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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(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, 2003

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 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	23-2588479
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)
745 Atlantic Avenue, Boston, Massachusetts	02111
(Address of principal executive offices)	(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	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

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes ý    No o

        As of June 30, 2003, the aggregate market value of the Common Stock of the registrant held by non-affiliates of the registrant was $2,658,636,421 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, 2004:    85,775,503

IRON MOUNTAIN INCORPORATED
2003 FORM 10-K ANNUAL REPORT

Table of Contents

		Page
PART I
Item 1.	Business	1
Item 2.	Properties	12
Item 3.	Legal Proceedings	13
Item 4.	Submission of Matters to a Vote of Security Holders	16
PART II
Item 5.	Market for the Registrant's Common Stock and Related Shareholder Matters	17
Item 6.	Selected Financial Data	17
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 8.	Financial Statements and Supplementary Data	55
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	55
Item 9A.	Controls and Procedures	56
PART III
Item 10.	Directors and Executive Officers of the Registrant	57
Item 11.	Executive Compensation	57
Item 12.	Security Ownership of Certain Beneficial Owners and Management	57
Item 13.	Certain Relationships and Related Transactions	57
Item 14.	Principal Accounting Fees and Services	57
Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	58

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        References in this Annual Report on Form 10-K to "the Company", "we", "us" or "our" include Iron Mountain Incorporated and its consolidated subsidiaries, unless the context indicates otherwise.

DOCUMENTS INCORPORATED BY REFERENCE

        Certain information required in Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated by reference from our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 27, 2004.

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 Private Securities Litigation Reform Act of 1995 and in other federal securities laws. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, strategies, objectives, plans and current expectations. 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:

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changes in customer preferences and demand for our services;



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changes in the price for our services relative to the cost of providing such services;



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the cost and availability of financing for contemplated growth;



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our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently;



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in the various digital businesses in which we are engaged, capital and technical requirements will be beyond our means, markets for our services will be less robust than anticipated, or competition will be more intense than anticipated;



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changes in the political and economic environments in the countries in which our international subsidiaries operate, including foreign currency fluctuations;



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the possibility that business partners upon whom we depend for technical assistance or management and acquisition expertise outside the U.S. will not perform as anticipated; and



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other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated.

        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 undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures we have made in this document, as well as our other periodic reports filed with the Securities and Exchange Commission (the "Commission" or "SEC").

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PART I

Item 1. Business.

A. Development of Business.

        We are the leader in records and information management services. 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 comprised of numerous commercial, legal, banking, healthcare, accounting, insurance, entertainment, and government organizations, including more than half of the Fortune 500 and more than two thirds of the FTSE 100. Our comprehensive solutions help customers save money and manage risks associated with legal and regulatory compliance, protection of vital assets, and business continuity challenges.

        Our core business records management services include: records management program development and implementation based on best-practices to help customers comply with specific regulatory requirements; implementation of policy-based programs that feature secure, cost-effective storage for all major media, including paper, which is the dominant form of records storage, flexible retrieval access and retention management; digital archiving services for secure, legally compliant and cost-effective long-term archiving of electronic records; secure shredding services that ensure privacy and a secure chain of record custody; and specialized services for vital records, film and sound and regulated industries such as healthcare, energy and financial services.

        Our off-site data protection services include: disaster preparedness planning support; secure, off-site vaulting of data backup media for fast and efficient data recovery in the event of a disaster, human error or virus; electronic vaulting to provide managed, online data backup and recovery services for personal computers and server data; and intellectual property escrow services to protect and manage source code and other proprietary information with a trusted, neutral third party.

        In addition to our core records management and off-site data protection services, we sell storage materials, including cardboard boxes and magnetic media, and provide 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 53^rd 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 in 1995 into the leader in records and information management services, providing a full range of services to customers in markets around the world. For the year ended December 31, 2003, we had total revenues of $1.5 billion.

        The growth since 1995 has been accomplished primarily through the acquisition of U.S. and international records management companies. 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 in the U.S. and internationally. Having substantially completed our North American geographic expansion by the end of 2000, we shifted our focus from growth through acquisitions to internal revenue growth. In 2001, as a result of this shift, internal revenue growth exceeded growth through acquisitions for the first time since we began our acquisition program in 1996. This was also the case in 2002 and 2003, and in the absence of unusual acquisition activity, we expect this trend to continue. We expect to achieve our internal revenue growth through a sophisticated new sales and account management coverage model that is designed to drive incremental revenue by acquiring new customer relationships, increasing the revenue generated by existing customer relationships and by effectively selling a wide range of complementary and ancillary services to expand our new and existing customer relationships.

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        In July 2003, we and Iron Mountain Europe ("IME"), our European joint venture, completed the acquisition of the records management operations of Hays plc ("Hays IMS") in two simultaneous transactions for aggregate cash consideration (including transactions costs) of approximately 205 million British pounds sterling ($333 million). IME acquired the European operations and we acquired the U.S. operations. IME's acquisition of Hays IMS has more than doubled our revenue base in Europe and has significantly strengthened our energy and U.K. public sector business lines. Since the acquisition, we have been integrating the cultures, operating systems and procedures, and information technology systems of IME and Hays IMS.

        In February 2004, we completed the acquisition of Mentmore plc's 49.9% equity interest in IME for total consideration of 82.5 million British pounds sterling ($154 million) in cash. Included in this amount is the repayment of all trade and working capital funding owed to Mentmore by IME. Completion of the transaction gives us 100% ownership of IME, affording us full access to all future cash flows and greater strategic and financial flexibility.

        As of December 31, 2003, we provided services to over 200,000 customer accounts in 82 markets in the U.S. and 58 markets outside of the U.S., employed over 13,000 people and operated approximately 800 records management facilities in the U.S., Canada, Europe and Latin America.

B. Description of Business.

The Records and Information Management Services Industry

Overview

        Companies in the records and information management services industry store and manage information in a variety of media formats, which can broadly be divided into physical and electronic records, and provide a wide range of services related to the records stored. We refer to our general physical records storage and management services as business records management. We define physical records 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 include in our electronic records storage and management services (1) off-site data protection and (2) digital archiving services.

Physical Records

        Physical 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 physical records are the principal focus of the records and information management services 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. A large and growing specialty subset of the physical records market is medical records. These are active and semi-active records that are often stored off-site with and serviced by a records and information management services 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 is either a backup copy of recently processed data or archival in nature. Customer needs for data backup and recovery and archiving are distinctively different. Backup data exists because of the need of many businesses to maintain backup copies of their data in order to be able to recover the data in the event of a system failure, casualty loss or other disaster. It is customary (and a

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best-practice) for data processing groups to rotate backup 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 off-site data protection.

        In addition to the physical rotation and storage of backup data, we offer electronic vaulting services as an alternative way for businesses to transfer data to us, and to access the data they have stored with us. Electronic vaulting is a Web-based service that automatically backs up computer data over the Internet and stores it off site in one of our secure data centers. In early 2003, we announced an expansion of the electronic vaulting service to include backup and recovery for personal computer data, answering customers' needs to protect critical business data, which is often orphaned and unprotected on employee laptops and desktop personal computers.

        There is a growing need for better ways of archiving data for legal, regulatory and compliance reasons and for occasional reference in support of ongoing business operations. Historically, businesses have relied on backup tapes for storing archived data, but this process can be costly and ineffective when attempting to search and retrieve the data for litigation or other needs. In addition, many industries, such as healthcare and financial services, are facing increased governmental regulation mandating the way in which electronic records are stored and managed. To help customers meet these growing storage challenges, we introduced digital archiving services. We have experienced early market adoption of these services, especially for e-mail archiving, which enables businesses to identify and retrieve electronic records quickly and cost-effectively, while maintaining regulatory compliance.

Growth of Market

        We believe that the volume of stored physical and electronic records will continue to increase for a number of reasons, including: (1) the rapid growth of inexpensive document producing technologies such as facsimile, desktop publishing software and desktop printing; (2) the continued proliferation of data processing technologies such as personal computers and networks; (3) regulatory requirements; (4) concerns over possible future litigation and the resulting increases in volume and holding periods of documentation; (5) the high cost of reviewing records and deciding whether to retain or destroy them; (6) the failure of many entities to adopt or follow policies on records destruction; and (7) audit requirements to keep backup copies of certain records in off-site locations.

        We believe that paper-based information will continue to grow, not in spite of, but because of, new "paperless" technologies such as e-mail and the Internet. These technologies have prompted the creation of hard copies of such electronic information and have also led to increased demand for electronic records services, such as the storage and off-site rotation of backup copies of magnetic media. 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 digital archiving and the management of electronic documents.

Consolidation of a Highly Fragmented Industry

        There was significant consolidation within the highly fragmented records and information management services industry from 1995 to 2000. Most records and information management services 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 the consolidation trend will continue because of the industry's capital requirements for growth, opportunities for large records and information management services 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 physical and electronic records needs. Large,

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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 secure shredding business, core services consist primarily of the scheduled collection and handling of sensitive records. In 2003, our storage and core service revenues represented approximately 87% 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 records and information management services 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.

        Our various operating segments offer the products and services discussed below. In general, our business records management segment offers records management, secure shredding, healthcare information services, vital records services, and service and courier operations in the U.S. and Canada. Our off-site data protection segment offers data backup and disaster recovery services, vital records services, service and courier operations, and intellectual property protection services in the U.S. Our international segment offers elements of all our product and services lines outside the U.S. and Canada. Our corporate and other segment includes our fulfillment, consulting and digital archiving services. Some of our complementary services and products are offered within all of our segments. The amount of revenues derived from our business records management, off-site data protection, international, and corporate and other operating segments and other relevant data for fiscal years 2001, 2002 and 2003 are set forth in Note 12 to Notes to Consolidated Financial Statements.

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 a proprietary order processing and inventory management system known as the SafekeeperPLUS® system to efficiently store and later retrieve a customer's cartons. 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

        Off-site data protection services consist of the storage and rotation of backup computer media as part of corporate disaster recovery and business continuity 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 proprietary information technology systems such as MediaLink™ and SecureBase™ software to manage this process. We also manage tape library relocations and support disaster recovery testing and execution. In addition, we have introduced electronic vaulting services as part of our off-site data protection services product line. Our electronic

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vaulting service automatically backs up personal computer and server data over the Internet and stores it off site in one of our secure data centers, always available in the event of a disaster.

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 open shelving systems that provide easier 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 (medical record copying), 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 SafekeeperPLUS® system controls the service processes from order entry through transportation and invoicing for business records management while MediaLink™ and SecureBase™ systems manage the process for the off-site data protection 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, 2003, we were utilizing a fleet of more than 2,000 owned or leased vehicles.

Secure Shredding

        Secure shredding is a natural extension of our records management services, completing the lifecycle of a record. The service 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 increased 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. Through a combination of plant based shredding operations and mobile shredding units comprised of custom built trucks, we are able to offer secure shredding services to our customers in all of our existing business records management markets throughout the U.S. and Canada. We seek to expand our presence in this business through acquisitions and internal start-ups that leverage our existing records management infrastructure.

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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 provides expertise and assistance to brokers and dealers in complying with electronic records regulations of the SEC.

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 physical records management services. Because of increased litigation risks and regulatory mandates, companies are increasingly aware of the need to apply the same records management policies and retention schedules to electronic data as they do physical records. Typical digital records include e-mail, e-statements, images, electronic documents retained for legal or compliance purposes and other data documenting business transactions.

        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 continue to cultivate marketing and technology partnerships to support this anticipated growth.

        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: (1) storage capacity and the preservation of data; (2) access to and control over the data in a secure environment; and (3) the need to retain electronic records due to regulatory compliance or for litigation support. Our digital archiving service is representative of our commitment to address evolving records management needs and expand the array of services we offer.

Complementary Services and Products

        We offer a variety of additional services 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 records and information management services to analyze the practices of 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: (1) a full line of specially designed corrugated cardboard, metal and plastic storage containers; (2) magnetic media products including computer tapes, cartridges and drives, tape cleaners

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and supplies and CDs; and (3) computer room equipment and supplies such as racking systems, furniture, bar code scanners and printers.

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 operating income before depreciation and amortization (OIBDA)¹ allow us to operate with a high degree of financial leverage. Our primary financial goal has always been, and continues to be, to increase consolidated OIBDA in relation to capital invested, even as our focus has shifted from growth through acquisitions to internal revenue growth. Our business has the following financial characteristics:

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For a more detailed definition and reconciliation of OIBDA and a discussion of why we believe this measure provides relevant and useful information to our current and potential investors, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures."

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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 quarterly revenues from these fixed periodic storage fees have grown for 60 consecutive quarters. Once a customer places physical 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 backup 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 58% of our total revenues. This stable and growing storage revenue base also provides the foundation for increases in service revenues and OIBDA.

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Historically Non-Cyclical Storage Business.  We have not experienced any significant reductions in 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. We believe that companies that have outsourced records and information management services are less likely during economic downturns to incur the move-out costs and other expenses associated with switching vendors or moving their records and information management services programs in-house. However, during this most recent economic slowdown, the rate at which some customers added new cartons to their inventory was below historical levels. The net effect of these factors is the continued growth of our storage revenue base, albeit at a lower rate.

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We define "Carton" as a measurement of volume equal to a single standard storage carton, approximately 1.2 cubic feet.

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We define "Net Carton Growth From Existing Customers" as the net increase in Cartons attributable to existing customers. This calculation excludes our Latin American and European operations as well as a portion of our medical records operations.

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Inherent Growth from Existing Physical Records Customers.  Our physical records customers have on average generated additional Cartons² at a faster rate than stored Cartons have been destroyed or permanently removed. From January 1, 1998 through December 31, 2001, our annual Net Carton Growth From Existing Customers³ ranged from approximately 4% to approximately 6%. For the years ended December 31, 2002 and 2003, Net Carton Growth from Existing Customers was between 3% to 4%. We believe the consistent growth of our physical records storage revenues is the result of a number of factors, including: (1) the trend toward increased records retention; (2) customer satisfaction with our services; and (3) the costs and

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inconvenience of moving storage operations in-house or to another provider of records and information management services.

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Diversified and Stable Customer Base.  As of December 31, 2003, we had over 200,000 customer accounts in a variety of industries. We currently provide services to numerous commercial, legal, banking, healthcare, accounting, insurance, entertainment and government organizations, including more than half of the Fortune 500 and more than two thirds of the FTSE 100. No customer accounted for more than 2% of our consolidated revenues for the year ended December 31, 2003. From January 1, 1999 through December 31, 2003, average annual permanent removals of Cartons, not including destructions, represented approximately 3% of total Cartons stored.



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Capital Expenditures Related Primarily to Growth.  Our records and information management services business requires limited annual capital expenditures made in order to maintain our current revenue stream. From January 1, 1999 through December 31, 2003, over 85% of our aggregate capital expenditures were growth-related investments, primarily in storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings. These growth-related capital expenditures are primarily discretionary and create additional capacity for increases in revenues and OIBDA. In addition, since shifting our focus from growth through acquisitions to internal revenue growth, our capital expenditures, made primarily to support our internal revenue growth, have exceeded the aggregate acquisition consideration we conveyed in both 2001 and 2002. Although this was not the case in 2003 due to the acquisition of Hays IMS, we expect this to be the case in 2004 and thereafter absent unusual acquisition activity.

Growth Strategy

        Our objective is to maintain our position as the leader in records and information management services. In the U.S. and Canada, we seek to be one of the largest records and information management services providers in each of our geographic markets. Internationally, our objectives are to continue to capitalize on our expertise in the records and information management services industry and to make additional acquisitions and investments in selected international markets. Our primary avenues of growth are: (1) increased business with existing customers; (2) the addition of new customers; (3) the introduction of new products and services such as secure shredding, electronic vaulting and digital archiving; and (4) selective acquisitions in new and existing markets.

Growth from Existing Customers

        Our existing customers storing physical records contribute to storage and storage-related service revenues 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 account management staff.

        Our new sales coverage model is designed to identify and capitalize on incremental revenue opportunities by reallocating our sales resources based on a more sophisticated segmentation of our customer base and selling additional business records management and off-site data protection services within our existing customer relationships. We also seek to 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.

Addition of New Customers

        Our sales forces are dedicated to three primary objectives: (1) establishing new customer account relationships, (2) generating additional revenue from existing customers and (3) expanding new and

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existing customer relationships by effectively selling a wide array of complementary services and products. In order to accomplish these objectives, our sales forces draw on our U.S. and international marketing organizations 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 600 such professionals as of December 31, 2003 from approximately 450 as of December 31, 2002.

Introduction of New Products and Services

        We continue to expand our menu of products and services. We have established a national presence in the U.S. and Canadian secure shredding industry and offer new electronic 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 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 records and information management services companies. Between January 1, 1996 and December 31, 2000, the height of our acquisition activity, we completed 78 acquisitions in the U.S., Canada, Europe and Latin America for total consideration of approximately $2 billion. During that period, we substantially completed our geographic expansion in the U.S. and Canada and began to expand in Europe and Latin America. Between January 1, 2001 and December 31, 2003, we completed an additional 34 acquisitions for total consideration of approximately $500 million (including the Hays IMS acquisition in July 2003 for approximately $333 million), primarily in the secure shredding industry in the U.S. and the records and information management industry in the U.S., Canada, Europe and Latin America.

Acquisitions in the U.S. and Canada

        We intend to continue our acquisition program in the U.S. and Canada focusing on the secure shredding industry, expanding geographically, as necessary and building scale in some of our smaller markets through "fold-in" acquisitions. However, given the small number of large acquisition prospects and our increased revenue base, future acquisitions are expected to be less significant to overall U.S. and Canadian revenue growth than they were prior to 2001.

International Growth Strategy

        We also intend to continue to make acquisitions and investments in records and information management services businesses outside the U.S. and Canada. We have acquired and invested in, and seek to acquire and invest in, records and information management services 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 significant growth. Since beginning our international expansion program in January 1999, we have directly and through joint ventures, expanded our operations into 19 countries in 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 U.S. and Canadian acquisition candidates, we also evaluate the presence in the potential market of our existing customers 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 began our international expansion by acquiring a 50.1% controlling interest in each of our Iron Mountain Europe

9

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. The local partner benefits from our expertise in the records and information management services industry, our access to capital and our technology, and we benefit from our local partner's knowledge of the market, relationships with customers and their presence in the community. Our long-term goal is to acquire full ownership of each such business, as evidenced by our recent acquisition of Mentmore's 49.9% equity interest in IME discussed previously under "—A. Development of Business."

        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.

        The amount of our revenues derived from international operations and other relevant financial data for fiscal years 2001, 2002 and 2003 are set forth in Note 12 to Notes to Consolidated Financial Statements. For the year ended December 31, 2003, we derived approximately 19% of our total revenues from outside of the U.S. We expect this percentage to increase in 2004 due to the acquisition of the European operations of Hays IMS.

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, 2003, we had over 200,000 customer accounts in a variety of industries. We currently provide services to numerous commercial, legal, banking, healthcare, accounting, insurance, entertainment and government organizations, including more than half of the Fortune 500 and more than two thirds of the FTSE 100. No customer accounted for more than 2% of our consolidated revenues for the year ended December 31, 2003.

Competition

        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 records and information management services 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 records and information management services 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 records and information management services business and such acquisition candidates or focus their strategy on our markets, our results of operations could be adversely affected.

Alternative Technologies

        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

10

require significantly less space than paper documents. These technologies include computer media, microform, CD-ROM and optical disk. To date, none of these technologies has replaced paper documents 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 documents format. A significant shift by our customers to storage of data through non-paper documents based technologies, whether now existing or developed in the future, could adversely affect our business. We continue to invest in additional services such as electronic vaulting and digital archiving, designed to address our customers' need for efficient, cost-effective, high quality solutions for electronic records and information management.

Employees

        As of December 31, 2003, we employed over 9,000 employees in the U.S. Directly and through majority-owned joint ventures, as of December 31, 2003, we employed over 4,000 employees outside of the U.S. A small percentage of our employees are represented by unions. These unionized employees are located in California and two cities in Canada. As of December 31, 2003, the aggregate number of unionized employees was less than 450.

        All non-union employees are generally eligible to participate in our benefit programs, which include medical, dental, life, short and long-term disability, retirement/401(k) 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 employees participate in some form of incentive-based compensation program that provides payments based on revenues, profits, collections or attainment of specified objectives for the unit in which they work. 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 that have adequate market security 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 excess policies for insurer defined Critical Earthquake Zone exposures are maintained at what we believe to be appropriate limits and deductibles for that exposure. Included among other types of insurance that we carry are: workers compensation, general liability, umbrella, automobile, professional and directors and officers liability policies, subject to certain policy conditions, sublimits and deductibles. In 2002, we established a wholly-owned Vermont domiciled captive insurance company as a subsidiary; through the subsidiary we retain and reinsure a portion of our property loss exposure.

        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.

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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. We have undertaken remediation activities at some of our properties. Although we regularly conduct limited environmental reviews of real property that we intend to purchase, we have not undertaken an in-depth environmental review of all of our owned and operated 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 owned and operated 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 an environmental impairment liability insurance policy, which covers all owned and leased locations. Coverage is provided for both liability and remediation costs.

Internet Website

        Our Internet address is www.ironmountain.com. Under the "Investor Relations" category on our Internet website, we make available through a hyperlink to a third party SEC website, free of charge, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") as soon as reasonably practicable after such forms are electronically filed or furnished to the SEC. We are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this Annual Report. Copies of our corporate governance guidelines, code of ethics and the charters of our audit, compensation, and nominating and governance committees may be obtained free of charge by writing to our Secretary, Iron Mountain Incorporated, 745 Atlantic Avenue, Boston, Massachusetts, 02111 and will be available on our website www.ironmountain.com under the heading "Corporate Governance" prior to our Annual Meeting of Shareholders to be held on or about May 27, 2004.

Item 2. Properties.

        As of December 31, 2003, we conducted operations through 582 leased facilities and 207 facilities that we own or are owned by variable interest entities that we consolidate. Our facilities are divided among our reportable segments as follows: Business Records Management (524), Off-Site Data Protection (60), International (187) and Corporate and Other (18). These facilities contain a total of 49.3 million square feet of space. Rent expense was $134.4 million for the year ended December 31, 2003. 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 U.K. We believe that the space available in our facilities is adequate to meet our current needs, although future growth may require that we acquire additional real property either by leasing or purchasing. See Note 13 to Notes to Consolidated Financial Statements for information regarding our minimum annual rental commitments.

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Item 3. Legal Proceedings.

Sequedex, H-W Associates, Pioneer and Pierce Proceedings

        On March 28, 2002, Iron Mountain and Iron Mountain Information Management, Inc. ("IMIM"), one of our wholly owned subsidiaries, commenced an action in the Middlesex County, New Jersey, Superior Court, Chancery Division, captioned Iron Mountain Incorporated and Iron Mountain Information Management, Inc. v. J. Peter Pierce, Sr., Douglas B. Huntley, J. Michael Gold, Fred A. Mathewson, Jr., Michael DiIanni, J. Anthony Hayden, Pioneer Capital, LLC, and Sequedex, LLC. In the complaint, we alleged that defendant J. Peter Pierce, Sr., a former member of our Board of Directors and the former President of IMIM until his termination without cause effective June 30, 2000, violated his fiduciary obligations, as well as various noncompetition and other provisions of an employment agreement with Iron Mountain, dated February 1, 2000, by providing direct and/or indirect financial, management and other support to defendant Sequedex. Sequedex was established in October 2000, and competed directly with us in the records information management services industry. The complaint also alleged that Mr. Pierce and certain of the other defendants, who were employed by or affiliated with Pierce Leahy Corp. prior to the merger of Pierce Leahy with Iron Mountain in February 2000, misappropriated and used our trade secrets and other confidential information. Finally, the complaint asserted claims against Sequedex and others for tortious interference with contractual relations, against all of the defendants for civil conspiracy in respect of the matters described above, and against defendant Michael DiIanni for breach of his employment agreement with IMIM, dated September 6, 2000. The litigation seeks injunctions in respect of certain matters and recovery of damages against the defendants.

