROPERTIES. (a) The Company will keep, and will cause each of its Subsidiaries to keep, all of its properties necessary in its business in good working order and condition (having regard to the condition of such properties at the time such properties were acquired by the Company or such Subsidiary), ordinary wear and tear excepted, and will permit representatives of the Lenders to inspect such properties and, upon reasonable notice and 70 at reasonable times, to examine and make extracts and copies from the books and records of the Company and any such Subsidiary. (b) The Company will, and will cause its Subsidiaries to, do all things necessary to preserve and keep in full force and effect all trademarks, patents, service marks, trade names, copyrights, franchises and licenses, and any rights with respect thereto, which are necessary for and material to the conduct of the business of the Company and its Subsidiaries taken as a whole. 9.06. COMPLIANCE WITH APPLICABLE LAWS. The Company will comply, and will cause each of its Subsidiaries to comply, with the requirements of all applicable laws, rules, regulations and orders of any governmental body or regulatory authority (including, without limitation, ERISA and all Environmental Laws), a breach of which would have a Material Adverse Effect, except where contested in good faith and by proper proceedings. 9.07. LITIGATION. The Company will promptly give to the Administrative Agent (which shall promptly notify each Lender) notice in writing of (i) all judgments against it or any of its Subsidiaries (other than judgments covered by insurance) which in the aggregate exceed $10,000,000 and (ii) all litigation and of all proceedings of which it is aware before any courts, arbitrators or governmental or regulatory agencies affecting the Company or any of its Subsidiaries except litigation or proceedings which, if adversely determined, would not in the reasonable opinion of the Company have a Material Adverse Effect. 9.08. INDEBTEDNESS. The Company will not, and will not permit any of its Subsidiaries to, create, incur or suffer to exist any Indebtedness except: (i) Indebtedness to the Lenders hereunder; (ii) the Indebtedness existing on the Effective Date and set forth in Schedule III hereto (including any extensions, renewals or refunding of such Indebtedness, so long as the maximum principal amount of such Indebtedness is not increased); (iii) Indebtedness issued pursuant to the Senior Subordinated Debt Indentures and other Indebtedness subordinated to the obligations of the Company hereunder to at least the same extent as the Senior Subordinated Debt, so long as such other Indebtedness has no scheduled payments of principal prior to the Commitment Termination Date and after giving effect to such Indebtedness, the Company is in compliance on a PRO FORMA basis with Sections 9.09 through 9.11 hereof, as at the last day of the latest fiscal quarter; (iv) so long as no Default shall have occurred or be continuing hereunder at the time of such creation or incurrence, Permitted Indebtedness; (v) so long as no Default shall have occurred and be continuing hereunder at the time of such creation or incurrence, Indebtedness created or incurred by any Excluded Subsidiary (subject to the limitations set forth in Section 9.09 hereof, and provided that any Indebtedness incurred under this clause (v) shall be without recourse to and shall not be Guaranteed by the Company or any Subsidiary (other than any Excluded Subsidiary) of the Company, except as permitted by Section 9.24 hereof); (vi) Synthetic Lease Obligations of any Subsidiary of the Company (or of the Company) and any Guarantees by the Company thereof under the Lease Agreement dated as of October 1, 1998 with Iron Mountain Statutory Trust - 1998 and other Synthetic Lease Obligations with a structure and terms substantially similar to said transaction (and any Indebtedness incurred by the Company and any Subsidiary to refund or replace any such Synthetic Lease Obligation, so long as the amount of such Indebtedness does not exceed the amount of such Synthetic Lease Obligation and has a maturity date not earlier than such Synthetic Obligation and, after giving 71 effect to each such refunding or replacing of any such Synthetic Lease Obligation, the Company is in compliance on a PRO FORMA basis with Sections 9.09 through 9.11 hereof as at the last day of the latest fiscal quarter) (PROVIDED, that the aggregate amount of all such Synthetic Lease Obligations permitted under this clause (vi) shall not at any time exceed $360,000,000 and that such obligations shall be without recourse to any Subsidiary (other than a lessee Subsidiary) of the Company and shall not be Guaranteed by any Subsidiary of the Company); (vii) Indebtedness incurred pursuant to the instruments governing (A) Accounts Receivable Financings or (B) Permitted Mortgage Financings secured by Existing Facilities (PROVIDED, that the aggregate amount outstanding of all such obligations incurred pursuant to such Accounts Receivable Financings or such Permitted Mortgage Financings permitted under this clause (vii) shall not at any time exceed $150,000,000); and (viii) Indebtedness incurred pursuant to the instruments governing Permitted Mortgage Financings secured by Facilities acquired by the Company or any of its Subsidiaries after the Effective Date hereof (PROVIDED, that the aggregate amount outstanding of all such obligations incurred pursuant to such Permitted Mortgage Financings permitted under this clause (viii) shall not at any time exceed $50,000,000). 9.09. LEVERAGE RATIOS. (a) The Company will not, as at the end of any fiscal quarter, permit the ratio, calculated as at the end of such fiscal quarter for the period of four fiscal quarters then ended, of (i) the excess of (x) the aggregate outstanding principal amount of Funded Indebtedness (on a consolidated basis) of the Company and its Subsidiaries at such date over (y) the aggregate amount of cash and Liquid Investments of the Company and Subsidiaries at such date to (ii) EBITDA for such period (the "Leverage Ratio") to exceed the ratio set forth below:
---------------------------------------------------------------------- PERIOD LEVERAGE RATIO ---------------------------------------------------------------------- From the date hereof through March 31, 2002 5.5 to 1 ---------------------------------------------------------------------- From April 1, 2002 through December 31, 2002 5.65 to 1 ---------------------------------------------------------------------- From January 1, 2003 through March 31, 2003 5.55 to 1 ---------------------------------------------------------------------- From April 1, 2003 through June 30, 2003 5.45 to 1 ---------------------------------------------------------------------- From July 1, 2003 through September 30, 2003 5.35 to 1 ---------------------------------------------------------------------- From October 1, 2003 through December 31, 2003 5.25 to 1 ---------------------------------------------------------------------- From January 1, 2004 and at all times thereafter 5.00 to 1 ----------------------------------------------------------------------
72 (b) The Company will not, as at the end of any fiscal quarter, permit the ratio, calculated as at the end of such fiscal quarter for the period of four fiscal quarters then ended, of (i) the excess of (x) the aggregate outstanding principal amount of Indebtedness (on a consolidated basis and without regard to Indebtedness owed to the Company and its Subsidiaries, Indebtedness under the Canadian Commitments, Indebtedness referred to in clause (xii) of the definition of "Permitted Indebtedness" in Section 1.01 hereof and the Indebtedness under the Pierce 1998 Senior Notes) of the Excluded Subsidiaries at such date over (y) the aggregate amount of cash and Liquid Investments of the Excluded Subsidiaries at such date to (ii) EBITDA for such period (the "FOREIGN LEVERAGE RATIO") to exceed 3.75 to 1. Solely for purposes of this clause (b), in determining the Foreign Leverage Ratio, EBITDA shall be determined by including only the Excluded Subsidiaries. 9.10. INTEREST COVERAGE RATIO. The Company will not, as at the end of any fiscal quarter, permit the ratio, calculated as at the end of such fiscal quarter for the period of four fiscal quarters then ended, of (i) EBITDA for such period to (ii) Interest Expense for such period to be less than the ratio set forth below for the period in which such fiscal quarter ends:
-------------------------------------------------------------------------------- PERIOD INTEREST COVERAGE RATIO -------------------------------------------------------------------------------- From the Effective Date through June 30, 2003 2.00 to 1 -------------------------------------------------------------------------------- From July 1, 2003 through September 30, 2003 2.10 to 1 -------------------------------------------------------------------------------- From October 1, 2003 through December 31, 2003 2.15 to 1 -------------------------------------------------------------------------------- From January 1, 2004 through June 30, 2004 2.25 to 1 -------------------------------------------------------------------------------- From July 1, 2004 through September 30, 2004 2.35 to 1 -------------------------------------------------------------------------------- From October 1, 2004 and at all times thereafter 2.50 to 1 --------------------------------------------------------------------------------
For purposes of calculating any ratio set forth in this Section, if the Company elects pursuant to the penultimate sentence of the definition of EBITDA to include in EBITDA for the period to which such ratio relates the PRO FORMA amounts referred to in such sentence, there shall be included in Interest Expense for such period, on a PRO FORMA basis, interest accruing during such period on Indebtedness (and the interest portion of payments under Capitalized Lease Obligations) assumed or incurred by the Company and its Subsidiaries (on a consolidated basis) in connection with any Permitted Acquisition having Acquisition Consideration of more than $500,000 during such period. 73 9.11. FIXED CHARGES COVERAGE RATIO. The Company will not, as at the end of any fiscal quarter, permit the ratio, calculated as at the end of such fiscal quarter for the period of four fiscal quarters then ended, of (i) Adjusted EBITDA for such period to (ii) Fixed Charges for such period to be less than the ratio set forth below for the period in which such fiscal quarter ends:
-------------------------------------------------------------------------------- PERIOD FIXED CHARGES COVERAGE RATIO -------------------------------------------------------------------------------- From the Effective Date through June 30, 2003 1.10 to 1 -------------------------------------------------------------------------------- From July 1, 2003 and at all times thereafter 1.20 to 1 --------------------------------------------------------------------------------
For purposes of calculating any ratio set forth in this Section, if the Company elects pursuant to the penultimate sentence of the definition of EBITDA to include in EBITDA for the period to which such ratio relates the PRO FORMA amounts referred to in such sentence, there shall be included in Fixed Charges for such period, on a PRO FORMA basis, principal payable and interest accruing during such period on Indebtedness (and the interest portion of payments under Capitalized Lease Obligations) assumed or incurred by the Company and its Subsidiaries (on a consolidated basis) in connection with any Permitted Acquisition having Acquisition Consideration of more than $500,000 during such period. 9.12. MERGERS, ASSET DISPOSITIONS. ETC. Except as expressly permitted by Section 9.04, the Company will not, and will not permit any of its Subsidiaries to, be a party to any merger or consolidation, or sell, lease, assign, transfer or otherwise dispose of any assets, or acquire assets from any Person, except: (i) dispositions and acquisitions of inventory in the ordinary course of business; (ii) dispositions of worn out or obsolete tools or equipment no longer used or useful in the business of the Company and its Subsidiaries, provided that no single disposition of tools or equipment shall have a fair market value (determined in good faith by the Company at the time of such disposition) in excess of $5,000,000; (iii) Capital Expenditures; (iv) acquisitions of Investments permitted under Section 9.14 hereof, dispositions of Investments described in clauses (i), (ii) and (iii) of Section 9.14 hereof and dispositions of other assets; PROVIDED, that the aggregate fair market value of such other assets, when added to the value of all such other assets disposed of during such fiscal year, shall not, without the prior consent of the Majority Lenders, exceed 25% of Consolidated Net Tangible Assets at the end of 74 the immediately preceding fiscal year; and PROVIDED, FURTHER, that the Net Cash Proceeds of the dispositions of such assets shall be subject to the provisions of Section 3.02(c) (including that such Net Cash Proceeds in any fiscal year of more than 10% of Consolidated Net Tangible Assets at the end of the immediately preceding fiscal year may not be used for a Reinvestment Event and shall cause a mandatory reduction of the Commitments); (v) subject to compliance with the provisions of Section 9.21(b) hereof, the sale, lease, assignment, transfer or other disposition of any assets by the Company or any Subsidiary of the Company to the Company or any Subsidiary thereof (other than Excluded Subsidiaries), PROVIDED, that (i) if such transfer is of material assets by the Company or a Subsidiary Guarantor, the recipient of such transfer shall also be the Company or a Subsidiary Guarantor and (ii) any Excluded Subsidiary may transfer assets to the Company or any other Subsidiary (including any Excluded Subsidiary); and (vi) so long as no Default shall have occurred and be continuing hereunder at the time of such Acquisition or transaction, Permitted Acquisitions and related Additional Expenditures and any other transaction expressly permitted by Section 9.14 hereof; PROVIDED, that any such Permitted Acquisition is an acquisition of another business operating principally in the United States of America. (vii) dispositions of accounts receivable and related general intangibles, and related lockbox and other collection accounts records and/or proceeds pursuant to the instruments governing an Accounts Receivable Financing permitted by Section 9.08 hereof. For purposes of this Section 9.12, "PERMITTED ACQUISITION" shall mean any Acquisition complying with the following: (a) COMPLIANCE WITH FINANCIAL COVENANTS. After giving effect to each such acquisition and any related incurrence of Indebtedness, the Company is in compliance on a PRO FORMA basis with Sections 9.09 through 9.11 hereof as at the last day of the latest fiscal quarter. (b) LINES OF BUSINESS. ETC. Each such Acquisition shall not be "hostile" and shall be of assets relating to the records and information management business or activities related thereto (or of 100% of the stock of corporations whose assets consist substantially of such assets) or through the merger of such a corporation into a Subsidiary of the Company, which shall be the surviving corporation. 9.13. LIENS. The Company will not, and will not permit any of its Subsidiaries to, create or suffer to exist any Lien upon any property or assets, now owned or hereafter acquired, securing any Indebtedness or other obligation, except: (i) the Liens created pursuant to the Security Documents; (ii) the Liens existing on the Effective Date set forth in Schedule III and Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured 75 by any Lien set forth on Schedule III, PROVIDED that the principal amount of such Indebtedness is not increased and is not secured by any additional assets; (iii) (A) Liens contemplated by clauses (ii), (iv), (v) and (vii) of the definition of Permitted Indebtedness; and (B) Liens securing Acquired Debt, provided that such Liens cover only those assets that were covered by such Liens prior to the relevant acquisition; (iv) attachment, judgment or other similar Liens arising in connection with litigation or other legal proceedings, PROVIDED that either (A) the claims in respect of such Liens are fully covered by insurance or (B) the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are in an amount not to exceed $10,000,000 in the aggregate and are being contested in good faith by appropriate proceedings diligently prosecuted; (v) Liens on properties or assets of an Excluded Subsidiary securing Indebtedness of such Excluded Subsidiary permitted hereunder; (vi) other Liens arising in the ordinary course of the business of the Company or such Subsidiary which are not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (vii) Liens securing Indebtedness permitted by clause (v) of Section 9.08 hereof, PROVIDED that such Liens extend only to the assets of any Excluded Subsidiary incurring such Indebtedness as a primary obligor (and not as a Guarantor) or Capital Stock of such Excluded Subsidiary; (viii) Liens on property leased pursuant to the Synthetic Lease Obligations permitted by clause (vi) of Section 9.08 hereof or securing Indebtedness permitted by said clause to refund or replace such Synthetic Lease Obligation; and (ix) Liens under the instruments governing (A) an Accounts Receivable Financing or (B) a Mortgage Financing permitted by Section 9.08 hereof. 9.14. INVESTMENTS. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, make or permit to remain outstanding any advances, loans or other extensions of credit or capital contributions (other than prepaid expenses in the ordinary course of business) to (by means of transfers of property or assets or otherwise), or purchase or own any stocks, bonds, notes, debentures or other securities of, any Person (all such transactions being herein called "INVESTMENTS"), except (subject to Section 9.24 hereof): (i) operating deposit accounts with any bank or financial institution; (ii) Liquid Investments (including Liquid Investments in the name and under the control of the Administrative Agent (or a collateral sub-agent for the Administrative Agent) as contemplated by the Security Documents); (iii) subject to Section 9.16 hereof, Investments in accounts and chattel paper as defined in the Uniform Commercial Code and notes receivable acquired in the ordinary course of business as presently conducted; (iv) Investments in an insurer required as a condition to the provision by such insurer of insurance coverage contemplated by Section 9.03; (v) (w) equity Investments in Wholly-Owned Subsidiaries of the Company; (x) additional equity Investments in Subsidiaries of the Company (other than Wholly-Owned Subsidiaries) with the prior written consent of the Majority Lenders and (y) Investments in the form of loans, advances or other 76 obligations owed by any Wholly-Owned Subsidiary to the Company, and Investments in the form of loans, advances or other obligations owed by the Company to any Wholly-Owned Subsidiary; PROVIDED that the aggregate amount of Investments by the Company permitted by subclauses (w) or (y) of this clause (v) in any Subsidiary of the Company that is a mortgagor under any Permitted Mortgage shall not exceed, in the aggregate for all such Subsidiaries, $10,000,000 at any one time outstanding. (vi) Investments consisting of loans or advances to officers and directors of the Company and its Subsidiaries in an amount not to exceed $2,000,000 in the aggregate and loans or advances made to employees of the Company to permit such employees to exercise options to purchase Capital Stock of the Company; (vii) (x) Investments in Persons that are not Subsidiaries of the Company and (y) Investments in Subsidiaries of the Company (to the extent such Investments are not permitted under clause (v) of this Section 9.14); PROVIDED that the aggregate outstanding amount of Investments made pursuant to this clause (vii) shall not at any time exceed $30,000,000; (viii) Investments consisting of (a) Permitted Acquisitions in accordance with Section 9.12 hereof and (b) any acquisition (by purchase of shares, merger or otherwise) by any Excluded Subsidiary of (x) a majority of the shares of Capital Stock of any Person principally engaged in the same line or lines of business as the Company and its Subsidiaries or (y) assets principally related to the records and information management business or related activities; PROVIDED, that any acquisition under this clause shall not be "hostile". (ix) subject to Section 9.16 hereof and on terms and pursuant to documentation in all respects reasonably satisfactory to the Administrative Agent, Investments in Affiliates of the Company (which are not Wholly-Owned Subsidiaries of the Company) to facilitate the construction or acquisition of records management facilities including, without limitation, the acquisition of real estate for development purposes; (x) subordinated Guarantees of Senior Subordinated Debt by Subsidiaries of the Company pursuant to the Senior Subordinated Debt Documents; (xi) equity Investments and loans and advances and other extensions of credit to any Excluded Subsidiary or any other person organized outside of the United States or principally conducting its business outside of the United States; (xii) Investments constituted by Hedging Agreements permitted under Section 9.25 hereof; and 77 (xiii) Investments by the Company in a Subsidiary formed pursuant to the instruments governing an Accounts Receivable Financing permitted by Section 9.08 hereof. 9.15. RESTRICTED PAYMENTS. The Company will not, and will not permit any of its Subsidiaries to, declare or make any Restricted Payment, except that the Company may: (i) provided that no Default has occurred and is continuing, purchase shares of any class of Capital Stock, or options to purchase such shares, of the Company from employees or former employees of the Company or its Subsidiaries in amounts not to exceed $500,000 in any fiscal year and $1,000,000 in the aggregate after the Effective Date; and (ii) make additional Restricted Payments constituting the purchase, redemption, retirement or other acquisition of shares of any class of Capital Stock of the Company (such Restricted Payments, "STOCK REPURCHASES"), subject to the satisfaction of each of the following conditions on the date of such Stock Repurchase and after giving effect thereto: (a) no Default shall have occurred and be continuing; and (b) the ratio of Senior Debt on the last day of the most recently completed fiscal quarter of the Company to EBITDA for the four fiscal quarters then ended on a PRO FORMA basis, after giving effect to any purchase, redemption or retirement of any Subordinated Indebtedness consummated on or prior to the date thereof and to any borrowings to finance the same and the Stock Repurchases is less than or equal to 1.5 to 1. Nothing herein shall be deemed to prohibit the payment of dividends by any Subsidiary of the Company to the Company or to any other Subsidiary of the Company. 9.16. TRANSACTIONS WITH AFFILIATES. Except as otherwise expressly permitted by this Agreement, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly: (i) make any Investment in an Affiliate of the Company; (ii) transfer, sell, lease, assign or otherwise dispose of any assets to an Affiliate of the Company; (iii) merge into or consolidate with or purchase or acquire assets from an Affiliate of the Company; or (iv) enter into any other transaction directly or indirectly with or for the benefit of an Affiliate of the Company (including, without limitation, guarantees and assumptions of obligations of an Affiliate of the Company); PROVIDED that (a) any Affiliate who is an individual may serve as a director, officer or employee of the Company and receive reasonable compensation or indemnification in connection with his 78 or her services in such capacity; (b) the Company or a Subsidiary of the Company may enter into any transaction with an Affiliate of the Company if the monetary or business consideration arising therefrom would be substantially as advantageous to the Company or such Subsidiary as the monetary or business consideration which would obtain in a comparable arm's length transaction with a Person similarly situated to the Company but not an Affiliate of the Company; and (c) the Company may make Investments in Affiliates permitted by Section 9.14(ix) hereof and may create Residual Assurances for the benefit of an Affiliate permitted by Section 9.23 hereof in either case in connection with the construction and/or acquisition of records management facilities to be leased to the Company or a Subsidiary, so long as, taking such transaction as a whole (giving effect to such Investment or Residual Assurance, and the lease of such facility to the Company or such Subsidiary) such Affiliate is not disproportionately benefited. 9.17. SUBORDINATED INDEBTEDNESS. The Company will not, nor will it permit any of its Subsidiaries to, purchase, redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous fund for the purchase, redemption, retirement or other acquisition of, or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any Subordinated Indebtedness, except for: (i) regularly scheduled payments or prepayments of principal and interest in respect thereof required pursuant to the instruments evidencing such Subordinated Indebtedness; (ii) so long as no Default has occurred and is continuing, scheduled payments of principal of (not to exceed $10,000,000 in the aggregate, excluding payments made in connection with that certain company named Datavault acquired by the Company in the United Kingdom) and interest on, and expenses and indemnities incurred in connection with, Seller Indebtedness; and (iii) any other purchase, redemption or retirement of Subordinated Indebtedness, so long as (i) no Default has occurred and is continuing and (ii) either (A) such other purchase, redemption or retirement is in connection with a refinancing of such Subordinated Indebtedness with the proceeds of, or in connection with an exchange of such Subordinated Indebtedness for a new series of, Senior Subordinated Debt issued within 60 days of the substantial completion of such purchase, redemption or retirement, or (B) after giving effect to such purchase, redemption or retirement, the ratio of Senior Debt on the last day of the most recently completed fiscal quarter of the Company to EBITDA for the four quarters then ended on a PRO FORMA basis, after giving effect to such purchase, redemption or retirement and any Stock Repurchase consummated on or prior to the date hereof, and to any borrowings to finance the same, as at the last day of the latest fiscal quarter is less than or equal to 1.5 to 1. 9.18. LINES OF BUSINESSES. Neither the Company nor any of its Subsidiaries, taken as a whole, shall engage to any substantial extent in any business activity other than the records and information management business or activities related or incidental thereto. 79 9.19. MODIFICATION OF OTHER AGREEMENTS. The Company will not request or consent to any modification, supplement or waiver of any of the provisions of any instrument or document evidencing or governing Subordinated Indebtedness except on terms and pursuant to documentation in all respects reasonably satisfactory to the Administrative Agent. 