        On April 12, 2002, Iron Mountain also initiated a related arbitration proceeding against Mr. Pierce before the Philadelphia, Pennsylvania, Office of the American Arbitration Association (the "AAA") pursuant to an arbitration clause in the employment agreement between Iron Mountain and Mr. Pierce. In the arbitration, Mr. Pierce counterclaimed for indemnification of his expenses, including attorneys' fees. We disputed Mr. Pierce's claim. On July 19, 2002, the litigation was stayed pending the outcome of the arbitration proceeding. On February 25, 2003, in response to Iron Mountain's request, the AAA removed the arbitrator. The arbitration proceeding was transferred by agreement of the parties to ADR Options, Inc. On February 4, 2004, the arbitrator rendered a decision. The arbitrator did not find the evidence provided by us in our action against Mr. Pierce sufficient to rule in our favor on the particular claims at issue. In addition, the arbitrator ruled that, pursuant to an indemnification provision in Mr. Pierce's employment agreement, we must pay Mr. Pierce's attorneys fees and costs that are attributable to this single arbitration. The arbitrator has established a procedure to ascertain the amount of these fees and expenses, which, in any case are not expected to be material to our financial position or results of operations. We have recently filed a motion to vacate the arbitrator's decision and award in Middlesex County, New Jersey, where the pending action against Mr. Pierce and others is currently stayed.

        On December 16, 2002, Hartford Windsor Associates, L.P. ("H-W Associates"), Hartford General, LLC, J. Anthony Hayden, Mr. Pierce, Frank Seidman and John H. Greenwald, Jr. commenced an action in the Court of Common Pleas, Montgomery County, Pennsylvania, against Iron Mountain Incorporated. In the complaint, the plaintiffs allege that H-W Associates purchased a warehouse property in Connecticut to serve as a records storage facility, and entered into a lease for the facility with Sequedex, then a competitor of ours, and that the remaining plaintiffs were limited or general partners of H-W Associates. The plaintiffs also allege that we tortiously interfered with Sequedex's contractual relations with an actual or prospective customer of Sequedex and, as a result, caused Sequedex to default on its lease to H-W Associates. The complaint seeks damages in excess of $100,000. We have denied the material allegations in the complaint filed against us by H-W Associates and the other plaintiffs and have since filed counterclaims against the plaintiffs alleging tortious

13

interference with our business relationship with one of our longstanding customers. Discovery is proceeding.

        Also on December 16, 2002, Pioneer Capital L.P. ("Pioneer"), Pioneer Capital Genpar, Inc. ("PCG"), the general partner of Pioneer, and Mr. Pierce, the President of PCG, commenced an action in the Court of Common Pleas, Montgomery County, Pennsylvania, against Iron Mountain Incorporated, C. Richard Reese, John F. Kenny, Jr., Garry Watzke, Schooner Capital LLC ("Schooner") and Vincent J. Ryan. The named individuals are Directors and/or officers of Iron Mountain and Schooner is a shareholder of Iron Mountain. In the complaint, the plaintiffs allege that the defendants had numerous conversations and arrangements with Mr. Carr, one of Mr. Pierce's and Pioneer's business partners in a company named Logisteq LLC. The plaintiffs further allege that, as a result of such conversations and arrangements, defendants conspired to, and did intentionally, interfere with Pioneer's relationship with its partner and Logisteq. The plaintiffs also allege that defendants damaged Mr. Pierce's reputation in the community by telling Iron Mountain employees and other third parties that Mr. Pierce breached his employment agreement with Iron Mountain, misappropriated and used Iron Mountain's confidential information, breached his fiduciary duties to Iron Mountain's shareholders and assisted Sequedex, then a competitor of Iron Mountain, in unfairly competing with Iron Mountain. Finally, the complaint alleges that the business partner in Logisteq taped conversations with Mr. Pierce and others which allegedly violated privacy laws, that the defendants knew, or should have known, that the tapes were being made without the consent of the individuals and, as a result, Mr. Pierce was harmed. The complaint seeks damages in excess of $5,000,000. Iron Mountain and the other defendants have challenged the legal sufficiency of the plaintiffs' pleadings in each of these cases.

        On September 10, 2003, IMIM filed a complaint in the Court of Common Pleas, Montgomery County, Pennsylvania in a matter related to the litigation between the Company and Sequedex, Mr. Pierce and others disclosed above. The new matter names Sequedex, J. Michael Gold and Peter Hamilton as defendants, and alleges that in 2000 defendants Gold and Hamilton, both former IMIM employees, used confidential and proprietary business information that they had obtained while employed by IMIM to form their own records management company, Sequedex. The complaint also alleges unlawful interference with IMIM's contractual relationship with a certain customer and other matters. The defendants filed preliminary objections to our complaint and Iron Mountain has answered those preliminary objections.

        Prior to the litigation directly pertaining to Mr. Pierce having been filed, in approximately October 2000, three former management employees of IMIM became employed by or otherwise associated with Sequedex. IMIM commenced actions against these three former employees to enforce its rights under their confidentiality and non-competition agreements. IMIM has also asserted claims against Sequedex for tortious interference with these agreements, and against both Sequedex and the former employees for misappropriation and use of IMIM's trade secrets and confidential information.

        The defendants in all three cases have denied the material allegations in IMIM's complaints and asserted various affirmative defenses. In addition, Sequedex and the individual defendants filed counterclaims against IMIM and third party complaints against Iron Mountain. The counterclaims and third party complaints assert claims for tortious interference with certain contracts and prospective business relations between Sequedex and its current and potential customers as well as a claim for trade disparagement and defamation. The defendant in one of these actions sought a declaratory judgment regarding the enforceability of the confidentiality and non-competition agreements at issue in that case and filed a motion for summary judgment seeking to have the non-competition agreement declared void, or to limit its scope. IMIM and Iron Mountain filed motions in all three cases to dismiss the various counterclaims and third-party complaints. All of these motions, i.e., the defendants' motion for summary judgment and IMIM's and Iron Mountain's motions to dismiss, were denied by the court following a hearing on May 7, 2002. As previously disclosed in our quarterly report on Form 10-Q for the quarter ended September 30, 2003, Sequedex furnished a preliminary statement of damages with an

14

estimate of compensatory damages of approximately $172 million and an indication that Sequedex intended to seek punitive damages of approximately $1.5 billion. Sequedex is no longer seeking damages in this amount and in connection with its proposed amended counterclaim, Sequedex has recently furnished a litigation expert's report of damages claiming approximately $59 million plus approximately $6.6 million of pre-judgment interest. Sequedex has indicated that it also intends to seek punitive damages in an undisclosed amount. Extensive discovery has been conducted in the three cases and is ongoing; on the basis of that discovery, it is our belief that Sequedex has not produced any material evidence that we or IMIM acted wrongfully in any respect. Further, limited discovery has been conducted in respect of Sequedex's damages claim; on the basis of that discovery, we do not believe that Sequedex has any foundation, and we believe that it cannot provide any foundation, for its damages calculations. We believe that the damages calculations submitted by Sequedex are not supported by credible evidence and are subject to serious legal, methodological and factual deficiencies. A trial of the three actions in which the Sequedex counterclaims and third party complaints have been asserted is scheduled to commence in April of 2004. IMIM, Sequedex and one of the individual defendants recently filed dispositive motions, including motions for summary judgment as to certain of the claims. All of these motions were denied by the court following a hearing on February 24, 2004.

        Discovery is proceeding in each of these cases, other than the arbitration. We intend to prosecute these actions vigorously, as well as to defend ourselves vigorously against the counterclaims and the third party complaints.

South Brunswick Fires Litigation

        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 another records and information management services 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 one pending lawsuit filed by the insurers of an abutter of one of the South Brunswick facilities. Five of these six lawsuits have been consolidated for pre-trial purposes in the Middlesex County, New Jersey, Superior Court. The sixth lawsuit, brought by a single customer, is pending in the Supreme Court for New York County, New York. A seventh lawsuit, also brought by a single customer, was tried before a federal judge in New Jersey in February 2000, with a defendant's verdict entered in favor of Iron Mountain. An eighth lawsuit filed by an injured firefighter is currently being settled by our insurer for a nominal amount. Several other claims that were originally filed in relation to these lawsuits have been voluntarily dismissed without prejudice by the customers, abutting business owners, and/or their insurance carriers.

        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 intend to vigorously defend ourselves against these and any other lawsuits that may arise.

        Our professional liability insurer, together with our general liability and property insurance carriers, have entered into a binding agreement with us regarding reimbursement of defense costs and have agreed to ongoing discussions regarding any remaining coverage issues, further defense and/or settlement of these claims.

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General

        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.

        The outcome of the South Brunswick fires, Sequedex, H-W Associates, Pioneer and Pierce 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.

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, 2003.

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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." The following table sets forth the high and low sale prices on the NYSE, for the years 2002 and 2003:

		Sale Prices
		High		Low
2002
	First Quarter	$	32.83	$	29.19
	Second Quarter		33.17		29.10
	Third Quarter		31.30		22.72
	Fourth Quarter		34.20		20.14
2003
	First Quarter	$	39.49	$	30.23
	Second Quarter		40.64		36.63
	Third Quarter		39.94		33.56
	Fourth Quarter		40.15		34.78

        The closing price of our common stock on the NYSE on March 1, 2004 was $45.23. As of March 1, 2004, there were 576 holders of record of our common stock. We believe that there are more than 15,000 beneficial owners of our common stock.

        We have not paid dividends on our common stock during the last two years. Any determinations by our Board to pay cash dividends on our common stock in the future will be based primarily upon our financial condition, results of operations and business requirements. Our Fifth Amended and Restated Credit Agreement dated March 15, 2002 (the "Amended and Restated Credit Agreement") contains provisions that limit the amount of cash dividends we may pay and stock repurchases that we may make.

Item 6.    Selected Financial Data.

        The following selected consolidated statements of operations, balance sheet and other 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 Item 7. "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.

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			Year Ended December 31,
			1999			2000(1)			2001(1)			2002(1)(2)			2003(2)
			(In thousands, except per share data)
Consolidated Statements of Operations Data:
Revenues:
	Storage		$	317,387		$	585,664		$	694,474		$	759,536		$	875,035
	Service and Storage Material Sales			214,002			418,501			491,244			558,961			626,294
		Total Revenues		531,389			1,004,165			1,185,718			1,318,497			1,501,329
Operating Expenses:
	Cost of Sales (excluding depreciation)			272,770			500,565			576,538			622,299			680,747
	Selling, General and Administrative			128,948			246,998			307,800			333,050			383,641
	Depreciation and Amortization			65,214			126,662			153,271			108,992			130,918
	Stock Option Compensation Expense			—			15,110			—			—			—
	Merger-related Expenses			—			9,133			3,673			796			—
	Loss on Disposal/Writedown of Property, Plant and Equipment, Net			208			148			320			774			1,130
		Total Operating Expenses		467,140			898,616			1,041,602			1,065,911			1,196,436
Operating Income				64,249			105,549			144,116			252,586			304,893
Interest Expense, Net				54,425			117,975			134,742			136,632			150,468
Other (Income) Expense, Net				(17	)		10,865			37,485			1,435			(2,564	)
Income (Loss) from Continuing Operations Before Provision for Income Taxes and Minority Interest				9,841			(23,291	)		(28,111	)		114,519			156,989
Provision for Income Taxes				10,579			6,758			17,875			47,318			66,730
Minority Interests in Earnings (Losses) of Subsidiaries, Net				322			(2,224	)		(1,929	)		3,629			5,622
(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle				(1,060	)		(27,825	)		(44,057	)		63,572			84,637
Income from Discontinued Operations (net of tax)				241			—			—			1,116			—
Loss on Sale of Discontinued Operations (net of tax benefit)				(13,400	)		—			—			—			—
Cumulative Effect of Change in Accounting Principle (net of minority interest)				—			—			—			(6,396	)		—
Net (Loss) Income			$	(14,219	)	$	(27,825	)	$	(44,057	)	$	58,292		$	84,637
Net (Loss) Income per Common Share—Basic:
	(Loss) Income from Continuing Operations		$	(0.02	)	$	(0.35	)	$	(0.53	)	$	0.75		$	0.99
	Income from Discontinued Operations (net of tax)			0.01			—			—			0.01			—
	Loss on Sale of Discontinued Operations (net of tax benefit)			(0.27	)		—			—			—			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)			—			—			—			(0.08	)		—
Net (Loss) Income—Basic			$	(0.28	)	$	(0.35	)	$	(0.53	)	$	0.69		$	0.99
Net (Loss) Income per Common Share—Diluted:
	(Loss) Income from Continuing Operations		$	(0.02	)	$	(0.35	)	$	(0.53	)	$	0.74		$	0.98
	Income from Discontinued Operations (net of tax)			0.01			—			—			0.01			—
	Loss on Sale of Discontinued Operations (net of tax benefit)			(0.27	)		—			—			—			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)			—			—			—			(0.07	)		—
Net (Loss) Income—Diluted			$	(0.28	)	$	(0.35	)	$	(0.53	)	$	0.68		$	0.98
Weighted Average Common Shares Outstanding—Basic				50,018			79,688			83,666			84,651			85,267
Weighted Average Common Shares Outstanding—Diluted				50,018			79,688			83,666			86,071			86,718

(footnotes follow)

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	Year Ended December 31,
	1999			2000(1)			2001(1)			2002(1)			2003
	(In thousands)
Other Data:
OIBDA (3)	$	129,463		$	232,211		$	297,387		$	361,578		$	435,811
OIBDA Margin (3)		24.4	%		23.1	%		25.1	%		27.4	%		29.0	%
Ratio of Earnings to Fixed Charges		1.1	x		0.8	x(4)		0.8	x(4)		1.6	x		1.8	x

	As of December 31,
	1999		2000(1)		2001		2002		2003
	(In thousands)
Consolidated Balance Sheet Data:
Cash and Cash Equivalents	$	3,830	$	6,200	$	21,359	$	56,292	$	74,683
Total Assets		1,317,212		2,659,096		2,859,906		3,230,655		3,892,099
Total Long-Term Debt (including Current Portion of Long-Term Debt)		612,947		1,355,131		1,496,099		1,732,097		2,089,928
Shareholders' Equity		488,754		924,458		885,959		944,861		1,066,114

Reconciliation of OIBDA to Operating Income and Net (Loss) Income:

		Year Ended December 31,
		1999			2000(1)			2001(1)			2002(1)(2)			2003(2)
		(In thousands)
OIBDA		$	129,463		$	232,211		$	297,387		$	361,578		$	435,811
Less: Depreciation and Amortization			65,214			126,662			153,271			108,992			130,918
Operating Income			64,249			105,549			144,116			252,586			304,893
Less: Interest Expense, Net			54,425			117,975			134,742			136,632			150,468
	Other (Income) Expense, Net		(17	)		10,865			37,485			1,435			(2,564	)
	Provision for Income Taxes		10,579			6,758			17,875			47,318			66,730
	Minority Interests in Earnings (Losses) of Subsidiaries		322			(2,224	)		(1,929	)		3,629			5,622
	Income from Discontinued Operations (net of tax)		(241	)		—			—			(1,116	)		—
	Loss on Sale of Discontinued Operations (net of tax benefit)		13,400			—			—			—			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)		—			—			—			6,396			—
Net (Loss) Income		$	(14,219	)	$	(27,825	)	$	(44,057	)	$	58,292		$	84,637

(footnotes follow)

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(1)

On February 1, 2000, we completed a merger with Pierce Leahy in a transaction valued at approximately $1,036,000. The results of the Pierce Leahy merger are reflected in the table above beginning with 11 months of activity in 2000. In addition, we recorded specific charges associated with the integration of the operations of Pierce Leahy in 2000, 2001 and 2002 within merger related expenses and recorded non-cash stock option compensation expense as a result of the Pierce Leahy acquisition in 2000. This merger impacts the comparability of results before and after the merger.

(2)

Effective January 1, 2002, we ceased amortizing our goodwill balance in accordance with Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets." The accounting change impacts the comparability of results to previous years. See Note 2(g) to Notes to Consolidated Financial Statements.

(3)

OIBDA is defined as operating income before depreciation and amortization expenses. OIBDA Margin is calculated by dividing OIBDA by total revenues. For a more detailed definition and reconciliation of OIBDA and a discussion of why we believe these measures provide relevant and useful information to our current and potential investors, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures."

(4)

We reported a loss from continuing operations before provision for income taxes and minority interest for the years ended December 31, 2000 and 2001. We would have needed to generate for the years ended December 31, 2000 and 2001 additional income from operations before provision for income taxes and minority interest of $23,291 and $28,111, respectively, to cover our fixed charges of $154,975 and $177,032, respectively.

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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 Financial Data" 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 Private Securities Litigation Reform Act of 1995 and in other federal securities laws. See "Cautionary Note Regarding Forward-Looking Statements" on page ii of this filing.

Overview

        Our revenues consist of storage revenues as well as service and storage material sales revenues. Storage revenues, which are considered a key performance indicator for the records and information management services industry, consist of largely recurring periodic charges related to the storage of materials (either on a per unit or per cubic foot of records basis), which are typically retained by customers for many years, and have accounted for approximately 58% of total consolidated revenues in each of the last five years. Our quarterly revenues from these fixed periodic storage fees have grown for 60 consecutive quarters. 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 other complementary and ancillary services, 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. Our consolidated revenues are subject to variations caused by the net effect of foreign currency translation on revenue derived from outside the U.S. For the years ended December 31, 2003 and 2002, we derived 19.0% and 14.0%, respectively, of our total revenues from outside the U.S. We expect the percentage of total revenues that we derive from outside the U.S. to increase in 2004 due to our acquisition of the European operations of Hays IMS.

        Cost of sales (excluding depreciation) consists primarily of wages and benefits for field personnel, facility occupancy costs including rent and utilities, transportation expenses including vehicle leases and fuel, other product cost of sales and other equipment costs and supplies. Of these, wages and benefits and facility occupancy costs are the most significant. Trends in total wages and benefits dollars and as a percentage of total consolidated revenue are influenced by changes in headcount and compensation levels, achievement of incentive compensation targets, workforce productivity and variability in costs associated with medical insurance and workers compensation. Trends in facility occupancy costs are similarly impacted by the total number of facilities we occupy, the mix of properties we own versus properties we occupy under operating leases, fluctuations in per square foot occupancy costs, and the levels of utilization of these properties.

        The expansion of our European and secure shredding operations have resulted in changes to the mix of certain cost of sales components. We expect that until we complete the integration of the European operations of Hays IMS, rationalize our European facilities and maximize their utilization, our facilities costs may increase as a percentage of consolidated revenue, as our European operations become a greater percentage of our consolidated results. Our European and secure shredding operations are more labor intensive; therefore, our labor expense will be higher as a percentage of revenue as compared to our mature operations. In addition, our secure shredding operations incur higher transportation costs and lower facility costs, as a percentage of consolidated revenue, as compared to our mature operations.

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        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. Trends in total wages and benefits dollars and as a percentage of total consolidated revenue are influenced by changes in headcount and compensation levels, achievement of incentive compensation targets, workforce productivity and variability in costs associated with medical insurance. We expect our adoption of the measurement provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure," will result in increasing amounts of selling, general and administrative expenses in the future. We began using the fair value method of accounting in our financial statements beginning January 1, 2003 using the prospective method. The prospective method involves recognizing expense for the fair value for all awards granted or modified in the year of adoption and thereafter with no expense recognition for previous awards. As we continue to grant new options subject to these standards and amortize compensation expense associated with options granted after January 1, 2003, we expect our stock compensation expense will grow significantly over the $1.5 million we recorded for such expense in selling, general and administrative expenses for the year ended December 31, 2003. It is not possible to predict the increase in stock compensation expense for 2004 as it is dependent upon the number of options that will be granted throughout 2004 and the valuation assumptions in use at the time those options are granted. The overhead structure of our expanding European operations, as compared to our mature operations, is more labor intensive and has not achieved the same level of overhead leverage, which may result in an increase in selling, general and administrative expenses, as a percentage of consolidated revenue, as our European operations become a more meaningful percentage of our consolidated results.

        Our depreciation and amortization charges result primarily from the capital-intensive nature of our business. The principal components of depreciation relate to storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings. Amortization relates primarily to customer relationships and acquisition costs.

        Effective July 1, 2001 and January 1, 2002, we adopted the provisions of SFAS No. 141, "Business Combinations" and SFAS No. 142. SFAS No. 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting. 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. Had SFAS No. 142 been effective January 1, 2001, goodwill amortization expense would have been reduced by $59.2 million ($50.9 million, net of tax) for the year ended December 31, 2001. See Note 2(g) to Notes to Consolidated Financial Statements.

        In February 2004, we completed the acquisition of Mentmore plc's 49.9% equity interest in IME. This transaction should have no impact on revenue or operating income since we already fully consolidate IME's financial results. Since we will be using the purchase method of accounting for this acquisition, 49.9% of the net assets of IME will be adjusted to reflect their fair market value if different from their current carrying value. As a result, we expect this transaction will increase depreciation and amortization expenses going forward. Additionally, we will record an increase in interest expense, net associated with debt used to fund this acquisition and will no longer record the minority interest in earnings of subsidiaries, net related to Mentmore's ownership interest in IME.

        All of our costs are subject to variations caused by the net effect of foreign currency translation on costs incurred by our entities outside the U.S. During 2003, we have seen increases in costs as a result of the strengthening of the British pound sterling, the Euro, and the Canadian dollar against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods. It is impossible to predict how much foreign currency exchange rates will fluctuate in the future and how those

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fluctuations will impact individual balances reported in our consolidated statement of operations; however, given the relative increase in our international operations, these fluctuations may become material.

Reclassifications and Changes in Presentation

        Previously, consolidated losses (gains) on disposal/writedown of property, plant and equipment, net were recorded within various captions of our consolidated statements of operations based on the nature of the underlying asset. During the first quarter of 2003, we determined that it was more appropriate to record these gains and losses separately within our results from operations. We have reflected this change in all applicable tables and discussions for all periods presented within the following discussion of results of operations.

        Previously, debt extinguishment expenses were recorded as an extraordinary charge within our consolidated statements of operations. Effective January 1, 2003, we have reflected these charges to other (income) expense, net in accordance with recent changes in accounting pronouncements. We have reflected this change in all applicable tables and discussions for all periods presented within the following discussion of results of operations.

Non-GAAP Measures

Operating Income Before Depreciation and Amortization, or OIBDA

        OIBDA is defined as operating income before depreciation and amortization expenses. OIBDA Margin is calculated by dividing OIBDA by total revenues. Our management uses these measures to evaluate the operating performance of our consolidated business. As such, we believe these measures provide relevant and useful information to our current and potential investors. We use OIBDA for planning purposes and multiples of current or projected OIBDA-based calculations in conjunction with our discounted cash flow models to determine our overall enterprise valuation and to evaluate acquisition targets. We believe OIBDA and OIBDA Margin are useful measures to evaluate our ability to grow our revenues faster than our operating expenses and they are an integral part of our internal reporting system utilized by management to assess and evaluate the operating performance of our business. OIBDA does not include certain items, specifically (1) minority interest in earnings (losses) of subsidiaries, net, (2) other (income) expense, net, (3) income from discontinued operations and loss on sale of discontinued operations and (4) cumulative effect of change in accounting principle that we believe are not indicative of our core operating results. OIBDA also does not include interest expense, net and the provision for income taxes. These expenses are associated with our capitalization and tax structures, which management does not consider when evaluating the profitability of our core operations. Finally, OIBDA does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which management believes is better evaluated by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. OIBDA and OIBDA Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the Unites States of America, or GAAP, such as operating or net income or cash flows from operating activities (as determined in accordance with GAAP).