9.20. INTEREST RATE AND CURRENCY EXCHANGE PROTECTION. The Company shall at all times maintain a program reasonably acceptable to the Administrative Agent providing for the hedging or mitigation of interest rate and currency exchange risk. 9.21. CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES. (a) The Company will, and will cause each of its Subsidiaries to, take such action from time to time as shall be necessary to ensure that the Company and each of its Subsidiaries at all times owns (i) all of the issued and outstanding shares of each class of Capital Stock of each of such Person's Subsidiaries (other than, in each case, Capital Stock of Excluded Subsidiaries) and (ii) more than 50% of the issued and outstanding shares of Capital Stock of each Person acquired pursuant to clauses (b) and (c) of Section 9.14(viii) hereof. Without limiting the generality of the foregoing, the Company shall not, and shall not permit any of its Subsidiaries to, sell, transfer or otherwise dispose of any shares of stock in any Subsidiary (other than an Excluded Subsidiary) owned by them, nor permit any Subsidiary of the Company (other than an Excluded Subsidiary) to issue any shares of Capital Stock of any class whatsoever to any Person (other than to the Company or to another Wholly-Owned Subsidiary or pursuant to Section 9.12 hereof). In the event that any such additional shares of Capital Stock shall be issued by any Subsidiary of the Company, or any Subsidiary shall be acquired, the Company agrees (so long as the certificates evidencing such shares of stock are not subject to a lien permitted under Section 9.13(vii) hereof, and in any event subject to clause (c) below) forthwith to deliver to the Administrative Agent pursuant to the Security Documents the certificates evidencing such shares of stock, accompanied by undated stock powers executed in blank as well as, in accordance with the Security Documents, promissory notes and intercompany notes specified as Collateral as defined in the Security Documents and shall take such other action as the Administrative Agent shall request to perfect the security interest created therein pursuant to the Security Documents. (b) The Majority Lenders shall have the right from time to time to require the Company, pursuant to a written request from the Administrative Agent, to cause such Subsidiaries of the Company as may be specified in such request (except for any SPE) to become parties to the Subsidiary Guaranty or to execute and deliver such other guaranties, in form and substance satisfactory to the Majority Lenders, guaranteeing payment of the Company's obligations hereunder. Any such request shall be made by the Majority Lenders in the good faith and reasonable exercise of their discretion. Within 30 days after any such request, the Company shall, and shall cause the appropriate Subsidiaries of the Company to, (i) execute and deliver to the Administrative Agent such number of copies as the Administrative Agent may specify of documents creating such guaranties and (ii) do all other things which may be necessary or which the Administrative Agent may reasonably request in order to confer upon and confirm to the Lenders the benefits of such security. (c) Notwithstanding anything to the contrary in this Section 9.21: 80 (I) no Excluded Subsidiary shall be required to be or become a party to the Subsidiary Guaranty or otherwise Guarantee the obligations of the Company hereunder; (II) the Company and its Subsidiaries shall not be required to pledge more than 66% of the aggregate Voting Stock of such Excluded Subsidiary directly held by the Company or its Domestic Subsidiaries to the Administrative Agent under the Security Documents; and (III) the Company and its Subsidiaries shall not be required to pledge the stock of any other Excluded Subsidiary. (d) The Company will not permit any of its Subsidiaries (other than Excluded Subsidiaries or any SPE acting pursuant to the terms of an Accounts Receivable Financing permitted by the terms of this Agreement) to enter into, after the date hereof, any indenture, agreement, instrument or other arrangement (other than the Senior Subordinated Debt Documents) that, directly or indirectly, prohibits or restrains, or has the effect of prohibiting or restraining, or imposes materially adverse conditions upon, the incurrence or payment of Indebtedness, the granting of Liens, the declaration or payment of dividends, the making of loans, advances or Investments or the sale, assignment, transfer or other disposition of Property. 9.22. ENVIRONMENTAL MATTERS. The Company will promptly give to the Lenders notice in writing of any complaint, order, citation, notice or other written communication from any Person with respect to, or if the Company becomes aware after due inquiry of, (i) the existence or alleged existence of a violation of any applicable Environmental Law or the incurrence of any liability, obligation, remedial action, loss, damage, cost, expense, fine, penalty or sanction resulting from any air emission, water discharge, noise emission, asbestos, Hazardous Substance or any other environmental, health or safety matter at, upon, under or within any property now or previously owned, leased, operated or used by the Company or any of its Subsidiaries or any part thereof, or due to the operations or activities of the Company, any Subsidiary or any other Person on or in connection with such property or any part thereof (including receipt by the Company or any Subsidiary of any notice of the happening of any event involving the Release or cleanup of any Hazardous Substance), (ii) any Release on such property or any part thereof in a quantity that is reportable under any applicable Environmental Law, (iii) the commencement of any cleanup pursuant to or in accordance with any applicable Environmental Law of any Hazardous Substances on or about such property or any part thereof and (iv) any pending or threatened proceeding for the termination, suspension or non-renewal of any permit required under any applicable Environmental Law, in each of the cases (i), (ii), (iii) and (iv), which individually or in the aggregate could have a Material Adverse Effect. 9.23. RESIDUAL ASSURANCES. The Company will not, and will not permit any of its Subsidiaries to, create, incur or suffer to exist any Residual Assurances, except that (notwithstanding Sections 9.08 and 9.14) the Company may create a Residual Assurance with respect of the construction or acquisition of any records management facility by any Affiliate of the Company so long as (a) the maximum liability of the Company in respect of such Residual Assurance does not exceed 15% of the fair market value (as determined in good faith by the Board of Directors of the Company) of the completed records management facility, and (b) the 81 maximum liability of the Company in respect of all Residual Assurances does not exceed $3,000,000 in the aggregate. 9.24. INVESTMENTS IN EXCLUDED SUBSIDIARIES. The Company will not, and will not permit any of its Subsidiaries (other than its Excluded Subsidiaries), to make any advance, loan or other extension of credit to, or any other Investment in, or Guarantee any Indebtedness of, any Excluded Subsidiary or any other person organized outside of the United States or principally conducting its business outside the United States if, after giving effect thereto, the aggregate outstanding amount of such Investments and Guaranties (other than (a) Guaranties permitted under clause (viii) of the definition of "Permitted Indebtedness" in Section 1.01 hereof, (b) the Guaranties by the Company and its Subsidiaries of (x) the Pierce 1998 Senior Notes and (y) Indebtedness under the Canadian Commitments, and (c) Investments by the Company in Iron Mountain Canada Corporation to finance the payment by Iron Mountain Canada Corporation of principal, interest and other amounts due in respect of the Pierce 1998 Senior Notes) made after August 14, 2000 is greater than $225,000,000 (with the applicable exchange rate for any Investment or Guaranty or repayment thereof determined by reference to the relevant Exchange Rate in effect at the time of such Investment or Guaranty or repayment). 9.25. HEDGING AGREEMENTS. The Company will not, and will not permit any of its Subsidiaries to enter into any Hedging Agreement other than Hedging Agreements entered into in the ordinary course of business, and not for speculative purposes, to protect against changes in interest rates or foreign exchange rates. Without limiting the generality of the foregoing, the Company will not, and will not permit any of its Subsidiaries to, enter into any derivatives or other transactions with any financial institution, commodities or stock exchange or clearing house (a "DERIVATIVES COUNTERPARTY") obligating the Company or any of its Subsidiaries to make any payments to such Derivatives Counterparty as a result of a change in market value of the Company's Capital Stock or any Subordinated Indebtedness. 9.26. PERFECTION OF SECURITY INTERESTS IN STOCK OF FOREIGN SUBSIDIARIES. Within 60 days after the Effective Date, the Company shall have completed the perfection of security interests in the stock of Subsidiaries organized in a jurisdiction outside of the United States of America and listed in Annex 1 to the Company Pledge Agreement, Annex 1 to the Canadian Borrower Pledge Agreement or Annex 1 to the Subsidiary Pledge Agreement. Section 10 DEFAULTS. 10.01. EVENTS OF DEFAULT. If one or more of the following events (herein called "Events of Default") shall occur and be continuing: (a) default in the payment of any principal of or interest on any Loan, any Reimbursement Obligation or any other amount payable hereunder when due; or (b) the Company or any of its Subsidiaries (other than Excluded Subsidiaries) shall default in the payment when due of any principal of or interest on any Indebtedness having an aggregate outstanding principal amount of at least $5,000,000 (other than the Loans); or any event or condition shall occur which results in the acceleration of the maturity of any such Indebtedness of the Company or any of its Subsidiaries (other than 82 Excluded Subsidiaries) or enables (or, with the giving of notice or lapse of time or both, would enable) the holder of any such Indebtedness or any Person acting on such holder's behalf to accelerate the maturity thereof; or (c) any representation or warranty made or deemed made by the Company, the Canadian Borrower, any other Borrower or any Subsidiary Guarantor in any Basic Document, or in any certificate or financial information furnished to any Lender, the Administrative Agent or the Canadian Administrative Agent pursuant to the provisions of any Basic Document, shall prove to have been false or misleading in any material respect as of the time made or furnished; or (d) (i) the Company shall default in the performance of any of its obligations under Sections 9.08 through 9.21 and 9.23 hereof or (ii) the Company, the Canadian Borrower, any other Borrower or any Subsidiary Guarantor shall default in the performance of any of its other obligations in any Basic Document, and such default described in this subclause (ii) shall continue unremedied for a period of 25 days after notice thereof to the Company by the Administrative Agent or the Majority Lenders (through the Administrative Agent); or (e) the Company or any of its Subsidiaries (except any De Minimus Excluded Subsidiary) shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or (f) the Company or any of its Subsidiaries (except any De Minimus Excluded Subsidiary) shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, or (vi) take any corporate action for the purpose of effecting any of the foregoing; or (g) a proceeding or case shall be commenced, without the application or consent of the Company or any of its Subsidiaries (except any De Minimus Excluded Subsidiary) in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of such Person or of all or any substantial part of its assets, or (iii) similar relief in respect of such Person under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 days; or an order for relief against such Person shall be entered in an involuntary case under the Bankruptcy Code; or 83 (h) a final judgment or judgments by a court or courts (or a final order by an appropriate Governmental Authority) shall be rendered against the Company or any of its Subsidiaries (except any De Minimus Excluded Subsidiary) in excess of $3,000,000 in the aggregate, and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof, or the Company or such Subsidiary shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or (i) the Company or any member of the Controlled Group shall fail to pay when due an amount or amounts aggregating in excess of $1,000,000 which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having aggregate Unfunded Liabilities in excess of $1,000,000 shall be filed under Title IV of ERISA by the Company or any member of the Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any such Plan or Plans or a proceeding shall be instituted by a fiduciary of any such Plan or Plans against the Company or any member of the Controlled Group to enforce Section 515 or 421 9(c)(5) of ERISA; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Plan or Plans must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 421 9(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause the Company or one or more members of the Controlled Group to incur a current payment obligation in excess of $1,000,000; or (j) an Excluded Subsidiary Material Adverse Change or any Change of Control shall occur; or (k) (i) any Security Document or the Company Guaranty or the Subsidiary Guaranty shall cease, for any reason, to be in full force and effect (other than as provided therein) or any party thereto (other than the Lenders) shall so assert in writing; or (ii) any Security Document shall cease to be effective to grant a Lien on the collateral described therein with the priority purported to be created thereby. THEREUPON: the Administrative Agent may (and, if directed by the Majority Lenders, shall) (a) declare the Commitments terminated (whereupon the Commitments shall be terminated) and/or (b) declare the principal amount then outstanding of and the accrued interest on the Loans, the Reimbursement Obligations, and commitment fees and all other amounts payable hereunder and under the Notes and the C$ Notes to be forthwith due and payable, whereupon such amounts shall be and become immediately due and payable, without notice (including, without limitation, notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Borrowers and the Canadian Borrower; PROVIDED that in the case of the occurrence of an Event of Default with respect to the Company referred to in clause (f) or (g) of this Section 10.01, the Commitments shall be automatically terminated and the principal amount then outstanding of and the accrued interest on the Loans, the 84 Reimbursement Obligations, and commitment fees and all other amounts payable hereunder and under the Notes and the C$ Notes shall be and become automatically and immediately due and payable, without notice (including, without limitation, notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Company, the Borrowers and the Canadian Borrower. In addition, upon the occurrence and during the continuance of any Event of Default (if the Administrative Agent has declared the principal amount then outstanding of, and accrued interest on, the Loans and all other amounts payable by the Company, the Canadian Borrower or any other Borrower hereunder and under the Notes and the C$ Notes to be due and payable), the Company agrees that it shall, if requested by the Administrative Agent or the Majority Lenders through the Administrative Agent (and, in the case of any Event of Default referred to in clause (f) or (g) of this Section 10.01 with respect to the Company or the other Borrowers or the Canadian Borrower, forthwith, without any demand or the taking of any other action by the Administrative Agent or such Lenders) provide cover for the Letter of Credit Liabilities by paying to the Administrative Agent immediately available funds in an amount equal to the then aggregate undrawn stated amount of all Letters of Credit, which funds shall be held by the Administrative Agent in the Collateral Account as collateral security in the first instance for the Letter of Credit Liabilities. 10.02. RATABLE TREATMENT OF LENDERS. In the event that the Loans and the Reimbursement Obligations shall be declared or become immediately due and payable on any date (the "ACCELERATION DATE") pursuant to Section 10.01 hereof, the Borrowers, the Canadian Borrower and the Revolving Lenders agree that the outstanding Revolving Loans and Reimbursement Obligations and accrued but unpaid interest thereon not denominated in Dollars shall be automatically converted to Dollars on the Acceleration Date at the then applicable Exchange Rate and any Reimbursement Obligation not denominated in Dollars thereafter arising shall be automatically converted to Dollars on the date of the drawing giving rise thereto under the relevant Letter of Credit at the then applicable Exchange Rate. The Revolving Lenders hereby irrevocably agree for the benefit of each other (and not for the benefit of the Borrowers, the Canadian Borrower or the other Obligors) that, effective as of the Acceleration Date, each Revolving Lender shall acquire participations in each then outstanding Revolving Loan and Letter of Credit Liability in proportion to the aggregate Commitments of such Revolving Lender to the aggregate Revolving Commitments of all the Revolving Lenders, in each case determined immediately prior to the Acceleration Date (such Revolving Lender's "PROPORTION"). On or promptly following the Acceleration Date, the Administrative Agent shall determine for each Revolving Lender the difference between (a) such Revolving Lender's Proportion of the aggregate principal amount of the outstanding Revolving Loans and Reimbursement Obligations on the Acceleration Date after giving effect to the automatic conversion to Dollars and (b) the aggregate principal amount of such Revolving Lender's actual outstanding Revolving Loans and Reimbursement Obligations on the Acceleration Date after giving effect to the automatic conversions to Dollars. Each Revolving Lender whose difference is positive shall make a payment which is equal to such difference to the Administrative Agent in Dollars in immediately available funds on a date set by the Administrative Agent promptly following the Acceleration Date. The Administrative Agent shall distribute such payment to the Revolving Lenders whose differences are negative, with such distribution to be ratable based upon the respective amounts of such negative differences. On each subsequent date on which a Reimbursement Obligation 85 arises by virtue of a draw on a Letter of Credit, each Revolving Lender shall, promptly after being notified thereof, make a payment to the Issuing Lender equal to its Proportion of such Reimbursement Obligation. To the extent that any Revolving Lender shall fail to pay any amount required to be paid pursuant to this Section 10.02 on the due date therefor, such Revolving Lender shall pay interest to the Administrative Agent for ratable distribution to the Revolving Lenders or Issuing Lenders entitled thereto on such amount from and including such due date to but excluding the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate, PROVIDED that if such Revolving Lender shall fail to make such payment within three Business Days of such due date, then, retroactively to the due date, such Revolving Lender shall be obligated to pay interest on such amount at the ABR Rate. Section 11 THE ADMINISTRATIVE AGENT. 11.01. APPOINTMENT POWERS AND IMMUNITIES. Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to act as its agent hereunder and under the other Basic Documents with such powers as are specifically delegated to the Administrative Agent by the terms hereof and thereof, together with such other powers as are reasonably incidental thereto. The Administrative Agent (which term as used in this Section 11 shall include reference to its affiliates and its own and its affiliates' officers, directors, employees and agents): (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Basic Documents, and shall not by reason of this Agreement or any other Basic Document be a trustee for any Lender; (b) shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or any other Basic Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Basic Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Basic Document or any other document referred to or provided for herein or therein or for any failure by the Company, the Canadian Borrower, any other Borrower or any of the Subsidiary Guarantors or any other Person to perform any of its obligations hereunder or thereunder; (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Basic Document except to the extent requested by the Majority Lenders; and (d) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Basic Document or any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. The Administrative Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. 11.02. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent. As to any matters not expressly provided for by this Agreement or any other Basic Document, the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and thereunder in accordance with instructions signed by the 86 Majority Lenders and such instructions of the Majority Lenders and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. 11.03. DEFAULTS. The Administrative Agent shall not be deemed to have knowledge of the occurrence of a Default (other than a Default of the type specified in Section 10.01(a)) unless the Administrative Agent has received notice from a Lender or the Company, the Canadian Borrower or any other Borrower specifying such Default and stating that such notice is a "Notice of Default". In the event that the Administrative Agent receives such a notice of the occurrence of a Default, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall (subject to Section 11.07 hereof) take such action with respect to such Default as shall be directed by the Majority Lenders, provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interests of the Lenders. The Administrative Agent shall deliver to the Lenders a copy of any written declaration made pursuant to the second to last paragraph of Section 10.01 hereof. 11.04. RIGHTS AS A LENDER. With respect to its Commitments and the Loans made by it, the Administrative Agent in its capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Administrative Agent and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent in its individual capacity may (without having to account therefor to any Lender) accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with the Company, the Canadian Borrower, the other Borrowers and the Subsidiary Guarantors (and their respective Affiliates) as if it were not acting as the Administrative Agent, and the Administrative Agent in its individual capacity may accept fees and other consideration from the Company, the Canadian Borrower or any other Borrower (in addition to the agency fees and arrangement fees heretofore agreed to between the Company or the Canadian Borrower and the Administrative Agent) for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 11.05. INDEMNIFICATION. The Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed under Section 12.03 or 12.04 hereof, but without limiting the obligations of the Company under said Sections 12.03 and 12.04), ratably in accordance with the principal amount of their respective Loans and Reimbursement Obligations outstanding, or if no Loans or Reimbursement Obligations are outstanding, ratably in accordance with their respective Commitments, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any other Basic Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses which the Company is obligated to pay under Sections 12.03 and 12.04 hereof but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other 87 documents, PROVIDED, that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified. 11.06. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each Lender agrees that it has, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Company and the Canadian Borrower and decision to enter into this Agreement and that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or any of the other Basic Documents. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by the Company, the Canadian Borrower, the other Borrowers and the Subsidiary Guarantors of this Agreement or any of the other Basic Documents or any other document referred to or provided for herein or therein or to inspect the properties or books of the Company, the Canadian Borrower, any other Borrower or any of the Subsidiary Guarantors. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder or the other Basic Documents, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of the Company, the Canadian Borrower, any other Borrower or any of the Subsidiary Guarantors (or any of their affiliates) which may come into the possession of the Administrative Agent. 11.07. FAILURE TO ACT. Except for action expressly required of the Administrative Agent hereunder and under the other Basic Documents, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction by the Lenders of their indemnification obligations under Section 11.05 hereof against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. 11.08. RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT. Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Company and the Administrative Agent may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal the Majority Lenders shall have the right to appoint a successor Administrative Agent reasonably acceptable to the Company. Upon any such resignation or removal, the Administrative Agent that resigned or was removed shall, to the extent that its annual agency fee was paid in advance, pay to the Company an amount equal to such fee multiplied by a fraction the numerator of which shall be the number of days remaining on the date of such resignation or removal until the next anniversary of the Effective Date, and the denominator of which shall be 365. If no successor Administrative Agent shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent's giving of notice of resignation or the Majority Lenders' removal of the retiring Administrative Agent (the "Notice Date"), then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent reasonably acceptable to the Company. Any successor Administrative Agent shall be (i) a Lender or (ii) if no Lender has accepted such appointment within 30 days after the Notice Date, a 88 bank which has an office in New York, New York with a combined capital and surplus of at least $250,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Section 11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent. 11.09. CONSENTS UNDER BASIC DOCUMENTS. Without the prior written consent of the Majority Lenders, the Administrative Agent will not consent to any modification, supplement or waiver under any of the Basic Documents or any of the other documents described in Section 9.20 hereof. 11.10. COLLATERAL SUB-AGENTS. Each Lender by its execution and delivery of this Agreement agrees, as contemplated by the Security Documents, that, in the event it shall hold any Liquid Investments referred to therein, such Liquid Investments shall be held in the name and under the control of such Lender and such Lender shall hold such Liquid Investments as a collateral sub-agent for the Administrative Agent thereunder. 11.11. MULTI-CURRENCY PAYMENT AGENT AND CANADIAN ADMINISTRATIVE AGENT. The Multi-Currency Payment Agent referred to herein and the Canadian Administrative Agent referred to in Annex A hereto shall be deemed to be sub-agents of the Administrative Agent for all purposes of this Agreement and entitled to the benefits of this Section 11. 11.12. ADDITIONAL MINISTERIAL POWERS OF THE AGENTS. The Administrative Agent is hereby irrevocably authorized by each of the Lenders to execute any document creating any Lien and to release any Lien covering any asset of the Company or any of its Subsidiaries (including, without limitation, any Facilities, accounts receivable or inventory) that is the subject of a disposition, sale or assignment which is permitted under this Agreement. Section 12 MISCELLANEOUS. 12.01. WAIVER. No failure on the part of the Administrative Agent or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Basic Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided in the Basic Documents are cumulative and not exclusive of any remedies provided by law. 12.02. NOTICES. All notices and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made by telecopy or other writing and telecopied, mailed or delivered to the intended recipient (a) in the case of the Company, the Canadian Borrower, the Administrative Agent, the Multi-Currency Payment Agent or the Canadian Administrative Agent at the "Address for Notices" specified below its name on the signature pages hereof; (b) in the 89 case of any Lender, at its address (or telecopy number) set forth in its Administrative Questionnaire; (c) in the case of any other Borrower, at its address (or telecopy number) set forth in its Election to Participate; or, as to any party, at such other address as shall be designated by such party in a notice to the Company, the Canadian Borrower and the Administrative Agent given in accordance with this Section 12.02. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier (and receipt is electronically confirmed), personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. 12.03. EXPENSES ETC. The Company agrees to pay or reimburse each of the Lenders and the Administrative Agent for paying: (a) the reasonable fees and expenses of Simpson Thacher & Bartlett, special counsel to the Administrative Agent, in connection with (i) the preparation, execution and delivery of this Agreement (including the Exhibits hereto) and the Security Documents and the making of the Loans hereunder and (ii) any modification, supplement or waiver of any of the terms of this Agreement or any other Basic Document (including, without limitation, the amendment and restatement evidenced hereby); (b) all reasonable costs and expenses of the Lenders and the Administrative Agent (including reasonable counsels' fees) in connection with the enforcement of this Agreement or any other Basic Document or any bankruptcy, insolvency or other proceedings); (c) all mortgage, intangible, transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other Basic Document or any other document referred to herein or therein; and (d) all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by this Agreement, any Security Document or any document referred to herein or therein. 12.04. INDEMNIFICATION. The Company shall indemnify the Administrative Agent, the Canadian Administrative Agent, the Lenders and each affiliate thereof and their respective directors, officers, employees and agents from, and hold each of them harmless against, any and all losses, liabilities, claims or damages to which any of them may become subject, insofar as such losses, liabilities, claims or damages arise out of, relate to or result from any (i) Loan by any Lender hereunder or (ii) breach by the Company, the Canadian Borrower or any other Borrower of this Agreement or any other Basic Document or (iii) the Pierce Merger or (iv) any Environmental Liabilities (whether known or unknown) or (v) any investigation, litigation or other proceeding (including any threatened investigation or proceeding) relating to the foregoing, and the Company shall reimburse the Administrative Agent, the Canadian Administrative Agent and each Lender, and each affiliate and their respective directors, officers, employees and agents, upon demand for any reasonable expenses (including legal fees) incurred in connection with any such investigation or proceeding; but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified. 12.05. AMENDMENTS. ETC. No amendment or waiver of any provision of this Agreement or the Notes or the C$ Notes, nor any consent to any departure by the Company, the Canadian Borrower or any other Borrower therefrom, shall in any event be effective unless the same shall be agreed or consented to by the Majority Lenders and the Company, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for 90 which given; PROVIDED that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a defaulting Lender) directly affected thereby, (i) extend the Commitment Termination Date (it being understood that any waiver of any prepayment of, or the method of application of any prepayment to the amortization of, Loans shall not constitute any such extension), or extend the stated maturity of any Letter of Credit beyond the Commitment Termination Date, or extend the scheduled date of any payment of principal of any Term Loan, or reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) or fees, or reduce the principal amount thereof, or increase any Commitment of any Lender over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Commitments shall not constitute a change in the terms of a Commitment of a Lender), (ii) amend, modify or waive any provision of this Section 12.05, (iii) reduce the percentage specified in, or (except to give effect to any additional facilities hereunder) otherwise modify, the definition of Majority Lenders, (iv) release all or substantially all of the security for the obligations of the Company, the Canadian Borrower or any other Borrower under this Agreement or any Note, (v) change the order of any mandatory prepayment provided for in Section 3.02(b) or (c) hereof without the consent of Term Lenders having at least 51% of the aggregate principal amount of the Term Loans or (vi) release all or substantially all of the Subsidiary Guarantors from their obligations under the Subsidiary Guaranty. Notwithstanding anything in this Section 12.05 to the contrary, no amendment, waiver or consent shall be made (x) with respect to Section 11 without the consent of the Administrative Agent or (y) with respect to Annex A hereto without the consent of the Canadian Borrower. 12.06. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns except that the Company, the Canadian Borrower and the other Borrowers may not assign their rights or obligations hereunder or under the Notes or the C$ Notes without the prior written consent of all of the Lenders. Each Lender may assign all or a portion of its rights and obligations under this Agreement and the Notes and the C$ Notes (i) to any affiliate thereof (including, without limitation, (x) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar lines of credit in the ordinary course of its business and is administered or managed by a Lender or an affiliate of such Lender and (y) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an affiliate of such investment advisor), (ii) to any other Lender or (iii) with the consent of the Administrative Agent, of the Issuing Bank or the Canadian Issuing Bank (to the extent that the rights and obligations assigned include obligations in respect of the US$ Commitments, Multi-Currency Commitments or Canadian Commitments, as the case may be) and of the Company (provided, that the consent of the Company shall not be required if an Event of Default hereunder shall have occurred and be continuing), which consents shall not be unreasonably withheld or delayed, to any other bank or financial institution (it being understood that, in the case of the Canadian Issuing Bank, it shall not be unreasonable to withhold consent in the case of any proposed assignment to any entity or entities rated below BBB+ by Standard & Poor's, a Division of the McGraw-Hill Companies, Inc., or other comparable rating by another comparable rating agency), PROVIDED that any such partial assignment shall not, unless the Company and the Administrative Agent otherwise agree, be less than $5,000,000 (or, in the case of Term Loans, 91 $1,000,000), or if the remainder of the Lender's Commitment or Term Loans is less than $5,000,000, such lesser amount. Upon execution by the assignor and the assignee of an instrument pursuant to which the assignee assumes such rights and obligations, payment by such assignee to such assignor of an amount equal to the purchase price agreed between such assignor and such assignee and delivery to the Administrative Agent and the Company of an executed copy of such instrument together with payment by such assignee to the Administrative Agent of a processing fee of $2,500, such assignee shall have, to the extent of such assignment (unless otherwise provided therein), the same rights and benefits as it would have if it were a Lender hereunder and the assignor shall be, to the extent of such assignment (unless otherwise provided therein), released from its obligations under this Agreement. Each Lender may (without the consent of any other party to this Agreement) sell participations in all or any part of any Loan or Loans or any Commitment or Commitments made by it to another bank or other entity, in which event the participant shall not have any rights under this Agreement (except as provided in the next succeeding sentence hereof), or in the case of a Loan, such Lender's Note or C$ Note (the participant's rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto, which agreement shall not give the participant the right to consent to any modification, amendment or waiver other than one described in clause (i), (ii), (iii),(iv), (v) or (vi) of Section 12.05 hereof). Each of the Company and the Canadian Borrower agrees that each participant shall be entitled to the benefits of Sections 5.07 and 6 of this Agreement and Section 3.8 of Annex A hereto with respect to its participation; PROVIDED that no participant shall be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such participant had no such transfer occurred. Each Lender may furnish any information concerning the Company and its Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants) which have agreed in writing to be bound by the provisions of Section 12.07 hereof. The Administrative Agent and the Company may, for all purposes of this Agreement, treat any Lender as the holder of any Note or C$ Note drawn to its order (and owner of the Loans evidenced thereby) until written notice of assignment, participation or other transfer shall have been received by them from such Lender. In addition to the assignments and participations permitted the foregoing provisions of this Section 12.06, any Lender may (without notice to the Company, the Canadian Borrower, any other Borrower, the Administrative Agent, the Issuing Bank or any other Lender and without payment of any fee) assign and pledge all or any portion of its Loans and its Notes (i) to any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank and (ii) with respect to any Lender which is a fund, to its trustee or creditors in support of its obligations to its trustee or creditors, and such Loans and Notes shall be fully transferable as provided therein. No such assignment pursuant to the preceding sentence shall release the assigning Lender from its obligations hereunder. 12.07. CONFIDENTIALITY. Each Lender agrees to exercise all reasonable efforts to keep any information delivered or made available by or on behalf of the Company to it which has not been publicly disclosed confidential from anyone other than persons employed or retained by such Lender who are or are expected to become engaged in evaluating, approving, structuring or administering the Loans; PROVIDED that nothing herein shall prevent any Lender 92 from disclosing such information (i) to any other Lender, (ii) to the officers, directors, employees, agents, attorneys and accountants of such Lender or its affiliates who have a need to know such information in accordance with customary banking practices and who receive such information having been made aware of the restrictions set forth in this Section, (iii) upon the order of any court or administrative agency, (iv) upon the request or demand of any regulatory agency or authority having jurisdiction over such Lender, (v) to the extent reasonably required in connection with any litigation to which the Administrative Agent, any Lender, the Company, the Canadian Borrower, any other Borrower, any Subsidiary Guarantor or their respective affiliates may be a party, (vi) to the extent reasonably required in connection with the exercise of any remedy hereunder, (vii) to such Lender's legal counsel and independent auditors, and (viii) to any actual or proposed participant or assignee of all or part of its rights hereunder which has agreed in writing to be bound by the provisions of this Section 12.07. 12.08. SURVIVAL. The obligations of the Company under Sections 6.01, 6.05, 6.06, 6.08, 6.09, 12.03 and 12.04 hereof and of the Canadian Borrower under such Sections and Section 3.8 of Annex A hereto and the obligations of the Lenders under Section 11.05 shall survive the repayment of the Loans and the termination of the Commitments. 12.09. CAPTIONS. Captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 12.10. COUNTERPARTS; INTEGRATION. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral and written, relating to the subject matter hereof. 12.11. [intentionally omitted] 12.12. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. EACH OF THE COMPANY, THE CANADIAN BORROWER AND THE SUBSIDIARY BORROWERS HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER BASIC DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE COMPANY, THE CANADIAN BORROWER AND THE SUBSIDIARY BORROWERS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE COMPANY, THE CANADIAN BORROWER, THE SUBSIDIARY 93 BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER BASIC DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. 12.13. CANADIAN BORROWER'S AGENT; SUBSIDIARY BORROWERS' AGENT. (a) The Canadian Borrower, by execution and delivery of this Agreement, irrevocably appoints the Company as its agent and attorney-in-fact for all purposes of this Agreement, irrevocably designates, appoints and empowers the Company, as its designee and agent, for service of any and all legal process, summons, notices and documents which may be served in any such action or proceeding and hereby ratifies and confirms, and agrees to be bound by, all actions taken by the Company on its behalf pursuant to the foregoing authorization. The Company irrevocably accepts such appointment. Without limiting the generality of the foregoing, all notices from and to the Canadian Borrower hereunder shall be given by or to the Company on its behalf. Each Lender, the Canadian Administrative Agent and the Administrative Agent may conclusively rely on the authority of the Company to act on behalf of the Canadian Borrower. (b) Each Subsidiary Borrower, by execution and delivery of its Election to Participate, irrevocably appoints the Company as its agent and attorney-in-fact for all purposes of this Agreement, irrevocably designates, appoints and empowers the Company, as its designee and agent, for service of any and all legal process, summons, notices and documents which may be served in any such action or proceeding and hereby ratifies and confirms, and agrees to be bound by, all actions taken by the Company on its behalf pursuant to the foregoing authorization. The Company irrevocably accepts such appointment. Without limiting the generality of the foregoing, all notices from and to each Subsidiary Borrower hereunder shall be given by or to the Company on its behalf. Each Lender and the Administrative Agent may conclusively rely on the authority of the Company to act on behalf of any Subsidiary Borrower. 12.14. DESIGNATION OF INDEBTEDNESS. The indebtedness incurred hereunder constitutes "Senior Debt" or "Senior Indebtedness", as the case may be (and, accordingly, "Designated Senior Debt" or "Designated Senior Indebtedness", as the case may be) under the Senior Subordinated Debt Indentures and the other Senior Subordinated Debt Documents. 12.15. AMENDMENTS TO SECURITY DOCUMENTS, ETC. Each of the parties hereby consents to and approves in all material respects the Acknowledgment and Confirmation of Guarantee or Security Documents, dated as of the date hereof, among the Company, Iron Mountain Canada Corporation, the Subsidiary Guarantors, the Administrative Agent and the Canadian Administrative Agent, and substantially in the form attached hereto as Exhibit L, upon the terms and conditions set forth therein, including, without limitation, the amendments to the Security Documents effected thereby, including the amendment to the Company Pledge Agreement, the Subsidiary Pledge Agreement and the Canadian Borrower Pledge Agreement to include as part of the Collateral, as defined therein, intercompany notes and advances and the amendment to the Company Guarantee to include within such Guarantee the Reimbursement Obligations of the Canadian Borrower in respect of Canadian Letters of Credit. The following annexes, exhibits and schedules have been omitted and will be supplementally furnished to the Securities and Exchange Commission upon request: SCHEDULES --------- SCHEDULE I - Commitments SCHEDULE II - Subsidiaries; Investments in Joint Ventures and Other Persons SCHEDULE III - Credit Agreements, Indentures, Leases SCHEDULE IV - Existing Letters of Credit SCHEDULE V - Subsidiary Borrowers EXHIBITS -------- EXHIBIT A-1 - Form of Revolving Credit Note EXHIBIT A-2 - Form of Term Note EXHIBIT B - Subsidiary Guaranty EXHIBIT C - Company Guaranty EXHIBIT D - Company Pledge Agreement EXHIBIT E - Subsidiary Pledge Agreement EXHIBIT F - Canadian Borrower Pledge Agreement EXHIBIT G-1 - Form of Opinion of Special New York Counsel to the Company EXHIBIT G-2 - Form of Opinion of Special Pennsylvania Counsel to the Company EXHIBIT H - Form of Opinion of Special New York Counsel to the Administrative Agent EXHIBIT I - Election to Participate EXHIBIT J - Election to Terminate EXHIBIT K - Exemption Certificate EXHIBIT L - Form of Acknowledgment and Confirmation of Guarantee or Security Document EXHIBIT M - Form of Second Amended and Restated Pledge and Intercreditor Agreement IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. COMPANY: -------- IRON MOUNTAIN INCORPORATED By /s/ J.P. Lawrence -------------------------------------- Title: VP & Treasurer Address for Notices: 745 Atlantic Avenue Boston, Massachusetts 02111 Attention: John F. Kenny, Jr. Executive Vice President and Chief Financial Officer Fax No.: (617) 350-7881 COPY TO: Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Attention: Harry E. Ekblom, Jr. Fax No.: (617) 338-2880 CANADIAN BORROWER: IRON MOUNTAIN CANADA CORPORATION By /s/ J.P. Lawrence -------------------------------------- Title: VP & Treasurer Address for Notices: Iron Mountain Canada Corporation 195 Summerlea Road Brampton, Ontario, Canada L6T 4P6 Fax: (905) 792-2567 with a copy to: Iron Mountain Incorporated. 745 Atlantic Avenue Boston, Massachusetts 02111 Attention: John F. Kenny, Jr. Executive Vice President and Chief Financial Officer US$ LENDERS WACHOVIA BANK, N.A. Name of Lender By: /s/ J. Andrew Pagen -------------------------------------- J. Andrew Pagen Vice President FIRST UNION NATIONAL BANK Name of Lender By: /s/ J. Andrew Pagen -------------------------------------- J. Andrew Pagen Vice President FLEET NATIONAL BANK Name of Lender By: /s/ Michael A. Palmer -------------------------------------- Michael A. Palmer Senior Vice President CIBC, INC. Name of Lender By: /s/ Tefta Ghilaga -------------------------------------- Tefta Ghilaga Executive Director CIBC World Markets Corp. As Agent THE BANK OF NOVIA SCOTIA Name of Lender By: /s/ T.M. Pitcher -------------------------------------- T.M. Pitcher Authorized Signatory CREDIT LYONNAIS NEW YORK BRANCH Name of Lender By: /s/ James D. A. Gibson -------------------------------------- James D. A. Gibson Senior Vice President BANK ONE, NA (MAIN OFFICE CHICAGO) Name of Lender By: /s/ Joseph Pinzone -------------------------------------- Joseph Pinzone Director THE BANK OF NEW YORK Name of Lender By: /s/ Kenneth Sneider -------------------------------------- Kenneth Sneider Vice President HSBC BANK USA Name of Lender By: /s/ Thomas J. Crowley -------------------------------------- Thomas J. Crowley Vice President UNION BANK OF CALIFORNIA, N.A. Name of Lender By: /s/ David W. Kinkeis -------------------------------------- David W. Kinkeis Vice President DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES Name of Lender By: /s/ John A. Ramelli III -------------------------------------- John A. Ramelli III Vice President By: /s/ Brian M. Smith -------------------------------------- Brian M. Smith Director ALLFIRST BANK Name of Lender By: /s/ Mark K. Fidati -------------------------------------- Mark K. Fidati Vice President ERSTE BANK NEW YORK BRANCH Name of Lender By: /s/ Paul Judicke -------------------------------------- Paul Judicke Vice President Erste Bank New York Branch By: /s/ Robert J. Wagman -------------------------------------- Robert J. Wagman Vice President Erste Bank New York Branch CITIZEN'S BANK OF MASSACHUSETTS Name of Lender By: /s/ Edward C. Thaute -------------------------------------- Edward C. Thaute Vice President ARAB BANK Name of Lender By: /s/ Samer Tamili -------------------------------------- Samer Tamili Vice President MULTI-CURRENCY LENDERS WACHOVIA BANK, N.A. Name of Lender By: /s/ J. Andrew Pagen -------------------------------------- J. Andrew Pagen Vice President FIRST UNION NATIONAL BANK Name of Lender By: /s/ J. Andrew Pagen -------------------------------------- J. Andrew Pagen Vice President FLEET NATIONAL BANK Name of Lender By: /s/ Michael A. Palmer -------------------------------------- Michael A. Palmer Senior Vice President CIBC, INC. Name of Lender By: /s/ Tefta Ghilaga -------------------------------------- Tefta Ghilaga Executive Director CIBC World Markets Corp. As Agent THE BANK OF NOVIA SCOTIA Name of Lender By: /s/ T.M. Pitcher -------------------------------------- T.M. Pitcher Authorized Signatory CREDIT LYONNAIS NEW YORK BRANCH Name of Lender By: /s/ James D. A. Gibson -------------------------------------- James D.A. Gibson Senior Vice President BANK ONE, NA (MAIN OFFICE CHICAGO) Name of Lender By: /s/ Joseph Pinzone -------------------------------------- Joseph Pinzone Director THE BANK OF NEW YORK Name of Lender By: /s/ Kenneth Sneider -------------------------------------- Kenneth Sneider Vice President HSBC BANK USA Name of Lender By: /s/ Thomas J. Crowley -------------------------------------- Thomas J. Crowley Vice President UNION BANK OF CALIFORNIA, N.A. Name of Lender By: /s/ David W. Kinkeis -------------------------------------- David W. Kinkeis Vice President DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES Name of Lender By: /s/ John A. Ramelli III -------------------------------------- John A. Ramelli III Vice President By: /s/ Brian M. Smith -------------------------------------- Brian M. Smith Director ALLFIRST BANK Name of Lender By: /s/ Mark X. Fidati -------------------------------------- Mark X. Fidati Vice President ERSTE BANK NEW YORK BRANCH Name of Lender By: /s/ Paul Judicke -------------------------------------- Paul Judicke Vice President Erste Bank New York Branch By: /s/ Robert J. Wagman -------------------------------------- Robert J. Wagman Vice President Erste Bank New York Branch CITIZENS BANK OF MASSACHUSETTS Name of Lender By: /s/ Edward C. Thaute -------------------------------------- Edward C. Thaute Vice President US$-CANADIAN LENDERS -------------------- CIBC, Inc. Name of Lender By: /s/ Tefta Ghilaga -------------------------------------- Name: Tefta Ghilaga Title: Executive Director, CIBC World Markets Corp. as Agent The Bank of Nova Scotia Name of Lender By: /s/ T.M. Pitcher -------------------------------------- T.M. Pitcher Authorized Signatory CANADIAN LENDERS ---------------- CIBC, Inc. Name of Lender By: /s/ Tefta Ghilaga -------------------------------------- Name: Tefta Ghilaga Title: Executive Director, CIBC World Markets Corp. as Agent The Bank of Nova Scotia Name of Lender By: /s/ S.C. Spencer -------------------------------------- S.C. Spencer Director TERM LENDERS FLEET NATIONAL BANK Name of Lender By: /s/ Michael A. Palmer -------------------------------------- Michael A. Palmer Senior Vice President THE BANK OF NOVIA SCOTIA Name of Lender By: /s/ T.M. Pitcher -------------------------------------- T.M. Pitcher Authorized Signatory BNP PARIBAS Name of Lender By: /s/ Shayn P. March -------------------------------------- Shayn P. March Vice President By: /s/ Nanette Baudon -------------------------------------- Nanette Baudon Vice President CREDIT LYONNAIS NEW YORK BRANCH Name of Lender By: /s/ James D. A. Gibson -------------------------------------- James D. A. Gibson Senior Vice President BANK ONE, NA (MAIN OFFICE CHICAGO) Name of Lender By: /s/ Joseph Pinzone -------------------------------------- Joseph Pinzone Director THE SUMITOMO TRUST AND BANKING CO., LTD., NEW YORK BRANCH Name of Lender By: /s/ Frances E. Wynne -------------------------------------- Frances E. Wynne Vice President LAGUNA FUNDING TRUST Name of Lender By: /s/ Ann E. Morris -------------------------------------- Ann E. Morris Authorized Agent WEBSTER BANK Name of Lender By: /s/ Gail Bruhn -------------------------------------- Gail Bruhn Vice President METROPOLITAN LIFE INSURANCE COMPANY Name of Lender By: /s/ Jones R. Dingler -------------------------------------- Jones R. Dingler BEAR STEARNS CORPORATE LENDING, INC. Name of Lender By: /s/ Keith C. Barnish -------------------------------------- Keith C. Barnish Executive Vice President GENERAL ELECTRIC CAPITAL CORPORATION Name of Lender By: /s/ Robert M. Kadlick -------------------------------------- Robert M. Kadlick Duly Authorized Signatory MORGAN STANLEY PRIME INCOME TRUST Name of Lender By: /s/ Peter Gewirtz -------------------------------------- Peter Gewirtz Vice President TORONTO DOMINION (NEW YORK), INC, Name of Lender By: /s/ Stacey Malek -------------------------------------- Stacey Malek Vice President PPM SHADOW CREEK FUNDING LLC Name of Lender By: /s/ Ann E. Morris -------------------------------------- Ann E. Morris Asst. Vice President PINEHURST TRADING, INC. Name of Lender By: /s/ Ann E. Morris -------------------------------------- Ann E. Morris Asst. Vice President JUPITER FUNDING TRUST Name of Lender By: /s/ Ann E. Morris -------------------------------------- Ann E. Morris Authorized Agent WINGED FOOT FUNDING TRUST Name of Lender By: /s/ Ann E. Morris -------------------------------------- Ann E. Morris Authorized Agent KZH PONDVIEW LLC Name of Lender By: /s/ Anthony Tarrobino -------------------------------------- Anthony Tarrobino Authorized Agent KZH WATERSIDE LLC Name of Lender By: /s/ Susan Lee -------------------------------------- Susan Lee Authorized Agent SKUDDER FLOATING RATE FUND Name of Lender By: /s/ Kenneth Weber -------------------------------------- Kenneth Weber Sr. Vice President OLYMPIC FUNDING TRUST, SERIES 1999-1 Name of Lender By: /s/ Ann E. Morris -------------------------------------- Ann E. Morris Authorized Agent MUIRFIELD TRADING LLC Name of Lender By: /s/ Ann E. Morris -------------------------------------- Ann E. Morris Asst. Vice President ADMINISTRATIVE AGENT -------------------- JPMORGAN CHASE BANK, as Administrative Agent By: ------------------------------------- Title: ADDRESS FOR NOTICES GIVEN PURSUANT TO SECTION 5.05: (a) US$ Notices JPMorgan Chase Bank Loan and Agency Group 1 Chase Manhattan Plaza 8th Floor New York, New York 10081 Attention: Ryan White Telecopier No.: (212) 552-5662 Telephone No.: (212) 552-7915 (b) Multicurrency Notices Chase Manhattan International Agency Department Trinity Tower-9 Thomas More St. London, United Kingdom E1 9YT Attention: Steven Clarke Telecopier No.: 44-207-777-2360 Telephone No.: 44-207-777-2353 ADDRESS FOR OTHER NOTICES: JPMorgan Chase Bank 270 Park Avenue 47th Floor New York, New York 10017 Attention: Robert Sacks Telecopier No.: (212) 270-5120 Telephone No.: (212) 270-4118 CANADIAN ADMINISTRATIVE AGENT ----------------------------- J.P. MORGAN BANK CANADA, as Canadian Administrative Agent By: ------------------------------------- Title: ADDRESS FOR FUNDING NOTICES: J.P. Morgan Bank Canada 200 Bay St. Royal Bank Plaza, South Tower Suite 1800 Toronto, Ontario M5J 2J2 Attention: Amanda Staff Telecopier No.: (416) 981-9128 Telephone No.: (416) 981-9235 ADDRESS FOR NOTICES: J.P. Morgan Bank Canada 200 Bay St. Royal Bank Plaza, South Tower Suite 1800 Toronto, Ontario M5J 2J2 Attention: Christine Chan Telecopier No.: (416) 981-9278 Telephone No.: (416) 981-9123 Annex A to the Credit Agreement SECTION 1. DEFINITIONS DEFINED TERMS. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms shall have the following meanings: "ACCEPTANCE FEE" shall mean the fee payable in C$ to each Canadian Lender in respect of Bankers' Acceptances computed in accordance with subsection 2.3(e). "APPLICABLE BA DISCOUNT RATE" shall mean (i) with respect to any Schedule I Canadian Lender, as applicable to a Bankers' Acceptance being purchased by such Schedule I Canadian Lender on any day, the average (as determined by the Canadian Administrative Agent) of the respective percentage discount rates (expressed to two decimal places and rounded upward, if necessary, to the nearest 1/100th of 1%) quoted to the Canadian Administrative Agent by each Schedule I Reference Canadian Lender as the percentage discount rate at which such Schedule I Reference Canadian Lender would, in accordance with its normal practices, at or about 10:00 A.M. (Toronto time) on such day, be prepared to purchase bankers' acceptances accepted by such Schedule I Reference Canadian Lender having a term and face amount comparable to the term and face amount of such Bankers' Acceptance and (ii) with respect to any Schedule II Canadian Lender, as applicable to a Bankers' Acceptance being purchased by such Schedule II Canadian Lender on any day, the lesser of (x) the average (as determined by the Canadian Administrative Agent) of the respective percentage discount rates (expressed to two decimal places and rounded upward, if necessary, to the nearest 1/100th of 1%) quoted to the Canadian Administrative Agent by each Schedule II Reference Canadian Lender as the percentage discount rate at which such Schedule II Reference Canadian Lender would, in accordance with its normal practices, at or about 10:00 A.M. (Toronto time) on such day, be prepared to purchase bankers' acceptances accepted by such Schedule II Reference Canadian Lender having a term and a face amount comparable to the term and face amount of such Bankers' Acceptance and (y) the rate that is 0.10% per annum in excess of the rate determined pursuant to clause (i) of this definition in connection with the relevant issuance of Bankers' Acceptances. "APPLICABLE MARGIN FOR CANADIAN BORROWING" shall mean the rate for the respective type of C$ Loan set forth below opposite the level (either Level 1, Level 2, Level 3, Level 4, Level 5 or Level 6) indicated in the schedule set forth below corresponding to the Applicable Leverage Ratio in effect at such time: 2 Applicable Margin (% per annum) ----------------------------------