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Reconciliation of OIBDA to Operating Income and Net (Loss) Income (In Thousands):

		Year Ended December 31,
		2001			2002			2003
OIBDA		$	297,387		$	361,578		$	435,811
Less: Depreciation and Amortization			153,271			108,992			130,918
Operating Income			144,116			252,586			304,893
Less: Interest Expense, Net			134,742			136,632			150,468
	Other Expense (Income), Net		37,485			1,435			(2,564	)
	Provision for Income Taxes		17,875			47,318			66,730
	Minority Interest		(1,929	)		3,629			5,622
	Income from Discontinued Operations		—			(1,116	)		—
	Cumulative Effect of Change in Accounting Principle		—			6,396			—
Net (Loss) Income		$	(44,057	)	$	58,292		$	84,637

Critical Accounting Policies

        Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. 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. Our critical accounting policies include the following and are in no particular order:

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 of accounting 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, SFAS No. 141. 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

24

indicate that the final purchase price allocations for acquisitions completed in 2003 would differ meaningfully from preliminary estimates. See Note 7 to Notes to Consolidated Financial Statements.

        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. The estimated cost of these restructuring activities are included as costs of the acquisition and are recorded as goodwill consistent with the guidance of Emerging Issues Task Force ("EITF") 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. Beginning on January 1, 2002, we ceased to amortize goodwill in accordance with SFAS No. 142. We reviewed goodwill for impairment consistent with the guidelines of SFAS No. 142 using a discounted future cash flow approach to approximate fair value. The result of testing our goodwill for impairment in accordance with SFAS No. 142, as of January 1, 2002, was a non-cash charge of $6.4 million (net of minority interest of $8.5 million), which, consistent with SFAS No. 142, is reported in the caption "cumulative effect of change in accounting principle" in our consolidated statement of operations. Impairment adjustments recognized in the future, if any, are generally required to be recognized as operating expenses. The $6.4 million charge relates to our South American reporting unit within our international reporting segment. The South American reporting unit failed the impairment test primarily due to a reduction in the expected future performance of the unit resulting from a deterioration of the local economic environment and the devaluation of the currency in Argentina. As goodwill amortization expense in our South American reporting unit is not deductible for tax purposes, this impairment charge is not net of a tax benefit. We have a controlling 50.1% interest in Iron Mountain South America, Ltd ("IMSA") and the remainder is owned by an unaffiliated entity. IMSA has acquired a controlling interest in entities in which local partners have retained a minority interest in order to enhance our local market expertise. These local partners have no ownership interest in IMSA. This has caused the minority interest portion of the non-cash goodwill impairment charge ($8.5 million) to exceed our portion of the non-cash goodwill impairment charge ($6.4 million). In accordance with SFAS No. 142, we selected October 1 as our annual goodwill impairment review date. We performed our annual goodwill impairment review as of October 1, 2003 and noted no impairment of goodwill at our reporting units as of that date. As of December 31, 2003, no factors were identified that would alter this assessment.

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. 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. As of December 31, 2002 and 2003, our allowance for doubtful accounts balance totaled $20.3 million and $18.3 million, respectively. The decrease in the allowance for doubtful accounts as of December 31, 2003 compared to December 31, 2002 is primarily attributable to the success of our centralized collection efforts within the U.S. and Canada, which resulted in improved cash collections and an improved accounts receivable aging that enabled us to significantly reduce our allowance for doubtful accounts in the year ended December 31, 2003. The decrease in the allowance for doubtful accounts was partially offset by an increase in the

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allowance for doubtful accounts associated with businesses acquired during the year ended December 31, 2003, including Hays IMS.

Accounting for Variable Interest Entities

        Three variable interest entities were established to acquire properties and lease those properties to us. These leases were designed to qualify as operating leases for accounting purposes, where the monthly lease expense was recorded as rent expense in our consolidated statements of operations and where the related underlying assets and liabilities were not consolidated in our consolidated balance sheets. We changed the characterization and the related accounting for properties in one variable interest entity ("VIE III") during the third quarter of 2002 and prospectively for new property acquisitions in the fourth quarter of 2002. In addition, anticipating the requirement to consolidate, and in line with our objective of transparent reporting, we voluntarily guaranteed all of the at-risk equity in VIE III and our two other variable interest entities (together, the "Other Variable Interest Entities" and, collectively with VIE III, our "Variable Interest Entities") as of December 31, 2002. These guarantees resulted in our consolidating all of our Variable Interest Entities' assets and liabilities.

        Our Variable Interest Entities were financed with real estate term loans. These real estate term loans have always been and continue to be treated as indebtedness for purposes of our financial covenants under our Amended and Restated Credit Agreement. As of the date they were consolidated into our financial statements, they were also considered indebtedness under our indentures for certain of our senior subordinated notes. As of December 31, 2003, these real estate term loans amounted to $202.6 million. No further financing is currently available to our Variable Interest Entities to fund further property acquisitions. See Note 5 to Notes to Consolidated Financial Statements.

        As of December 31, 2002, we voluntarily guaranteed all of the at-risk equity in VIE III. This resulted in our consolidating all of its remaining assets and liabilities. VIE III's remaining assets and liabilities relate to an interest rate swap agreement, which it entered into upon its inception. This swap agreement hedges the majority of interest rate risk associated with VIE III's real estate term loans. Specifically, VIE III has swapped $97.0 million of floating rate debt to fixed rate debt. Since the time it entered into the swap agreement, interest rates have fallen. As a result, the estimated fair value of the derivative liability held by VIE III, and now consolidated on our balance sheet, related to the swap agreement was $11.0 million at December 31, 2003. This swap has been since inception and continues to be, as of December 31, 2003, an effective hedge in accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." During the years ended December 31, 2002 and 2003, we recorded depreciation expense of $1.7 million and $1.8 million, respectively, associated with the properties and interest expense of $6.2 million and $8.2 million, respectively, associated with the real estate term loans. See Notes 3, 4 and 5 to Notes to Consolidated Financial Statements.

        In addition, as of December 31, 2002, we voluntarily guaranteed all of the at-risk equity in the Other Variable Interest Entities. This resulted in our consolidating all of their assets and liabilities. As of December 31, 2002, the total impact of consolidating the Other Variable Interest Entities was an increase of $103.9 million both in property, plant and equipment and long-term debt. The underlying leases associated with the Other Variable Interest Entities were treated as operating leases from inception (as early as 1998) through consolidation on December 31, 2002. As a result, during the years ended December 31, 2001 and 2002, we recorded $6.7 million and $5.9 million, respectively, in rent expense in our consolidated statements of operations related to these leases. In 2003, we began recording depreciation expense associated with the properties, interest expense associated with the real estate term loans and no longer have rent expense related to leases associated with the Other Variable Interest Entities in our consolidated financial results. During the year ended December 31, 2003, we recorded depreciation expense of $2.0 million associated with the properties and interest expense of $5.5 million associated with the real estate term loans. If the Other Variable Interest Entities had been consolidated in our historical financial statements as of January 1, 2002: (1) depreciation expense would

26

have increased in an amount equal to $2.0 million for the twelve months ended December 31, 2002; and (2) rent expense for these properties would have been reclassified as interest expense in an amount equal to $5.9 million for the twelve months ended December 31, 2002. Consequently, our OIBDA, operating income and interest expense would have increased by $5.9 million, $3.9 million and $5.9 million, respectively, for the twelve months ended December 31, 2002. In addition, net income before provision for income taxes would have decreased by $2.0 million for the twelve months ended December 31, 2002.

        In January and December 2003, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 46 ("FIN 46") and No. 46, revised ("FIN 46R"), "Consolidation of Variable Interest Entities." These statements, which address perceived weaknesses in accounting for entities commonly known as special-purpose or off-balance-sheet, require consolidation of certain interests or arrangements by virtue of holding a controlling financial interest in such entities. Certain provisions of FIN 46R related to interests in special purpose entities were applicable for the period ended December 31, 2003. We must apply FIN 46R to our interests in all entities subject to the interpretation as of the first interim or annual period ending after March 15, 2004. Adoption of this new method of accounting for variable interest entities did not and is not expected to have a material impact on our consolidated results of operations and financial position. As a result of the actions described above, as of December 31, 2002 and December 31, 2003, we did not have any unconsolidated variable interest entities.

Accounting for Derivative Instruments and Hedging Activities

        SFAS No. 133 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 No. 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 gains and losses are recognized each period as other comprehensive income which is a component of accumulated other comprehensive items included in shareholders' equity, assets and liabilities or earnings depending on the nature of such derivatives. See Note 4 to Notes to Consolidated Financial Statements for a detailed description of our derivative instruments.

        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.

        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 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 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.

        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

27

correlation of the changes in fair values of the derivatives and underlying risks is generally high. We had $25.6 million of interest rate risk management liabilities and had a corresponding amount for unrealized losses to other comprehensive income ($16.2 million, net of tax) related to cash flow hedges at December 31, 2003.

        We provided the initial financing totaling 190.5 million British pounds sterling to IME, our European joint venture, for all of the consideration associated with the acquisition of the European operations of Hays IMS using cash on hand and borrowings under our revolving credit facility. We recorded a foreign currency gain of $27.8 million in other (income) expense, net for this intercompany balance for the year ended December 31, 2003. In order to minimize the foreign currency risk associated with providing IME with the consideration necessary for the acquisition of Hay IMS, we borrowed 80.0 million British pounds sterling under our revolving credit facility to create a natural hedge. We recorded a foreign currency loss of $11.5 million on the translation of this revolving credit balance to U.S. dollars in other (income) expense, net for the year ended December 31, 2003. In addition, we entered into two cross currency swaps with a combined notional value of 100.0 million British pounds sterling. These swaps each have a term of one year and at maturity we have a right to receive $162.8 million in exchange for 100.0 million British pounds sterling. We have not designated these swaps as hedges and, therefore, all mark to market fluctuations of the swaps are recorded in other (income) expense, net in our consolidated statements of operations. We have recorded, for the year ended December 31, 2003, a foreign currency loss of $19.0 million in other (income) expense, net.

        One of our interest rate swaps was used to hedge interest rate risk on certain variable operating lease commitments. As a result of the December 31, 2002 consolidation of one of the Other Variable Interest Entities ("VIE I"), the operating lease commitments that were hedged by this swap are now considered to be inter-company transactions and we determined that this hedge was no longer effective on a prospective basis. We have consolidated the real estate term loans of VIE I and we will prospectively record interest expense instead of rent expense as we make cash interest payments on this debt. The unrealized mark to market losses previously recorded in other comprehensive income attributable to this swap ($1.9 million and $0.8 million, net of tax, as of December 31, 2002 and 2003, respectively) will be amortized through other (income) expense, net in our consolidated statement of operations based on the changes in the fair value of the swap each period that the remaining interest payments are made on VIE I's external debt. We are accounting for mark to market changes in the derivative liability of this swap agreement through other (income) expense, net in our consolidated statement of operations. This accounting has a net zero impact within our consolidated statement of operations as it relates to the amortization of unrealized mark to market losses and the fair valuing of the derivative liability.

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 ("SOP") 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 No.144, "Accounting for the Impairment or Disposal of Long-Lived Assets."

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        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 or shorten the estimated useful life 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. See Note 2(f) to Notes to Consolidated Financial Statements.

        During the years ended December 31, 2002 and 2003, we replaced internal use software programs, which resulted in the write-off to loss on disposal/writedown of property, plant and equipment, net of the remaining net book value of $1.1 million and $0.7 million, respectively.

Deferred Income Taxes

        We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We have considered estimated future taxable income and ongoing tax planning strategies in assessing the amount needed for the valuation allowance. If actual results differ unfavorably from those estimates used, we may not be able to realize all or part of our net deferred tax assets and additional valuation allowances may be required.

Stock-based Compensation

        As of January 1, 2003, we adopted the measurement provisions of SFAS No. 123 and SFAS No. 148. As a result we began using the fair value method of accounting in our financial statements beginning January 1, 2003 using the prospective method. The prospective method involves recognizing expense for the fair value for all awards granted or modified in the year of adoption and thereafter with no expense recognition for previous awards. We will apply the fair value recognition provisions to all stock based awards granted, modified or settled on or after January 1, 2003 and will continue to provide the required pro forma information for all awards previously granted, modified or settled before January 1, 2003 in our consolidated financial statements. During the year ended December 31, 2003, we recorded $1.7 million of stock compensation expense in our consolidated statement of operations. Had we elected to recognize compensation cost based on the fair value of all options as of their grant dates as prescribed by SFAS No. 123 and No. 148, we would have recorded stock compensation expense of $4.9 million, $4.5 million and $5.6 million in our consolidated statements of operations for the years ended December 31, 2001, 2002 and 2003, respectively.

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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,
			2001		2002		2003
Revenues:
	Storage		58.6	%	57.6	%	58.3	%
	Service and Storage Material Sales		41.4		42.4		41.7
		Total Revenues	100.0		100.0		100.0
Operating Expenses:
	Cost of Sales (excluding depreciation)		(48.6	)	(47.2	)	(45.3	)
	Selling, General and Administrative		(26.0	)	(25.3	)	(25.6	)
	Depreciation and Amortization		(12.9	)	(8.3	)	(8.7	)
	Merger-related Expenses		(0.3	)	(0.1	)	—
	Loss on Disposal/Writedown of Property, Plant and Equipment, Net		—		(0.1	)	(0.1	)
		Total Operating Expenses	(87.8	)	(80.8	)	(79.7	)
Operating Income			12.2		19.2		20.3
Interest Expense, Net			(11.4	)	(10.4	)	(10.0	)
Other (Expense) Income, Net			(3.2	)	(0.1	)	0.2
(Loss) Income from Continuing Operations Before Provision for Income Taxes and Minority Interest			(2.4	)	8.7		10.5
Provision for Income Taxes			(1.5	)	(3.6	)	(4.4	)
Minority Interest in Losses (Earnings) of Subsidiaries			0.2		(0.3	)	(0.4	)
(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle			(3.7	)	4.8		5.6
Income from Discontinued Operations (net of tax)			—		0.1		—
Cumulative Effect of Change in Accounting Principle (net of minority interest)			—		(0.5	)	—
Net (Loss) Income			(3.7	)%	4.4	%	5.6	%
Other Data:
OIBDA Margin (1)			25.1	%	27.4	%	29.0	%

(1)

See "Non-GAAP Measures—Operating Income Before Depreciation and Amortization, or OIBDA" for definition, reconciliation and a discussion of why we believe this measure provides relevant and useful information to our current and potential investors.

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Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 Consolidated Results (in thousands)

			Year Ended December 31,
									Dollar Change			Percent Change
			2002			2003
Revenues:
	Storage		$	759,536		$	875,035		$	115,499		15.2	%
	Service and Storage Material Sales			558,961			626,294			67,333		12.0	%
		Total Revenues		1,318,497			1,501,329			182,832		13.9	%
Operating Expenses:
	Cost of Sales (excluding depreciation)			622,299			680,747			58,448		9.4	%
	Selling, General and Administrative			333,050			383,641			50,591		15.2	%
	Depreciation and Amortization			108,992			130,918			21,926		20.1	%
	Merger-related Expenses			796			—			(796	)	—
	Loss on Disposal/Writedown of Property, Plant and Equipment, Net			774			1,130			356		46.0	%
		Total Operating Expenses		1,065,911			1,196,436			130,525		12.2	%
		Operating Income		252,586			304,893			52,307		20.7	%
Interest Expense, Net				136,632			150,468			13,836		10.1	%
Other Expense (Income), Net				1,435			(2,564	)		(3,999	)	(278.7	%)
Income from Continuing Operations Before Provision for Income Taxes and Minority Interest				114,519			156,989			42,470		37.1	%
Provision for Income Taxes				47,318			66,730			19,412		41.0	%
Minority Interest in Earnings of Subsidiaries				3,629			5,622			1,993		54.9	%
Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle				63,572			84,637			21,065		33.1	%
Income from Discontinued Operations (net of tax)				1,116			—			(1,116	)	—
Cumulative Effect of Change in Accounting Principle (net of minority interest)				(6,396	)		—			6,396		—
Net Income			$	58,292		$	84,637		$	26,345		45.2	%
Other Data:
OIBDA (1)			$	361,578		$	435,811		$	74,233		20.5	%
OIBDA Margin (1)				27.4	%		29.0	%

(1)

See "Non-GAAP Measures—Operating Income Before Depreciation and Amortization, or OIBDA" for definition, reconciliation and a discussion of why we believe these measures provide relevant and useful information to our current and potential investors.

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Comparison of Year Ended December 31, 2003 to Year Ended December 31, 2002

Revenue

        Our consolidated storage revenues increased $115.5 million, or 15.2%, to $875.0 million for the year ended December 31, 2003. The increase is attributable to internal revenue growth (8%) resulting from net increases in records and other media stored by existing customers and sales to new customers, acquisitions (5%), primarily consisting of $30.0 million from the operations of Hays IMS, and foreign currency exchange rate fluctuations (2%). Foreign currency exchange rate fluctuations were primarily due to the strengthening of the British pound sterling, Canadian dollar, and Euro against the U.S. dollar, offset by a weakening of the Mexican peso and Brazilian real against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods.

        Consolidated service and storage material sales revenues increased $67.3 million, or 12.0%, to $626.3 million for the year ended December 31, 2003. The increase is attributable to acquisitions (7%), including revenue from the Hays IMS operations of $24.6 million, internal revenue growth (3%) resulting from net increases in service and storage material sales to existing customers and sales to new customers, and foreign currency exchange rate fluctuations (2%). Foreign currency exchange rate fluctuations were primarily due to the strengthening of the British pound sterling, Canadian dollar, and Euro against the U.S. dollar, offset by a weakening of the Mexican peso and Brazilian real against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods.

        For the reasons stated above, our consolidated revenues increased $182.8 million, or 13.9%, to $1,501.3 million. Internal revenue growth for the year ended December 31, 2003 was 6%. We calculate internal revenue growth in local currency for our international operations.

Internal Growth—Eight-Quarter Trend

	2002										2003
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
Storage Revenue	8	%	9	%	9	%	8	%	8	%	8	%	8	%	9	%	8	%	8	%
Service and Storage Material Sales Revenue	9	%	10	%	15	%	10	%	11	%	8	%	3	%	2	%	1	%	3	%
Total Revenue	9	%	9	%	11	%	9	%	10	%	8	%	6	%	6	%	5	%	6	%

        Our internal revenue growth rate represents the weighted average year over year growth rate of our revenues after removing the effects of acquisitions and foreign currency exchange rate fluctuations. Over the past eight quarters, the internal growth rate of our storage revenues has ranged between 8% to 9%. Our storage revenue internal growth rate trend for the year ended December 31, 2003 reflects higher growth rates in our international businesses, primarily Europe, stabilized net carton volume growth in our North American records management business and higher growth rates in our digital businesses. We experienced higher volumes of carton destructions and permanent removals in the fourth quarter of 2003 as compared to the first three quarters of 2003, which contributed to the decline in our internal growth rate for storage revenue from the third quarter to the fourth quarter of 2003. We experienced similar volumes of destructions and permanent removals in the fourth quarter of 2002. Net carton volume growth is a function of the rate new cartons are added by existing and new customers offset by the rate of carton destructions and other permanent removals.

        The internal growth rate for service and storage material sales revenue is inherently more volatile than the storage revenue internal growth rate due to more discretionary services we offer such as large special projects, data products and carton sales and recycled paper. These revenues are impacted to a greater extent by economic downturns as customers defer or cancel the purchase of these services as a way to reduce their short-term costs. As a commodity, recycled paper prices are subject to the volatility

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of that market. The quarterly growth rates in 2003 were negatively impacted by several factors: (1) large special project service revenue did not achieve the same high levels experienced in the corresponding periods of 2002, (2) product sales, primarily data product sales, decreased and (3) carton destructions and other permanent removals have decreased relative to prior periods. In addition, our off-site data protection business continued to operate in a market experiencing downward pressure on information technology spending as companies look to reduce their costs.

Cost of Sales

        Consolidated cost of sales (excluding depreciation) is comprised of the following expenses (in thousands):

										% of Consolidated Revenues
	2002		2003		Dollar Change			Percent Change		2002		2003		Percent Change (Favorable)/ Unfavorable
Labor	$	318,707	$	344,761	$	26,054		8.2	%	24.2	%	23.0	%	(1.2	)%
Facilities		184,988		211,597		26,609		14.4	%	14.0	%	14.1	%	0.1	%
Transportation		56,972		65,142		8,170		14.3	%	4.3	%	4.3	%	—
Product Cost of Sales		34,552		30,987		(3,565	)	(10.3	)%	2.6	%	2.1	%	(0.5	)%
Other		27,080		28,260		1,180		4.4	%	2.1	%	1.9	%	(0.2	)%
	$	622,299	$	680,747	$	58,448		9.4	%	47.2	%	45.3	%	(1.9	)%

Labor

        Labor expense decreased as a percentage of revenue as a result of improved labor management in our North American operations and lower incentive compensation expense for the year ended December 31, 2003 as compared to the year ended December 31, 2002. This improvement was offset by increases in wages, medical expenses, and headcount due to growth and acquisitions in our secure shredding operations and the acquisition of Hays IMS. We expect labor expenses as a percentage of consolidated revenues in 2004 may increase as we report a full year of integrated Hays IMS operations.

Facilities

        The largest component of our facilities cost is rent expense, which increased $6.9 million for the year ended December 31, 2003 primarily as a result of increased rent in our European operations of $9.0 million attributable to new facilities and properties acquired through acquisitions, including our acquisition of Hays IMS. In addition, after adjusting for the consolidation of properties owned by our Variable Interest Entities, we have increased the number of leased facilities we occupy in the U.S. and Canada as of December 31, 2003 compared to December 31, 2002 primarily due to acquisitions. The increase in rent is offset by the consolidation of 38 properties owned by our Variable Interest Entities during the third and fourth quarter of 2002. The leases associated with these properties were accounted for as operating leases prior to December 31, 2002. We recorded $5.9 million of rent expense for these 38 properties during the year ended December 31, 2002 and no rent expense in the year ended December 31, 2003. Rather than rent expense, we recorded interest expense and depreciation expense associated with these properties for the year ended December 31, 2003. Excluding our European operations, the dollar increase in facilities expenses is attributable to property taxes, utilities, and property insurance, which increased $5.5 million, $4.0 million, and $1.9 million, respectively, for the year ended December 31, 2003 compared to the year ended December 31, 2002. Facilities expenses in our European operations increased $6.4 million primarily due to the growth of operations and acquisitions for the year ended December 31, 2003 compared to the year ended December 31, 2002.

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We anticipate that reporting a full year of integrated Hays IMS operations and no longer having the offsetting impact caused by our Variable Interest Entities could cause an increase in rent expense and possibly in total facility costs as a percentage of consolidated revenues in 2004.

Transportation

        Our transportation expenses, which were flat as a percentage of consolidated revenues, are influenced by several variables including total number of vehicles, owned versus leased vehicles, use of subcontracted couriers, fuel expenses, and maintenance. In the year ended December 31, 2003, we experienced a $3.4 million increase in transportation expenses in our European operations as compared to the year ended December 31, 2002, which is primarily attributable to an increase in fleet size and vehicles under operating lease resulting from the acquisition of Hays IMS and growth of operations. Transportation efficiencies achieved in our North American operations, partially offset by higher fuel costs and an increased percentage of vehicles under operating lease, mitigated the impact of our European operations on transportation expenses as a percentage of consolidated revenues.