Range of C$ Prime Bankers' Leverage Ratio Loans Acceptances -------------- ------------ --------------- LEVEL 6 Greater than or equal to 5.50 to 1.00 1.50% 2.50% LEVEL 5 Less than 5.50 to 1.00 and greater than or equal to 5.25 to 1.00 1.25% 2.25% LEVEL 4 Less than 5.25 to 1.00 and greater than or equal to 4.50 to 1.00 1.00% 2.00% LEVEL 3 Less than 4.50 to 1.00 and greater than or equal to 3.75 to 1.00 0.75% 1.75% LEVEL 2 Less than 3.75 to 1.00 and greater than or equal to 3.25 to 1.00 0.50% 1.50% LEVEL 1 Less than 3.25 to 1.00 0.25% 1.25%
"AVAILABLE CANADIAN COMMITMENT" shall mean as to any Canadian Lender, at a particular time, an amount equal to the excess, if any, of (a) the amount of such Canadian Lender's Canadian Commitment at such time OVER (b) the aggregate principal amount of all C$ Loans made by such Canadian Lender then outstanding. "BA DISCOUNT PROCEEDS" shall mean in respect of any Bankers' Acceptance to be purchased by a Canadian Lender on any day under subsection 2.3, an amount (rounded to the nearest whole Canadian cent, and with one-half of one Canadian cent being rounded up) calculated on such day by dividing: (a) the face amount of such Bankers' Acceptance; by (b) the sum of one PLUS the product of: 3 (i) the Applicable BA Discount Rate (expressed as a decimal) applicable to such Bankers' Acceptance; and (ii) a fraction, the numerator of which is the number of days remaining in the term of such Bankers' Acceptance and the denominator of which is 365; with such product being rounded up or down to the fifth decimal place and .000005 being rounded up. "BANKERS' ACCEPTANCE" shall mean a bill of exchange or a depository bill governed by the Depository Bills and Notes Act (Canada) denominated in C$ drawn by the Canadian Borrower and accepted by a Canadian Lender pursuant to subsection 2.3. "BORROWING DATE (CANADA)" shall mean any Business Day (Canada) specified in a notice as a date on which the Canadian Borrower requests the relevant Canadian Lenders to make C$ Loans under this Annex A to the Credit Agreement. "BUSINESS DAY (CANADA)" shall mean a day on which banks are open for business in Toronto, Ontario, Canada but excludes Saturday, Sunday and any other day which is a legal holiday in Toronto, Ontario, Canada. "CANADIAN ADMINISTRATIVE AGENT" shall mean J.P. Morgan Bank Canada, together with its affiliates, as the agent for the Canadian Lenders under the Credit Agreement and the other Basic Documents. "CANADIAN ADMINISTRATIVE OFFICE" shall mean the Canadian Administrative Agent's office located at 200 Bay Street, Royal Bank Plaza, South Tower, Suite 1800, Toronto, Ontario M5J 2J2, or such other office in Canada as may be designated as such by the Canadian Administrative Agent by written notice to the Canadian Borrower and the Lenders. "CANADIAN COMMITMENT" shall mean as to any Canadian Lender, the obligation of such Canadian Lender to make C$ Prime Loans to and purchase Bankers' Acceptances from the Canadian Borrower hereunder in an aggregate principal or face amount at any one time outstanding up to but not exceeding the amount set forth opposite such Canadian Lender's name on Schedule I to the Credit Agreement under the caption "Canadian Commitment" (expressed in Canadian Dollars) or, in the case of a Person that is party to an assignment permitted under Section 12.06 of the Credit Agreement after the Effective Date, as specified in the respective instrument of assignment pursuant to which such assignment is effected (as the same may be reduced at any time or from time to time pursuant to subsection 3.3 of this Annex A or reallocated from time to time pursuant to subsection 2.6 of this Annex A, and may be increased from time to time pursuant to Section 12.11 of the Credit Agreement). The original aggregate principal amount of the Canadian Commitments is the Canadian Dollar equivalent of US$50,000,000 minus the original aggregate amount of the US$-Canadian Commitments; PROVIDED, that in no event shall the aggregate outstanding principal amount of the C$ Loans, together with the 4 aggregate outstanding principal amount of the US$-Canadian Loans, exceed US$50,000,000. "CANADIAN DOLLARS" or "C$" shall mean dollars in lawful currency of Canada. "CANADIAN EXCHANGE RATE" shall mean on a particular date, the rate at which C$ may be exchanged into US$, determined by reference to the Bank of Canada noon rate as published on the Reuters Screen page BOFC. In the event that such rate does not appear on such Reuters page, the "CANADIAN EXCHANGE RATE" shall be determined by reference to any other means (as selected by the Canadian Administrative Agent) by which such rate is quoted or published from time to time by the Bank of Canada (in each case as in effect at or about 12:00 Noon, Toronto time, on the Business Day (Canada) immediately preceding the relevant date of determination); PROVIDED, that if at the time of any such determination, for any reason, no such exchange rate is being quoted or published, the Canadian Administrative Agent may use any reasonable method as it deems applicable to determine such rate, and such determination shall be prima facie evidence of the accuracy thereof. "CANADIAN ISSUING BANK" shall mean The Bank of Nova Scotia. "CANADIAN LENDER" shall mean each of the lenders that is a signatory to the Credit Agreement under the caption "CANADIAN LENDER" on the signature pages thereto and each lender or financial institution that becomes a Canadian Lender after the date hereof pursuant to Section 12.06 of the Credit Agreement. "CANADIAN LENDING OFFICE" shall mean for each Canadian Lender, the lending office for such Canadian Lender (or of an affiliate of such Canadian Lender) designated for each type of C$ Loan in the Administrative Questionnaire of such Canadian Lender or such other lending office of such Canadian Lender (or of an affiliate of such Canadian Lender) as such Canadian Lender may from time to time specify to the Canadian Administrative Agent and the Canadian Borrower as the office by which its C$ Loans of such type are to be made and maintained. "CANADIAN LETTERS OF CREDIT" shall have the meaning assigned to such term in Section 2.8 hereof. "C$ COMMITMENT PERCENTAGE" shall mean as to any Canadian Lender at any time, the percentage of the aggregate Canadian Commitments then constituted by such Canadian Lender's Canadian Commitment. "C$ LOANS" shall mean the collective reference to C$ Prime Loans and Bankers' Acceptances; for the purposes of this Agreement, the principal amount of any C$ Loan constituting a Bankers' Acceptance shall be deemed to be the undiscounted face amount of such Bankers' Acceptance. "C$ NOTE" as defined in subsection 3.2 hereof. 5 "C$ PRIME LOANS" shall mean advances denominated in Canadian Dollars that bear interest at a rate based upon the C$ Prime Rate. "C$ PRIME RATE" shall mean with respect to a C$ Prime Loan, on any day, the greater of (a) the annual rate of interest announced from time to time by the Canadian Administrative Agent as its reference rate then in effect for determining interest rates on C$ denominated commercial loans in Canada and (b) the annual rate of interest equal to the sum of (i) the CDOR Rate and (ii) 0.50% per annum. "CDOR RATE" shall mean on any date, the per annum rate of interest which is the rate based on the rate applicable to C$ bankers' acceptances for a term of 30 days appearing on the "Reuters Screen CDOR Page" (as defined in the International Swap Dealer Association, Inc. definitions, as modified and amended from time to time) on such date, or if such date is not a Business Day (Canada), then on the immediately preceding Business Day (Canada); PROVIDED, HOWEVER, that if no such rate appears on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any date shall be calculated as the arithmetic mean of the rates for the term and amount referred to above applicable to C$ bankers' acceptances quoted by the Schedule I Reference Canadian Lenders as of 10:00 A.M., Toronto time, on such date or, if such date is not a Business Day (Canada), then on the immediately preceding Business Day (Canada). "DRAFT" shall mean a blank bill of exchange, within the meaning of the Bills of Exchange Act (Canada), in substantially the form set forth in Exhibit A to this Annex A, drawn by the Canadian Borrower on a Canadian Lender, denominated in C$ and bearing such distinguishing letters and numbers as such Lender may determine, but which at such time, except as otherwise provided herein, has not been completed or accepted by such Lender. "DRAWING" shall mean the creation and purchase of Bankers' Acceptances and/or the purchase of completed Drafts, by the Canadian Lenders pursuant to subsection 2.3. "REQUIREMENT OF LAW" shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "SCHEDULE I CANADIAN LENDER" shall mean any Canadian bank named on Schedule I to the Bank Act (Canada). "SCHEDULE I REFERENCE CANADIAN LENDER" shall mean Canadian Imperial Bank of Commerce and The Bank of Nova Scotia. "SCHEDULE II CANADIAN LENDER" shall mean any bank named on Schedule II or Schedule III to the Bank Act (Canada). "SCHEDULE II REFERENCE CANADIAN LENDER" shall mean J.P. Morgan Bank Canada. 6 SECTION 2. THE CANADIAN COMMITMENTS 2.1. THE CANADIAN COMMITMENTS. Subject to the terms and conditions hereof, each Canadian Lender severally agrees to make revolving credit loans (which shall be C$ Prime Loans) to, to accept and, at the option of the Canadian Borrower, purchase Bankers' Acceptances from, and to issue letters of credit for the account of, the Canadian Borrower from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed the lesser of (i) such Lender's Canadian Commitment and (ii) the US$-Canadian Commitment of such Lender less the aggregate outstanding principal amount of the US$-Canadian Loans of such Lender. During the Commitment Period, the Canadian Borrower may use the Canadian Commitments by borrowing, prepaying (other than Bankers' Acceptances) or repaying the C$ Prime Loans or Bankers' Acceptances, in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. 2.2. PROCEDURE FOR C$ PRIME LOAN BORROWING. The Canadian Borrower may borrow C$ Prime Loans during the Commitment Period on any Business Day (Canada), provided that the Canadian Borrower shall give the Canadian Administrative Agent irrevocable written or telephonic notice (in the case of telephonic notice, to be promptly confirmed in writing) (which notice must be received by the Canadian Administrative Agent prior to 10:00 A.M., Toronto time, one Business Day (Canada) prior to the requested Borrowing Date (Canada)), specifying (a) the amount to be borrowed and (b) the requested Borrowing Date (Canada). Each borrowing of C$ Prime Loans shall be in an amount equal to C$300,000 or a whole multiple of C$100,000 in excess thereof. Upon receipt of any such irrevocable notice from the Canadian Borrower, the Canadian Administrative Agent shall promptly notify each Canadian Lender thereof. Each Canadian Lender will make the amount of its pro rata share of each such borrowing available to the Canadian Administrative Agent for the account of the Canadian Borrower at the Canadian Administrative Office prior to 11:00 A.M., Toronto time, on the Borrowing Date (Canada) requested by the Canadian Borrower in funds immediately available to the Canadian Administrative Agent. Such borrowing will then be made available on such date to the Canadian Borrower by the Canadian Administrative Agent crediting the account of the Canadian Borrower on the books of the Canadian Administrative Office with the aggregate of the amounts made available to the Canadian Administrative Agent by the Canadian Lenders and in like funds as received by the Canadian Administrative Agent. 2.3. BANKERS' ACCEPTANCES. (a) The Canadian Borrower may issue Bankers' Acceptances denominated in C$, for acceptance and, at the Canadian Borrower's option, purchase by the Canadian Lenders, each in accordance with the provisions of this subsection 2.3. (b) PROCEDURES. (1) NOTICE. The Canadian Borrower shall notify the Canadian Administrative Agent by irrevocable written or telephonic notice (in the case of telephonic notice, to be promptly confirmed in writing) by 10:00 A.M., Toronto time, two Business Days (Canada) prior to the date of the relevant borrowing in respect of any borrowing by way of Bankers' Acceptances. 7 (2) MINIMUM BORROWING AMOUNT. Each borrowing by way of Bankers' Acceptances shall be in a minimum aggregate face amount of C$1,000,000 or a whole multiple of C$100,000 in excess thereof. (3) FACE AMOUNTS. The face amount of each Bankers' Acceptance shall be C$100,000 or any whole multiple thereof. (4) TERM. Bankers' Acceptances shall be issued and shall mature on a Business Day (Canada). Each Bankers' Acceptance shall have a term of 30, 60, 90 or 180 days (or such shorter or longer term as shall be agreed to by all of the Canadian Lenders), shall mature on or before the Commitment Termination Date and shall be in form and substance reasonably satisfactory to each Canadian Lender. (5) BANKERS' ACCEPTANCES IN BLANK. To facilitate the acceptance of Bankers' Acceptances under this Agreement, the Canadian Borrower shall, from time to time as required, provide to the Canadian Administrative Agent Drafts duly executed and endorsed in blank by the Canadian Borrower in quantities sufficient for each Canadian Lender to fulfill its obligations hereunder. In addition, the Canadian Borrower hereby appoints each Canadian Lender as its attorney, with respect to Bankers' Acceptances for which the Canadian Borrower has provided a Bankers' Acceptance notice: (i) to complete and sign on behalf of the Canadian Borrower, either manually or by facsimile or mechanical signature, the Drafts to create the Bankers' Acceptances (with, in each Canadian Lender's discretion, the inscription "This is a depository bill subject to the Depository Bills and Notes Act (Canada)"); (ii) after the acceptance thereof by any Canadian Lender, to endorse on behalf of the Canadian Borrower, either manually or by facsimile or mechanical signature, such Bankers' Acceptance in favor of the applicable purchaser or endorsee thereof including, in such Canadian Lender's discretion, such Canadian Lender or a clearing house (as defined by the Depository Bills and Notes Act (Canada)); (iii) to deliver such Bankers' Acceptances to such purchaser or to deposit such Bankers' Acceptances with such clearing house; and (iv) to comply with the procedures and requirements established from time to time by such Canadian Lender or such clearing house in respect of the delivery, transfer and collection of bankers' acceptances and depository bills. The Canadian Borrower recognizes and agrees that all Bankers' Acceptances signed, endorsed, delivered or deposited on its behalf by a Canadian Lender shall bind the Canadian Borrower as fully and effectually as if signed in the handwriting of and duly issued, delivered or deposited by the proper signing officer of the Canadian Borrower. Each Canadian Lender is hereby authorized to accept such Drafts or issue such Bankers' Acceptances endorsed in blank in such face amounts as may be determined by such Canadian Lender in accordance with the terms of this Agreement, PROVIDED that the 8 aggregate amount thereof is less than or equal to the aggregate amount of Bankers' Acceptances required to be accepted by such Canadian Lender. No Canadian Lender shall be responsible or liable for its failure to accept a Bankers' Acceptance if the cause of such failure is, in whole or in part, due to the failure of the Canadian Borrower to provide duly executed and endorsed Drafts to the Canadian Administrative Agent on a timely basis, nor shall any Canadian Lender be liable for any damage, loss or other claim arising by reason of any loss or improper use of any such instrument except loss or improper use arising by reason of the gross negligence or willful misconduct of such Canadian Lender, its officers, employees, agents or representatives. The Canadian Administrative Agent and each Canadian Lender shall exercise such care in the custody and safekeeping of Drafts as it would exercise in the custody and safekeeping of similar property owned by it. Each Canadian Lender will, upon the request of the Canadian Borrower, promptly advise the Canadian Borrower of the number and designation, if any, of Drafts then held by it for the Canadian Borrower. Each Canadian Lender shall maintain a record with respect to Drafts and Bankers' Acceptances (i) received by it from the Canadian Administrative Agent in blank hereunder, (ii) voided by it for any reason, (iii) accepted by it hereunder, (iv) purchased by it hereunder and (v) canceled at their respective maturities. Each Canadian Lender further agrees to retain such records in the manner and for the statutory periods provided in the various Canadian provincial or federal statutes and regulations which apply to such Canadian Lender. (6) EXECUTION OF BANKERS' ACCEPTANCES. Drafts of the Canadian Borrower to be accepted as Bankers' Acceptances hereunder shall be duly executed on behalf of the Canadian Borrower. Notwithstanding that any person whose signature appears on any Bankers' Acceptance as a signatory for the Canadian Borrower may no longer be an authorized signatory for the Canadian Borrower at the date of issuance of a Bankers' Acceptance, such signature shall nevertheless be valid and sufficient for all purposes as if such authority had remained in force at the time of such issuance, and any such Bankers' Acceptance so signed shall be binding on the Canadian Borrower. (7) ISSUANCE OF BANKERS' ACCEPTANCES. Promptly following receipt of a notice of borrowing by way of Bankers' Acceptances, the Canadian Administrative Agent shall so advise the Canadian Lenders and shall advise each Canadian Lender of the face amount of each Draft to be accepted by it and the term thereof. The aggregate face amount of Drafts to be accepted by a Canadian Lender shall be determined by the Canadian Administrative Agent on a pro rata basis by reference to the respective Canadian Commitments of the Canadian Lenders, except that, if the face amount of a Draft which would otherwise be accepted by a Canadian Lender would not be C$100,000 or a whole multiple thereof, such face amount shall be increased or reduced by the Canadian Administrative Agent in its sole and unfettered discretion to the nearest whole multiple of C$100,000. (8) ACCEPTANCE OF BANKERS' ACCEPTANCES. Each Draft to be accepted by a Canadian Lender shall be accepted at such Canadian Lender's Canadian Lending Office. (9) PURCHASE OF BANKERS' ACCEPTANCES. Each Canadian Lender shall be required to purchase (subject to the commercial availability of a resale market in the case of 9 Bankers' Acceptances with a term of approximately 30, 60, 90 or 180 days, as the case may be) from the Canadian Borrower on the Borrowing Date (Canada), at the Applicable BA Discount Rate, the Bankers' Acceptances accepted by it on such date and to provide to the Canadian Administrative Agent the BA Discount Proceeds thereof not later than 12:00 Noon, Toronto time, on such Borrowing Date (Canada) for the account of the Canadian Borrower. The Acceptance Fee payable by the Canadian Borrower to such Canadian Lender under subsection 2.3(e) in respect of each Bankers' Acceptance accepted and purchased by such Canadian Lender from the Canadian Borrower shall be set off against the BA Discount Proceeds payable by such Canadian Lender under this subsection 2.3(b)(9). Not later than 2:00 P.M., Toronto time, on such Borrowing Date (Canada), the Canadian Administrative Agent shall make such BA Discount Proceeds available to the Canadian Borrower by crediting the account of the Canadian Borrower on the books of the Canadian Administrative Office with the aggregate of the amounts made available to the Canadian Administrative Agent by the Canadian Lenders and in like funds as received by the Canadian Administrative Agent. (10) SALE OF BANKERS' ACCEPTANCES. Each Canadian Lender may at any time and from time to time hold, sell, rediscount or otherwise dispose of any or all Bankers' Acceptances accepted and purchased by it. (11) WAIVER OF PRESENTMENT AND OTHER CONDITIONS. To the extent permitted by applicable law, the Canadian Borrower waives presentment for payment and any other defense to payment of any amounts due to a Canadian Lender in respect of a Bankers' Acceptance accepted by it pursuant to this Agreement which might exist solely by reason of such Bankers' Acceptance being held, at the maturity thereof, by such Canadian Lender in its own right, and the Canadian Borrower agrees not to claim any days of grace if such Canadian Lender as holder sues the Canadian Borrower on the Bankers' Acceptances for payment of the amount payable by the Canadian Borrower thereunder. (c) The Canadian Borrower shall reimburse a Canadian Lender for, and there shall become due and payable at 10:00 A.M., Toronto time, on the maturity date for each Bankers' Acceptance, an amount in Canadian Dollars in same day funds equal to the face amount of such Bankers' Acceptance. The Canadian Borrower shall make each such reimbursement payment (i) by causing any proceeds of a Refunding Bankers' Acceptance (as defined in subsection 2.3(d) below) issued in accordance with subsection 2.3(d) or conversion of such Bankers' Acceptance in accordance with subsection 2.4 to be applied in reduction of such reimbursement payment; and (ii) by depositing the amount of such reimbursement payment (or any portion thereof remaining unpaid after application of any proceeds referred to in clause (i)) with the Canadian Administrative Office in accordance with subsection 3.7. The Canadian Borrower's payment in accordance with this subsection shall satisfy its obligations under any Bankers' Acceptance to which it relates, and the Canadian Lender which has accepted such Bankers' Acceptance shall thereafter be solely responsible for the payment of such Bankers' Acceptance. (d) The Canadian Borrower shall give irrevocable written or telephonic notice (in the case of telephonic notice, to be promptly confirmed in writing) (or such other method of notification as may be agreed upon between the Canadian Administrative Agent and the 10 Canadian Borrower) to the Canadian Administrative Agent at or before 10:00 A.M., Toronto time, two Business Days (Canada) prior to the maturity date of each Bankers' Acceptance of the Canadian Borrower's intention to issue a Bankers' Acceptance on such maturity date (a "REFUNDING BANKERS' ACCEPTANCE") to provide for the payment of such maturing Bankers' Acceptance (it being understood that payments by the Canadian Borrower and fundings by the Canadian Lenders in respect of each maturing Bankers' Acceptance and the related Refunding Bankers' Acceptance shall be made on a net basis reflecting the difference between the face amount of such maturing Bankers' Acceptance and the BA Discount Proceeds (net of the applicable Acceptance Fee) of such Refunding Bankers' Acceptance). If the Canadian Borrower fails to give such notice or does not have sufficient funds on deposit in the amount of reimbursement payment in accordance with subsection 2.3(c)(ii), the Canadian Borrower shall be deemed to have requested that such maturing Bankers' Acceptances be repaid with the proceeds of C$ Prime Loans (without any requirement to give notice with respect thereto), commencing on the maturity date of such maturing Bankers' Acceptances. (e) An Acceptance Fee shall be payable by the Canadian Borrower to each Canadian Lender in advance (in the manner specified in subsection 2.3(b)(9) hereof) upon the issuance of a Bankers' Acceptance to be accepted by such Canadian Lender calculated at the rate per annum equal to the Applicable Margin for Canadian Borrowing, such Acceptance Fee to be calculated on the face amount of such Bankers' Acceptance and to be computed on the basis of the number of days in the term of such Bankers' Acceptance and a year of 365 days. (f) Upon the occurrence of any Event of Default which is continuing, the Canadian Borrower shall, forthwith, without any demand or the taking of any action by the Canadian Administrative Agent, provide cover for all outstanding Bankers' Acceptances by paying to the Canadian Administrative Agent immediately available funds in an amount equal to the then aggregate face amount of all outstanding Bankers' Acceptances, which funds shall be held by the Canadian Administrative Agent in an account as collateral security, and in addition to any other rights or remedies of any Canadian Lender and the Canadian Administrative Agent hereunder, any Canadian Lender or the Canadian Administrative Agent (or such alternate arrangement as may be agreed upon by the Canadian Borrower and such Canadian Lender or the Canadian Administrative Agent, as applicable) shall be entitled to deposit and retain in an account to be maintained by the Canadian Administrative Agent (bearing interest at the Canadian Administrative Agent's rates as may be applicable in respect of other deposits of similar amounts for similar terms), for the ratable benefit of the Canadian Lenders, amounts which are received by such Canadian Lender or the Canadian Administrative Agent from the Canadian Borrower hereunder or as proceeds of the exercise of any rights or remedies of any Canadian Lender or the Canadian Administrative Agent hereunder against the Canadian Borrower, to the extent such amounts may be required to satisfy any contingent or unmatured obligations or liabilities of the Canadian Borrower to the Canadian Lenders or the Canadian Administrative Agent, or any of them hereunder. 2.4. CONVERSION OPTION. Subject to the provisions of this Agreement, the Canadian Borrower may, prior to the Commitment Termination Date, effective on any Business Day (Canada), convert, in whole or in part, C$ Prime Loans into Bankers' Acceptances or vice versa upon giving to the Canadian Administrative Agent prior irrevocable written or telephonic notice (in the case of telephonic notice, to be promptly confirmed in writing) within the notice 11 period and in the form which would be required to be given to the Canadian Administrative Agent in respect of the category of C$ Loan into which the outstanding C$ Loan is to be converted in accordance with the provisions of subsection 2.2 or 2.3, as applicable, PROVIDED that: (a) no C$ Prime Loan may be converted into a Bankers' Acceptance when any Event of Default has occurred and is continuing; (b) each conversion to Bankers' Acceptances shall be for an aggregate amount of C$1,000,000 (and whole multiples of C$100,000 in excess thereof), and each conversion to C$ Prime Loans shall be in a minimum aggregate amount of C$300,000; and (c) Bankers' Acceptances may be converted only on the maturity date of such Bankers' Acceptances and, PROVIDED that, if less than all Bankers' Acceptances are converted, then after such conversion not less than C$1,000,000 (and whole multiples of C$100,000 in excess thereof) shall remain as Bankers' Acceptances. 2.5. CIRCUMSTANCES MAKING BANKERS' ACCEPTANCES UNAVAILABLE. (a) If the Canadian Administrative Agent determines in good faith, which determination shall be final, conclusive and binding upon the Canadian Borrower, and notifies the Canadian Borrower that, by reason of circumstances affecting the money market, there is no market for Bankers' Acceptances, then: (i) the right of the Canadian Borrower to request a borrowing by way of Bankers' Acceptance shall be suspended until the Canadian Administrative Agent determines that the circumstances causing such suspension no longer exist and the Canadian Administrative Agent so notifies the Canadian Borrower; and (ii) any notice relating to a borrowing by way of Bankers' Acceptance which is outstanding at such time shall be deemed to be a notice requesting a borrowing by way of C$ Prime Loans (all as if it were a notice given pursuant to subsection 2.2). (b) The Canadian Administrative Agent shall promptly notify the Canadian Borrower and the Canadian Lenders of the suspension of the Canadian Borrower's right to request a borrowing by way of Bankers' Acceptance and of the termination of such suspension. 2.6. DESIGNATION OF BORROWINGS. On or prior to the date which is five (5) Business Days (Canada) prior to the first day of each month, the US Borrower and the Canadian Borrower shall give notice to each of the Canadian Administrative Agent and the Administrative Agent, respectively, of the aggregate Canadian Commitment and the aggregate US$-Canadian Commitment to be available during such month (the "US-CANADIAN ALLOCATION"), and the Canadian Administrative Agent and the Administrative Agent shall promptly notify the Canadian Lenders and the US$-Canadian Lenders, respectively, thereof. With the consent of each of the US$-Canadian Lenders, the Canadian Lenders, the Administrative Agent and the Canadian Administrative Agent (as evidenced in a manner satisfactory to the Administrative 12 Agent), the US Borrower and the Canadian Borrower may modify the then-current US-Canadian Allocation for any period and subject to any notice as they may request; and in the event of a failure by the US Borrower and the Canadian Borrower to give a timely notice as to the US-Canadian Allocation for any month, the US-Canadian Allocation for the immediately preceding month shall continue in effect. The US Borrower and the Canadian Borrower agree that at no time during such month shall the aggregate principal amount of the C$ Loans exceed the aggregate Canadian Commitment specified in such notice, nor shall the aggregate principal amount of the US$-Canadian Loans exceed the aggregate US$-Canadian Commitment specified in such notice, and in no event shall the aggregate of the Canadian Commitments and the US$-Canadian Commitments exceed US$50,000,000. 2.7. FEES. The Canadian Borrower shall pay to the Canadian Administrative Agent for the account of each Canadian Lender commitment fees in Canadian Dollars on the daily average unused amount of such Canadian Lender's Canadian Commitment (for which purpose, the aggregate amount of any Bankers' Acceptance liabilities shall be deemed to be a PRO RATA (based on the Canadian Commitments) use of each Canadian Lender's Canadian Commitment and the daily average used amount of each Canadian Lender's Canadian Commitment shall be determined after taking into account its outstanding US$-Canadian Loans) for the period from the Closing Date to and including the earlier of the date the Canadian Commitments are terminated and the Commitment Termination Date, at a rate per annum equal to the Applicable Commitment Fee Rate in effect from time to time. Accrued commitment fees under this subsection 2.7 shall be payable on the Quarterly Dates and on the earlier of the date the Canadian Commitments are terminated and the Scheduled Revolving Credit Commitment Termination Date. The Canadian Borrower shall pay to the Canadian Administrative Agent on the Closing Date syndication, agency and additional commitment fees in the amounts heretofore mutually agreed in writing. The Canadian Borrower shall pay to the Canadian Administrative Agent on the Closing Date and on each anniversary thereof, so long as any of the Canadian Commitments are in effect and until payment in full of all C$ Loans hereunder, all interest thereon and all other amounts payable hereunder, and an annual agency fee in the amount heretofore mutually agreed in writing. 2.8. CANADIAN LETTERS OF CREDIT. Subject to the terms and conditions of this Agreement, the Canadian Commitments may be utilized, upon the request of the Canadian Borrower, in addition to the Loans provided for by subsection 2.2 hereof, by the issuance by the Canadian Issuing Bank of standby letters of credit ("CANADIAN LETTERS OF CREDIT") for the account of the Canadian Borrower, PROVIDED that in no event shall (i) the aggregate amount of all letter of credit liabilities under the Canadian Commitments, together with the aggregate outstanding principal amount of the C$ Loans, exceed the aggregate amount of the Canadian Commitments as in effect from time to time, (ii) the aggregate outstanding amount of all letter of credit liabilities under the Canadian Commitments exceed $5,000,000 and (iii) the expiration date of any Canadian Letter of Credit extend beyond the earlier of the Commitment Termination Date and the date one year following the issuance of such Canadian Letter of Credit (provided that any Canadian Letter of Credit with a one-year tenor may provide for the renewal thereof for additional one-year periods, which periods shall in any event not extend beyond the Commitment Termination Date). Prior to the issuance of any Canadian Letter of Credit, the Administrative Agent shall have first determined, and advised the relevant Canadian Issuing Bank, that the 13 requested amount of Canadian Letters of Credit shall be available under the Canadian Commitments The following additional provisions shall apply to Canadian Letters of Credit: (a) The Canadian Borrower shall give the Canadian Administrative Agent at least three Business Days' irrevocable prior notice (effective upon receipt) specifying the Business Day (which shall be no later than 5 days preceding the Commitment Termination Date) on which each Canadian Letter of Credit is to be issued and the account party or parties therefor and describing in reasonable detail the proposed terms of such Canadian Letter of Credit (including the beneficiary thereof) and the nature of the transactions or obligations proposed to be supported thereby. Upon receipt of any such notice, the Canadian Administrative Agent shall advise the Canadian Issuing Bank of the contents thereof. (b) On each day during the period commencing with the issuance by the Canadian Issuing Bank of any Canadian Letter of Credit and until such Canadian Letter of Credit shall have expired or been terminated, the Canadian Commitment of each Canadian Lender shall be deemed to be utilized for all purposes of this Agreement in an amount equal to such Canadian Lender's C$ Commitment Percentage of the then undrawn stated amount of such Canadian Letter of Credit. Each Canadian Lender (other than the Canadian Issuing Bank) agrees that, upon the issuance of any Canadian Letter of Credit hereunder, it shall automatically acquire a participation in the Canadian Issuing Bank's rights and obligations under such Canadian Letter of Credit in an amount equal to such Canadian Lender's C$ Commitment Percentage of such rights and obligations, and each Canadian Lender (other than the Canadian Issuing Bank) thereby shall automatically absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be unconditionally obligated to the Canadian Issuing Bank to pay and discharge when due, its C$ Commitment Percentage of the Canadian Issuing Bank's obligation to pay drawings under such Canadian Letter of Credit. (c) Upon receipt from the beneficiary of any Canadian Letter of Credit of any demand for payment under such Canadian Letter of Credit, the Canadian Issuing Bank shall promptly notify the Canadian Borrower (through the Canadian Administrative Agent) of the amount to be paid by the Canadian Issuing Bank as a result of such demand and the date on which payment is to be made by the Canadian Issuing Bank to such beneficiary in respect of such demand. Notwithstanding the identity of the account party of any Canadian Letter of Credit, the Canadian Borrower hereby unconditionally agrees to pay and reimburse the Canadian Administrative Agent for account of the Canadian Issuing Bank for the amount of each demand for payment under such Canadian Letter of Credit that is in substantial compliance with the provisions of such Canadian Letter of Credit at or prior to the date on which payment is to be made by the Canadian Issuing Bank to the beneficiary thereunder, without presentment, demand, protest or other formalities of any kind. (d) Forthwith upon its receipt of a notice referred to in paragraph (c) of this Section 2.8, the Canadian Borrower shall advise the Canadian Administrative Agent whether or not the Canadian Borrower intends to borrow hereunder to finance its obligation to reimburse the Canadian Issuing Bank for the amount of the related demand for payment and, if it does, submit a notice of such borrowing as provided in Section 5.05 of the Credit Agreement. 14 (e) Each Canadian Lender shall pay to the Canadian Administrative Agent for account of the Canadian Issuing Bank at the Canadian Administrative Office in Canadian Dollars and in immediately available funds the amount of such Canadian Lender's C$ Commitment Percentage of any payment under a Canadian Letter of Credit upon notice by the Canadian Issuing Bank (through the Canadian Administrative Agent) to such Canadian Lender requesting such payment and specifying such amount. Each such Canadian Lender's obligation to make such payment to the Canadian Administrative Agent for account of the Canadian Issuing Bank under this paragraph (e), and the Canadian Issuing Bank's right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever (other than gross negligence or wilful misconduct of the Canadian Issuing Bank), including, without limitation, the failure of any other Canadian Lender to make its payment under this paragraph (e), the financial condition of the Company or the Canadian Borrower (or any other account party), any failure to satisfy any condition precedent to any Loan, the existence of any Default or the termination of the Commitments. Each such payment to the Canadian Issuing Bank shall be made without any offset, abatement, withholding or reduction whatsoever. If any Canadian Lender shall default in its obligation to make any such payment to the Canadian Administrative Agent for account of the Canadian Issuing Bank, for so long as such default shall continue the Canadian Administrative Agent may at the request of the Canadian Issuing Bank withhold from any payments received by the Canadian Administrative Agent under this Agreement or any Note for account of such Canadian Lender the amount so in default and, to the extent so withheld, pay the same to the Canadian Issuing Bank in satisfaction of such defaulted obligation. (f) Upon the making of each payment by a Canadian Lender to the Canadian Issuing Bank pursuant to paragraph (e) above in respect of any Canadian Letter of Credit, such Canadian Lender shall, automatically and without any further action on the part of the Canadian Administrative Agent, the Canadian Issuing Bank or such Canadian Lender, acquire (i) a participation in an amount equal to such payment in the Reimbursement Obligation owing to the Canadian Issuing Bank hereunder and under the Canadian Letter of Credit Documents relating to such Letter of Credit and (ii) a participation in a percentage equal to such Canadian Lender's C$ Commitment Percentage in any interest or other amounts payable by the Canadian Borrower hereunder and under such Letter of Credit Documents in respect of such Reimbursement Obligation (other than the commissions, charges, costs and expenses payable to the Canadian Issuing Bank pursuant to paragraph (g) of this Section 2.8). Upon receipt by the Canadian Issuing Bank from or for account of the Canadian Borrower of any payment in respect of any Reimbursement Obligation or any such interest or other amount (including by way of setoff or application of proceeds of any collateral security) the Canadian Issuing Bank shall promptly pay to the Canadian Administrative Agent for account of each Canadian Lender entitled thereto such Canadian Lender's C$ Commitment Percentage of such payment, each such payment by the Canadian Issuing Bank to be made in the same money and funds in which received by the Canadian Issuing Bank. In the event any payment received by the Canadian Issuing Bank and so paid to the Canadian Lenders hereunder is rescinded or must otherwise be returned by the Canadian Issuing Bank, each Canadian Lender shall, upon the request of the Canadian Issuing Bank (through the Canadian Administrative Agent), repay to the Canadian Issuing Bank (through the Canadian Administrative Agent) the amount of such payment paid to such Canadian Lender, with interest at the rate specified in paragraph (j) of this Section 2.8. 15 (g) The Company shall pay to the Canadian Administrative Agent for account of the Canadian Lenders (ratably in accordance with their respective C$ Commitment Percentages) a letter of credit fee in Canadian Dollars in respect of each Canadian Letter of Credit in an amount equal to the Applicable L/C Percentage of the daily average undrawn stated amount of such Canadian Letter of Credit for the period from and including the date of issuance of such Canadian Letter of Credit (i) in the case of a Canadian Letter of Credit that expires in accordance with its terms, to and including such expiration date and (ii) in the case of a Canadian Letter of Credit that is drawn in full or is otherwise terminated other than on the stated expiration date of such Canadian Letter of Credit, to but excluding the date such Canadian Letter of Credit is drawn in full or is terminated (such fee to be non-refundable, to be paid in arrears on each Quarterly Date and on the Commitment Termination Date and on the date of expiry or termination or full utilization of such Canadian Letter of Credit and to be calculated for any day after giving effect to any payments made under such Canadian Letter of Credit on such day). In addition, the Company shall pay to the Canadian Administrative Agent for account of the Canadian Issuing Bank a fronting fee in Canadian Dollars in respect of each Canadian Letter of Credit in an amount equal to 0.25% per annum of the daily average undrawn stated amount of such Canadian Letter of Credit for the period from and including the date of issuance of such Canadian Letter of Credit (i) in the case of a Canadian Letter of Credit that expires in accordance with its terms, to and including such expiration date and (ii) in the case of a Canadian Letter of Credit that is drawn in full or is otherwise terminated other than on the stated expiration date of such Canadian Letter of Credit, to but excluding the date such Canadian Letter of Credit is drawn in full or is terminated (such fee to be non-refundable, to be paid in arrears on each Quarterly Date and on the Commitment Termination Date and to be calculated for any day after giving effect to any payments made under such Canadian Letter of Credit on such day) plus all commissions, charges, costs and expenses in the amounts customarily charged by the Canadian Issuing Bank from time to time in like circumstances with respect to the issuance of each Canadian Letter of Credit and drawings and other transactions relating thereto. (h) Promptly following the end of each calendar month, the Canadian Issuing Bank shall deliver (through the Canadian Administrative Agent) to each Canadian Lender and the Canadian Borrower a notice describing the aggregate amount of all Canadian Letters of Credit outstanding at the end of such month. Upon the request of any Canadian Lender from time to time, the Canadian Issuing Bank shall deliver any other information reasonably requested by such Canadian Lender with respect to each Canadian Letter of Credit then outstanding. (i) The issuance by the Canadian Issuing Bank of each Canadian Letter of Credit shall, in addition to the conditions precedent set forth in Section 7 of the Credit Agreement, be subject to the conditions precedent that (i) such Canadian Letter of Credit shall be in such form, contain such terms and support such transactions as shall be satisfactory to the Canadian Issuing Bank consistent with its then current practices and procedures with respect to letters of credit of the same type, (ii) such Canadian Letter of Credit shall be denominated in Canadian Dollars and (iii) the Canadian Borrower shall have executed and delivered such applications, agreements and other instruments relating to such Canadian Letter of Credit as the Canadian Issuing Bank shall have reasonably requested consistent with its then current practices and procedures with respect to letters of credit of the same type, provided that in the event of any conflict between any such application, agreement or other instrument and the provisions of this Agreement or any Security Document, the provisions of this Agreement and the Security Documents shall control. 16 (j) To the extent that any Canadian Lender shall fail to pay any amount required to be paid pursuant to paragraph (e) or (f) of this Section 2.8 on the due date therefor, such Canadian Lender shall pay interest to the Canadian Issuing Bank (through the Canadian Administrative Agent) on such amount from and including such due date to but excluding the date such payment is made at the rate determined by the Canadian Administrative Agent in its discretion as the appropriate rate for interbank settlements, PROVIDED that if such Canadian Lender shall fail to make such payment to the Canadian Issuing Bank within three Business Days of such due date, then, retroactively to the due date, such Canadian Lender shall be obligated to pay interest on such amount at the rate then payable by the Canadian Borrower on such amount. (k) The issuance by the Canadian Issuing Bank of any modification or supplement to any Canadian Letter of Credit hereunder shall be subject to the same conditions as are applicable under this Section 2.8 to the issuance of new Canadian Letters of Credit, and no such modification or supplement shall be issued hereunder unless either (i) the respective Canadian Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such modified or supplemented form or (ii) each Canadian Lender shall have consented thereto. The Company hereby indemnifies and holds harmless each Canadian Lender (including the Canadian Issuing Bank and the Canadian Administrative Agent) from and against any and all claims and damages, losses, liabilities, costs or expenses that such Canadian Lender or the Canadian Administrative Agent may incur (or that may be claimed against such Canadian Lender or the Canadian Administrative Agent by any Person whatsoever) by reason of or in connection with the execution and delivery or transfer of or payment or refusal to pay by the Canadian Issuing Bank under any Canadian Letter of Credit; PROVIDED that the Company shall not be required to indemnify any Canadian Lender or the Canadian Administrative Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (x) the willful misconduct or gross negligence of the Canadian Issuing Bank in determining whether a request presented under any Canadian Letter of Credit complied with the terms of such Canadian Letter of Credit or (y) in the case of the Canadian Issuing Bank, its failure to pay under any Canadian Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of such Canadian Letter of Credit. Nothing in this Section 2.8 is intended to limit the other obligations of the Canadian Borrower, any Canadian Lender or the Canadian Administrative Agent under this Agreement. SECTION 3. GENERAL PROVISIONS 3.1. REPAYMENT OF LOANS; EVIDENCE OF DEBT. The Canadian Borrower hereby unconditionally promises to pay to the Canadian Administrative Agent for the account of each Canadian Lender the then unpaid principal amount of each C$ Loan of such Canadian Lender on the Commitment Termination Date (or such earlier date on which the C$ Loans become due and payable pursuant to Section 10 of the Credit Agreement). The Canadian Borrower hereby further agrees to pay interest on the unpaid principal amount of the C$ Loans from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 3.5 hereof. 17 3.2. C$ NOTES. The C$ Prime Loans made by each Canadian Lender under its Canadian Commitment shall be evidenced by a single promissory note of the Canadian Borrower (each, a "C$ NOTE") in substantially the form of Exhibit B to this Annex A, dated the Closing Date, payable to such Canadian Lender in a principal amount equal to such Canadian Commitment as in effect on the Closing Date and otherwise duly completed. Each Canadian Lender is hereby authorized by the Canadian Borrower to endorse on the schedule (or a continuation thereof) attached to each C$ Note of such Canadian Lender, to the extent applicable, the date and amount for each C$ Prime Loan made by such Canadian Lender to the Canadian Borrower hereunder, and the date and amount of each payment or prepayment of principal of such C$ Loan received by such Canadian Lender, provided that any failure by such Canadian Lender to make any such endorsement shall not affect the obligations of the Canadian Borrower under such C$ Note or hereunder in respect of such C$ Prime Loan. 3.3. TERMINATION OR REDUCTION OF COMMITMENTS. (a) The Canadian Commitments shall terminate on the Commitment Termination Date. (b) The Canadian Borrower shall have the right to terminate or reduce the unused Canadian Commitments at any time or from time to time to an amount not less than the aggregate principal amount of the C$ Prime Loans and Bankers' Acceptances outstanding, PROVIDED that (i) the Canadian Borrower shall give no less than two Business Days' (Canada) notice of each such termination or reduction to the Canadian Administrative Agent and (ii) each partial reduction shall be in an aggregate amount at least equal to C$1,000,000 and, if greater, in integral multiples of C$100,000. Any termination of the Canadian Commitments shall be accompanied by prepayment in full of all C$ Prime Loans together with accrued interest thereon to the date of such prepayment, and by cash collateralization, but not prepayment, of the Bankers' Acceptances on terms satisfactory to the Canadian Administrative Agent. 3.4. OPTIONAL AND MANDATORY PREPAYMENTS. (a) OPTIONAL PREPAYMENTS. The Canadian Borrower shall have the right to prepay the C$ Loans, in whole or in part, at any time or from time to time, PROVIDED that the Canadian Borrower shall give the Canadian Administrative Agent at least one Business Days' (Canada) irrevocable notice of each such prepayment specifying the date and amount of such prepayment. Upon receipt of any such notice the Canadian Administrative Agent shall promptly notify each Canadian Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to Section 12.04 of the Credit Agreement. Partial prepayments shall be in an aggregate principal amount of C$1,000,000 or a whole multiple of C$100,000 in excess thereof. Notwithstanding anything to the contrary above, C$ Loans consisting of Bankers' Acceptances may not be prepaid pursuant to this subsection. (b) MANDATORY PREPAYMENTS. (i) If, at any time during the Commitment Period, the aggregate principal amount of C$ Loans outstanding with respect to all Canadian Lenders exceeds the aggregate Canadian Commitments then in effect by more than 5% of the aggregate principal amount of the Canadian Commitments then in effect, the Canadian Borrower shall, 18 without notice or demand, immediately repay the C$ Loans (or, in the case of Bankers' Acceptances, cash collateralize such Bankers' Acceptances) in an aggregate principal amount equal to such excess, together with interest accrued to the date of such payment or prepayment. (ii) If on any date, the Canadian Borrower or any Subsidiary of the Canadian Borrower shall receive Net Cash Proceeds from any issuance subsequent to the Closing Date of Indebtedness other than Indebtedness incurred pursuant to Section 9.08 of the Credit Agreement (it being understood that this subsection 3.4(b) shall not constitute a waiver of any provision of said Section 9.08), then the Canadian Borrower shall prepay the C$ Loans (or, in the case of Bankers' Acceptances, cash collateralize such Bankers' Acceptances) in an amount equal to such Net Cash Proceeds (less any prepayment on account of the receipt of such Net Cash Proceeds under Section 3.02(b) of the Credit Agreement), but the Canadian Commitments shall not be subject to automatic reduction. (c) APPLICATION OF MANDATORY PREPAYMENTS. To the extent that prepayment is required to be made by the Canadian Borrower, such prepayment shall be applied to reduce (ratably among the Canadian Lenders) such of the then outstanding C$ Loans (or, in the case of Bankers' Acceptances, cash collateralization of such Bankers' Acceptances on terms satisfactory to the Canadian Administrative Agent, which cash collateral shall be invested in a manner satisfactory to the Canadian Administrative Agent) as the Canadian Borrower shall determine in its sole discretion. (d) Notwithstanding anything to the contrary contained above, (i) all prepayments of C$ Loans shall be made in Canadian Dollars and (ii) all cash collateralization of Bankers' Acceptances shall be made in Canadian Dollars. 