Product Cost of Sales and Other Cost of Sales

        Product and other cost of sales are highly correlated to complementary revenue streams. Product cost of sales for the year ended December 31, 2003 was lower than the year ended December 31, 2002 as a percentage of product revenues due to more focused selling efforts on higher margin products and improved product sourcing.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses are comprised of the following expenses (in thousands):

											% of Consolidated Revenues
	2002		2003			Dollar Change			Percent Change		2002		2003		Percent Change (Favorable)/ Unfavorable
General and Administrative	$	179,550	$	206,575		$	27,025		15.1	%	13.6	%	13.8	%	0.2	%
Sales, Marketing & Account Management		85,932		111,408			25,476		29.6	%	6.5	%	7.4	%	0.9	%
Information Technology		55,971		67,950			11,979		21.4	%	4.2	%	4.5	%	0.3	%
Bad Debt Expense		11,597		(2,292	)		(13,889	)	(119.8	)%	0.9	%	(0.2	)%	(1.1	)%
	$	333,050	$	383,641		$	50,591		15.2	%	25.3	%	25.6	%	0.3	%

General and Administrative

        The increase in general and administrative expenses as a percentage of consolidated revenues for the year ended December 31, 2003 is primarily attributable to a $16.4 million increase in general and administrative expenses in our European operations due to the growth of operations and acquisitions. In our North American operations, general and administrative expenses increased as a result of higher wages due to normal inflation and merit increases, and increases in worker's compensation and medical expenses. The increase in labor expenses was partially offset by decreases in general insurance expenses and lower incentive compensation expenses. We anticipate increased pressure on our general and administrative expenses as a percentage of consolidated revenues as we integrate the operations of Hays IMS.

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Sales, Marketing & Account Management

        The majority of our sales, marketing and account management costs are labor related and are primarily driven by the headcount in each of these departments. Increased headcount and commissions are the most significant contributors to the increase in sales and marketing expenses for the year ended December 31, 2003. Throughout the years ended December 31, 2002 and 2003, we continued to invest in the expansion and improvement of our sales force and account management personnel. Excluding our European operations, since December 31, 2002, we added 66 sales and marketing employees, a 16% increase in headcount, increased our account management force and initiated several new marketing and promotional efforts to develop awareness in the marketplace of our entire service offerings. The costs associated with these efforts have contributed to the increase in our sales, marketing and account management expenses. In addition, costs associated with our European sales and account management teams increased by $4.1 million for the year ended December 31, 2003 as compared to the year ended December 31, 2002, due to the hiring of new personnel and the expansion of our European sales force. We expect that sales, marketing and account management expenses will continue to increase as a percentage of consolidated revenues as we continue to expand and train our sales force and develop new marketing initiatives.

Information Technology

        Information technology expenses increased $12.0 million for the year ended December 31, 2003 principally due to higher compensation costs resulting from increased headcount, normal inflation and merit increases, as well as an increase in external resources, which was partially offset by lower incentive compensation expenses. As our technology initiatives mature, less of our efforts are development related, thus decreasing capitalizable expenditures, which results in increased information technology expenses. In addition, we incurred additional costs to expand bandwidth and international connectivity in the year ended December 31, 2003 as compared to the year ended December 31, 2002 to satisfy growth of our business and to integrate acquisitions.

Bad Debt Expense

        The decrease in consolidated bad debt expense for the year ended December 31, 2003 compared to the year ended December 31, 2002 is primarily attributable to the success of our centralized collection efforts within the U.S. and Canada during 2002 and 2003, which resulted in improved cash collections and an improved accounts receivable aging that enabled us to significantly reduce our allowance for doubtful accounts in the year ended December 31, 2003. We do not expect to experience a similar decrease during 2004 and expect bad debt expense to be approximately 0.5% of consolidated revenues in 2004.

Depreciation, Amortization, Merger-Related Expenses and Loss on Disposal/Writedown of Property, Plant and Equipment, Net

        Consolidated depreciation and amortization expense increased $21.9 million to $130.9 million (8.7% of consolidated revenues) for the year ended December 31, 2003 from $109.0 million (8.3% of consolidated revenues) for the year ended December 31, 2002. Depreciation expense increased $19.8 million, primarily due to the additional depreciation expense related to recent capital expenditures, including storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings, and depreciation associated with facilities accounted for as capital leases. Depreciation associated with our digital initiatives increased $5.4 million during the year ended December 31, 2003 as a result of software and hardware assets placed in service throughout the years ended December 31, 2002 and 2003. The consolidation of the properties owned by our Variable Interest Entities during the year ended December 31, 2002 resulted in $2.2 million of additional depreciation in the year ended December 31, 2003. Amortization expense increased as a

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result of the amortization of intangible assets associated with acquisitions we completed in the fourth quarter of 2002 and during the year ended December 31, 2003.

        Merger-related expenses are certain expenses directly related to our merger with Pierce Leahy that cannot be capitalized and included system conversion costs, costs of exiting certain facilities, severance, relocation and pay-to-stay payments and other transaction-related costs. Merger-related expenses were $0.8 million for the year ended December 31, 2002. All merger related activities associated with the Pierce Leahy merger were completed in 2002.

        Consolidated loss on disposal/writedown of property, plant and equipment, net consisted of disposals and asset writedowns partially offset by $4.2 million of gains on the sale of properties in Texas, Florida and the U.K. in the year ended December 31, 2003 and a gain of $2.1 million on the sale of a property in the U.K. in the year ended December 31, 2002.

Operating Income

        As a result of the foregoing factors, consolidated operating income increased $52.3 million, or 20.7%, to $304.9 million (20.3% of consolidated revenues) for the year ended December 31, 2003 from $252.6 million (19.2% of consolidated revenues) for the year ended December 31, 2002.

OIBDA

        As a result of the foregoing factors, consolidated OIBDA increased $74.2 million, or 20.5%, to $435.8 million (29.0% of consolidated revenues) for the year ended December 31, 2003 from $361.6 million (27.4% of consolidated revenues) for the year ended December 31, 2002.

Interest Expense, Net

        Consolidated interest expense, net increased $13.8 million to $150.5 million (10.0% of consolidated revenues) for the year ended December 31, 2003 from $136.6 million (10.4% of consolidated revenues) for the year ended December 31, 2002. This increase was primarily attributable to (1) $7.4 million of interest expense associated with real estate term loans held by our Variable Interest Entities that were consolidated in the second half of 2002, (2) borrowings under our revolving credit facility and the issuance of our 6⁵/8% Senior Subordinated Notes due 2016 (the "6⁵/8% notes") which were used to finance the Hays IMS acquisition, and (3) an increase in our overall weighted average outstanding borrowings. The increase was offset by a decline in our overall weighted average interest rate from 8.3% as of December 31, 2002 to 7.7% as of December 31, 2003 resulting from our refinancing efforts and a decline in variable interest rates.

Other Expense (Income), Net (in thousands)

	2002			2003			Change
Foreign currency transaction gains	$	(5,045	)	$	(30,220	)	$	(25,175	)
Debt extinguishment expense		5,431			28,174			22,743
Loss on investments		901			(462	)		(1,363	)
Other, net		148			(56	)		(204	)
	$	1,435		$	(2,564	)	$	(3,999	)

        Foreign currency gains of $30.2 million based on period-end exchange rates were recorded in the year ended December 31, 2003 primarily due to the strengthening of the Canadian dollar and British pound sterling against the U.S. dollar as these currencies relate to our intercompany balances with our Canadian and U.K. subsidiaries, U.S. dollar denominated debt held by our Canadian subsidiary,

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borrowings denominated in foreign currencies under our revolving credit facility, and our British pound sterling denominated cross currency swap.

        During the year ended December 31, 2003, we redeemed the remaining outstanding principal amount of our 9¹/8% Senior Subordinated Notes due 2007 (the "9¹/8% notes"), resulting in a charge of $1.8 million, the remaining outstanding principal amount of our 8³/4% Senior Subordinated Notes due 2009 (the "8³/4% notes"), resulting in a charge of $13.8 million, and $115.0 million of the outstanding principal of the 8¹/8% Senior Notes due 2008 of our Canadian subsidiary (the "Subsidiary notes"), resulting in a charge of $12.6 million. During the year ended December 31, 2002, we recorded a charge of $1.2 million related to the early retirement of debt in conjunction with the refinancing of our revolving credit facility and a charge of $4.2 million related to the early retirement of a portion of our 9¹/8% notes. The charges consisted primarily of the call and tender premiums associated with the extinguished debt and the write-off of unamortized deferred financing cost and discounts.

Provision for Income Taxes

        Our effective tax rate for the year ended December 31, 2003 was 42.5%. The primary reconciling item between the statutory rate of 35% and our effective tax rate is state income taxes (net of federal benefit). The disallowance of certain intercompany interest charges by states, including a change in Massachusetts tax laws, retroactive to January 1, 2002, increased our provision for income taxes for the year ended December 31, 2003 by 1.1%. Our effective tax rate was 41.3% for the year ended December 31, 2002. There may be future volatility with respect to our effective tax rate related to items including unusual unforecasted permanent items, significant changes in tax rates in foreign jurisdictions and the need for additional valuation allowances. Also, as a result of our net operating loss carryforwards, we do not expect to pay any significant international, U.S. federal and state income taxes during 2004.

Minority Interest, Discontinued Operations, and Cumulative Effect of Change in Accounting Principle

        Minority interest in earnings of subsidiaries, net resulted in a charge to income of $5.6 million (0.4% of consolidated revenues) for the year ended December 31, 2003 compared to $3.6 million (0.3% of consolidated revenues) for the year ended December 31, 2002. This represents our minority partners' share of earnings in our majority-owned international subsidiaries that are consolidated in our operating results. The increase is a result of the improved profitability of our European and South American businesses.

        In the fourth quarter of 2002, we recorded income from discontinued operations of $1.1 million (net of tax of $0.8 million) as a result of resolving several outstanding contingencies remaining from the sale of the Arcus Staffing Resources, Inc. business unit in 1999. There was no such income recorded in 2003.

        In the first quarter of 2002, we recorded a non-cash charge for the cumulative effect of change in accounting principle of $6.4 million (net of minority interest of $8.5 million) as a result of our implementation of SFAS No. 142. There was no such charge in 2003.

Net Income

        As a result of the foregoing factors, consolidated net income increased $26.3 million, or 45.2%, to $84.6 million (5.6% of consolidated revenues) for the year ended December 31, 2003 from net income of $58.3 million (4.4% of consolidated revenues) for the year ended December 31, 2002.

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Segment Analysis (in thousands)

        The results of our various operating segments are discussed below. In general, our business records management segment offers records management, secure shredding, healthcare information services, vital records services, and service and courier operations in the U.S. and Canada. Our off-site data protection segment offers data backup and disaster recovery services, vital records services, service and courier operations, and intellectual property protection services in the U.S. Our international segment offers elements of all our product and services lines outside the U.S. and Canada. Our corporate and other segment includes our corporate overhead functions and our fulfillment, consulting and digital archiving services.

	Business Records Management			Off-Site Data Protection			International			Corporate & Other
Segment Revenue
Year Ended
December 31, 2003	$	1,022,335		$	251,141		$	198,068		$	29,785
December 31, 2002		944,845			239,081			109,381			25,190
Increase in Revenues	$	77,490		$	12,060		$	88,687		$	4,595
Percentage Increase in Revenues		8.2	%		5.0	%		81.1	%		18.2	%
Segment Contribution (1)
Year Ended
December 31, 2003	$	286,208		$	71,240		$	46,825		$	32,668
December 31, 2002		262,541			61,729			21,988			16,890
Segment Contribution (1) as a Percentage of Segment Revenue
Year Ended
December 31, 2003		28.0	%		28.4	%		23.6	%		109.7	%
December 31, 2002		27.8	%		25.8	%		20.1	%		67.1	%

(1)

See Note 12 to Notes to Consolidated Financial Statements for definition of Contribution and for the basis on which allocations are made and a reconciliation of Contribution to net income (loss) on a consolidated basis.

Business Records Management

        During the year ended December 31, 2003, revenue in our business records management segment increased 8.2% primarily due to increased storage revenues, growth of our secure shredding operations and acquisitions (including revenue from the U.S. operations of Hays IMS of $8.2 million), and was offset by lower special project service revenue and lower permanent removal and destruction fees. In addition, favorable currency fluctuations during the year ended December 31, 2003 in Canada increased revenue $9.6 million when compared to the year ended December 31, 2002. Contribution as a percent of segment revenue increased primarily due to lower bad debt expense and lower incentive compensation expense which were partially offset by higher property taxes, utilities and our increased investment in our sales and account management force. Items excluded from the calculation of Contribution include the following: (1) depreciation and amortization expense for the year ended December 31, 2003 of $71.7 million compared to $67.7 million for the year ended December 31, 2002, (2) foreign currency gains of $29.5 million and $1.6 million for the years ended December 31, 2003 and 2002, respectively, and (3) gain on disposal/writedown of property plant and equipment, net of

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$0.6 million for the year ended December 31, 2003 and a loss on disposal/writedown of property plant and equipment, net of $1.5 million for the year ended December 31, 2002.

Off-Site Data Protection

        Revenue in our off-site data protection segment increased 5.0% primarily due to internal revenue growth from both existing and new customers in the face of increasing pressure in the marketplace to reduce information technology related spending. Contribution as a percent of segment revenue increased primarily due to reduced bad debt expense, increased product sales margins and improved labor management. This increase was partially offset by the growth of our sales and account management force. Items excluded from the calculation of Contribution include the following: (1) depreciation and amortization expense for the year ended December 31, 2003 of $13.8 million compared to $12.8 million for the year ended December 31, 2002 and (2) a loss on disposal/writedown of property plant and equipment, net of $1.9 million and $0.2 million for the year ended December 31, 2003 and 2002, respectively.

International

        Revenue in our international segment increased 81.1% primarily due to acquisitions completed in Europe, including $46.4 million from the acquisition of Hays IMS, and in South America, as well as increased sales efforts and a large service project in the U.K. Favorable currency fluctuations during the year ended December 31, 2003 in Europe increased revenue, as measured in U.S. dollars, by $17.5 million compared to the year ended December 31, 2002. This increase was offset by $1.2 million of unfavorable currency fluctuations in Mexico and South America during the year ended December 31, 2003 compared to the year ended December 31, 2002. Contribution as a percent of segment revenue increased primarily due to improved gross margins from our European, South American, and Mexican operations and overall increased direct labor utilization and lower bad debt expenses. This increase was partially offset by increased overhead expenses associated with the growth of these emerging businesses. Items excluded from the calculation of Contribution include the following: (1) depreciation and amortization expense for the year ended December 31, 2003 of $16.0 million compared to $7.1 million for the year ended December 31, 2002, including $3.6 million associated with the acquisition of Hays IMS in the year ended December 31, 2003, (2) gains on disposal/writedown of property plant and equipment, net of $0.8 million and $2.1 million for the years ended December 31, 2003 and 2002, respectively, and (3) a foreign currency gain of $1.2 million in the year ended December 31, 2003 compared to a loss of $0.3 million in the year ended December 31, 2002.

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Year Ended December 31, 2002 Compared to Year Ended December 31, 2001 Consolidated Results (in thousands)

			Year Ended December 31,
									Dollar Change			Percent Change
			2001			2002
Revenues:
	Storage		$	694,474		$	759,536		$	65,062		9.4	%
	Service and Storage Material Sales			491,244			558,961			67,717		13.8	%
		Total Revenues		1,185,718			1,318,497			132,779		11.2	%
Operating Expenses:
	Cost of Sales (excluding depreciation)			576,538			622,299			45,761		7.9	%
	Selling, General and Administrative			307,800			333,050			25,250		8.2	%
	Depreciation and Amortization			153,271			108,992			(44,279	)	(28.9	)%
	Merger-related Expenses			3,673			796			(2,877	)	(78.3	)%
	Loss on Disposal/Writedown of Property, Plant and Equipment, Net			320			774			454		141.9	%
		Total Operating Expenses		1,041,602			1,065,911			24,309		2.3	%
Operating Income				144,116			252,586			108,470		75.3	%
Interest Expense, Net				134,742			136,632			1,890		1.4	%
Other Expense, Net				37,485			1,435			(36,050	)	(96.2	)%
(Loss) Income from Continuing Operations Before Provision for Income Taxes and Minority Interest				(28,111	)		114,519			142,630		507.4	%
Provision for Income Taxes				17,875			47,318			29,443		164.7	%
Minority Interest in (Losses) Earnings of Subsidiaries				(1,929	)		3,629			5,558		288.1	%
(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle				(44,057	)		63,572			107,629		244.3	%
Income from Discontinued Operations (net of tax)				—			1,116			1,116		—
Cumulative Effect of Change in Accounting Principle (net of minority interest)				—			(6,396	)		(6,396	)	—
Net (Loss) Income			$	(44,057	)	$	58,292		$	102,349		232.3	%
Other Data:
OIBDA (1)			$	297,387		$	361,578		$	64,191		21.6	%
OIBDA Margin (1)				25.1	%		27.4	%

(1)

See "Non-GAAP Measures—Operating Income Before Depreciation and Amortization, or OIBDA" for definition, reconciliation and a discussion of why we believe these measures provide relevant and useful information to our current and potential investors.

40

Comparison of Year Ended December 31, 2002 to Year Ended December 31, 2001

Revenue

        For the year ended December 31, 2002, our consolidated revenues increased $132.8 million, or 11.2%, compared to the same period of 2001. This increase was principally a result of internal revenue growth, which for the year ended December 31, 2002 was 10%, comprised of 8% for storage revenue and 11% for service and storage material sales revenue. We calculate internal revenue growth in local currency for our international operations.

        Consolidated storage revenues increased $65.1 million, or 9.4%, to $759.5 million for the year ended December 31, 2002. The increase was primarily attributable to internal revenue growth of 8% resulting from net increases in records and other media stored by existing customers and sales to new customers. The net effect of foreign currency translation on storage revenues was a decrease in revenue of $2.4 million. This was a result of a weakening of the Argentine peso, the Canadian dollar, and the Brazilian real against the U.S. dollar, offset by a strengthening of the British pound sterling and the Euro against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods.

        Consolidated service and storage material sales revenues increased $67.7 million, or 13.8%, to $559.0 million for the year ended December 31, 2002. The increase was primarily attributable to internal revenue growth of 11% resulting from net increases in service and storage material sales to existing customers and sales to new customers. The net effect of foreign currency translation on service and storage material sales revenues was a decrease in revenue of $0.7 million. This was a result of a weakening of the Argentine peso, the Canadian dollar, and the Brazilian real against the U.S. dollar, offset by a strengthening of the British pound sterling and the Euro against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods.

Internal Growth—Eight-Quarter Trend

	2001										2002
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
Storage Revenue	13	%	12	%	11	%	10	%	11	%	8	%	9	%	9	%	8	%	8	%
Service and Storage Material Sales Revenue	9	%	9	%	5	%	11	%	8	%	9	%	10	%	15	%	10	%	11	%
Total Revenue	11	%	10	%	9	%	10	%	10	%	9	%	9	%	11	%	9	%	10	%

        The consecutive quarter storage revenue internal growth trend over the last eight quarters, as calculated quarterly comparing the current quarter to the applicable quarter in the prior year, is primarily attributable to a decline in the rate at which customers have added new cartons to their inventory, which may be a result of current economic conditions. However, we have not seen a decline in the duration that our customers maintain their cartons in inventory nor an increase in the rate of cartons destroyed or permanently removed from inventory as a percentage of the total population. In addition, growth from new sales was adversely affected in 2001 and 2002 as a result of the disruption caused by the merging of our sales force with that of Pierce Leahy in 2000. The sales force reorganization has been completed and growth from new sales has begun to increase.

        Service and storage material sales revenue internal growth is subject to fluctuations in the timing of non-recurring service projects ordered by customers and in some cases can be affected by delays or cancellations as some customers seek to reduce short-term costs. During the year ended December 31, 2002, we benefited from a number of large non-recurring service projects in North America and Europe. The volatility in the service revenue growth for the third and fourth quarters of 2001 and 2002 is primarily due to a disruption in the normal pattern of services we provide to our customers following

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the events of September 11, 2001 and the resulting shift of some services and related revenue, to the fourth quarter of 2001. This caused a favorable comparison for the service revenue growth rate in the third quarter of 2002 and a difficult comparison in the fourth quarter of 2002.

Cost of Sales

        Consolidated cost of sales (excluding depreciation) is comprised of the following expenses (in thousands):

										% of Consolidated Revenues
	2001		2002		Dollar Change			Percent Change		2001		2002		Percent Change (Favorable)/Unfavorable
Labor	$	286,951	$	318,707	$	31,756		11.1	%	24.2	%	24.2	%	—
Facilities		173,610		184,988		11,378		6.6	%	14.6	%	14.0	%	(0.6	)%
Transportation		55,167		56,972		1,805		3.3	%	4.7	%	4.3	%	(0.4	)%
Product Cost of Sales		31,363		34,552		3,189		10.2	%	2.6	%	2.6	%	—
Other		29,447		27,080		(2,367	)	(8.0	%)	2.5	%	2.1	%	(0.4	)%
	$	576,538	$	622,299	$	45,761		7.9	%	48.6	%	47.2	%	(1.4	)%

Labor

        The dollar increase in labor expense is primarily attributable to increases in headcount and changes in our labor mix resulting from the expansion of our secure shredding operations. Our secure shredding operations are more labor intensive, therefore, labor expense will be higher as a percentage of revenue as compared to our mature operations. In the year ended December 31, 2002, this impact was mitigated by improved labor management in our off-site data protection segment. In addition, our operations in the U.S. and Canada, which comprise approximately 75% of our workforce, experienced an overall increase in wages due to normal inflation, merit increases and significant increases in medical insurance and worker's compensation expenses of approximately $12.0 million. The majority of these increases are attributable to higher premiums and self-insurance requirements.

Facilities

        Our property management activities combined with a higher utilization of our space has driven the decrease of our facilities expenses as a percentage of consolidated revenues from 14.6% in the year ended December 31, 2001 to 14.0% in the year ended December 31, 2002. The largest component of our facilities cost is rent expense, which decreased $0.3 million for the year ended December 31, 2002. We reduced the number of leased facilities we occupy by 23 in the year ended December 31, 2002 primarily through the consolidation of our property portfolio as we exited less desirable facilities and consolidated our remaining properties subsequent to the Pierce Leahy merger.

        The decrease in leased properties is also a result of the recharacterization of eight properties held by our Variable Interest Entities at the end of 2001, which are now consolidated on our balance sheet at the end of 2002. During the years ended December 31, 2001 and 2002, we recorded $1.8 million and $0.0 million of rent expense for these eight properties, respectively. An additional 23 properties held by our Variable Interest Entities were consolidated as of December 31, 2002; however, they were accounted for as operating leases during the year ended December 31, 2002 and their costs were included in rent expense. For the years ended December 31, 2001 and 2002, we recorded rent expense of $6.7 million and $5.9 million, respectively, on these 23 properties and we recorded rent expense as interest expense beginning in 2003.

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        The dollar increase in facilities expenses is attributable to property insurance, which increased $4.7 million for the year ended December 31, 2002 compared to the year ended December 31, 2001. The market-wide increase in property insurance premiums in the wake of the events of September 11, 2001, in addition to experience based annual premium adjustments, resulted in this dramatic increase. Increased rent and facilities expenses in our European operations of $4.6 million and higher property taxes in the U.S. and Canada of $1.8 million have also contributed to the dollar increase in facilities expenses.

Transportation

        Our transportation expenses are influenced by several variables including total number of vehicles, owned versus leased vehicles, use of subcontracted couriers, fuel expenses, and maintenance. For the years ended December 31, 2002 and 2001 our fleet of vehicles used in operations totaled 2,140 and 2,032, respectively, of which 1,429 and 1,269, respectively, were under operating leases. The net increase in vehicles is primarily attributable to an increase of 40 vehicles in our secure shredding division that were either acquired through acquisitions or added to support growth in the business. We reduced our operating lease expense by $0.6 million during the year ended December 31, 2002 as a result of our fleet leasing program, which has benefited from an overall reduction in interest rates and our improving credit rating.

        The results of our ongoing transportation efficiency projects and the completion of our conversions to the SafeKeeper Plus® system have been significant in reducing transportation expenses, including fuel and outside courier fees, as a percentage of consolidated revenues. In the year ended December 31, 2002 we had an overall reduction in fuel consumption and a decrease in fuel expense of $0.4 million in spite of an average increase in the price per gallon of fuel during the year ended December 31, 2002. We also benefited from a $0.9 million decline in subcontracted courier expenses, which we believe is the result of better management of internal transportation resources. Our improvements in transportation have been partially offset by increased vehicle insurance and repair costs of $0.7 million and $0.9 million, respectively, for the year ended December 31, 2002 over the year ended December 31, 2001, as a result of the increased size of our fleet. We experienced a $2.0 million increase in transportation expenses in our European operations, which is primarily attributable to the growth of operations and is also impacted by the weakening of the U.S. dollar in comparison to the British pound sterling in the year ended December 31, 2002 versus the year ended December 31, 2001.

Product Cost of Sales and Other Cost of Sales

        Product and other cost of sales are highly correlated to complementary revenue streams. Product cost of sales for the year ended December 31, 2002 was consistent with the year ended December 31, 2001 as a percentage of product revenues. The decrease in other cost of sales of $2.4 million is directly attributable to decreases in variable expenses from our changing mix of complementary services and will vary as our mix of special projects changes from period to period.

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Selling, General and Administrative Expenses

        Selling, general and administrative expenses are comprised of the following expenses (in thousands):

									% of Consolidated Revenues
	2001		2002		Dollar Change		Percent Change		2001		2002		Percent Change (Favorable)/Unfavorable
General and Administrative	$	175,639	$	179,550	$	3,911	2.2	%	14.8	%	13.6	%	(1.2	)%
Sales, Marketing & Account Management		70,956		85,932		14,976	21.1	%	6.0	%	6.5	%	0.5	%
Information Technology		50,866		55,971		5,105	10.0	%	4.3	%	4.2	%	(0.1	%)
Bad Debt Expense		10,339		11,597		1,258	12.2	%	0.9	%	0.9	%	—
	$	307,800	$	333,050	$	25,250	8.2	%	26.0	%	25.3	%	(0.7	)%

General and Administrative

        The dollar increase in general and administrative expenses is primarily attributable to an increase in professional fees, office facilities, telephone, and supplies expenses. However, these costs were consistent with the increasing scale of our business, as indicated by the decrease of 1.2% as a percentage of consolidated revenues. Increased overhead leverage offset an increase in wages due to normal inflation and merit increases.

Sales, Marketing & Account Management

        The majority of our sales, marketing and account management expenses are labor related and are primarily driven by the headcount in each of these departments. Throughout the year ended December 31, 2002, we continued to expand our sales force and account management teams. We added approximately 60 new sales and marketing employees since December 31, 2001, a 15% increase in headcount.

Information Technology

        Information technology expenses increased $5.1 million, or 10.0%, to $56.0 million (4.2% of consolidated revenues) for the year ended December 31, 2002 principally due to increased compensation costs as a result of increased headcount and normal inflation and merit increases, as well as, a decrease in capitalizable projects. Additionally, these costs were offset by savings of $1.7 million realized through improved management of information technology telecommunication expenses and a reduction of $1.1 million of information technology equipment lease expenses.

Bad Debt Expense

        Consolidated bad debt expense increased $1.3 million, or 12.2%, to $11.6 million (0.9% of consolidated revenues) for the year ended December 31, 2002. Our projects to centralize collection efforts within our divisions have contributed significantly to holding bad debt expense flat as a percentage of consolidated revenues.

Depreciation, Amortization, Merger-Related Expenses and Loss on Disposal/Writedown of Property, Plant and Equipment, Net

        Consolidated depreciation and amortization expense decreased $44.3 million, or 28.9%, to $109.0 million (8.3% of consolidated revenues) for the year ended December 31, 2002 from $153.3 million (12.9% of consolidated revenues) for the year ended December 31, 2001. Depreciation

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expense increased $16.7 million, primarily due to the additional depreciation expense related to capital expenditures, including storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings, and depreciation associated with facilities accounted for as capital leases. Depreciation associated with our digital initiatives increased $3.7 million during the year ended December 31, 2002 as a result of software and hardware assets placed in service during late 2001 and throughout the years ended December 31, 2002. In the year ended December 31, 2002, the recharacterization of eight properties added in the year ended December 31, 2001 under one of our synthetic lease programs, as well as nine properties added to such program in the year ended December 31, 2002, resulted in $1.7 million of additional depreciation. Amortization expense decreased $61.3 million, primarily due to eliminating amortization expense related to goodwill in accordance with SFAS No. 142. See Note 2(g) to Notes to Consolidated Financial Statements and "—Critical Accounting Policies—Accounting for Acquisitions."

        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 $0.8 million (0.1% of consolidated revenues) for the year ended December 31, 2002 compared to $3.7 million (0.3% of consolidated revenues) for the same period of 2001. All merger related activities associated with the Pierce Leahy merger were completed in the year ended December 31, 2002.

        Consolidated loss on disposal/writedown of property, plant and equipment, net for the year ended December 31, 2002 consisted of disposals and asset write-downs partially offset by a gain of $2.1 million recorded on the sale of a property in the U.K. during the second quarter of 2002.

Operating Income

        As a result of the foregoing factors, consolidated operating income increased $108.5 million, or 75.3%, to $252.6 million (19.2% of consolidated revenues) for the year ended December 31, 2002 from $144.1 million (12.2% of consolidated revenues) for the year ended December 31, 2001.

OIBDA

        As a result of the foregoing factors, consolidated OIBDA increased $64.2 million, or 21.6%, to $361.6 million (27.4% of consolidated revenues) for the year ended December 31, 2002 from $297.4 million (25.1% of consolidated revenues) for the year ended December 31, 2001.

Interest Expense, Net

        Consolidated interest expense, net increased $1.9 million, or 1.4%, to $136.6 million for the year ended December 31, 2002 from $134.7 million for the year ended December 31, 2001. This increase was primarily attributable to $6.2 million of interest expense associated with 17 properties within one of our Variable Interest Entities and increased long-term borrowings through our 2001 bond offerings. These increases were offset by a decline in our overall weighted average interest rate resulting from a general decline in interest rates coupled with our refinancing efforts.

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Other (Income) Expense, Net

        Significant items included in other (income) expense, net include the following (in thousands):

	2001		2002			Change
Foreign currency transaction (gains) and losses	$	10,437	$	(5,045	)	$	(15,482	)
Debt extinguishment expense		19,978		5,431			(14,547	)
Loss on investments		6,900		901			(5,999	)
Other, net		170		148			(22	)
	$	37,485	$	1,435		$	(36,050	)

        Foreign currency gains of $5.0 million based on period-end exchange rates were recorded in the year ended December 31, 2002 primarily due to the strengthening of the Canadian dollar and British pound sterling against the U.S. dollar as these currencies relate to our intercompany balances with our Canadian and European subsidiaries. During the year ended December 31, 2001, the Canadian dollar had weakened compared to the U.S. dollar and was the primary reason for the foreign currency loss of $10.4 million, based on period-end exchange rates.

        The loss on investments is the result of a $6.9 million impairment charge taken on our investment in convertible preferred stock of a technology development company in the third quarter of 2001. In the year ended December 31, 2002, we recorded $0.9 million of similar write-downs.

        During the year ended December 31, 2002, we recorded a debt extinguishment charge of $1.2 million related to the early retirement of debt in conjunction with the refinancing of our revolving credit facility and in the fourth quarter of 2002 we recorded a debt extinguishment charge of $4.2 related to the early retirement of a portion of our 9¹/8% notes in conjunction with our underwritten public offering of the 7³/4% Senior Subordinated Notes due 2015 (the "7³/4% notes"). For the year ended December 31, 2001, we recorded a debt extinguishment charge of $20.0 million related to the early retirement of the 11¹/8% senior subordinated notes and 10¹/8% senior subordinated notes in conjunction with our underwritten public offerings of the 8⁵/8% Senior Subordinated Notes due 2013 (the "8⁵/8% notes"). The charges consisted primarily of the write-off of unamortized deferred financing costs and call and tender premiums associated with the extinguished debt.

Provision for Income Taxes

        The provision for income taxes was $47.3 million for the year ended December 31, 2002 compared to $17.9 million for the year ended December 31, 2001. The effective rate was 41.3% for the year ended December 31, 2002 and the primary reconciling item between the statutory rate of 35% and the effective rate is state income taxes (net of federal benefit). The effective rate was (63.6%) for the year ended December 31, 2001. During the year ended December 31, 2001, we amortized non-deductible goodwill for book purposes, however, as result of the adoption of SFAS No. 142 in 2002, goodwill amortization ceased, thereby reducing the effective rate and some of the volatility with respect to our effective rate in the future. Additionally, the 2001 effective rate was impacted by state income taxes (net of federal benefit).

Minority Interest, Discontinued Operations, and Cumulative Effect of Change in Accounting Principle

        Minority interest in earnings (losses) of subsidiaries, net resulted in a charge to income of $3.6 million (0.3% of consolidated revenues) for the year ended December 31, 2002. This represents our minority partners' share of earnings (losses) in our majority-owned international subsidiaries that are consolidated in our operating results. In the year ended December 31, 2001, our subsidiaries incurred losses and the minority interest resulted in a credit to income of $1.9 million. The improved results are primarily a result of (1) the elimination of goodwill amortization expense in accordance with

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SFAS No. 142, (2) increased profitability in our European business and (3) our European minority partners' share ($0.7 million, net of tax) of the $2.1 million gain recorded on the sale of a property held by one of our European subsidiaries during the second quarter of 2002.

        In the fourth quarter of 2002, we recorded income from discontinued operations of $1.1 million (net of tax of $0.8 million) as a result of resolving several outstanding contingencies remaining from the sale of the Arcus Staffing Resources, Inc. business unit in 1999.

        In the first quarter of 2002, we recorded a non-cash charge for the cumulative effect of change in accounting principle of $6.4 million (net of minority interest of $8.5 million) as a result of our implementation of SFAS No. 142. There was no such charge in 2001.

Net Income (Loss)

        As a result of the foregoing factors, consolidated net income increased $102.3 million, or 232.3%, to $58.3 (4.4% of consolidated revenues) for the year ended December 31, 2002 from a net loss of $44.1 (3.7% of consolidated revenues) for the year ended December 31, 2001.

Segment Analysis (in thousands)

        The results of our various operating segments are discussed below. In general, our business records management segment offers records management, secure shredding, healthcare information services, vital records services, and service and courier operations in the U.S. and Canada. Our off-site data protection segment offers data backup and disaster recovery services, vital records services, service and courier operations, and intellectual property protection services in the U.S. Our international segment offers elements of all our product and services lines outside the U.S. and Canada. Our corporate and other segment includes our corporate overhead functions and our fulfillment, consulting and digital archiving services.

	Business Records Management			Off-Site Data Protection			International			Corporate & Other
Segment Revenue
Year Ended
December 31, 2002	$	944,845		$	239,081		$	109,381		$	25,190
December 31, 2001		861,302			209,429			89,475			25,512
Increase (Decrease) in Revenues	$	83,543		$	29,652		$	19,906		$	(322	)
Percentage Increase in Revenues		9.7	%		14.2	%		22.2	%		(1.3	%)
Segment Contribution (1)
Year Ended
December 31, 2002	$	262,541		$	61,729		$	21,988		$	16,890
December 31, 2001		227,164			50,254			16,250			7,712
Segment Contribution (1) as a Percentage of Segment Revenue
Year Ended
December 31, 2002		27.8	%		25.8	%		20.1	%		67.1	%
December 31, 2001		26.4	%		24.0	%		18.2	%		30.2	%

(1)

See Note 12 to Notes to Consolidated Financial Statements for definition of Contribution and for the basis on which allocations are made and a reconciliation of Contribution to net income (loss) on a consolidated basis.

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Business Records Management

        Revenue in our business records management segment increased 9.7% primarily due to increased storage revenues, strong special projects revenues and acquisitions. The increase in Contribution, which we use as our internal measurement of financial performance and as the basis for allocating resources to our segments, as a percent of segment revenue for our business records management segment is primarily due to labor and transportation efficiencies gained by the increasing scale of our business and the completion of our integration of Pierce Leahy. Lower facilities expenditures, including rent expense and utilities, and lower bad debt expense resulting from our improved collection efforts also contributed to the improvement of Contribution, as a percentage of segment revenue. This increase was partially offset by higher insurance premiums for property and casualty insurance and an increased investment in our sales force. Reductions in spending related to telecommunication expenditures, as a percentage of segment revenue, also contributed to increasing Contribution.

Off-Site Data Protection

        Revenue in our off-site data protection segment increased 14.2% primarily due to internal revenue growth from both existing and new customers. Contribution as a percent of segment revenue for our off-site data protection segment increased primarily due to improved labor and transportation management. This increase was partially offset by higher insurance premiums for property and casualty insurance and an increase in bad debt expense.

International

        Revenue in our international segment increased primarily due to increased sales efforts and a large service project in the U.K., as well as, acquisitions completed in Europe and South America in the fourth quarter of 2002. Contribution as a percent of segment revenue for our international segment increased primarily due to improved gross margins from our European operations and reduced bad debt expense. This increase was partially offset by higher insurance premiums for property and casualty insurance and reduced margins in our South American operations due to the deteriorating local economic conditions and devaluation of the currency in Argentina. Unfavorable currency fluctuations in South America and Mexico during the year ended December 31, 2002 reduced revenues, as measured in U.S. dollars, by $5.0 million. This reduction was offset by the impact of favorable currency fluctuations during the year ended December 31, 2002 in Europe that increased revenue $2.9 million when compared to the prior year rates.

Liquidity and Capital Resources

        The following is a summary of our cash balances and cash flows for the years ended 2001, 2002 and 2003 (in thousands).

	2001			2002			2003
Cash flows provided by operating activities	$	160,909		$	254,948		$	288,693
Cash flows used in investing activities		(278,136	)		(247,757	)		(586,634	)
Cash flows provided by financing activities		134,901			27,098			315,054
Cash and cash equivalents at the end of year	$	21,359		$	56,292		$	74,683

        Net cash provided by operating activities was $288.7 million for the year ended December 31, 2003 compared to $254.9 million for the year ended December 31, 2002. The increase resulted primarily from an increase in operating income and non-cash items, such as depreciation, amortization, debt extinguishment expenses and deferred income taxes. The net change in assets and liabilities primarily associated with growth in revenues and the resulting increase in receivables and disbursements to

48

vendors contributed $2.0 million to cash flows from operating activities in the year ended December 31, 2003 as compared to $27.6 million in the year ended December 31, 2002.

        We have made significant capital expenditures, additions to customer relationship costs and other investments, primarily acquisitions. Our capital expenditures are primarily related to growth and include investments in storage systems, information systems and discretionary investments in real estate. Cash paid for our capital expenditures and additions to customer relationship and acquisition costs during the year ended December 31, 2003 amounted to $204.5 million and $12.6 million, respectively. These investments have been funded entirely through cash flows from operations, as was the case in the year ended December 31, 2002, and we expect this to be the case again in the year ended December 31, 2004. In addition, we received proceeds from sales of property and equipment of $11.7 million in the year ended December 31, 2003. Excluding any potential acquisitions, we expect our capital expenditures to be between approximately $210 million and approximately $240 million in the year ending December 31, 2004.

        In the year ended December 31, 2003, we paid net cash consideration of $381.2 million for acquisitions and other investments including $333.0 million for the acquisition of Hays IMS. Cash flows from operations funded all but the Hays IMS acquisition, which was funded through borrowings under our revolving credit facilities and the net proceeds from other financing transactions. In the year ended December 31, 2002, cash flows from operations funded all of our acquisitions.

        Net cash provided by financing activities was $315.1 million for the year ended December 31, 2003. During the year we had gross borrowings under our revolving credit facilities of $744.0 million and we received net proceeds of $617.2 million from the issuance of our 7³/4% notes and our 6⁵/8% notes. We used the proceeds from these financing transactions to repay debt and term loans ($698.8 million), retire senior subordinated notes ($374.3 million) and to partially fund the acquisition of Hays IMS.

        Since December 31, 2003, we have completed three acquisitions for total consideration of approximately $26 million. In addition, we acquired the remaining 49.9% equity interest in IME for approximately $154 million. These transactions will be reflected in our consolidated statement of cash flows in the first quarter of 2004.

        We are highly leveraged and expect to continue to be highly leveraged for the foreseeable future. Our consolidated debt as of December 31, 2003 was comprised of the following (in thousands):

Revolving Credit Facility due 2005	$	142,280
Term Loan due 2008		248,750
81/8% Senior Notes due 2008		18,768
81/4% Senior Subordinated Notes due 2011(1)		149,670
85/8% Senior Subordinated Notes due 2013(1)		481,075
73/4% Senior Subordinated Notes due 2015(1)		441,331
65/8% Senior Subordinated Notes due 2016(1)		314,071
Real Estate Term Loans		202,647
Real Estate Mortgages		17,584
Seller Notes		12,607
Other		61,145
Long-term Debt		2,089,928
Less Current Portion		(115,781	)
Long-term Debt, Net of Current Portion	$	1,974,147

(1)

These debt instruments are collectively referred to as the "Parent Notes." The Parent notes, along with our revolving credit facility and term loan, are fully and unconditionally guaranteed, on a

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senior subordinated basis, by substantially all of our direct and indirect wholly owned U.S. subsidiaries (the "Guarantors"). These guarantees are joint and several obligations of the Guarantors. The remainder of our subsidiaries do not guarantee the Parent notes or the revolving credit facility and term loan.

        Our indentures use OIBDA-based calculations as primary measures of financial performance, including leverage ratios. Our key bond leverage ratio, as calculated per our bond indentures, increased to 5.0 as of December 31, 2003 from 4.8 as of December 31, 2002. The increase was primarily attributable to indebtedness incurred by us and lent to IME to fund IME's acquisition of the European operations of Hays IMS. Noncompliance with this leverage ratio would have a material adverse effect on our financial condition and liquidity. Subsequent to December 31, 2003, our key bond leverage ratio decreased to 4.9. The decrease was the result of the partial repayment by IME of the financing we provided to acquire Hays IMS offset by our January 2004 offering of 150 million British pounds sterling in aggregate principal amount of our 7¹/4% Senior Subordinated Notes due 2014 (the "7¹/4% notes") and the related use of the proceeds to acquire Mentmore's 49.9% equity interest in IME and to repay existing debts. Our target for this ratio is generally in the range of 4.5 to 5.5 while the maximum ratio allowable under the bond indentures is 6.5.

        Our ability to pay interest on or to refinance our indebtedness depends on our future performance, working capital levels and capital structure, which are subject to general economic, financial, competitive, legislative, regulatory and other factors which may be beyond our control. There can be no assurance that we will generate sufficient cash flow from our operations or that future financings will be available on acceptable terms or in amounts sufficient to enable us to service or refinance our indebtedness, or to make necessary capital expenditures.

        Our indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under our indentures and other agreements governing our indebtedness. As of December 31, 2003, we were in compliance with all material debt covenants and agreements.

        As of December 31, 2003, we had $142.3 million of borrowings outstanding under our revolving credit facility, all of which was denominated in British pounds sterling in the amount of GBP 80.0 million. We also had various outstanding letters of credit totaling $34.4 million. The remaining availability under the revolving credit facility on December 31, 2003 was $223.3 million based on our current level of external debt and the leverage ratio under the Amended and Restated Credit Agreement. The interest rate in effect was 5.6% as of December 31, 2003.

        In January 2003, we redeemed the remaining $23.2 million of outstanding principal amount of our 9¹/8% notes, at a redemption price (expressed as a percentage of principal amount) of 104.563%, plus accrued and unpaid interest, with proceeds from our underwritten public offering of $100.0 million in aggregate principal of our 7³/4% notes. We recorded a charge to other (income) expense, net in the accompanying consolidated statement of operations of $1.8 million in the first quarter of 2003 related to the early retirement of the remaining 9¹/8% notes.

        In March 2003, we completed two debt exchanges, which resulted in the issuance of $31.3 million in face value of our 7³/4% notes and the retirement of $30.0 million of our 8³/4% notes. These non-cash debt exchanges resulted in carryover basis and, therefore, no gain (loss) on extinguishment of debt in accordance with EITF No. 96-19, "Debtor's Accounting for Modification or Exchange of Debt Instruments." These exchanges result in a lower interest rate and, therefore, lower interest expense in future periods, as well as extend the maturity of our debt obligations. From time to time, we may enter into similar exchange transactions that we deem appropriate.

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        In April 2003, we completed an underwritten public offering of an additional $300 million in aggregate principal amount of our 7³/4% notes, which were issued at a price to investors of 104% of par, implying an effective yield to worst of 7.066%. Our net proceeds of $307.3 million, after paying the underwriters' discounts, commissions and transaction fees, were used to fund our offer to purchase and consent solicitation relating to our outstanding 8³/4% notes, redeem the 8³/4% notes not purchased in the offer, repay borrowings under our revolving credit facility, repay other indebtedness and pay for acquisitions.

        In April 2003, we received and accepted tenders for $143.3 million of the $220 million aggregate principal amount outstanding of our 8³/4% notes. In May 2003, we redeemed the remaining $76.7 million of outstanding principal amount of our 8³/4% notes, at a redemption price (expressed as a percentage of principal amount) of 104.375%, plus accrued and unpaid interest. We recorded a charge to other (income) expense, net of $13.8 million in the second quarter of 2003 related to the early retirement of the 8³/4% notes, which consists of redemption premiums and transaction costs, as well as original issue discount and unamortized deferred financing costs related to the 8³/4% notes.

        In June 2003, we completed an underwritten public offering of $150 million in aggregate principal amount of our 6⁵/8% notes. The 6⁵/8% notes were issued at a price to investors of 100% of par. Our net proceeds of $147.5 million, after paying the underwriters' discounts, commissions and transaction fees, were used to redeem $50 million in aggregate principal amount of the outstanding Subsidiary notes in the third quarter of 2003 and pay for acquisitions.

        In July 2003, using proceeds from our June 2003 offering of 6⁵/8% notes, we redeemed $50 million of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%, plus accrued and unpaid interest. We recorded a charge to other (income) expense, net of $5.5 million in the third quarter of 2003 related to the early retirement of these Subsidiary notes, which consists of redemption premiums and transaction costs, as well as original issue discount related to these Subsidiary notes.

        In July 2003, we and IME completed the acquisition of Hays IMS in two simultaneous transactions. IME acquired the European operations of Hays IMS for aggregate cash consideration (including transaction costs) of approximately 190.0 million British pounds sterling ($309.0 million), while we acquired the U.S. operations of Hays IMS for aggregate cash consideration (including transaction costs) of 14.5 million British pounds sterling ($24.0 million). Both transactions were on a cash and debt free basis.

        We provided the initial financing totaling 190.5 million British pounds sterling to IME for all of the consideration associated with the acquisition of the European operations of Hays IMS using cash on hand and borrowings under our revolving credit facility. We recorded a foreign currency gain of $27.8 million in other (income) expense, net for this intercompany balance for the year ended December 31, 2003. In order to minimize the foreign currency risk associated with providing IME with the consideration necessary for the acquisition of the European operations of Hay IMS, we borrowed 80.0 million British pounds sterling under our revolving credit facility to create a natural hedge. We recorded a foreign currency loss of $11.5 million on the translation of this revolving credit balance to U.S. dollars in other (income) expense, net for the year ended December 31, 2003. Additionally, on July 16, 2003 we entered into two cross currency swaps with a combined notional value of 100.0 million British pounds sterling. These swaps each have a term of one year and at maturity we have a right to receive $162.8 million in exchange for 100.0 million British pounds sterling. We have not designated these swaps as hedges and, therefore, all mark to market fluctuations of the swaps are recorded in other (income) expense, net in our consolidated statements of operations. We have recorded, as of December 31, 2003, a foreign currency loss of $19.0 million in other (income) expense, net.