3.5. INTEREST RATES AND PAYMENT DATES. (a) Subject to subsection 3.5(b) below, each C$ Prime Loan shall bear interest at a rate per annum equal to the C$ Prime Rate PLUS the Applicable Margin for Canadian Borrowing. (b) The Canadian Borrower hereby promises to pay to the Canadian Administrative Agent for account of each Canadian Lender interest at the applicable Post-Default Rate (x) on any principal of any C$ Loan made by such Canadian Lender and on any other amount payable by the Canadian Borrower hereunder or under the C$ Note held by such Canadian Lender to or for account of such Canadian Lender (but, if such amount is interest, only to the extent legally enforceable), that shall not be paid in full when due (whether at stated maturity, by acceleration, by mandatory prepayment or otherwise), for the period from and including the due date thereof to but excluding the date the same is paid in full and (y) during any period when an Event of Default shall have occurred under Section 10.01(a) of the Credit Agreement and for so long as such Event of Default shall be continuing, on any principal of any C$ Loan made by such Canadian Lender. (c) Accrued interest on each C$ Prime Loan shall be calculated monthly and payable quarterly in arrears, and in any event, upon the payment or prepayment thereof, but only on the principal so paid or prepaid; PROVIDED that interest payable after the occurrence of a 19 Default at the Post-Default Rate shall be payable from time to time on demand of the Canadian Administrative Agent or the Canadian Lenders having at least 51% of the aggregate amount of the Canadian Commitments. Promptly after the determination of any interest rate provided for herein or any change therein, the Canadian Administrative Agent shall notify the Canadian Lenders and the Canadian Borrower thereof. (d) Interest in respect of C$ Prime Loans (and all other amounts denominated in C$) shall be payable in C$ and shall be payable based upon a year of 365 days. (e) (i) If any provision of this Annex would obligate any party to the Credit Agreement to make any payment of interest or other amount payable to any Canadian Lender in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by such Canadian Lender of interest at a criminal rate (as such terms are construed under the CRIMINAL CODE (Canada)), then notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by such Canadian Lender of interest at a criminal rate, such adjustment to be effected, to the extent necessary, as follows: (x) first, by reducing the amount or rates of interest required to be paid under this subsection 3.5; and (y) thereafter, by reducing any fees, commissions, premiums and other amounts which would constitute interest for purposes of Section 347 of the CRIMINAL CODE (Canada). (ii) If, notwithstanding the provisions of clause (i) of this subsection 3.5(e), and after giving effect to all adjustments contemplated thereby, any Canadian Lender shall have received an amount in excess of the maximum permitted by such clause, then the party having paid such amount shall be entitled, by notice in writing to such Canadian Lender, to obtain reimbursement from such Canadian Lender of an amount equal to such excess, and, pending such reimbursement, such amount shall be deemed to be an amount payable by such Canadian Lender to such party. (iii) Any amount or rate of interest referred to in this subsection 3.5(e) shall be determined in accordance with generally accepted actuarial practices and principles as an effective annual rate of interest over the term of any C$ Loan on the assumption that any charges, fees or expenses that fall within the meaning of "interest" (as defined in the CRIMINAL CODE (Canada)) shall, if they relate to a specific period of time, be prorated over that period of time and otherwise be prorated over the period from the Closing Date to the Scheduled Revolving Credit Commitment Termination Date and, in the event of dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Canadian Administrative Agent shall be conclusive for the purposes of such determination absent manifest error. 3.6. COMPUTATION OF INTEREST AND FEES. For the purposes of the INTEREST ACT (Canada), in any case in which an interest rate is stated in this Agreement to be calculated on the basis of a year of 360 days or 365 days, as the case may be, the yearly rate of interest to which 20 such interest rate is equivalent is equal to such interest rate multiplied by the number of days in the year in which the relevant interest payment accrues and divided by 360 or 365, respectively. In addition, the principles of deemed investment of interest do not apply to any interest calculations under this Agreement and the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields. 3.7. PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the Canadian Borrower from the Canadian Lenders hereunder, each payment by the Canadian Borrower on account of any commitment fee or Acceptance Fee hereunder and any reduction of the Canadian Commitments of the Canadian Lenders shall be made pro rata according to the respective C$ Commitment Percentages. Each payment by the Canadian Borrower on account of principal of and interest on the C$ Loans shall be made pro rata according to the respective outstanding principal amounts of the relevant C$ Loans then held by the relevant Canadian Lenders. All payments (including prepayments) to be made by the Canadian Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without set off or counterclaim and shall be made prior to 11:00 A.M., Toronto time, on the due date thereof to the Canadian Administrative Agent, for the account of the Canadian Lenders, at the Canadian Administrative Office in C$ and in immediately available funds. The Canadian Administrative Agent shall distribute such payments to the Canadian Lenders promptly upon receipt in like funds as received, but the Canadian Borrower shall have satisfied its payment obligation hereunder upon payment to the Canadian Administrative Agent, regardless of whether such Canadian Administrative Agent distributes such payments as required hereunder. If any payment hereunder becomes due and payable on a day other than a Business Day (Canada), such payment shall be extended to the next succeeding Business Day (Canada), and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. (b) Unless the Canadian Administrative Agent shall have received notice from a Canadian Lender prior to 11:00 A.M., Toronto time, on any Borrowing Date (Canada) that such Lender will not make available to the Canadian Administrative Agent such Canadian Lender's share of the borrowing requested to be made on such Borrowing Date (Canada), the Canadian Administrative Agent may assume that such Canadian Lender has made its share of such borrowing available to the Canadian Administrative Agent on such Borrowing Date (Canada), and the Canadian Administrative Agent may, in reliance upon such assumption, make available to the Canadian Borrower on such Borrowing Date (Canada) a corresponding amount. If such amount is not so made available to the Canadian Administrative Agent by such Canadian Lender on such Borrowing Date (Canada), the Canadian Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to the C$ Prime Rate determined for such day PLUS 1%, on demand, from the relevant Canadian Lender. Nothing contained in this subsection 3.7(b) shall relieve any Canadian Lender which has failed to make available its share of any borrowing hereunder from its obligation to do so in accordance with the terms hereof or prejudice any rights which the Canadian Borrower may have against any Canadian Lender as a result of any default by such Canadian Lender to make loans. (c) The failure of any Canadian Lender to make the C$ Loan to be made by it on any Borrowing Date (Canada) shall not relieve any other Lender of its obligation, if any, 21 hereunder to make its C$ Loan on such Borrowing Date (Canada), but no Lender shall be responsible for the failure of any other Canadian Lender to make the C$ Loan to be made by such other Canadian Lender on such Borrowing Date (Canada). 3.8. ADDITIONAL COSTS. (a) If the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof by any Governmental Authority or compliance by any Canadian Lender or any corporation controlling such Canadian Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Canadian Lender's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Canadian Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Canadian Lender to be material, then from time to time, the Canadian Borrower shall promptly pay to such Canadian Lender, upon written demand therefor, such additional amount or amounts as will compensate such Canadian Lender for such reduced rate of return. In determining such additional amounts, each Canadian Lender will act reasonably and in good faith and will use averaging and attribution methods which are reasonable and which will, to the extent the reduced rate of return relates to such Canadian Lender's loans or commitments in general and are not specifically attributable to C$ Loans or Canadian Commitments hereunder, be calculated with respect to all loans or commitments similar to the C$ Loans or Canadian Commitments made by such Canadian Lender hereunder whether or not the loan documentation for such other loans or commitments permits the Canadian Lender to charge the respective borrower on a basis similar to that provided in this subsection 3.8. (b) If any Canadian Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Canadian Borrower (with a copy to the Canadian Administrative Agent) of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by such Canadian Lender to the Canadian Borrower (with a copy to the Canadian Administrative Agent), showing in reasonable detail the basis for the calculation thereof, shall be prima facie evidence of such additional amounts payable. The agreements in this subsection shall survive the termination of the Credit Agreement and the payment of the C$ Loans and all other amounts payable thereunder. 3.9. TAXES. All payments made by the Canadian Borrower, the US Borrower or any Subsidiary Guarantor in respect of amounts owing under this Annex A and any C$ Notes shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding gross or net income or gross receipts taxes, ad valorem taxes, personal property and/or sales taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Canadian Administrative Agent or any Canadian Lender as a result of a present or former connection between the Canadian Administrative Agent or such Canadian Lender and the jurisdiction of the Governmental Authority imposing such tax or any political 22 subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Canadian Administrative Agent or such Canadian Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Annex A or any C$ Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees deductions or withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any amounts payable to the Canadian Administrative Agent or any Canadian Lender hereunder or under any C$ Note, the amounts so payable to the Canadian Administrative Agent or such Canadian Lender shall be increased to the extent necessary to yield to the Canadian Administrative Agent or such Canadian Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Annex A, PROVIDED, HOWEVER, that neither the Canadian Borrower, the US Borrower, nor any Subsidiary Guarantor shall be required to increase any such amounts payable to the Canadian Administrative Agent, any Canadian Lender or any holder of Bankers' Acceptances if such increased amount arises as a result of the failure of such Canadian Lender, the Canadian Administrative Agent or any holder of Bankers' Acceptances to be a Person resident in Canada for the purposes of the INCOME TAX ACT (Canada). The Canadian Borrower shall also indemnify the Canadian Administrative Agent and each Canadian Lender on an after-tax basis for any additional taxes on net income which the Canadian Administrative Agent or such Canadian Lender, as the case may be, may be obligated to pay as a result of the receipt of additional amounts under this subsection 3.9. Whenever any Non-Excluded Taxes are payable by the Canadian Borrower, the US Borrower or any Subsidiary Guarantor, as promptly as possible thereafter but in any event within 45 days after the date of payment the Canadian Borrower, the US Borrower or such Subsidiary Guarantor shall send to the Canadian Administrative Agent for its own account or for the account of such Canadian Lender, as the case may be, a certified copy of an original official receipt received by the Canadian Borrower, the US Borrower or such Subsidiary Guarantor showing payment thereof. If the Canadian Borrower, the US Borrower or any Subsidiary Guarantor fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Canadian Administrative Agent the required receipts or other required documentary evidence, the Canadian Borrower, the US Borrower or such Subsidiary Guarantor shall indemnify the Canadian Administrative Agent and the Canadian Lenders for any incremental taxes, interest or penalties that may become payable by the Canadian Administrative Agent or any Canadian Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Annex A and the payment of the C$ Loans and all other amounts payable hereunder. 3.10. SUBSTITUTION OF LENDER. If any Canadian Lender has demanded compensation under subsection 3.8 of this Annex A, the Canadian Borrower shall have the right, with the assistance of the Canadian Administrative Agent, to seek a substitute bank or banks (which may be one or more of the Lenders) satisfactory to the Canadian Borrower and the Canadian Administrative Agent to purchase the C$ Notes and assume the Canadian Commitments of such Canadian Lender. Any such Canadian Lender shall be obligated to sell the C$ Notes for cash without recourse to such substitute bank or banks and to execute and deliver an appropriately completed assignment and assumption agreement reasonably satisfactory to the Canadian Administrative Agent and the Canadian Borrower and any other document or perform any act reasonably necessary to effect the assumption of the rights and obligations of such substitute bank or banks. EXHIBIT B To Annex A [Form of C$ Note] PROMISSORY NOTE FOR VALUE RECEIVED, IRON MOUNTAIN CANADA CORPORATION, a Nova Scotia corporation (the "CANADIAN BORROWER"), hereby promises to pay to _______________ (the "BANK"),for account of its respective Applicable Lending Offices provided for by the Credit Agreement referred to below, at the principal office of the Canadian Administrative Agent at 200 Bay Street, Royal Bank Plaza, South Tower, Suite 1800, Toronto, Ontario M5J 2J2, the aggregate unpaid principal amount of the C$ Prime Loans made by the Bank to the Canadian Borrower under the Credit Agreement), in lawful money in the currency of such C$ Prime Loans and in immediately available funds, on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount of each such C$ Prime Loan, at such office, in like money and funds, for the period commencing on the date of such C$ Prime Loan until such C$ Prime Loan shall be paid in full, at the rates per annum and on the dates provided in the Credit Agreement. The date, amount and interest rate of each C$ Prime Loan made by the Bank to the Canadian Borrower and each payment made on account of the principal thereof, shall be recorded by the Bank on its books and, prior to any transfer of this C$ Note, endorsed by the Bank on the schedule attached hereto or any continuation thereof, PROVIDED that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Canadian Borrower to make a payment when due of any amount owing under the Credit Agreement or hereunder in respect of the C$ Prime Loans made by the Bank. This C$ Note is one of the C$ Notes referred to in the Fifth Amended and Restated Credit Agreement dated as of March 15, 2002 (as the same may be modified and supplemented and in effect from time to time, the "CREDIT AGREEMENT") between Iron Mountain Incorporated, Iron Mountain Canada Corporation, the lenders party thereto (including the Bank), Fleet National Bank as Documentation Agent, J.P. Morgan Securities Inc. as Arranger and Book Manager, JPMorgan Chase Bank as Administrative Agent, and J.P. Morgan Bank Canada as Canadian Administrative Agent and evidences C$ Prime Loans made by the Bank thereunder. Terms used but not defined in this C$ Note have the respective meanings assigned to them in the Credit Agreement. The Credit Agreement provides for the acceleration of the maturity of this C$ Note upon the occurrence of certain events and for prepayments of C$ Prime Loans upon the terms and conditions specified therein. 2 Except as permitted by Section 12.06 of the Credit Agreement, this C$ Note may not be assigned by the Bank to any other Person. This C$ Note shall be governed by, and construed in accordance with, the law of the State of New York. IRON MOUNTAIN CANADA CORPORATION By --------------------------- Title: 3 SCHEDULE OF C$ PRIME LOANS This C$ Note evidences C$ Prime Loans made, Continued or Converted under the within-described Credit Agreement to the Canadian Borrower, on the dates, in the principal amounts and bearing interest at the rates set forth below, subject to the payments, Continuations, Conversions and prepayments of principal set forth below.
Principal Amount Paid, Date Made, Amount Prepaid, Unpaid Continued of Continued or Principal Notation or Converted Loan Interest Rate Converted Amount Made by - -------------- ----------- ------------- -------------- ---------- ---------
EX-10.17 5 a2073447zex-10_17.txt EXHIBIT 10.17 EXHIBIT 10.17 AMENDMENT NO. 2 AND CONSENT TO GUARANTY AMENDMENT NO. 2 AND CONSENT TO UNCONDITIONAL GUARANTY dated as of October 22, 1999 between IRON MOUNTAIN INCORPORATED, a Delaware corporation (Guarantor) and IRON MOUNTAIN STATUTORY TRUST - 1998, a Connecticut statutory trust (Owner), and consented to by each of the Lenders and Agent Bank listed on the signature pages hereto. Guarantor and Owner are parties to a certain Unconditional Guaranty dated as of October 1, 1998 as amended by the Amendment and Consent to Guaranty dated July 1, 1999 (the Guaranty) pursuant to which the Guarantor guarantees to Owner and the Indemnified Parties the Guaranteed Obligations, including, without limitation, certain obligations of Iron Mountain Records Management, Inc. (Lessee/Agent) under (i) a Lease Agreement from Owner to Lessee/Agent dated as of October 1, 1998 (the Lease), and (ii) an Agency Agreement between Lessee/Agent and Owner dated as of October 1, 1998 (the Agency Agreement). Each of the Lease and the Agency Agreement have been assigned to the Agent Bank pursuant to an Assignment of Lease and Agency Agreement from Owner to Agent Bank and consented to by Lessee/Agent dated as of October 1, 1998. Guarantor has requested that Owner amend the Guaranty with respect to the sale of Arcus Staffing Resources, Inc. (a wholly owned subsidiary of Guarantor) and Guarantor has requested that the Lenders and Agent Bank consent to such sale and appropriate changes to the Guaranty. Accordingly, the parties hereto agree as follows: Section 1. DEFINITIONS. Except as otherwise defined in this Agreement, terms defined in the Guaranty are used herein as defined therein. Section 2. AMENDMENTS. Subject to the terms and conditions contained herein, Section 10(d)(y) of the Guaranty is amended by adding the following sentence thereto: "Notwithstanding anything in this Section 10(d)(y) to the contrary, Guarantor hereby permits its wholly owned subsidiary, Arcus Staffing Resources, Inc., ("Arcus") to sell and transfer all of Arcus' assets as an entirety to Kenda Systems, Inc. ("Kenda"), as more particularly described in a letter dated September 19, 1999 from Guarantor to Kenda, as further described in Guarantor's letter dated October 11, 1999 to Chase Manhattan Bank, The Bank of Nova Scotia and Wachovia Securities, Inc." Section 3. CONDITIONS OF EFFECTIVENESS. This Agreement shall become effective as of the date hereof when, and only when, the Owner, the Lenders and the Agent Bank shall have received a counterpart of this Agreement duly executed by the parties hereto. Section 4. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and warrants to Owner, Agent Bank, the Lenders and their respective counsel that: A. the representations and warranties made by Guarantor in the Guaranty and in each other Operative Document to which it is a party are correct on and as of the date hereof, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and B. no event has occurred and is continuing under any Operative Document that constitutes a Default or an Event of Default. Section 5. MISCELLANEOUS. Except as herein provided, the Guaranty and each of the other Operative Documents shall remain unchanged and in full force and effect. Upon the effectiveness of this Agreement, on and after the date hereof, each reference in any Operative Document to the Guaranty shall mean and be a reference to the Guaranty as amended hereby. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be governed by, and construed in accordance with, the law of the Commonwealth of Massachusetts. -2- EXHIBIT 10.20 IN WITNESS WHEREOF, the parties hereunto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. GUARANTOR: IRON MOUNTAIN INCORPORATED By: /s/ J.P. Lawrence ---------------------------- Name: J.P. Lawrence Title: VP, Treasurer OWNER: IRON MOUNTAIN STATUTORY TRUST - 1998 By: First Union National Bank, not in its individual capacity except as expressly set forth herein, but solely as trustee under the Amended and Restated Trust Agreement dated as of October 1, 1998, as amended By: /s/ W. Jeffrey Kramer -------------------------------- Name: W. Jeffrey Kramer Title: Vice President AGREED AND CONSENTED TO: AGENT BANK: THE BANK OF NOVA SCOTIA, as Agent Bank By: /s/ T.M. Pitcher ----------------------------- Name: T.M. Pitcher Title: Authorized Signatory LENDERS: BANKBOSTON, N.A. FLEET NATIONAL BANK By: /s/ Maria L. Wisniewski By: /s/ Michael A. Salmer ----------------------------- -------------------------- Name: Maria L. Wisniewski Name: Michael A. Salmer Title: Director Title: Vice President UNION BANK OF CALIFORNIA, N.A. USTRUST By: /s/ Nancy A. Perkins By: /s/ Daniel G. Eastman ----------------------------- -------------------------- Name: Nancy A. Perkins Name: Eastman, D.G. Title: Vice President Title: Vice President THE BANK OF NOVA SCOTIA By: /s/ T.M. Pitcher ----------------------------- Name: T.M. Pitcher Title: Authorized Signatory EX-10.18 6 a2073447zex-10_18.txt EXHIBIT 10.18 EXHIBIT 10.18 AMENDMENT NO. 3 AND CONSENT TO GUARANTY AMENDMENT NO. 3 AND CONSENT TO UNCONDITIONAL GUARANTY dated as of January 31, 2000 between IRON MOUNTAIN INCORPORATED, a Delaware corporation (Guarantor) and IRON MOUNTAIN STATUTORY TRUST - 1998, a Connecticut statutory trust (Owner), and consented to by each of the Lenders and Agent Bank listed on the signature pages hereto. Guarantor and Owner are parties to a certain Unconditional Guaranty dated as of October 1, 1998, as amended by Amendment and Consent to Guaranty Dated as July 1, 1999 and by Amendment No. 2 and Consent to Guaranty dated as of October 22, 1999 (the Guaranty) pursuant to which the Guarantor guarantees to Owner and the Indemnified Parties the Guaranteed Obligations, including, without limitation, certain obligations of Iron Mountain Records Management, Inc. (Lessee/Agent) under (i) a Lease Agreement from Owner to Lessee/Agent dated as of October 1, 1998, as amended (the Lease), and (ii) an Amended and Restated Agency Agreement between Lessee/Agent and Owner dated as of October 1, 1998, as amended (the Agency Agreement). Each of the Lease and the Agency Agreement have been assigned to the Agent Bank pursuant to an Assignment of Lease and Agency Agreement from Owner to Agent Bank and consented to by Lessee/Agent dated as of October 1, 1998. Guarantor has requested that Owner, Agent Bank and Lenders consent to Guarantor's merger with Pierce Leahy Corp. and amend the Guaranty with respect to certain financial covenants and related definitions; and Guarantor has requested that the Lenders and Agent Bank consent to such changes. Accordingly, the parties hereto agree as follows: Section 1. DEFINITIONS. Except as otherwise defined in this Agreement, terms defined in the Guaranty are used herein as defined therein. Section 2. CONSENT TO MERGER; CERTAIN DEFINED TERMS. Notwithstanding that Section 10(d)(x) of the Guaranty requires that Guarantor be the surviving entity of any merger, Owner, Agent Bank and the Lenders hereby consent and approve of Guarantor's proposed merger with Pierce Leahy Corp., to take place and be effective on or about January 31, 2000 (the Merger Date), as such merger is evidenced by the articles of merger attached hereto as EXHIBIT A. As of the Merger Date, Owner, Agent Bank and the Lenders acknowledge that Pierce Leahy Corp., is the surviving entity of such merger with Guarantor, and as a result of such merger will be known as "IRON MOUNTAIN INCORPORATED." Owner, Agent Bank and the Lenders hereby agree that, (i) as of the Merger Date, as used herein, in the Guaranty and in each other Operative Document, Guarantor shall mean Iron Mountain Incorporated, a Pennsylvania corporation, formerly known as Pierce Leahy Corp. as survivor by merger with Iron Mountain Incorporated, a Delaware corporation, and (ii) as of the date hereof, as used in the Guaranty and in each other Operative Document, reference to the "Credit Agreement" shall be as defined in Section 3 E hereof. Section 3. AMENDMENTS. Subject to the terms and conditions contained herein, the Guaranty is hereby amended as follows: A. LEVERAGE RATIO. (i) The Leverage Ratio "grid" in Section 10(a)(i) of the Guaranty is hereby amended to read as follows:
PERIOD LEVERAGE RATIO ------ -------------- From January 21, 2000 through June 30, 2001 5.75 to 1 From July 1, 2001 through June 30, 2002 5.50 to 1 From July 1, 2002 through June 30, 2003 5.25 to 1 From July 1, 2003 and all times thereafter 5.00 to 1
(ii) Section 10(a)(i)(B) of the Guaranty is hereby deleted in its entirety. B. INTEREST COVERAGE RATIO. The Interest Coverage Ratio "grid" in Section 10(a)(ii) of the Guaranty is hereby amended to read as follows:
INTEREST COVERAGE PERIOD RATIO ------ ----- From January 21, 2000 through June 30, 2001 1.75 to 1 From July 1, 2001 through June 30, 2002 2.00 to 1 From July 1, 2002 through June 30, 2003 2.25 to 1 From July 1, 2003 and all times thereafter 2.50 to 1
C. FIXED CHARGES COVERAGE RATIO. The Fixed Charges Coverage Ratio "grid" in Section 10(a)(iii) of the Guaranty is hereby amended to read as follows:
FIXED CHARGES PERIOD COVERAGE RATIO ------ -------------- ~~From January 21, 2000 through June 30, 2001 1.00 to 1 From July 1, 2001 through June 30, 2003 1.10 to 1 From July 1, 2003 and at all times thereafter 1.20 to 1~~