        In December 2003, we completed an underwritten public offering of an additional $170 million in aggregate principal amount of our 6⁵/8% notes, which were issued at a price to investors of 96.5% of

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par, implying an effective yield to worst of 7.06%. Our net proceeds of $161.3 million, after paying the underwriters' discounts, commissions and transaction fees, were used to redeem $65.0 million in aggregate principal amount of the outstanding Subsidiary notes in the fourth quarter of 2003, repay borrowings under our revolving credit facility, repay other indebtedness and pay for acquisitions.

        In December 2003, using proceeds from our December 2003 offering of 6⁵/8% notes, we redeemed $65.0 million of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.313%, plus accrued and unpaid interest. We recorded a charge to other (income) expense, net of $7.0 million in the fourth quarter of 2003 related to the early retirement of these Subsidiary notes, which consists of redemption premiums and transaction costs, as well as original issue discount related to these Subsidiary notes.

        In January 2004, we completed an offering of 150 million British pounds sterling in aggregate principal amount of our 7¹/4% notes, which were issued at a price of 100.0% of par. Our net proceeds of 146.9 million British pounds sterling, after paying the initial purchasers' discounts, commissions and transaction fees, were used to fund our acquisition of Mentmore plc's 49.9% equity interest in IME for total consideration of 82.5 million British pounds sterling, to redeem $20.0 million in aggregate principal amount of the outstanding Subsidiary notes in the first quarter of 2004, repay borrowings under our revolving credit facility, repay other indebtedness and pay for other acquisitions.

        In February 2004, using proceeds from our January 2004 offering of 7¹/4% notes, we redeemed the remaining $20 million of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%, plus accrued and unpaid interest. We will record a charge of approximately $2 million to other (income) expense, net in the first quarter of 2004 related to the early retirement of these remaining Subsidiary notes, which consists of redemption premiums and transaction costs, as well as original issue discount related to these Subsidiary notes.

        In February 2004, we completed the acquisition of Mentmore plc's 49.9% equity interest in IME for total consideration of 82.5 million British pounds sterling ($154 million) in cash from proceeds of our 7¹/4% notes issued in January 2004. Included in this amount is the repayment of all trade and working capital funding owed to Mentmore by IME. Completion of the transaction gives us 100% ownership of IME, affording us full access to all future cash flows and greater strategic and financial flexibility. This transaction should have no impact on revenue or operating income since we already fully consolidate IME's financial results. Since we will be using the purchase method of accounting for this acquisition, 49.9% of the net assets of IME will be adjusted to reflect their fair market value if different from their current carrying value. As a result, we expect this transaction will increase depreciation and amortization expenses going forward. Additionally, we will record an increase in interest expense, net associated with the 7¹/4% notes used to fund this acquisition and will no longer record the minority interest in earnings of subsidiaries, net related to Mentmore's ownership interest in IME.

        In March 2004, IME and certain of its subsidiaries entered into a credit agreement (the "IME Credit Agreement") with a syndicate of European lenders. The IME Credit Agreement provides for maximum borrowing availability in the principal amount of 210 million British pounds sterling, including a 100 million British pounds sterling revolving credit facility, (which includes the ability to borrow in certain other foreign currencies), a 100 million British pounds sterling term loan, and a 10 million British pounds sterling overdraft protection line. The revolving credit facility matures on March 2, 2009. The term loan facility is payable in three installments; two installments of 20 million British pounds sterling on March 2, 2007 and 2008, respectively, and the final payment of the remaining balance on March 2, 2009. The interest rate on borrowings under the IME Credit Agreement is based on LIBOR and varies depending on IME's choice of interest rate period, plus an applicable margin. The IME Credit Agreement includes various financial covenants applicable to the results of IME, which may restrict IME's ability to incur indebtedness under the IME Credit

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Agreement and with third parties. Each of IME's subsidiaries will either guarantee the obligations or pledge shares to secure the IME Credit Agreement. We have not guaranteed or otherwise provided security for the IME Credit Agreement nor have any of our U.S., Canadian, Mexican and South American subsidiaries.

        In March 2004, IME borrowed approximately 147 million British pounds sterling under the IME Credit Agreement, including the full amount of the term loan. IME used those proceeds to repay us 135 million British pounds sterling related to our initial financing of the acquisition of the European operations of Hays IMS. We expect to use those proceeds to: (1) pay down approximately $104 million of real estate term loans, (2) settle all obligations associated with terminating our two cross currency swaps used to hedge the foreign currency impact of our intercompany financing with IME, and (3) to pay down amounts outstanding under our Amended and Restated Credit Agreement. After the initial balance, IME's availability under the IME Credit Agreement, based on its current level of external debt and the leverage ratio under the IME Credit Agreement, was approximately 9 million British pounds sterling.

        The real estate term loans held by our Variable Interest Entities have always been and continue to be treated as indebtedness for purposes of our financial covenants under our Amended and Restated Credit Agreement. As of the date they were consolidated into our financial statements, they were also considered indebtedness under our Indentures for our Senior Subordinated Notes and our Subsidiary notes. As of December 31, 2002 and 2003, these real estate term loans amounted to $202.6 million. No further financing is currently available to our Variable Interest Entities to fund further property acquisitions. See Notes 3, 4 and 5 to Notes to Consolidated Financial Statements and "—Critical Accounting Policies." The details of each real estate term loan is a follows:

•

A $47.5 million real estate term loan made in October 1998 bearing interest at various variable interest rates based on LIBOR (London Inter-Bank Offered Rate) plus an applicable margin. This real estate term note has a principal payment due on March 31, 2004 of $28.8 million with the remaining $18.7 million maturing on March 31, 2005. This real estate term loan is expected to be repaid in March 2004.



•

A $56.4 million real estate term loan made in July 1999 bearing interest at various variable interest rates based on LIBOR plus an applicable margin. This real estate term note matures on December 31, 2005. This real estate term loan is expected to be repaid in March 2004.



•

A $98.7 million real estate term loan made in May 2001 bearing interest at various variable interest rates based on LIBOR plus an applicable margin. This real estate term note matures on November 22, 2007.

        The following table summarizes our contractual obligations as of December 31, 2003 and the anticipated effect of these obligations on our liquidity in future years (in thousands):

	Payments Due by Period
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Long-term Debt (including Capital Lease Obligations)	$	2,087,127	$	116,998	$	228,472	$	347,209	$	1,394,448
Operating Lease Obligations		902,884		135,512		222,238		158,722		386,412
Purchase Obligations		42,528		16,011		23,888		2,629		—
Total	$	3,032,539	$	268,521	$	474,598	$	508,560	$	1,780,860

        In connection with some of our acquisitions, we have potential earn-out obligations that would be payable in the event businesses we acquired meet certain operational objectives. These payments are

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based on the future results of these operations and our estimate of the maximum contingent earn-out payments we would be required to make under all such agreements as of December 31, 2003 is approximately $5 million.

        We expect to meet our cash flow requirements for the next twelve months from cash generated from operations, existing cash, cash equivalents and marketable securities, borrowings under our revolving credit facility and other financings, which may include secured credit facilities, securitizations and mortgage or capital lease financings. See Notes 5, 10 and 13 to Notes to Consolidated Financial Statements.

Net Operating Loss Carryforwards

        At December 31, 2003, we had estimated net operating loss carryforwards of approximately $123 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. These net operating loss carryforwards do not include approximately $103 million of potential preacquisition net operating loss carryforwards of Arcus Group, Inc. and certain 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 begin to expire in two years. As a result of these loss carryforwards, we do not expect to pay any significant international, U.S. federal and state income taxes in 2004.

Seasonality

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

Inflation

        Certain of our expenses, such as wages and benefits, insurance, 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.

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

Interest Rate Risk

        In December 2000, January 2001 and May 2001, we and our Variable Interest Entities, which we now consolidate, entered into a total of four derivative financial contracts, which are variable-for-fixed interest rate swaps consisting of (a) two contracts for interest payments payable on our term loan of an aggregate principal amount of $195.5 million, (b) one contract for interest payments payable (previously certain variable operating lease commitments payable) on our real estate term loans of an aggregate principal amount of $47.5 million and (c) one contract for interest payments payable on our real estate term loans of an aggregate principal amount of $97.0 million. See Note 4 to Notes to Consolidated Financial Statements and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies" in this Form 10-K.

        After consideration of the swap contracts mentioned above, as of December 31, 2003, we had $308.1 million of variable rate debt outstanding with a weighted average variable interest rate of 4.72%, and $1,781.8 million of fixed rate debt outstanding. As of December 31, 2003, 85% of our total debt outstanding was fixed. If the weighted average variable interest rate on our variable rate debt had increased by 1%, our net income for the year ended December 31, 2003 would have been reduced by $1.7 million. See Note 5 to Notes to Consolidated Financial Statements for a discussion of our

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long-term indebtedness, including the fair values of such indebtedness as of December 31, 2003 included in this Form 10-K.

Currency Risk

        Our investments in IME, Iron Mountain Canada Corporation, Iron Mountain South America, Ltd. and other international investments may be subject to risks and uncertainties related to fluctuations in currency valuation. Our reporting currency is the U.S. dollar. However, our international revenues are generated in the currencies of the countries in which we operate, primarily the Canadian dollar and British pound sterling. The currencies of many Latin American countries have experienced substantial volatility and depreciation in the past, including the Argentine peso. In addition, one of our Canadian subsidiaries, Iron Mountain Canada Corporation, has U.S. dollar denominated debt. Declines in the value of the local currencies in which we are paid relative to the U.S. dollar will cause revenues in U.S. dollar terms to decrease and dollar-denominated liabilities to increase in local currency. We also have several intercompany obligations between our foreign subsidiaries and Iron Mountain and our U.S.-based subsidiaries. These intercompany obligations are primarily denominated in the local currency of the foreign subsidiary. Our currency exposures to intercompany borrowings are generally unhedged, except as discussed below.

        We provided the initial financing to IME for all of the consideration associated with the acquisition of the European operations of Hays IMS using cash on hand and borrowings under our revolving credit facility. In order to minimize the foreign currency risk associated with providing IME with the consideration necessary for the acquisition of Hay IMS, we borrowed 80.0 million British pounds sterling under our revolving credit facility to create a natural hedge. Additionally, on July 16, 2003 we entered into two cross currency swaps with a combined notional value of 100.0 million British pounds sterling. These swaps each have a term of one year and at maturity we have a right to receive $162.8 million in exchange for 100.0 million British pounds sterling. We have not designated these swaps as hedges and, therefore, all mark to market fluctuations of the swaps are recorded in other (income) expense, net in our consolidated statements of operations.

        The impact of devaluation or depreciating currency on an entity depends on the residual effect on the local economy and the ability of an entity to raise prices and/or reduce expenses. Due to our constantly changing currency exposure and the potential substantial volatility of currency exchange rates, we cannot predict the effect of exchange fluctuations on our business. 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 2003 functional currencies, relative to the U.S. dollar, would result in a $14.5 million reduction in our shareholders' equity.

Item 8. Financial Statements and Supplementary Data.

        The information required by this item is included in Item 15 (a) of this Annual Report on Form 10-K.

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

        On June 19, 2002, our Board of Directors, upon recommendation of the Audit Committee and approval of the Executive Committee, dismissed Arthur Andersen LLP as our independent public accountants and engaged Deloitte & Touche LLP as our independent public accountants for the fiscal year ending December 31, 2002.

        The audit reports of Arthur Andersen on our consolidated financial statements for the fiscal year ended December 31, 2001 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

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        During the fiscal year ended December 31, 2001 and the subsequent interim period through June 19, 2002, there were no disagreements with Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Arthur Andersen's satisfaction, would have caused Arthur Andersen to make reference to the subject matter of the disagreement in connection with its reports. None of the reportable events described under Item 304(a)(1)(v) of Regulation S-K occurred within the fiscal year ended December 31, 2001 or within the interim period through June 19, 2002.

        We provided Arthur Andersen with a copy of the above disclosures. A letter dated June 19, 2002 from Arthur Andersen stating its agreement with our statements was listed under Item 7 and filed as Exhibit 16.1 and incorporated by reference into our report on Form 8-K filed June 19, 2002.

        During the fiscal year ended December 31, 2001 and the subsequent interim period through June 19, 2002, we did not consult with Deloitte & Touche with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements or regarding any other matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

        The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. As of December 31, 2003 (the "Evaluation Date"), we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, such disclosure controls and procedures were effective in ensuring that required information will be disclosed on a timely basis in our reports filed under the Exchange Act.

Changes in Internal Controls

        We maintain a system of internal accounting controls that are designed to provide reasonable assurance that our transactions are properly recorded and reported and that our assets are safeguarded against unauthorized or improper use. As part of the evaluation of our disclosure controls and procedures, we evaluated our internal controls. There were no changes to our internal control over financial reporting during the quarter ended December 31, 2003 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting, including any corrective actions taken with regard to any significant deficiencies or material weaknesses.

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PART III

Item 10. Directors and Executive Officers of the Registrant.

        The information required by Item 10 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 27, 2004.

Item 11. Executive Compensation.

        The information required by Item 11 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 27, 2004.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

        The information required by Item 12 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 27, 2004.

Item 13. Certain Relationships and Related Transactions.

        The information required by Item 13 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 27, 2004.

Item 14. Principal Accounting Fees and Services.

        The information required by Item 14 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 27, 2004.

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Item 15. 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:

	Page
A. Iron Mountain Incorporated
Independent Auditors' Report	59
Report of Independent Public Accountants	61
Consolidated Balance Sheets, December 31, 2002 and 2003	62
Consolidated Statements of Operations, Years Ended December 31, 2001, 2002 and 2003	63
Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss), Years Ended December 31, 2001, 2002 and 2003	64
Consolidated Statements of Cash Flows, Years Ended December 31, 2001, 2002 and 2003	65
Notes to Consolidated Financial Statements	66
B. Iron Mountain Europe Limited
Report of the Independent Auditors	111
C. Financial Statement Schedule:
Report of Independent Public Accountants	112
Schedule II—Valuation and Qualifying Accounts	113

(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 5, 2003, the Company filed a Current Report on Form 8-K under Item 7 to file certain exhibits related to the (1) Underwriting Agreement dated December 4, 2003 between the Company, certain of the Company's subsidiaries and certain underwriters as an exhibit, (2) announcement of a proposed public offering of an additional $160 million of the Company's 6⁵/8% Senior Subordinated Notes due 2016, (3) commencement of a tender offer and consent solicitation for any and all of the $85 million aggregate principal amount of 8¹/8% Senior Notes due 2008 of Iron Mountain Canada Corporation and (4) announcement that the Company priced an underwritten public offering of an additional $170 million in aggregate principal amount of its 6⁵/8% Senior Subordinated Notes due 2016.

        On December 10, 2003, the Company filed a Current Report on Form 8-K under Items 5 and 7 to announce that the Company signed an agreement with Mentmore plc to acquire Mentmore's 49.9% equity interest in Iron Mountain Europe Limited for total consideration of 82.5 million British pounds sterling in cash.

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INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
Iron Mountain Incorporated:

        We have audited the accompanying consolidated balance sheets of Iron Mountain Incorporated (a Pennsylvania corporation) and its subsidiaries (the "Company") as of December 31, 2003 and 2002, and the related consolidated statements of operations, shareholders' equity and comprehensive income (loss), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of Iron Mountain Europe Limited (a consolidated subsidiary) as of October 31, 2003 and 2002, which statements reflect total assets constituting 18% and 8%, respectively, of consolidated total assets as of December 31, 2003 and 2002, and total revenues constituting 12% and 7%, respectively, of the consolidated total revenues for the years then ended. 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 Iron Mountain Europe Limited, is based solely on the report of such other auditors. The financial statements of Iron Mountain Incorporated and its subsidiaries for the year ended December 31, 2001 were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements and referred to the report of other auditors in their report dated February 22, 2002 (except with respect to Note 17, as to which the date is March 15, 2002).

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 the other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of Iron Mountain Incorporated and its subsidiaries as of December 31, 2003 and 2002, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

59

        As discussed above, the consolidated financial statements of Iron Mountain Incorporated and its subsidiaries for the year ended December 31, 2001 were audited by other auditors who have ceased operations. As described in Note 2g, these consolidated financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standards (Statement) No. 142, Goodwill and Other Intangible Assets, which was adopted by the Company as of January 1, 2002. Our audit procedures with respect to the disclosures in Note 2g for 2001 amounts included (a) agreeing the previously reported net income to the previously issued consolidated financial statements and the adjustments to reported net income representing amortization expense (including any related tax effects) recognized in those periods related to goodwill, intangible assets that are no longer being amortized and changes in amortization periods for intangible assets that will continue to be amortized as a result of initially applying Statement No. 142 (including any related tax effects) to the Company's underlying records obtained from management, and (b) testing the mathematical accuracy of the reconciliation of adjusted net income to reported net income, and the related earnings-per-share amounts. In our opinion, the disclosures for 2001 in Note 2g are appropriate. However, we were not engaged to audit, review, or apply any procedures to the 2001 consolidated financial statements of the Company other than with respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001 consolidated financial statements taken as a whole.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
March 8, 2004

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        This is a copy of the audit report previously issued by Arthur Andersen LLP in connection with Iron Mountain Incorporated's filing of an Annual Report on Form 10-K for the year ended December 31, 2001. This audit report has not been reissued by Arthur Andersen LLP in connection with this Annual Report on Form 10-K for the year ended December 31, 2003. See Exhibit 23.3 to the December 31, 2002 Annual Report on Form 10-K filed with the SEC for further discussion. The consolidated balance sheets as of December 31, 2000 and 2001 and the consolidated statements of operations, shareholders' equity and comprehensive loss and cash flows for the years ended December 31, 1999 and 2000 referred to in this report have not been included in the accompanying consolidated financial statements.

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.

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

61

IRON MOUNTAIN INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

			December 31,
			2002			2003
ASSETS
Current Assets:
	Cash and cash equivalents		$	56,292		$	74,683
	Accounts receivable (less allowances of $20,274 and $18,310, respectively)			225,416			279,800
	Deferred income taxes			34,192			33,043
	Prepaid expenses and other			51,140			84,057
		Total Current Assets		367,040			471,583
Property, Plant and Equipment:
	Property, plant and equipment			1,577,588			1,950,893
	Less—Accumulated depreciation			(338,400	)		(458,626	)
		Net Property, Plant and Equipment		1,239,188			1,492,267
Other Assets, net:
	Goodwill			1,544,974			1,776,279
	Customer relationships and acquisition costs			48,213			116,466
	Deferred financing costs			19,358			23,934
	Other			11,882			11,570
		Total Other Assets, net		1,624,427			1,928,249
		Total Assets	$	3,230,655		$	3,892,099
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
	Current portion of long-term debt		$	69,732		$	115,781
	Accounts payable			76,115			87,006
	Accrued expenses			168,025			234,426
	Deferred revenue			95,188			107,857
	Other current liabilities			18,902			39,675
		Total Current Liabilities		427,962			584,745
Long-term Debt, net of current portion				1,662,365			1,974,147
Other Long-term Liabilities				35,433			24,499
Deferred Rent				19,438			20,578
Deferred Income Taxes				78,464			146,231
Commitments and Contingencies (see Note 13)
Minority Interests				62,132			75,785
Shareholders' Equity:
	Preferred stock (par value $0.01; authorized 10,000,000 shares; none issued and outstanding)			—			—
	Common stock (par value $0.01; authorized 150,000,000 shares; issued and outstanding 85,049,624 shares and 85,575,254 shares, respectively)			850			856
	Additional paid-in capital			1,020,452			1,034,070
	(Accumulated deficit) Retained earnings			(45,403	)		39,234
	Accumulated other comprehensive items, net			(31,038	)		(8,046	)
		Total Shareholders' Equity		944,861			1,066,114
		Total Liabilities and Shareholders' Equity	$	3,230,655		$	3,892,099

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

62

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

			Year Ended December 31,
			2001			2002			2003
Revenues:
	Storage		$	694,474		$	759,536		$	875,035
	Service and storage material sales			491,244			558,961			626,294
		Total Revenues		1,185,718			1,318,497			1,501,329
Operating Expenses:
	Cost of sales (excluding depreciation)			576,538			622,299			680,747
	Selling, general and administrative			307,800			333,050			383,641
	Depreciation and amortization			153,271			108,992			130,918
	Merger-related expenses			3,673			796			—
	Loss on disposal/writedown of property, plant and equipment, net			320			774			1,130
		Total Operating Expenses		1,041,602			1,065,911			1,196,436
Operating Income				144,116			252,586			304,893
Interest Expense, Net				134,742			136,632			150,468
Other Expense (Income), Net				37,485			1,435			(2,564	)
	(Loss) Income from Continuing Operations Before Provision for Income Taxes and Minority Interest			(28,111	)		114,519			156,989
Provision for Income Taxes				17,875			47,318			66,730
Minority Interest in (Losses) Earnings of Subsidiaries				(1,929	)		3,629			5,622
	(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle			(44,057	)		63,572			84,637
Income from Discontinued Operations (net of tax of $768)				—			1,116			—
Cumulative Effect of Change in Accounting Principle (net of minority interest)				—			(6,396	)		—
		Net (Loss) Income	$	(44,057	)	$	58,292		$	84,637
Net (Loss) Income per Share—Basic:
	(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle		$	(0.53	)	$	0.75		$	0.99
	Income from Discontinued Operations (net of tax)			—			0.01			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)			—			(0.08	)		—
		Net (Loss) Income per Share—Basic	$	(0.53	)	$	0.69		$	0.99
Net (Loss) Income per Share—Diluted:
	(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle		$	(0.53	)	$	0.74		$	0.98
	Income from Discontinued Operations (net of tax)			—			0.01			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)			—			(0.07	)		—
		Net (Loss) Income per Share—Diluted	$	(0.53	)	$	0.68		$	0.98
Weighted Average Common Shares Outstanding—Basic				83,666			84,651			85,267
Weighted Average Common Shares Outstanding—Diluted				83,666			86,071			86,718

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

63

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share data)

	Common Stock Voting
				Additional Paid-in Capital			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Items			Total Shareholders' Equity
	Shares	Amount
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
Issuance of shares under employee stock purchase plan and option plans, including tax benefit	755,309		7		13,373			—			—			13,380
Deferred compensation	—		—		243			—			—			243
Currency translation adjustment	—		—		—			—			3,378			3,378
Unrealized loss on hedging contracts	—		—		—			—			(16,391	)		(16,391	)
Net income	—		—		—			58,292			—			58,292
Balance, December 31, 2002	85,049,624		850		1,020,452			(45,403	)		(31,038	)		944,861
Issuance of shares under employee stock purchase plan and option plans, including tax benefit	525,630		6		18,242			—			—			18,248
Deferred compensation	—		—		(4,624	)		—			—			(4,624	)
Currency translation adjustment	—		—		—			—			16,466			16,466
Unrealized loss on hedging contracts	—		—		—			—			6,215			6,215
Unrealized gain on securities, net of tax	—		—		—			—			311			311
Net income	—		—		—			84,637			—			84,637
Balance, December 31, 2003	85,575,254	$	856	$	1,034,070		$	39,234		$	(8,046	)	$	1,066,114

		2001			2002			2003
COMPREHENSIVE (LOSS) INCOME:
Net (loss) income		$	(44,057	)	$	58,292		$	84,637
Other Comprehensive (Loss) Income, Net of Tax:
	Foreign Currency Translation Adjustments		(4,388	)		3,378			16,466
	Transition Adjustment Charge		(214	)		—			—
	Unrealized (Loss) Gain on Hedging Contracts		(5,857	)		(16,391	)		6,215
	Unrealized Gain on Securities		—			—			311
Comprehensive (Loss) Income		$	(54,516	)	$	45,279		$	107,629

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

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IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

		Year Ended December 31,
		2001			2002			2003
Cash Flows from Operating Activities:
	Net (loss) income	$	(44,057	)	$	58,292		$	84,637
Adjustments to reconcile net (loss) income to (loss) income from continuing operations before discontinued operations and cumulative effect of change in accounting principle:
	Income from discontinued operations (net of tax of $768)		—			(1,116	)		—
	Cumulative effect of change in accounting principle (net of minority interest)		—			6,396			—
(Loss) Income from continuing operations			(44,057	)		63,572			84,637
Adjustments to reconcile (loss) income from continuing operations to cash flows provided by operating activities:
	Minority interests, net		(1,929	)		3,629			5,622
	Depreciation		87,130			104,176			123,974
	Amortization (includes deferred financing costs and bond discount of $4,930, $4,921 and $3,654, respectively)		71,071			9,737			10,598
	Provision for deferred income taxes		15,688			44,112			61,485
	Loss on early extinguishment of debt		19,980			5,430			28,175
	Loss on impairment of long-term assets		6,925			1,717			—
	Loss on disposal/writedown of property, plant and equipment, net		320			774			1,130
	Loss (Gain) on foreign currency and other, net		10,399			(5,773	)		(28,961	)
Changes in Assets and Liabilities (exclusive of acquisitions):
	Accounts receivable		(15,677	)		(2,547	)		(16,004	)
	Prepaid expenses and other current assets		(17,158	)		(3,792	)		6
	Accounts payable		12,554			11,802			979
	Accrued expenses, deferred revenue and other current liabilities		10,448			20,575			18,134
	Other assets and long-term liabilities		5,215			1,536			(1,082	)
	Cash Flows Provided by Operating Activities		160,909			254,948			288,693
Cash Flows from Investing Activities:
	Capital expenditures		(197,039	)		(196,997	)		(204,477	)
	Cash paid for acquisitions, net of cash acquired		(71,397	)		(49,361	)		(379,890	)
	Additions to customer relationship and acquisition costs		(8,420	)		(8,419	)		(12,577	)
	Investment in convertible preferred stock		(2,000	)		—			(1,357	)
	Proceeds from sales of property and equipment		720			7,020			11,667
	Cash Flows Used in Investing Activities		(278,136	)		(247,757	)		(586,634	)
Cash Flows from Financing Activities:
	Repayment of debt and tern loans		(118,278	)		(462,243	)		(698,817	)
	Proceeds from borrowings and term loans		105,595			438,842			744,016
	Early retirement of senior subordinated notes		(312,701	)		(54,380	)		(374,258	)
	Net proceeds from sales of senior subordinated notes		427,924			99,000			617,179
	Debt financing (repayment to) and equity contribution from (distribution to) minority shareholders, net		21,216			(1,241	)		20,225
	Other, net		11,145			7,120			6,709
	Cash Flows Provided by Financing Activities		134,901			27,098			315,054
Effect of Exchange Rates on Cash and Cash Equivalents			(2,515	)		644			1,278
Increase in Cash and Cash Equivalents			15,159			34,933			18,391
Cash and Cash Equivalents, Beginning of Year			6,200			21,359			56,292
Cash and Cash Equivalents, End of Year		$	21,359		$	56,292		$	74,683
Supplemental Information:
Cash Paid for Interest		$	133,373		$	133,873		$	126,952
Cash Paid for Income Taxes		$	4,925		$	3,147		$	8,316

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

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IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2003

(In thousands, except share and per share data)

1. Nature of Business

        The accompanying financial statements represent the consolidated accounts of Iron Mountain Incorporated, a Pennsylvania corporation, and its subsidiaries. We are 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 and FTSE 100 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 our financial position and results of operations on a consolidated basis. All significant intercompany account balances have been eliminated.

        b.     Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

        c.     Cash and Cash Equivalents

        Cash and cash equivalents include cash on hand and cash invested in short-term securities which have remaining maturities at the date of purchase of less than 90 days. Cash and cash equivalents are carried at cost, which approximates fair value. Our balance of cash and cash equivalents as of December 31, 2003 includes $1,959 of restricted cash due to contractual and other arrangements.

        d.     Foreign Currency Translation

        Local currencies are considered the functional currencies for most of our 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 our Canadian subsidiary and those related to the foreign currency

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denominated intercompany obligations of our foreign subsidiaries to us, are included in Other (Income) Expense, net, on our Consolidated Statements of Operations. The total of such net (gains) losses amounted to $10,437, $(5,043) and $(30,223) for the years ended December 31, 2001, 2002 and 2003, respectively.

        e.     Derivative Instruments and Hedging Activities

        SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" 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 January 1, 2001.

        Periodically, we acquire derivative instruments that are intended to hedge either cash flows or fair values which are subject to exchange or other market price risk, and not for trading purposes. We have formally documented our hedging relationships, including identification of the hedging instruments and the hedged items, as well as the risk management objectives and strategies for undertaking each hedge transaction.

        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	3 to 20 years
Furniture and fixtures	3 to 10 years
Computer hardware and software	3 to 5 years

        Property, plant and equipment, at cost, consist of the following:

	December 31,
	2002		2003
Land and buildings	$	623,717	$	745,838
Leasehold improvements		96,509		144,244
Racking		496,919		598,101
Warehouse equipment/vehicles		66,718		88,127
Furniture and fixtures		34,005		41,996
Computer hardware and software		204,444		260,190
Construction in progress		55,276		72,397
	$	1,577,588	$	1,950,893

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        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.

        We develop 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 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.

        We apply the provisions of Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" ("SOP 98-1") which 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. The computer software costs incurred and capitalized 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. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."

        During the year ended December 31, 2002 and 2003, we replaced certain of our internal use software programs, which resulted in the write-off to loss on disposal/writedown of property, plant and equipment, net of the remaining net book value of $1,077 and $710, respectively.

        g.     Goodwill and Other Intangible Assets

        Effective July 1, 2001 and January 1, 2002, we adopted the provisions of SFAS No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets," respectively. 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. Had SFAS No. 142 been effective January 1, 2001, goodwill amortization expense would have been reduced by $59,217 ($50,903, net of tax) for the year ended December 31, 2001.

        Through December 31, 2001, we reviewed our existing goodwill for impairment, consistent with the guidelines of SFAS No. 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 No. 121. Effective January 1, 2002, we reviewed goodwill for impairment consistent with the guidelines of SFAS No. 142 using a discounted future cash flow approach to approximate fair value. The result of testing our goodwill for impairment in accordance with SFAS No. 142, as of January 1, 2002, was a non-cash charge of $6,396 (net of minority interest of $8,487), which, consistent with SFAS No. 142, is reported in the caption "cumulative effect of change in accounting principle" in the accompanying consolidated statement of operations. Impairment adjustments recognized in the future, if any, are generally required to be recognized as

68

operating expenses. The $6,396 charge relates to our South American reporting unit within our international reporting segment. The South American reporting unit failed the impairment test primarily due to a reduction in the expected future performance of the unit resulting from a deterioration of the local economic environment and the devaluation of the currency in Argentina. As goodwill amortization expense in our South American reporting unit is not deductible for tax purposes, this impairment charge is not net of a tax benefit. We have a controlling 50.1% interest in Iron Mountain South America, Ltd ("IMSA") and the remainder is owned by an unaffiliated entity. IMSA has acquired a controlling interest in entities in which local partners have retained a minority interest in order to enhance our local market expertise. These local partners have no ownership interest in IMSA. This has caused the minority interest portion of the non-cash goodwill impairment charge ($8,487) to exceed our portion of the non-cash goodwill impairment charge ($6,396). In accordance with SFAS No. 142, we selected October 1 as our annual goodwill impairment review date. We performed our annual goodwill impairment review as of October 1, 2003 and noted no impairment of goodwill at our reporting units as of that date. As of December 31, 2003, no factors were identified that would alter this assessment.

        The changes in the carrying value of goodwill attributable to each reportable operating segment for the years ended December 31, 2002 and 2003 is as follows:

	Business Records Management			Off-Site Data Protection			International			Corporate & Other			Total Consolidated
Balance as of December 31, 2001	$	1,139,212		$	236,850		$	149,928		$	3,557		$	1,529,547
Goodwill acquired during the year		19,726			895			15,163			—			35,784
Adjustments to purchase reserves		(5,134	)		(85	)		561			—			(4,658	)
Fair value adjustments		(4,355	)		35			—			(26	)		(4,346	)
Other adjustments and currency effects		2,311			(517	)		3,896			(2,160	)		3,530
Impairment losses		—			—			(14,883	)		—			(14,883	)
Balance as of December 31, 2002		1,151,760			237,178			154,665			1,371			1,544,974
Goodwill acquired during the year		39,330			7,675			142,065			—			189,070
Adjustments to purchase reserves		(613	)		(52	)		(285	)		—			(950	)
Fair value adjustments		3,097			(150	)		(4,385	)		—			(1,438	)
Other adjustments and currency effects		24,898			(30	)		19,755			—			44,623
Balance as of December 31, 2003	$	1,218,472		$	244,621		$	311,815		$	1,371		$	1,776,279

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        Actual results of operations for the years ended December 31, 2002 and 2003 and pro forma results of operations for the year ended December 31, 2001 had we applied the non-amortization provisions of SFAS No. 142 as of January 1, 2001 are as follows:

	Year Ended December 31,
	2001			2002			2003
	(Proforma)			(Actual)
(Loss) Income from Continuing Operations before Provision for Income Taxes and Minority Interest	$	(28,111	)	$	114,519		$	156,989
Add: Goodwill Amortization		59,217			—			—
Provision for Income Taxes		26,154			47,318			66,730
Minority Interest in Earnings of Subsidiaries, Net		1,197			3,629			5,622
Adjusted Income from Continuing Operations before Discontinued Operations, Extraordinary Charges and Cumulative Effect of Change in Accounting Principle		3,755			63,572			84,637
Income from Discontinued Operations		—			1,116			—
Cumulative Effect of Change in Accounting Principle		—			(6,396	)		—
Net Income	$	3,755		$	58,292		$	84,637
Net (Loss) Income per Share—Basic:
(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle, as Reported	$	(0.53	)	$	0.75		$	0.99
Add: Goodwill Amortization, Net of Change in Provision for Income Taxes and Minority Interest		0.57			—			—
Adjusted Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle		0.04			0.75			0.99
Income from Discontinued Operations		—			0.01			—
Cumulative Effect of Change in Accounting Principle		—			(0.08	)		—
Net Income per Share—Basic	$	0.04		$	0.69		$	0.99
Net (Loss) Income per Share—Diluted:
(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle, as Reported	$	(0.53	)	$	0.74		$	0.98
Add: Goodwill Amortization, Net of Change in Provision for Income Taxes and Minority Interest		0.56			—			—
Adjusted Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle		0.04			0.74			0.98
Income from Discontinued Operations		—			0.01			—
Cumulative Effect of Change in Accounting Principle		—			(0.07	)		—
Net Income per Share—Diluted	$	0.04		$	0.68		$	0.98

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        Estimated amortization expense for existing intangible assets (excluding deferred financing costs which are amortized through interest expense) for the next five succeeding fiscal years is as follows:

	Estimated Amortization Expense
2004	$	6,935
2005		6,314
2006		5,970
2007		5,891
2008		5,755

        h.     Long-Lived Assets

        In accordance with SFAS No. 144, we review long-lived assets and all amortizable intangible assets (excluding 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 their 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 Relationships and Acquisition Costs and Other

        In connection with adopting SFAS No. 142, we reassessed the useful lives and classification of our intangible assets. 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 periods ranging from five to 30 years (weighted average of 29 years at December 31, 2003). These costs had previously been amortized over periods not to exceed 12 years. If the customer terminates its relationship with us, the unamortized cost is charged to expense. However, in the event of such termination, we collect, and record as income, permanent removal fees that generally equal or exceed the amount of the unamortized costs. Customer relationship intangible assets acquired through business combinations are amortized over periods ranging from five to 30 years (weighted average of 21 years at December 31, 2003). As of December 31, 2002 and 2003, the gross carrying amount of customer relationships and acquisition costs was $58,781 and $131,294, respectively, and accumulated amortization of those costs was $10,568 and $14,828, respectively. For years ended December 31, 2001, 2002 and 2003, amortization expense was $3,053, $1,770, and $4,395, respectively.

        Other intangible assets, including noncompetition agreements and trademarks, are capitalized and amortized over a weighted average period of five years. As of December 31, 2002 and 2003, the gross carrying amount of other intangible assets was $21,088 and $22,212, respectively, and accumulated amortization of those costs was $16,857 and $20,280, respectively. For the years ended December 31, 2001, 2002 and 2003, amortization expense was $3,872, $3,046 and $2,559, respectively.

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        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 in the period the debt is retired to other (income) expense, net. As of December 31, 2002 and 2003, gross carrying amount of deferred financing costs was $25,883 and $29,620, respectively, and accumulated amortization of those costs was $6,525 and $5,686, respectively, and was recorded in interest expense, net.

        k.     Investment in Preferred Stock

        In May 2000, we made a $6,500 investment in the convertible preferred stock of LiveVault Corporation, a technology development company. This investment is accounted for at the lower of cost or market. In September 2001, we recorded an impairment charge in other (income) expense, net of $6,900, including the original investment and certain loans related to such investment. In December 2001, in connection with a recapitalization of LiveVault, we made an additional $2,000 investment in LiveVault's convertible preferred stock. In December 2002, we recorded an impairment charge related to this investment in other (income) expense, net of $600. In March 2003, we made an additional $1,357 investment in LiveVault's convertible preferred stock. As of December 31, 2002 and 2003, $1,400 and $2,757, respectively, of carrying value related to this investment is included in other assets in the accompanying consolidated balance sheets.

        l.      Accrued Expenses

        Accrued expenses consist of the following:

	December 31
	2002		2003
Interest	$	26,647	$	48,960
Payroll and vacation		36,634		47,874
Derivative Liability		13,778		30,633
Restructuring costs (see Note 7)		9,906		16,322
Incentive compensation		23,752		15,306
Other		57,308		75,331
	$	168,025	$	234,426

        m.    Revenues

        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). 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

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operations and the sale of storage materials. 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 revenue and amortized over the applicable period.

        n.     Deferred Rent

        We have 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, we have assumed various above market leases in connection with certain of our acquisitions. The difference between the 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

        As of January 1, 2003, we adopted the measurement provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure." As a result we began using the fair value method of accounting in our financial statements beginning January 1, 2003 using the prospective method. The prospective method involves recognizing expense for the fair value for all awards granted or modified in the year of adoption and thereafter with no expense recognition for previous awards. Additionally, we recognize expense related to the discount embedded in our employee stock purchase plan. We will apply the fair value recognition provisions to all stock based awards granted, modified or settled on or after January 1, 2003 and will continue to provide the required pro forma information for all awards previously granted, modified or settled before January 1, 2003.

        Had we elected to recognize compensation cost based on the fair value of the options granted at grant date as prescribed by SFAS No. 123 and No. 148, net (loss) income and net (loss) income per share would have been changed to the pro forma amounts indicated in the table below:

		Year Ended December 31,
		2001			2002		2003
Net (loss) income, as reported		$	(44,057	)	$	58,292	$	84,637
Add: Stock-based employee compensation expense included in reported net income, net of tax benefit			—			—		984
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax benefit			2,912			2,687		3,304
Net (loss) income, pro forma		$	(46,969	)	$	55,605	$	82,317
(Losses) Earnings per share:
	Basic—as reported		(0.53	)		0.69		0.99
	Basic—pro forma		(0.56	)		0.66		0.97
	Diluted—as reported		(0.53	)		0.68		0.98
	Diluted—pro forma		(0.56	)		0.65		0.95

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        The weighted average fair value of options granted in 2001, 2002 and 2003 was $8.74, $9.70 and $10.97 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	2001		2002		2003
Expected volatility	27.0	%	27.5	%	27.0	%
Risk-free interest rate	4.65		4.08		2.91
Expected dividend yield	None		None		None
Expected life of the option	5.0 years		5.0 years		5.0 years

        p.     Merger-related Expenses

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

        q.     Income Taxes

        We account 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 future tax consequences of temporary differences between the tax and financial reporting basis of assets and liabilities and for loss and credit carryforwards. Valuation allowances are provided when recovery of deferred tax assets is not considered likely.

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

        In accordance with SFAS No. 128, "Earnings per Share," basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding. The calculation of diluted net income (loss) per share is consistent with that of basic net income (loss) per share but gives effect to all potential common shares (that is, securities such as options, warrants or convertible securities) that were outstanding during the period, unless the effect is antidilutive. Potential common shares, substantially attributable to stock options, included in the calculation of diluted net income per share totaled 1,420,655 and 1,451,467 shares for the years ended December 31, 2002 and 2003, respectively. Potential common shares of 1,912,069, 316,864 and 380,304 for the years ended December 31, 2001, 2002 and 2003, respectively, have been excluded from the calculation of diluted net income per share, as their effects are antidilutive.

        s.     Reclassifications

        Certain reclassifications have been made to the 2001 and 2002 consolidated financial statements to conform to the 2003 presentation.

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        t.      New Accounting Pronouncements

        In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, amendment of FASB Statement No. 13, and Technical Corrections," which, among other things, limits the classification of gains and losses from extinguishment of debt as extraordinary to only those transactions that are unusual and infrequent in nature as defined by 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." We adopted SFAS No. 145 on January 1, 2003. Gains and losses on certain future debt extinguishments, if any, will be recorded in pre-tax income. Losses on early extinguishment of debt of $19,980, $5,430 and $28,175 for the years ended December 31, 2001, 2002 and 2003, respectively, are included in other (income) expense, net in our accompanying consolidated statements of operations to conform to the requirements under SFAS No. 145.

        In January and December 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46") and No. 46, revised ("FIN 46R"), "Consolidation of Variable Interest Entities." These statements, which address perceived weaknesses in accounting for entities commonly known as special-purpose or off-balance-sheet, require consolidation of certain interests or arrangements by virtue of holding a controlling financial interest in such entities. Certain provisions of FIN 46R related to interests in special purpose entities were applicable for the period ended December 31, 2003. We must apply FIN 46R to our interests in all entities subject to the interpretation as of the first interim or annual period ending after March 15, 2004. Adoption of this new method of accounting for variable interest entities did not and is not expected to have a material impact on our consolidated results of operations and financial position.

        u.     Rollforward of Allowance for Doubtful Accounts

Year Ended December 31,	Balance at Beginning of the Year		Charged to Expense			Other Additions(1)		Deductions			Balance at End of the Year
2002	$	17,086	$	11,597		$	783	$	(9,192	)	$	20,274
2003	$	20,274	$	(2,292	)	$	4,873	$	(4,545	)	$	18,310

(1)

Includes allowance of businesses acquired during the year as described in Note 7, the impact associated with currency translation adjustments and the reclassification of certain allowances and credit memo reserves that were historically presented in other balance sheet accounts.

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        v.     Accumulated Other Comprehensive Items, Net

        Accumulated other comprehensive items, net consists of the following:

	December 31,
	2002			2003
Foreign currency translation adjustments	$	(8,576	)	$	7,890
Transition adjustment charge		(214	)		(214	)
Unrealized loss on hedging contracts		(22,248	)		(16,033	)
Unrealized gain on securities		—			311
	$	(31,038	)	$	(8,046	)

3. Variable Interest Entities

        Three variable interest entities were established to acquire properties and lease those properties to us. These leases were designed to qualify as operating leases for accounting purposes, where the monthly lease expense was recorded as rent expense in our consolidated statements of operations and where the related underlying assets and liabilities were not consolidated in our consolidated balance sheets. We changed the characterization and the related accounting for properties in one variable interest entity ("VIE III") during the third quarter of 2002 and prospectively for new property acquisitions in the fourth quarter of 2002. In addition, anticipating the requirement to consolidate, and in line with our objective of transparent reporting, we voluntarily guaranteed all of the at-risk equity in VIE III and our two other variable interest entities (together, the "Other Variable Interest Entities" and, collectively with VIE III, our "Variable Interest Entities") as of December 31, 2002. These guarantees resulted in our consolidating all of our Variable Interest Entities' assets and liabilities.

        Our Variable Interest Entities were financed with real estate term loans. These real estate term loans have always been and continue to be treated as indebtedness for purposes of our financial covenants under our Fifth Amended and Restated Credit Agreement dated March 15, 2002 (the "Amended and Restated Credit Agreement"). As of the date they were consolidated into our financial statements, they were also considered indebtedness under our indentures for certain of our senior subordinated notes. As of December 31, 2003, these real estate term loans amounted to $202,647. No further financing is currently available to our Variable Interest Entities to fund further property acquisitions. See Note 5.

        As of December 31, 2002, we voluntarily guaranteed all of the at-risk equity in VIE III. This resulted in our consolidating all of its remaining assets and liabilities. VIE III's remaining assets and liabilities relate to an interest rate swap agreement, which it entered into upon its inception. This swap agreement hedges the majority of interest rate risk associated with VIE III's real estate term loans. Specifically, VIE III has swapped $97,000 of floating rate debt to fixed rate debt. Since the time it entered into the swap agreement, interest rates have fallen. As a result, the estimated fair value of the derivative liability held by VIE III, and now consolidated on our balance sheet, related to the swap agreement was $13,658 and $10,960 at December 31, 2002 and 2003, respectively. This swap has been

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since inception and continues to be, as of December 31, 2003, an effective hedge in accordance with SFAS No. 133. During the years ended December 31, 2002 and 2003, we recorded depreciation expense of $1,675 and $1,779 associated with the properties, respectively, and interest expense of $6,193 and $8,169, respectively, associated with the real estate term loans. See Notes 4 and 5.

        In addition, as of December 31, 2002, we voluntarily guaranteed all of the at-risk equity in the Other Variable Interest Entities. This resulted in our consolidating all of their assets and liabilities. As of December 31, 2002, the total impact of consolidating the Other Variable Interest Entities was an increase of $103,932 both in property, plant and equipment and long-term debt. The underlying leases associated with the Other Variable Interest Entities were treated as operating leases from inception (as early as 1998) through consolidation on December 31, 2002. As a result, we recorded $6,733 and $5,915 in rent expense in our consolidated statements of operations related to these leases for the years ended December 31, 2001 and 2002, respectively. For the year ended December 31, 2003, we recorded depreciation expense of $2,001 associated with the properties, interest expense of $5,464 associated with the real estate term loans and no longer have rent expense related to leases associated with the Other Variable Interest Entities in our consolidated financial results.

4. Derivative Instruments and Hedging Activities

        We have entered into two 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 our term loan. For all qualifying and highly effective cash flow hedges, the changes in the fair value of the derivatives are recorded in other comprehensive income (loss) which is a component of accumulated other comprehensive items included in shareholders' equity in the accompanying consolidated balance sheets. Specifically, we chose to swap the interest rates on $195,500 of floating rate debt to fixed rate. Since entering into these two swap agreements, interest rates have fallen. As a result, the estimated cost to terminate these swaps (fair value of derivative liability) would be $18,713 and $13,370 at December 31, 2002 and 2003, respectively. We have recorded, in the accompanying consolidated balance sheets, the fair value of the derivative liability, a deferred tax asset and a corresponding charge to accumulated other comprehensive items of $13,370 ($8,709 recorded in accrued expenses and $4,661 recorded in other long-term liabilities), $4,878 and $8,492, respectively, as of December 31, 2003. Additionally, as a result of the foregoing, for the years ended December 31, 2001, 2002 and 2003, we recorded additional interest expense of $2,677, $7,534 and $8,709 resulting from interest rate swap settlements. These interest rate swap agreements were determined to be highly effective, and therefore no ineffectiveness was recorded in earnings.