D. LIENS. Section 10(a)(iv) of the Guaranty is hereby deleted in its entirety and replaced as follows: "The Guarantor will not, and will not permit any of its Subsidiaries to, create or suffer to exist any Lien upon any property or assets, now owned or hereafter acquired, securing any -2- Indebtedness or other obligation, except: (i) the Liens created pursuant to the Security Documents; (ii) the Liens existing on the Effective Date set forth in Schedule III to the Credit Agreement and Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien set forth on Schedule III to the Credit Agreement, PROVIDED that the principal amount of such Indebtedness is not increased and is not secured by any additional assets; (iii) (A) Liens contemplated by clauses (ii), (iv), (v) and (vii) of the definition of Permitted Indebtedness; and (B) Liens securing Acquired Debt, provided that such Liens cover only those assets that were covered by such Liens prior to the relevant acquisition; (iv) attachment, judgment or other similar Liens arising in connection with litigation or other legal proceedings, PROVIDED that either (A) the claims in respect of such Liens are fully covered by insurance or (B) the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are in an amount not to exceed $3,000,000 in the aggregate and are being contested in good faith by appropriate proceedings diligently prosecuted; (v) Liens on properties or assets of an Excluded Subsidiary securing Indebtedness of such Excluded Subsidiary permitted under the Credit Agreement; (vi) other Liens arising in the ordinary course of the business of the Guarantor or such Subsidiary which are not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (vii) Liens securing Indebtedness permitted by clause (v) of Section 9.08 of the Credit Agreement, PROVIDED that such Liens extend only to the assets of any Excluded Subsidiary incurring such Indebtedness as a primary obligor (and not as a guarantor) or Capital Stock of such Excluded Subsidiary; and (viii) Liens on property leased pursuant to the Synthetic Lease Obligations permitted by clause (vi) of Section 9.08 of the Credit Agreement." E. DEFINITIONS. (i) Section 10(c) of the Guaranty is hereby amended by inserting the following definitions (or, in the case of any definition for a term that is defined in the Guaranty before giving effect to this Agreement, by amending and restating such definition to read as set forth below): "CAPITAL EXPENDITURES" shall mean capital expenditures by the Guarantor or any of its Subsidiaries during the relevant period determined in accordance with GAAP. "CAPITAL STOCK" shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or nonvoting) of such Person's capital stock or other ownership interests, including, without limitation, all common stock and all preferred stock. "CREDIT AGREEMENT" shall mean the Third Amended and Restated Credit Agreement dated as of January 21, 2000 in the amount of up to $400,000,000 among Guarantor and the other parties thereto, as amended, amended and restated, modified, extended, refinanced or supplemented from time to time, except to the extent that the Operative Documents refer to it as in effect on the date hereof. "DOLLARS," "US$" and "$" shall mean lawful money of the United States of America. -3- "EBITDA" shall mean, for any period, the sum (without duplication), determined on a consolidated basis for the Guarantor and its Subsidiaries, of (a) net income for such period PLUS (b) to the extent deducted in determining net income for such period, the sum of (i) depreciation and amortization (including deferred financing costs, organization costs, goodwill and non-compete amortization) for such period, (ii) other non-cash expenses for such period, (iii) Interest Expense for such period, (iv) provision for income taxes for such period, (v) extraordinary, unusual or non-recurring losses or other items (including without limitation losses arising from any natural disasters) for such period determined in accordance with GAAP, (vi) non-compete expenses for such period to the extent not capitalized in accordance with GAAP and (vii) losses on sales of fixed assets not in the ordinary course of business for such period after giving effect to any related charges for, reductions of or provisions for taxes thereon MINUS (c) to the extent included in the calculation of net income for such period, the sum of (i) other income (including interest income) for such period, (ii) extraordinary, unusual or non-recurring gains or other items for such period determined in accordance with GAAP and (iii) gains on sales of fixed assets not in the ordinary course of business for such period after giving effect to any related charges for, reductions of or provisions for taxes thereon. For the purposes of calculating the ratios set forth in Section 10 hereof there may, at the Guarantor's option (such option to be consistently applied with respect to each transaction), be included in EBITDA for any relevant period, on a PRO FORMA basis (adjusted to give effect to expenses that will not be ongoing), the net income (and the additions and subtractions thereto referred to above) for such period of any Person (or assets) acquired after the commencement of such period in connection with (i) the Pierce Merger and (ii) any Permitted Acquisition or any acquisition pursuant to Section 9.14(viii)(b) of the Credit Agreement having Acquisition Consideration, in the case of any such Permitted Acquisition, or an aggregate amount of consideration paid, in the case of such acquisition pursuant to Section 9.14(viii)(b) of the Credit Agreement, of more than $500,000. The net income (and the related additions and subtractions) of the Person or assets acquired pursuant to such acquisition for such period shall be calculated by reference to the most recent available quarterly financial statements of the acquired business, annualized. "EFFECTIVE DATE" shall have the meaning assigned to such term in the Credit Agreement. "EXCLUDED SUBSIDIARY" shall mean any Subsidiary of the Guarantor principally engaged in the records and information management business or related activities organized outside of the United States of America. "FIXED CHARGES" shall mean for any period the sum of (i) Scheduled Amortization for such period PLUS (ii) Interest Expense for such period PLUS (iii) 50% of the total Capital Expenditures (total Capital Expenditures being calculated for this purpose to exclude replacement Capital Expenditures made with the proceeds of insurance) for such period PLUS (iv) the aggregate amount of non-compete expenses for such period to the extent not capitalized in accordance with GAAP. "FUNDED INDEBTEDNESS" shall mean, without duplication, (a) Indebtedness (other than in respect of Synthetic Lease Obligations) that matures or otherwise becomes due more than one year after the incurrence thereof or is extendible, renewable or refundable, at the option of the -4- obligor, to a date more than one year after the incurrence thereof (including the current portion thereof), (b) Indebtedness outstanding under the Credit Agreement and (c) Synthetic Lease Obligations and any Guarantees by the Guarantor thereof. "GAAP" shall mean generally accepted accounting principles as in effect from time to time in the United States of America consistently applied. "PIERCE MERGER" shall have the meaning assigned to such term in the Credit Agreement. (ii) Section 10(c) of the Guaranty is hereby amended by deleting therefrom the following definitions: "ARCUS UK," "FOREIGN LEVERAGE RATIO," "LARGE VOLUME ACCOUNT CAPITALIZED EXPENDITURES," "MAINTENANCE CAPITAL EXPENDITURES," "PERMITTED INVESTMENT," "POND JOINT VENTURE," "POND TRANSACTION" and "QUALIFYING SALE-LEASEBACK TRANSACTION." Section 4. CONDITIONS OF EFFECTIVENESS. This Agreement shall become effective as of the date hereof when, and only when, the Owner, the Lenders and the Agent Bank shall have received a counterpart of this Agreement duly executed by the parties hereto and payment of an amendment fee pursuant to a letter sent by the Agent Bank to the Guarantor dated as of January 24, 2000. Section 5. REPRESENTATIONS AND WARRANTIES. As of the date hereof, Guarantor hereby represents and warrants to Owner, Agent Bank, the Lenders and their respective counsel that: A. the representations and warranties made by Guarantor in each Operative Document to which it is a party are correct on and as of the date hereof, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); B. no event has occurred and is continuing under any Operative Document that constitutes a Default or an Event of Default; and C. it shall deliver, or cause to be delivered, on the Merger Date to Owner, Agent Bank and the Lenders, (i) a certificate of Iron Mountain Incorporated, formerly known as Pierce Leahy Corp., in the form attached hereto as SCHEDULE 1; and (ii) an opinion of counsel to Iron Mountain Incorporated, formerly known as Pierce Leahy Corp., stating that said certificate in the preceding clause (i) has been duly authorized, executed and delivered by, and is enforceable against, Iron Mountain Incorporated, formerly known as Pierce Leahy Corp., in accordance with its terms and such opinion shall otherwise be in form and substance satisfactory to the Owner, Agent Bank and the Lenders. Section 6. MISCELLANEOUS. Except as herein provided, the Guaranty and each of the other Operative Documents shall remain unchanged and in full force and effect. Upon the effectiveness of this Agreement, on and after the date hereof, each reference in any Operative Document to the Guaranty shall mean and be a reference to the Guaranty as amended hereby. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be governed by, and construed in accordance with, the law of the Commonwealth of Massachusetts. -5- [Remainder of Page Intentionally Left Blank] -6- IN WITNESS WHEREOF, the parties hereunto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. GUARANTOR: IRON MOUNTAIN INCORPORATED By: /s/ J.P. Lawrence ------------------------------- Name: J.P. Lawrence Title: VP, Treasurer LENDERS: THE BANK OF NOVA SCOTIA, as Agent Bank and as a Lender By: /s/ T.M. Pitcher ------------------------------- Name: /s/ T.M. Pitcher Title: Authorized Signatory UNION BANK OF CALIFORNIA, N.A. By: /s/ Nancy A. Perkins ------------------------------- Name: NANCY A. PERKINS Title: Vice President FLEET NATIONAL BANK By: /s/ Michael A. Salmer -------------------------------- Name: Michael A. Salmer Title: Vice President BANKBOSTON, N.A. By: /s/ Michael A. Salmer ------------------------------- Name: Michael A. Salmer Title: Vice President CITIZENS BANK OF MASSACHUSETTS, SUCCESSOR TO USTRUST By: /s/ Daniel G. Eastman ------------------------------ Name: Eastman, D.G. Title: Vice President OWNER: IRON MOUNTAIN STATUTORY TRUST-1998 By: First Union National Bank, not in its individual capacity, but solely as trustee By: /s/ W. Jeffrey Kramer ---------------------------- Name: W. Jeffrey Kramer Title: Vice President The following exhibits and schedules have been omitted and will be supplementally furnished to the Securities and Exchange Commission upon request: ~~EXHIBIT A ARTICLES OF MERGER SCHEDULE 1 CERTIFICATE OF IRON MOUNTAIN INCORPORATED~~

EX-10.24 7 a2073447zex-10_24.txt EXHIBIT 10.24 EXHIBIT 10.24 AMENDMENT NO. 1 AND CONSENT TO GUARANTY AMENDMENT NO. 1 AND CONSENT TO UNCONDITIONAL GUARANTY dated as of October 22, 1999 between IRON MOUNTAIN INCORPORATED, a Delaware corporation (Guarantor) and IRON MOUNTAIN STATUTORY TRUST - 1999, a Connecticut statutory trust (Owner), and consented to by each of the Lenders and Agent Bank listed on the signature pages hereto. Guarantor and Owner are parties to a certain Unconditional Guaranty dated as of July 1, 1999 (the Guaranty) pursuant to which the Guarantor guarantees to Owner and the Indemnified Parties the Guaranteed Obligations, including, without limitation, certain obligations of Iron Mountain Records Management, Inc. (Lessee/Agent) under (i) a Lease Agreement from Owner to Lessee/Agent dated as of July 1, 1999 (the Lease), and (ii) an Agency Agreement between Lessee/Agent and Owner dated as of July 1, 1999 (the Agency Agreement). Each of the Lease and the Agency Agreement have been assigned to the Agent Bank pursuant to an Assignment of Lease and Agency Agreement from Owner to Agent Bank and consented to by Lessee/Agent dated as of July 1, 1999. Guarantor has requested that Owner amend the Guaranty with respect to the sale of Arcus Staffing Resources, Inc. (a wholly owned subsidiary of Guarantor) and Guarantor has requested that the Lenders and Agent Bank consent to such sale and appropriate changes to the Guaranty. Accordingly, the parties hereto agree as follows: Section 1. DEFINITIONS. Except as otherwise defined in this Agreement, terms defined in the Guaranty are used herein as defined therein. Section 2. AMENDMENTS. Subject to the terms and conditions contained herein, Section 10(d)(y) of the Guaranty is amended by adding the following sentence thereto: "Notwithstanding anything in this Section 10(d)(y) to the contrary, Guarantor hereby permits its wholly owned subsidiary, Arcus Staffing Resources, Inc., ("Arcus") to sell and transfer all of Arcus' assets as an entirety to an unaffiliated purchaser which sale and transfer shall be satisfactory to the Lenders." Section 3. CONDITIONS OF EFFECTIVENESS. This Agreement shall become effective as of the date hereof when, and only when, the Owner, the Lenders and the Agent Bank shall have received a counterpart of this Agreement duly executed by the parties hereto. Section 4. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and warrants to Owner, Agent Bank, the Lenders and their respective counsel that: A. the representations and warranties made by Guarantor in the Guaranty and in each other Operative Document to which it is a party are correct on and as of the date hereof, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and B. no event has occurred and is continuing under any Operative Document that constitutes a Default or an Event of Default. Section 5. MISCELLANEOUS. Except as herein provided, the Guaranty and each of the other Operative Documents shall remain unchanged and in full force and effect. Upon the effectiveness of this Agreement, on and after the date hereof, each reference in any Operative Document to the Guaranty shall mean and be a reference to the Guaranty as amended hereby. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be governed by, and construed in accordance with, the law of the Commonwealth of Massachusetts. -2- IN WITNESS WHEREOF, the parties hereunto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. GUARANTOR: IRON MOUNTAIN INCORPORATED By: J.P. Lawrence ------------------------------ Name: J.P. Lawrence Title: V.P., Treasurer OWNER: IRON MOUNTAIN STATUTORY TRUST - 1999 By: First Union National Bank, not in its individual capacity except as expressly set forth herein, but solely as trustee under the Trust Agreement dated as of July 1, 1999, as amended By: /s/ W. Jeffrey Kramer ----------------------------- Name: W. Jeffrey Kramer Title: Vice President AGREED AND CONSENTED TO: AGENT BANK: WACHOVIA CAPITAL INVESTMENTS, INC., as Agent Bank By: /s/ Kevin T. McConnell -------------------------------- Name: Kevin T. McConnell Title: Senior Vice President LENDERS: THE BANK OF NEW YORK NATIONAL CITY BANK By: /s/ William G.C. Dakin By: /s/ Lisa B. Lisi -------------------------------- ----------------------------- Name: William G.C. Dakin Name: Lisa B. Lisi Title: Vice President Title: Vice President PNC COMMERCIAL CORP. USTRUST By: /s/ John McEnery By: /s/ D.G. Eastman -------------------------------- ----------------------------- Name: John McEnery Name: Eastman, D.G. Title: Vice President Title: Vice President WACHOVIA CAPITAL INVESTMENTS, INC. By: /s/ Kevin T. McConnell -------------------------------- Name: Kevin T. McConnell Title: Senior Vice President DIAMOND LEASE (U.S.A.), INC. By: /s/ Takeaki Takeuchi --------------------------------- Name: Takeaki Takeuchi Title: President EX-10.25 8 a2073447zex-10_25.txt EXHIBIT 10.25 EXHIBIT 10.25 AMENDMENT NO. 2 AND CONSENT TO GUARANTY AMENDMENT NO. 2 AND CONSENT TO UNCONDITIONAL GUARANTY dated as of January 31, 2000 between IRON MOUNTAIN INCORPORATED, a Delaware corporation (Guarantor) and IRON MOUNTAIN STATUTORY TRUST - 1999, a Connecticut statutory trust (Owner), and consented to by each of the Lenders and Agent Bank listed on the signature pages hereto. Guarantor and Owner are parties to a certain Unconditional Guaranty dated as of July 1, 1999 as amended by Amendment No. 1 and Consent to Guaranty dated as of October 22, 1999 (the Guaranty) pursuant to which the Guarantor guarantees to Owner and the Indemnified Parties the Guaranteed Obligations, including, without limitation, certain obligations of Iron Mountain Records Management, Inc. (Lessee/Agent) under (i) a Lease Agreement from Owner to Lessee/Agent dated as of July 1, 1999 (the Lease), and (ii) an Agency Agreement between Lessee/Agent and Owner dated as of July 1, 1999 (the Agency Agreement). Each of the Lease and the Agency Agreement have been assigned to the Agent Bank pursuant to an Assignment of Lease and Agency Agreement from Owner to Agent Bank and consented to by Lessee/Agent dated as of July 1, 1999. Guarantor has requested that Owner, Agent Bank and the Lenders consent to Guarantor's merger with Pierce-Leahy Corp. and amend the Guaranty with respect to certain financial covenants and related definitions; and Guarantor has requested that the Lenders and Agent Bank consent to such changes. Accordingly, the parties hereto agree as follows: Section 1. DEFINITIONS. Except as otherwise defined in this Agreement, terms defined in the Guaranty are used herein as defined therein. Section 2. CONSENT TO MERGER; CERTAIN DEFINED TERMS. Notwithstanding that Section 10(d)(x) of the Guaranty requires that Guarantor be the surviving entity of any merger, Owner, Agent Bank and the Lenders hereby consent and approve of Guarantor's merger with Pierce Leahy Corp. to take place and be effective on or about January 31, 2000 (the Merger Date), as such merger is evidenced by such articles of merger attached hereto as EXHIBIT A. As of the Merger Date, Owner, Agent Bank and the Lenders acknowledge that Pierce Leahy Corp., is the surviving entity of such merger with Guarantor and as a result of such merger will be known as "IRON MOUNTAIN INCORPORATED." Owner, Agent Bank and the Lenders hereby agree that, (i) as of the Merger Date, as used herein, in the Guaranty and in each other Operative Document, Guarantor shall mean Iron Mountain Incorporated, a Pennsylvania corporation, formerly known as Pierce Leahy Corp. as survivor by merger with Iron Mountain Incorporated, a Delaware corporation, and (ii) as of the date hereof, as used in the Guaranty and in each other Operative Document reference to the "Credit Agreement" shall be as defined in Section 3 F hereof. Section 3. AMENDMENTS. Subject to the terms and conditions contained herein, the Guaranty is hereby amended as follows: A. LEVERAGE RATIO. Section 10(a)(i) of the Guaranty is hereby amended by deleting in its entirety paragraph 10(a)(i)(B) thereof and replacing it as follows: (B) The Guarantor will not, as at the end of any fiscal quarter, permit the ratio, calculated as at the end of such fiscal quarter for the period of four fiscal quarters then ended, of (i) the excess of (x) the aggregate outstanding principal amount of Indebtedness (on a consolidated basis and without regard to Indebtedness owed to the Guarantor and its Subsidiaries, Indebtedness referred to in clause (xii) of the definition of "Permitted Indebtedness" in Section 1.01 of the Credit Agreement and the Indebtedness under the Pierce 1998 Senior Notes) of the Excluded Subsidiaries at such date over (y) the aggregate amount of cash and Liquid Investments of the Excluded Subsidiaries at such date to (ii) EBITDA for such period (the "FOREIGN LEVERAGE RATIO") to exceed 3.50 to 1. Solely for purposes of this clause (B), in determining the Foreign Leverage Ratio, EBITDA shall be determined by including only the Excluded Subsidiaries. B. INTEREST COVERAGE RATIO. Section 10(a)(ii) of the Guaranty is hereby amended by deleting clause (ii) of the first paragraph thereof and replacing it as follows: "(ii) Interest Expense for such period to be less than the ratio of 1.75 to 1." C. FIXED CHARGES COVERAGE RATIO. Section 10(a)(iii) of the Guaranty is hereby amended by deleting clause (ii) of the first paragraph thereof and replacing it as follows: "(ii) Fixed Charges for such period to be less than the ratio of 1.0 to 1." D. SUBORDINATED INDEBTEDNESS. Section 10(a)(iv) of the Guaranty is hereby deleted in its entirety and replaced as follows: "(iv) SUBORDINATED INDEBTEDNESS. Guarantor will not, nor will it permit any of its Subsidiaries to, purchase, redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous fund for the purchase, redemption, retirement or other acquisition of, or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any Subordinated Indebtedness, except for: (i) regularly scheduled payments or prepayments of principal and interest in respect thereof required pursuant to the instruments evidencing such Subordinated Indebtedness; (ii) any other purchase, redemption or retirement of Subordinated Indebtedness, so long as (i) no Default has occurred and is continuing and (ii) after giving effect to each such purchase, redemption or retirement, the ratio of Senior Debt on the last day of the most recently completed fiscal quarter of the Guarantor to EBITDA for the four quarters then ended on a PRO FORMA basis, after giving effect to such purchase, redemption or retirement and any Stock Repurchase consummated on or prior to the date thereof, and to any borrowings to finance the same, as at the last day of the latest fiscal quarter is less than or equal to 1.5 to 1." E. LIENS. Section 10(a)(v) of the Guaranty is hereby deleted in its entirety and replaced as follows: -2- "Guarantor will not, and will not permit any of its Subsidiaries to, create or suffer to exist any Lien upon any property or assets, now owned or hereafter acquired, securing any Indebtedness or other obligation, except: (i) the Liens created pursuant to the Security Documents; (ii) the Liens existing on the Effective Date set forth in Schedule III to the Credit Agreement and Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien set forth on Schedule III to the Credit Agreement, PROVIDED that the principal amount of such Indebtedness is not increased and is not secured by any additional assets; (iii) (A) Liens contemplated by clauses (ii), (iv), (v) and (vii) of the definition of Permitted Indebtedness; and (B) Liens securing Acquired Debt, provided that such Liens cover only those assets that were covered by such Liens prior to the relevant acquisition; (iv) attachment, judgment or other similar Liens arising in connection with litigation or other legal proceedings, PROVIDED that either (A) the claims in respect of such Liens are fully covered by insurance or (B) the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are in an amount not to exceed $3,000,000 in the aggregate and are being contested in good faith by appropriate proceedings diligently prosecuted; (v) Liens on properties or assets of an Excluded Subsidiary securing Indebtedness of such Excluded Subsidiary permitted under the Credit Agreement; (vi) other Liens arising in the ordinary course of the business of the Guarantor or such Subsidiary which are not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (vii) Liens securing Indebtedness permitted by clause (v) of Section 9.08 of the Credit Agreement, PROVIDED that such Liens extend only to the assets of any Excluded Subsidiary incurring such Indebtedness as a primary obliger (and not as a guarantor) or Capital Stock of such Excluded Subsidiary; and (viii) Liens on property leased pursuant to the Synthetic Lease Obligations permitted by clause (vi) of Section 9.08 of the Credit Agreement." F. DEFINITIONS. (i) Section 10(c) of the Guaranty is hereby amended by inserting the following definitions (or, in the case of any definition for a term that is defined in the Guaranty before giving effect to this Agreement, by amending and restating such definition to read as set forth below): "ACQUIRED DEBT" shall mean, with respect to the Guarantor or any Subsidiary, Indebtedness of any other Person, existing at the time such other Person merged with or into or became a Subsidiary of the Guarantor or any Subsidiary thereof in connection with a Permitted Acquisition occurring after the Effective Date, provided that (i) such Indebtedness was not created by such other Person in contemplation of such acquisition and (ii) the aggregate outstanding principal amount of such Indebtedness shall not at any time exceed $15,000,000. "CAPITAL EXPENDITURES" shall mean capital expenditures by the Guarantor or any of its Subsidiaries during the relevant period determined in accordance with GAAP. "CAPITAL STOCK" shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or nonvoting) of such Person's capital stock or other ownership interests, including, without limitation, all common stock and all preferred stock. -3- "CREDIT AGREEMENT" shall mean the Third Amended and Restated Credit Agreement dated as of January 27, 2000 in the amount of up to $400,000,000 among Guarantor and the other parties thereto as amended, amended and restated, modified, extended, refinanced or supplemented from time to time, except to the extent that the Operative Documents refer to it as in effect on the date hereof. "DOLLARS," "US$" and "$" shall mean lawful money of the United States of America. "EBITDA" shall mean, for any period, the sum (without duplication), determined on a consolidated basis for the Guarantor and its Subsidiaries, of (a) net income for such period PLUS (b) to the extent deducted in determining net income for such period, the sum of (i) depreciation and amortization (including deferred financing costs, organization costs, goodwill and non-compete amortization) for such period, (ii) other non-cash expenses for such period, (iii) Interest Expense for such period, (iv) provision for income taxes for such period, (v) extraordinary, unusual or non-recurring losses or other items (including without limitation losses arising from any natural disasters) for such period determined in accordance with GAAP, (vi) non-compete expenses for such period to the extent not capitalized in accordance with GAAP and (vii) losses on sales of fixed assets not in the ordinary course of business for such period after giving effect to any related charges for, reductions of or provisions for taxes thereon MINUS (c) to the extent included in the calculation of net income for such period, the sum of (i) other income (including interest income) for such period, (ii) extraordinary, unusual or non-recurring gains or other items for such period determined in accordance with GAAP and (iii) gains on sales of fixed assets not in the ordinary course of business for such period after giving effect to any related charges for, reductions of or provisions for taxes thereon. For the purposes of calculating the ratios set forth in Section 10 hereof there may, at the Guarantor's option (such option to be consistently applied with respect to each transaction), be included in EBITDA for any relevant period, on a PRO FORMA basis (adjusted to give effect to expenses that will not be ongoing), the net income (and the additions and subtractions thereto referred to above) for such period of any Person (or assets) acquired after the commencement of such period in connection with (i) the Pierce Merger and (ii) any Permitted Acquisition or any acquisition pursuant to Section 9.14(viii)(b) of the Credit Agreement having Acquisition Consideration, in the case of any such Permitted Acquisition, or an aggregate amount of consideration paid, in the case of such acquisition pursuant to Section 9.14(viii)(b) of the Credit Agreement, of more than $500,000. The net income (and the related additions and subtractions) of the Person or assets acquired pursuant to such acquisition for such period shall be calculated by reference to the most recent available quarterly financial statements of the acquired business, annualized. "EFFECTIVE DATE" shall have the meaning assigned to such term in the Credit Agreement. "EXCLUDED SUBSIDIARY" shall mean any Subsidiary of the Guarantor principally engaged in the records and information management business or related activities organized outside of the United States of America. "FIXED CHARGES" shall mean for any period the sum of (i) Scheduled Amortization for such period PLUS (ii) Interest Expense for such period PLUS (iii) 50% of the total Capital -4- Expenditures (total Capital Expenditures being calculated for this purpose to exclude replacement Capital Expenditures made with the proceeds of insurance) for such period PLUS (iv) the aggregate amount of non-compete expenses for such period to the extent not capitalized in accordance with GAAP. "FUNDED INDEBTEDNESS" shall mean, without duplication, (a) Indebtedness (other than in respect of Synthetic Lease Obligations) that matures or otherwise becomes due more than one year after the incurrence thereof or is extendible, renewable or refundable, at the option of the obligor, to a date more than one year after the incurrence thereof (including the current portion thereof), (b) Indebtedness outstanding under the Credit Agreement and (c) Synthetic Lease Obligations and any Guarantees by the Guarantor thereof. "GAAP" shall mean generally accepted accounting principles as in effect from time to time in the United States of America consistently applied. "PIERCE MERGER" shall have the meaning assigned to such term in the Credit Agreement. "PIERCE 1998 SENIOR NOTES" shall have the meaning assigned to such term in the Credit Agreement. "SENIOR DEBT" shall have the meaning assigned to such term in the Credit Agreement. "STOCK REPURCHASE" shall have the meaning assigned to such term in the Credit Agreement. "SUBORDINATED INDEBTEDNESS" shall have the meaning assigned to such term in the Credit Agreement. (ii) Section 10(c) of the Guaranty is hereby amended by deleting therefrom the following definitions: "ARCUS UK," "LARGE VOLUME ACCOUNT CAPITALIZED EXPENDITURES," "MAINTENANCE CAPITAL EXPENDITURES," "PERMITTED INVESTMENT," "POND JOINT VENTURE," "POND TRANSACTION" and "QUALIFYING SALE-LEASEBACK TRANSACTION." Section 4. CONDITIONS OF EFFECTIVENESS. This Agreement shall become effective as of the date hereof when, and only when, the Owner, the Lenders and the Agent Bank shall have received a counterpart of this Agreement duly executed by the parties hereto and payment of an amendment fee pursuant to a letter sent by the Agent Bank to Guarantor dated as of January 26, 2000. Section 5. REPRESENTATIONS AND WARRANTIES. As of the date hereof, Guarantor hereby represents and warrants to Owner, Agent Bank, the Lenders and their respective counsel that: A. the representations and warranties made by Guarantor in each Operative Document to which it is a party are correct on and as of the date hereof, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); -5- B. no event has occurred and is continuing under any Operative Document that constitutes a Default or an Event of Default; and C. it shall deliver, or cause to be delivered, on the Merger Date to Owner, Agent Bank and the Lenders, (i) a certificate of Iron Mountain Incorporated, formerly known as Pierce Leahy Corp., in the form attached hereto as SCHEDULE 1; and (ii) an opinion of counsel to Iron Mountain Incorporated, formerly known as Pierce Leahy Corp., stating that said certificate in the preceding clause (i) has been duly authorized, executed and delivered by, and is enforceable against, Iron Mountain Incorporated, formerly known as Pierce Leahy Corp., in accordance with its terms and such opinion shall otherwise be in form and substance satisfactory to the Owner, Agent Bank and the Lenders. Section 5. MISCELLANEOUS. Except as herein provided, the Guaranty and each of the other Operative Documents shall remain unchanged and in full force and effect. Upon the effectiveness of this Agreement, on and after the date hereof, each reference in any Operative Document to the Guaranty shall mean and be a reference to the Guaranty as amended hereby. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be governed by, and construed in accordance with, the law of the Commonwealth of Massachusetts. [Remainder of Page Intentionally Left Blank] -6- IN WITNESS WHEREOF, the parties hereunto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. GUARANTOR: IRON MOUNTAIN INCORPORATED By: /s/ J.P. Lawrence ------------------------------ Name: J.P. Lawrence Title: VP, Treasurer LENDERS: WACHOVIA CAPITAL INVESTMENTS, INC., as Agent Bank and as a Lender By: Kevin T. McConnell ------------------------------ Name: Kevin T. McConnell Title: Senior Vice President [GUARANTY AMENDMENT NO.2] PNC COMMERCIAL LLC By: /s/ John McEnery ------------------------------ Name: /s/ John McEnery Title: Vice President CITIZENS BANK OF MASSACHUSETTS, SUCCESSOR TO USTRUST By: /s/ Daniel G. Eastman ------------------------------- Name: Eastman, D.G. Title: Vice President NATIONAL CITY BANK By: /s/ Lisa B. Lisi ------------------------------ Name: Lisa B. Lisi Title: Vice President DIAMOND LEASE (U.S.A.) INC. By: /s/ Jeffrey H. Fishman ------------------------------ Name: Jeffrey H. Fishman Title: Vice President/Credit Administration BANK OF NEW YORK By: /s/ William G.C. Dakin ------------------------------ Name: William G.C. Dakin Title: Vice President [GUARANTY AMENDMENT NO.2] OWNER: IRON MOUNTAIN STATUTORY TRUST - 1999 By: First Union National Bank, not in its individual capacity, but solely as trustee By: /s/ W. Jeffrey Kramer ------------------------------ Name: W. Jeffrey Kramer Title: Vice President [GUARANTY AMENDMENT NO.2] The following exhibits and schedules have been omitted and will be supplementally furnished to the Securities and Exchange Commission upon request: ~~EXHIBIT A ARTICLES OF MERGER SCHEDULE 1 CERTIFICATE OF IRON MOUNTAIN INCORPORATED~~

EX-10.28 9 a2073447zex-10_28.txt EXHIBIT 10.28 Exhibit 10.28 Amendment No. 1 THIS AMENDMENT NO. 1 (this "AMENDMENT"), dated as of November 1, 2001, is entered into between IRON MOUNTAIN STATUTORY TRUST - 2001, a Connecticut statutory trust, as the Lessor, and IRON MOUNTAIN RECORDS MANAGEMENT, INC., a Delaware corporation, as the Lessee. W I T N E S S E T H : WHEREAS, the Lessor and the Lessee have heretofore entered into a Master Lease and Security Agreement (the "LEASE") dated as of May 22, 2001; and WHEREAS, the Lessee has advised the Lessor that it desires to expand certain Properties for which the Lease Term and the Lessee's obligation to pay Base Rent has already commenced (the "EXISTING PROPERTIES") by constructing additional Improvements which will be located on or attached to such Existing Properties; and WHEREAS, the Lessor is willing to finance the cost of such expansion as if such new Improvements (and any Land to be acquired in connection therewith) constituted a separate Construction Property for purposes of the Lease and the other Operative Documents on the terms and conditions set forth herein; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. DEFINITIONS. Capitalized terms used but not otherwise defined in this Amendment have the meanings specified in Appendix 1 to the Lease; and the rules of interpretation set forth in Appendix 1 shall apply to this Amendment. 2. AMENDMENTS. Notwithstanding anything to the contrary in the Lease, the Construction Agency Agreement or the other Operative Documents: (a) The Lessee may request Fundings for the purpose of (i) constructing Improvements located in whole or in part on Land which is a part of an Existing Property and (ii) acquiring contiguous Land on which a portion of such Improvements will be located and constructing such portion of such Improvements. Any such Improvements and contiguous Land will constitute a separate Construction Property for purposes of the Lease, the Construction Agency Agreement and the other Operative Documents. The Acquisition Date for such Construction Property will be deemed to be the date of the initial Funding by the Lessor with respect thereto. Any such Construction Property is referred to herein as an "ADDITIONAL CONSTRUCTION PROPERTY" and the Existing Property to which it relates is referred to herein as the "RELATED EXISTING PROPERTY". In constructing such Improvements, the Lessee may, in accordance with the Plans and Specifications for such Additional Construction Property, make Modifications to the Related Existing Property which do not comply with clause (vi)(A), (B) or (C) of Section 14.1 of the Lease, provided that if the Construction of the Additional Construction Property is not completed for any reason, then the Lessee shall, at its own cost and expense, (x) restore the Related Existing Property so that its condition and value are at least equal to its condition and value before the Acquisition Date of such Additional Construction Property and (y) if requested by the Administrative Agent, furnish an Appraisal to the Lessor and the Administrative Agent confirming such value. (b) If the Additional Construction Property is located entirely on Land which is part of the Related Existing Property, the occurrence of the Acquisition Date with respect to such Additional Construction Property is subject to the satisfaction of the following conditions: (i) the conditions precedent in Sections 4.2(a) and (c) of the Lease, except that the Appraisal to be delivered pursuant to Section 4.2(a)(ii) shall appraise the Fair Market Sales Value of the Additional Construction Property and the Related Existing Property as a whole and, if such Appraisal shows that such Fair Market Sales Value as of the Expiration Date will be less than the combined Maximum Lease Balance of such Additional Construction Property and the Related Existing Property, the Lessor and the Lessee shall have agreed upon the Quarterly Amortization for the Additional Construction Property, (ii) the Mortgage and the title insurance policies for the Related Existing Property shall have been increased, if necessary, by the amount of the Maximum Lease Balance for the Additional Construction Property and (iii) no Involuntary Change of Control shall have occurred. (c) If the Additional Construction Property is located partly on Land which is not a part of the Related Existing Property, the occurrence of the Acquisition Date with respect to such Additional Construction Property is subject to the satisfaction of the following conditions: (i) the conditions precedent in clause 2(b)(i) above, (ii) the conditions precedent in Section 4.2(b) of the Lease, except that the Mortgage on such Land may be effected by spreading the Mortgage on such Related Existing Property and the title insurance policies delivered pursuant to Section 4.2(b)(vii) shall be for an amount which, when added to the title insurance policies for the Related Existing Property, is not less than the combined Maximum Lease Balance of such Additional Construction Property and the Related Existing Property and (iii) no Involuntary Change of Control shall have occurred. (d) Each Additional Construction Property shall have its own Construction Agency Agreement Supplement, Lease Supplement, Lease Balance, Construction Period Guaranteed Amount and Guaranteed Residual Value. However, following Substantial Completion of any Additional Construction Property, (i) neither such Additional Construction Property nor the Related Existing Property may be purchased, sold or exchanged pursuant to any provision of the Operative Documents unless there is a simultaneous purchase, sale or exchange of the Related Existing Property or Additional Construction Property, as the case may be, and (ii) if the Lessee purchases any Additional Construction Property or Related Existing Property pursuant to the Lease, it shall also simultaneously purchase the Related Existing Property or Additional Construction Property, as the case may be. (e) Prior to Substantial Completion of any Additional Construction Property, (i) if the Lessee purchases any Additional Construction Property pursuant to the Construction Agency Agreement, it shall also simultaneously purchase the Related Existing Property, (ii) if the Lessee purchases any Related Existing Property pursuant to the Lease, it shall also simultaneously purchase the related Additional Construction Property, (iii) the Lessee may not exchange the Related Existing Property pursuant to Article XXVI of the Lease and (iv) if any Involuntary Change of Control shall occur, the Related Existing Property shall be deemed to be a Construction Property for purposes of Section 24.3 of the Lease and Section 5.5 of the Construction Agency Agreement unless and until the Lease Term for such Additional Construction Property has commenced. (f) Each purchase by the Lessee pursuant to clauses (d) and (e) above shall be made at the Purchase Option Price and in accordance with Section 25.1 of the Lease. (g) Any failure of the Lessee to comply with this Amendment shall constitute an Event of Default and a Construction Agency Agreement Event of Default. 3. CONDITION TO EFFECTIVENESS. This Amendment shall become effective as of the date hereof when the Administrative Agent shall have received counterparts of this Amendment executed by the Lessor, Lessee, Collateral Agent and Guarantor. 2 4. COUNTERPARTS. This Amendment may be executed in several counterparts and by the different parties hereto on separate counterparts, all of which taken together shall constitute but one and the same Amendment. Delivery of an executed counterpart of a signature page of this Amendment by telecopy shall be effective as delivery of a manually executed counterpart of this Amendment. 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 6. OPERATIVE DOCUMENTS REMAIN IN EFFECT. Except as provided herein, all provisions, terms and conditions of the Operative Documents shall remain in full force and effect. As amended hereby, the Operative Documents are ratified and confirmed in all respects. IN WITNESS WHEREOF, the parties have caused this Amendment be duly executed and delivered as of the date first above written. IRON MOUNTAIN STATUTORY TRUST - 2001, as Lessor By: First Union National Bank, not in its individual capacity, except as expressly provided herein, but solely as trustee By: /s/ TIMOTHY A. DONMOYER ----------------------------------- IRON MOUNTAIN RECORDS MANAGEMENT, INC., as Lessee By: /s/ J.P. LAWRENCE ----------------------------------- Consented to and Agreed: THE BANK OF NOVA SCOTIA, as Collateral Agent By: /s/ T.M. PITCHER ------------------------------ IRON MOUNTAIN INCORPORATED, as Guarantor By: /s/ J.P. LAWRENCE ------------------------------ EX-12 10 a2073447zex-12.txt EXHIBIT 12 Exhibit 12 IRON MOUNTAIN INCORPORATED STATEMENT OF THE CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in thousands)
Year Ended December 31, --------------------------------------------------------------------- 1997 1998 1999 2000 2001 ---- ---- ---- ---- ---- Earnings: Income (loss) from continuing operations before provision (benefit) for Income taxes & Minority Interest $(4,601) $ 3,391 $ 9,841 $(18,032) $ (8,131) Add: Fixed charges 37,489 61,169 73,957 154,975 177,032 ------------ ------------ -------------- -------------- -------------- $32,888 $64,560 $83,798 $136,943 $168,901 ============ ============ ============== ============== ============== Fixed Charges: Interest Expense $27,712 $45,673 $54,425 $117,975 $134,742 Interest Portion of rent expense 9,777 15,496 19,532 37,000 42,290 ------------ ------------ -------------- -------------- -------------- $37,489 $61,169 $73,957 $154,975 $177,032 ============ ============ ============== ============== ============== Ratio of earnings to fixed charges 0.9x 1.1x 1.1x 0.9x 1.0x (1) (1) (1)
(1) We reported a loss from continuing operations before provision (benefit) for income taxes and minority interest, for the years ended December 31, 1997, December 31, 2000, and December 31, 2001, the Company would have needed to generate additional income from operations before provision for income taxes and minority interest of $4,601, $18,032, and $8,131 to cover its fixed charges of $37,489, $154,975 and $177,032, respectively. EX-21 11 a2073447zex-21.txt EXHIBIT 21 Exhibit 21
- --------------------------------------------------------- ------------------------------ --------------------------------- JURISDICTION OF NAMES UNDER WHICH THE ENTITY ENTITY NAME INCORPORATION OR ORGANIZATION DOES BUSINESS - --------------------------------------------------------- ------------------------------ ---------------------------------- Almacenaje Y Administracion De Archivos LTDA Chile - --------------------------------------------------------- ------------------------------ ---------------------------------- Archive Services Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Archivex Box Company Limited Alberta - --------------------------------------------------------- ------------------------------ ---------------------------------- Archivex Limited Nova Scotia - --------------------------------------------------------- ------------------------------ ---------------------------------- Arcus Data Security Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Arcus Data Security, LLC Delaware - --------------------------------------------------------- ------------------------------ ---------------------------------- BDM S.A. France - --------------------------------------------------------- ------------------------------ ---------------------------------- Beverly Records Management Ltd. Ireland - --------------------------------------------------------- ------------------------------ ---------------------------------- Beverly Smyth Business Services Ltd. Ireland - --------------------------------------------------------- ------------------------------ ---------------------------------- Box Security Argentina - --------------------------------------------------------- ------------------------------ ---------------------------------- C.A.D.A. Storage S.A. Argentina - --------------------------------------------------------- ------------------------------ ---------------------------------- COMAC, Inc. Delaware - --------------------------------------------------------- ------------------------------ ---------------------------------- Custodia De Documentos LTDA De Archivos LTDA Chile - --------------------------------------------------------- ------------------------------ ---------------------------------- Datavault Holdings Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Datavault Limited Scotland - --------------------------------------------------------- ------------------------------ ---------------------------------- Datavault, S.A. Spain - --------------------------------------------------------- ------------------------------ ---------------------------------- Datavault Northwest Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Datavault Southwest Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Documentalia, S.A. Spain - --------------------------------------------------------- ------------------------------ ---------------------------------- Document and Information Management Services, Ltd. United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- DSI Technology Escrow Services, Inc. Delaware - --------------------------------------------------------- ------------------------------ ---------------------------------- FIME S.A. France - --------------------------------------------------------- ------------------------------ ---------------------------------- France Telesauvegarde, S.A. France - --------------------------------------------------------- ------------------------------ ---------------------------------- Immobiliaria E Inversiones LA Primavera LTDA Chile - --------------------------------------------------------- ------------------------------ ---------------------------------- IMSA Peru SRL Peru - --------------------------------------------------------- ------------------------------ ---------------------------------- Innovator Projects, S.A. Spain - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Box Company Nova Scotia - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Business Trust #1 Massachusetts - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Canada Corporation Nova Scotia Iron Mountain - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Cayman Ltd. Cayman Islands - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Chile S.A. Chile - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Confidential Destruction LLC Delaware - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain do Brazil Empreendimentos Ltda. Brazil Iron Mountain - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain do Brazil S.A. Brazil - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Espana, S.A. Spain - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Europe Limited United Kingdom Iron Mountain - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain (France), S.A. France - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Global, Inc. Delaware - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Global, LLC Delaware - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Group (Europe) Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Holdings (Europe) Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Holdings (France), SNC France - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Iberica, SL Spain - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Information Management, Inc. Delaware Iron Mountain Off-Site Data Protection Iron Mountain Records Management Iron Mountain National Underground Iron Mountain Digital Archives - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Mexico, S.A. de R.L. de C.V. Mexico - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain (Netherlands) B.V. Netherlands - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Peru S.A. Peru - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Records Management (Puerto Rico), Inc. Puerto Rico Iron Mountain Records Management - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Scotland (Holdings) Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain Scotland Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain South America Ltd. Cayman Islands - --------------------------------------------------------- ------------------------------ ---------------------------------- Iron Mountain (UK) Limited United Kingdom Iron Mountain - --------------------------------------------------------- ------------------------------ ---------------------------------- JAD 93 Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Jones & Crossland Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Kestrel Data Services Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Kestrel Data Storage and Management Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Kestrel Data UK Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Kestrel Reprographics Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- MAP, S.A. France - --------------------------------------------------------- ------------------------------ ---------------------------------- Memogarde, S.A. France - --------------------------------------------------------- ------------------------------ ---------------------------------- Miller Data Management Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Mountain Real Estate Assets, Inc. Delaware - --------------------------------------------------------- ------------------------------ ---------------------------------- Mountain West Palm Real Estate, Inc. Delaware - --------------------------------------------------------- ------------------------------ ---------------------------------- Pierce Leahy Europe, Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Secur' Archiv Aktenmanagement Germany - --------------------------------------------------------- ------------------------------ ---------------------------------- Silver Sky Jersey Channel Islands - --------------------------------------------------------- ------------------------------ ---------------------------------- Sistemas de Archivo Corporativo, S.A. de R.L. de C.V. Mexico - --------------------------------------------------------- ------------------------------ ---------------------------------- Sistemas de Archivo de Mexico, S.A. de R.L. de C.V. Mexico - --------------------------------------------------------- ------------------------------ ---------------------------------- Sistemas de Archivo, S.A. de R.L. de C.V. Mexico - --------------------------------------------------------- ------------------------------ ---------------------------------- Societe Civile Immobiliere du Chemin Cornillon France - --------------------------------------------------------- ------------------------------ ---------------------------------- The Document Storage Company Limited United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- 397499 British Columbia Ltd. British Columbia - --------------------------------------------------------- ------------------------------ ---------------------------------- TM 1177 Ltd. United Kingdom - --------------------------------------------------------- ------------------------------ ---------------------------------- Upper Providence Venture I, L.P. Pennsylvania - --------------------------------------------------------- ------------------------------ ----------------------------------
EX-23.1 12 a2073447zex-23_1.txt EXHIBIT 23.1 Exhibit 23.1 Consent of Independent Public Accountants As independent public accountants, we hereby consent to the incorporation of our reports, included in this Form 10-K, into Iron Mountain Incorporated's previously filed registration statements on Forms S-3 (File Nos. 333-75068, 333-91577, 333-72191 and 333-54030) and S-8 (File Nos. 333-43787, 333-69859 and 333-95901). /s/ Arthur Andersen LLP Boston, Massachusetts March 20, 2002 EX-23.2 13 a2073447zex-23_2.txt EXHIBIT 23.2 Exhibit 23.2 Consent of Independent Public Accountants As independent public accountants, we hereby consent to the incorporation of our reports, included in this Form 10-K, into Iron Mountain Incorporated's previously filed registration statements on Forms S-3 (File Nos. 333-75068, 333-91577, 333-72191 and 333-54030) and S-8 (File Nos. 333-43787, 333-69859 and 333-95901). /s/ RSM Robson Rhodes Birmingham, England March 20, 2002 EX-99 14 a2073447zex-99.txt EXHIBIT 99 Exhibit 99 IRON MOUNTAIN INCORPORATED 745 Atlantic Avenue Boston, Massachusetts 02111 March 20, 2002 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549-0408 Re: LETTER TO SECURITIES AND EXCHANGE COMMISSION PURSUANT TO TEMPORARY NOTE 3T Ladies and Gentlemen: Pursuant to Temporary Note 3T to Article 3 of Regulation S-X, Iron Mountain Incorporated has obtained a letter of representation from Arthur Andersen LLP ("Andersen"), its independent public accountants, stating that the December 31, 2001 audit was subject to Andersen's quality control system for the U.S. accounting and auditing practice to provide reasonable assurance that the engagement was conducted in compliance with professional standards, that there was appropriate continuity of Andersen personnel working on the audit and availability of national office consultation. Availability of personnel at foreign affiliates of Andersen is not relevant to this audit. Very truly yours, Iron Mountain Incorporated /s/ John F. Kenny, Jr. John F. Kenny, Jr. Executive Vice President and Chief Financial Officer ~~-----END PRIVACY-ENHANCED MESSAGE-----~~