        We have entered into a third interest rate swap agreement, which was designated as a cash flow hedge through December 31, 2002. This swap agreement hedged interest rate risk on certain amounts of our variable operating lease commitments. Specifically, we chose to swap the variable component of $47,500 of certain operating lease commitments to fixed operating lease commitments. Since entering into the swap agreement, interest rates have fallen. As a result, the estimated cost to terminate these swaps (fair value of derivative liability) would be $2,949 and $1,250 at December 31, 2002 and 2003, respectively. We have recorded, in the accompanying consolidated balance sheets, the estimated cost to terminate this swap, a deferred tax asset and a corresponding charge to accumulated other

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comprehensive items of $1,250 ($1,135 recorded in accrued expenses and $115 recorded in other long-term liabilities), $456 and $794, respectively, as of December 31, 2003. From inception through December 31, 2002, this interest rate swap agreement was determined to be highly effective, and therefore no ineffectiveness was recorded in earnings. As a result of the consolidation of one of the Other Variable Interest Entities ("VIE I") on December 31, 2002, we consolidated the real estate term loans of VIE I and the operating lease commitments that were hedged by this swap are now considered to be inter-company transactions. As a result, this interest rate swap agreement was deemed to be no longer effective on a prospective basis. The unrealized mark to market losses previously recorded in other comprehensive income attributable to this swap ($1,875, net of tax, as of December 31, 2002) will be amortized through other (income) expense, net in the accompanying consolidated statement of operations based on the changes in the fair value of the swap each period that the remaining interest payments are made on VIE I's real estate term loans. We will prospectively account for mark to market changes in the derivative liability of this swap through other (income) expense, net in the accompanying consolidated statement of operations. This accounting will have a net zero impact within our consolidated statement of operations as it relates to the amortization of unrealized mark to market losses and the fair valuing of the derivative liability. Additionally, as a result of the foregoing, for the years ended December 31, 2001 and 2002, we recorded additional rent expense of $743 and $1,807, respectively, resulting from the settlements associated with this interest rate swap agreement and for the year ended December 31, 2003 we recorded additional interest expense of $2,083 resulting from settlements associated with this interest rate swap agreement.

        Also, as of December 31, 2002, we consolidated VIE III which had entered into an interest rate swap agreement upon its inception which was designated as a cash flow hedge. This swap agreement hedges the majority of interest rate risk associated with VIE III's real estate term loans. Specifically, VIE III has swapped $97,000 of floating rate debt to fixed rate debt. Since the time it entered into the swap agreement, interest rates have fallen. As a result, the estimated cost to terminate these swaps (fair value of derivative liability) would be $13,658 and $10,960 at December 31, 2002 and 2003, respectively. We have recorded, in the accompanying consolidated balance sheets, the fair value of the derivative liability, a deferred tax asset and a corresponding charge to accumulated other comprehensive items of $10,960 ($4,806 recorded in accrued expenses and $6,154 recorded in other long-term liabilities), $3,998 and $6,962, respectively, as of December 31, 2003. Additionally, as a result of the foregoing, for the year ended December 31, 2002 and 2003, we recorded additional interest expense of $3,423 and $4,806, respectively, resulting from interest rate swap settlements. This interest rate swap agreement has been since inception and continues to be a highly effective hedge, and therefore no ineffectiveness was recorded in earnings.

        In July 2003, we provided the initial financing totaling 190,459 British pounds sterling to Iron Mountain Europe Limited ("IME"), our European joint venture, for all of the consideration associated with the acquisition of the information management services business of Hays plc ("Hays IMS") using cash on hand and borrowings under our revolving credit facility. We recorded a foreign currency gain of $27,777 in other (income) expense, net for this intercompany balance for the year ended December 31, 2003. In order to minimize the foreign currency risk associated with providing IME with the consideration necessary for the acquisition of the European operations of Hay IMS, we borrowed

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80,000 British pounds sterling under our revolving credit facility to create a natural hedge. We recorded a foreign currency loss of $11,496 on the translation of this revolving credit balance to U.S. dollars in other (income) expense, net for the year ended December 31, 2003. In addition, on July 16, 2003, we entered into two cross currency swaps with a combined notional value of 100,000 British pounds sterling. These swaps each have a term of one year and at maturity we have a right to receive $162,800 in exchange for 100,000 British pounds sterling. We have not designated these swaps as hedges and, therefore, all mark to market fluctuations of the swaps are recorded in other (income) expense, net in our consolidated statements of operations. We have recorded, in the accompanying consolidated balance sheet, the fair value of the derivative liability and the associated swap cost of $18,978 in accrued expenses as of December 31, 2003 and for the year ended December 31, 2003, we recorded $18,978 in other (income) expense, net in the accompanying consolidated statement of operations.

5. Debt

        Long-term debt consists of the following:

	December 31,
	2002			2003
Revolving Credit Facility due 2005	$	75,360		$	142,280
Term Loan due 2008		249,750			248,750
91/8% Senior Subordinated Notes due 2007 (the "91/8% notes")		22,409			—
81/8% Senior Notes due 2008 (the "Subsidiary notes")		124,666			18,768
83/4% Senior Subordinated Notes due 2009 (the "83/4% notes")		249,727			—
81/4% Senior Subordinated Notes due 2011 (the "81/4% notes")		149,625			149,670
85/8% Senior Subordinated Notes due 2013 (the "85/8% notes")		481,097			481,075
73/4% Senior Subordinated Notes due 2015 (the "73/4% notes")		100,000			441,331
65/8% Senior Subordinated Notes due 2016 (the "65/8% notes")		—			314,071
Real Estate Term Loans		202,647			202,647
Real Estate Mortgages		16,262			17,584
Seller Notes		12,864			12,607
Other		47,690			61,145
Long-term Debt		1,732,097			2,089,928
Less Current Portion		(69,732	)		(115,781	)
Long-term Debt, Net of Current Portion	$	1,662,365		$	1,974,147

        a.     Revolving Credit Facility and Term Loans

        The Amended and Restated Credit Agreement replaced our prior credit agreement. As a result, we recorded a charge to other (income) expense, net in the accompanying consolidated statement of operations of $1,222 related to the early retirement of debt in conjunction with the refinancing of our revolving credit facility in the year ended December 31, 2002. The Amended and Restated Credit Agreement has an aggregate principal amount of $650,000 and includes a $400,000 revolving credit

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facility, which includes the ability to borrow in certain foreign currencies, and a $250,000 term loan facility. The revolving credit facility matures on January 31, 2005. Quarterly term loan payments of $250 began in the fourth quarter of 2002 and will continue through maturity on February 15, 2008, at which time the remaining outstanding principal balance of the term loan facility is due. The interest rate on borrowings under the Amended and Restated Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin. All intercompany notes and the capital stock of all of our U.S. subsidiaries are pledged to secure the Amended and Restated Credit Agreement. As of December 31, 2003, we had $142,280 of borrowings outstanding under our revolving credit facility, all of which was denominated in British pound sterling in the amount of GBP 80,000. We also had various outstanding letters of credit totaling $34,447. The remaining availability under the revolving credit facility on December 31, 2003 was $223,273 based on our current level of external debt and the leverage ratio under the Amended and Restated Credit Agreement. The interest rate in effect was 5.6% as of December 31, 2003.

        In December 2000, we entered into an interest rate swap contract to hedge the risk of changes in market interest rates on our 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 London Inter-Bank Offered Rate (LIBOR). In January 2001, we 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. In conjunction with the Amended and Restated Credit Agreement on March 15, 2002, these interest rate swap contracts hedge the risk of changes in market interest rates on our term loan due 2008 rather than the previous Tranche B term loan due 2006.

        The Amended and Restated Credit Agreement contains certain restrictive financial and operating covenants including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under the Amended and Restated Credit Agreement. We were in compliance with all material debt covenants as of December 31, 2003.

        b.     Publicly Issued Notes

        As of December 31, 2003, we have four series of senior subordinated notes issued to the public, that are obligations of the parent company, Iron Mountain Incorporated (the "Parent notes"):

•

$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;



•

$480,874 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;



•

$431,255 principal amount of notes maturing on January 15, 2015 and bearing interest at a rate of 7³/4% per annum, payable semi-annually in arrears on January 15 and July 15; and

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•

$320,000 principal amount of notes maturing on January 1, 2016 and bearing interest at a rate of 6⁵/8% per annum, payable semi-annually in arrears on January 1 and July 1.

        The Parent notes, along with our revolving credit facility and term loan, are fully and unconditionally guaranteed, on a senior subordinated basis, by substantially all of our direct and indirect wholly owned U.S. subsidiaries (the "Guarantors"). These guarantees are joint and several obligations of the Guarantors. The remainder of our subsidiaries do not guarantee the Parent notes or the revolving credit facility and the term loan.

        In addition, Canada Company, our 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 Incorporated 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. In July 2003, we redeemed $50,000 of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%, plus accrued and unpaid interest. In December 2003, we redeemed $65,015 of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.313%, plus accrued and unpaid interest. We recorded a charge to other (income) expense, net of $12,530 in 2003 related to the early retirement of these Subsidiary notes, which consists of redemption premiums and transaction costs, as well as original issue discount related to these Subsidiary notes. In February 2004, we redeemed the remaining $19,985 of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%, plus accrued and unpaid interest. We will record a charge to other (income) expense, net of approximately $2,000 in the first quarter of 2004 related to the early retirement of these remaining Subsidiary notes, which consists of redemption premiums and transaction costs as well as original issue discount related to these Subsidiary notes.

        In January 2003, we redeemed the remaining $23,183 of outstanding principal amount of our 9¹/8% notes, at a redemption price (expressed as a percentage of principal amount) of 104.563%, plus accrued and unpaid interest, with proceeds from our underwritten public offering of $100,000 in aggregate principal of our 7³/4% notes. We recorded a charge to other (income) expense, net in the accompanying consolidated statement of operations of $1,804 in the first quarter of 2003 related to the early retirement of the remaining 9¹/8% notes.

        In March 2003, we completed two debt exchanges which resulted in the issuance of $31,255 in face value of our 7³/4% notes and the retirement of $30,000 of our 8³/4% notes. These non-cash debt exchanges resulted in carryover basis and, therefore, no gain (loss) on extinguishment of debt in accordance with EITF No. 96-19, "Debtor's Accounting for Modification or Exchange of Debt Instruments." These exchanges result in a lower interest rate and, therefore, lower interest expense in

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future periods as well as extend the maturity of our debt obligations. From time to time, we may enter into similar exchange transactions that we deem appropriate.

        In April 2003, we completed an underwritten public offering of an additional $300,000 in aggregate principal amount of our 7³/4% notes, which were issued at a price to investors of 104% of par, implying an effective yield to worst of 7.066%. Our net proceeds of $307,340, after paying the underwriters' discounts, commissions and transaction fees, were used to fund our offer to purchase and consent solicitation relating to our outstanding 8³/4% notes, redeem the 8³/4% notes not purchased in the offer, repay borrowings under our revolving credit facility, repay other indebtedness and pay for acquisitions.

        In April 2003, we received and accepted tenders for $143,317 of the $220,000 aggregate principal amount outstanding of our 8³/4% notes. In May 2003, we redeemed the remaining $76,683 of outstanding principal amount of our 8³/4% notes, at a redemption price (expressed as a percentage of principal amount) of 104.375%, plus accrued and unpaid interest. We recorded a charge to other (income) expense, net of $13,841 in the second quarter of 2003 related to the early retirement of the 8³/4% notes, which consists of redemption premiums and transaction costs, as well as original issue discount and unamortized deferred financing costs related to the 8³/4% notes.

        In June 2003, we completed an underwritten public offering of $150,000 in aggregate principal amount of our 6⁵/8% notes. The 6⁵/8% notes were issued at a price to investors of 100% of par. Our net proceeds of $147,500, after paying the underwriters' discounts, commissions and transaction fees, were used to redeem $50,000 in aggregate principal amount of the outstanding Subsidiary notes in the third quarter of 2003 and pay for acquisitions.

        In December 2003, we completed an underwritten public offering of an additional $170,000 in aggregate principal amount of our 6⁵/8% notes, which were issued at a price to investors of 96.5% of par, implying an effective yield to the worst of 7.06%. Our net proceeds of $161,339, after paying the underwriters' discounts, commissions and transaction fees, were used to redeem $65,015 in aggregate principal amount of our outstanding Subsidiary notes in the fourth quarter of 2003, repay borrowings under our revolving credit facility, repay other indebtedness and pay for acquisitions.

        In January 2004, we completed an offering of 150,000 British pounds sterling in aggregate principal amount of our 7¹/4% Senior Subordinated Notes due 2014 (the "7¹/4% notes"), which were issued at a price of 100% of par. Our net proceeds of 146,900 British pounds sterling, after paying the initial purchasers' discounts, commissions and transaction fees, were used to fund our acquisition of Mentmore plc's 49.9% equity interest in IME for total consideration of 82,500 British pounds sterling, to redeem $19,985 in aggregate principal amount of our outstanding Subsidiary notes in the first quarter of 2004, repay borrowings under our revolving credit facility, repay other indebtedness and pay for other acquisitions.

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

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        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 our option at a premium redemption price. After these dates, the notes may be redeemed at 100% of face value:

Redemption Date	81/4% notes July 15,		85/8% notes April 1,		71/4% notes April 15,		73/4% notes January 15,		65/8% notes July 1,
2003	—		—		—		—		—
2004	104.125	%	—		—		—		—
2005	102.750	%	—		—		—		—
2006	101.375	%	104.313	%	—		—		—
2007	—		102.875	%	—		—		—
2008	—		101.438	%	—		103.875	%	103.313	%
2009	—		—		103.625	%	102.583	%	102.208	%
2010	—		—		102.417	%	101.292	%	101.104	%
2011	—		—		101.208	%	—		—

        Prior to July 1, 2004, the 8¹/4% notes are redeemable at our option, in whole or in part, at a specified make-whole price.

        In addition, until April 1, 2004, we 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.

        Prior to January 15, 2008, the 7³/4% notes are redeemable at our option, in whole or in part, at a specified make-whole price. Prior to January 15, 2006, we may under certain conditions redeem up to 35% of the 7³/4% notes with the net proceeds of one or more public equity offerings, at a redemption price of 107.750% of the principal amount.

        Prior to July 1, 2008, the 6⁵/8% notes are redeemable at our option, in whole or in part, at a specified make-whole price. Prior to July 1, 2006, we may under certain conditions redeem 6⁵/8% notes with the net proceeds of one or more public equity offerings, at a redemption price of 106.625% of the principal amount.

        Prior to April 15, 2009, the 7¹/4% notes are redeemable at our option, in whole or in part, at a specified make-whole price. Prior to April 15, 2007, we may under certain conditions redeem 7¹/4% notes with the net proceeds of one or more public equity offerings, at a redemption price of 107.25% of the principal amount.

        Each of the indentures for the notes provides that we 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, we are not required to make sinking fund or redemption payments with respect to any of the notes.

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        Our indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under our indentures and other agreements governing our indebtedness. As of December 31, 2003, we were in compliance with all material debt covenants and agreements.

        c.     Real Estate Term Loans

        Our Variable Interest Entities were financed with real estate term loans. See Note 3. As of December 31, 2003, these real estate term loans amounted to $202,647. No further financing is currently available to our Variable Interest Entities to fund further property acquisitions. The details of each real estate term loan is a follows:

•

A $47,500 real estate term loan made in October, 1998 bearing interest at various variable interest rates based on LIBOR plus an applicable margin. This real estate term note has a principal payment due on March 31, 2004 of $28,800 with the remaining $18,700 maturing on March 31, 2005. Effective February 1, 2001, we entered into an interest rate swap to fix this floating rate debt for its full term at a fixed interest of 7.42%. This real estate term loan is expected to be repaid in March 2004.



•

A $56,432 real estate term loan made in July, 1999 bearing interest at various variable interest rates based on LIBOR plus an applicable margin. As of December 31, 2003, the weighted average interest rate on this note was 3.33%. This real estate term note matures on December 31, 2005. This real estate term loan is expected to be repaid in March 2004.



•

A $98,715 real estate term loan made in May, 2001 bearing interest at various variable interest rates based on LIBOR plus an applicable margin. This real estate term note matures on November 22, 2007. Effective May 21, 2001, we entered into an interest rate swap to fix $97,000 of this floating rate debt for its full term at a fixed interest of 8.41%.

        The real estate term loans held by our Variable Interest Entities have always been and continue to be treated as indebtedness for purposes of our financial covenants under our Amended and Restated Credit Agreement. As of the date they were consolidated into our financial statements, they were also considered indebtedness under our Indentures for our Senior Subordinated Notes and our Subsidiary notes. We were in compliance with all material debt covenants under these real estate term loans as of December 31, 2003.

        d.     Real Estate Mortgages

        In connection with the purchase of real estate and acquisitions, we assumed several mortgages on real property. The mortgages bear interest at rates ranging from 5% to 8.5% and are payable in various installments through 2025.

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        e.     Seller Notes

        In connection with the merger with Pierce Leahy in 2000, we assumed debt related to certain existing notes as a result of acquisitions which Pierce Leahy completed in 1999. The notes bear interest at a rate of 4.75% per year. The outstanding balance of $12,607 on these notes at December 31, 2003 is due on demand through 2009 and is classified as a current portion of long-term debt. The notes are supported by a letter of credit under our revolving credit facility.

        f.      Other

        Other long-term debt includes various notes and obligations assumed by us as a result of certain acquisitions. Additionally, IME has term loans and revolving credit facilities with its local banks that provide for approximately $87,791 of credit, of which $35,801 was available as of December 31, 2003. As of December 31, 2002, the amounts outstanding under IME's bank overdraft (due on demand), term loan and working capital/revolving credit facilities amounted to $11,175, $11,050 and $12,811, respectively. As of December 31, 2003, the amounts outstanding under IME's term loan and revolving credit facilities amounted to $32,503 and $19,487, respectively. Principal on the term loan and revolving credit facility are due on April 30, 2004 and interest is charged on borrowings at 1.25% over LIBOR. The average effective interest rate of IME's debt was 6.05%, 5.80% and 4.22% for the years ending 2001, 2002 and 2003, respectively. IME's various debt and credit facilities are secured by the assets of IME and each of its subsidiaries and includes various financial and non-financial covenants and restrictions based on net worth, net indebtedness and net finance charges. During 2003, IME breached its interest covenant following the acquisition of the European operations of Hays IMS. However, IME obtained from the bank a waiver of the breach.

        Maturities of long-term debt, excluding (premiums) discounts, net, are as follows:

Year	Amount
2004	$	116,998
2005		224,504
2006		3,968
2007		101,120
2008		246,089
Thereafter		1,394,448
	$	2,087,127

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        We have estimated the following fair values for our long-term debt as of December 31:

	2002				2003
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Revolving Credit Facility (1)	$	75,360	$	75,360	$	142,280	$	142,280
Term Loan (1)		249,750		249,750		248,750		248,750
91/8% notes (2)(3)		22,409		24,241		—		—
83/4% notes (2)(3)		249,727		257,825		—		—
81/4% notes (2)(3)		149,625		154,500		149,670		156,375
85/8% notes (2)(3)		481,097		502,513		481,075		521,748
73/4% notes (2)(3)		100,000		100,000		441,331		456,052
65/8% notes (2)(3)		—		—		314,071		311,200
Subsidiary notes (3)		124,666		138,038		18,768		20,684
Real Estate Term Loans (1)		202,647		202,647		202,647		202,647
Real Estate Mortgages (1)		16,262		16,262		17,584		17,584
Seller Notes (1)		12,864		12,864		12,607		12,607
Other (1)		47,690		47,690		61,145		61,145

(1)

The fair value of this long-term debt either approximates the carrying value (as borrowings under these debt instruments are based on current variable market interest rates as of December 31, 2002 and 2003) or it is impracticable to estimate the fair value due to the nature of such long-term debt.

(2)

These debt instruments are collectively referred to as the "Parent notes."

(3)

The fair values of the Parent notes and the Subsidiary notes are based on quoted market prices for these notes on December 31, 2002 and 2003.

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6. 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, 2003 and 2002 and for the years ended December 31, 2003, 2002 and 2001. The Guarantor column includes all subsidiaries that guarantee the Parent notes and the Subsidiary notes. The Canada Company column includes Canada Company and our other Canadian subsidiaries that guarantee the Subsidiary notes, but do not guarantee the Parent notes. The Parent and the Guarantors also guarantee the Subsidiary 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, 2003
			Parent		Guarantors		Canada Company			Non-Guarantors		Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	54,793	$	2,659		$	17,231	$	—		$	74,683
	Accounts Receivable			—		202,271		16,593			60,936		—			279,800
	Intercompany Receivable			870,924		—		—			13,935		(884,859	)		—
	Other Current Assets			3,591		84,733		1,398			27,788		(410	)		117,100
		Total Current Assets		874,515		341,797		20,650			119,890		(885,269	)		471,583
Property, Plant and Equipment, Net				—		973,619		108,259			410,389		—			1,492,267
Other Assets, Net:
	Long-term Notes Receivable from Affiliates and Intercompany Receivable			1,625,796		1,000		—			98,715		(1,725,511	)		—
	Investment in Subsidiaries			402,045		91,336		—			—		(493,381	)		—
	Goodwill, Net			—		1,323,340		138,720			304,478		9,741			1,776,279
	Other, Net			23,661		69,221		6,895			54,888		(2,695	)		151,970
		Total Other Assets, Net		2,051,502		1,484,897		145,615			458,081		(2,211,846	)		1,928,249
		Total Assets	$	2,926,017	$	2,800,313	$	274,524		$	988,360	$	(3,097,115	)	$	3,892,099
Liabilities and Shareholders' Equity
	Intercompany Payable		$	—	$	237,392	$	233,597		$	413,870	$	(884,859	)	$	—
	Total Current Liabilities			74,650		257,663		41,075			211,767		(410	)		584,745
	Long-term Debt, Net of Current Portion			1,777,480		2,924		3,594			190,149		—			1,974,147
	Long-term Notes Payable to Affiliates and Intercompany Payable			1,000		1,724,511		—			—		(1,725,511	)		—
	Other Long-term Liabilities			6,773		169,695		5,152			12,383		(2,695	)		191,308
	Commitments and Contingencies
	Minority Interests			—		—		—			6,105		69,680			75,785
	Shareholders' Equity (Deficit)			1,066,114		408,128		(8,894	)		154,086		(553,320	)		1,066,114
		Total Liabilities and Shareholders' Equity	$	2,926,017	$	2,800,313	$	274,524		$	988,360	$	(3,097,115	)	$	3,892,099

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			December 31, 2002
			Parent		Guarantors		Canada Company			Non-Guarantors		Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	52,025	$	1,759		$	2,508	$	—		$	56,292
	Accounts Receivable			—		183,610		13,898			27,908		—			225,416
	Intercompany Receivable			782,547		—		—			13,785		(796,332	)		—
	Other Current Assets			3,400		72,140		2,299			7,665		(172	)		85,332
		Total Current Assets		785,947		307,775		17,956			51,866		(796,504	)		367,040
Property, Plant and Equipment, Net				—		926,147		77,003			236,038		—			1,239,188
Other Assets, Net:
	Long-term Notes Receivable from Affiliates and Intercompany Receivable			1,150,627		—		—			98,715		(1,249,342	)		—
	Investment in Subsidiaries			367,355		76,011		—			—		(443,366	)		—
	Goodwill, Net			—		1,273,774		114,131			147,328		9,741			1,544,974
	Other, Net			21,191		52,292		9,327			4,785		(8,142	)		79,453
		Total Other Assets, Net		1,539,173		1,402,077		123,458			250,828		(1,691,109	)		1,624,427
		Total Assets	$	2,325,120	$	2,635,999	$	218,417		$	538,732	$	(2,487,613	)	$	3,230,655
Liabilities and Shareholders' Equity
	Intercompany Payable		$	—	$	637,941	$	92,259		$	66,132	$	(796,332	)	$	—
	Total Current Liabilities			62,025		255,016		15,249			95,844		(172	)		427,962
	Long-term Debt, Net of Current Portion			1,306,027		1,232		126,408			228,698		—			1,662,365
	Long-term Notes Payable to Affiliates and Intercompany Payable			—		1,249,342		—			—		(1,249,342	)		—
	Other Long-term Liabilities			12,207		111,415		997			16,858		(8,142	)		133,335
	Commitments and Contingencies
	Minority Interests			—		—		—			4,182		57,950			62,132
	Shareholders' Equity (Deficit)			944,861		381,053		(16,496	)		127,018		(491,575	)		944,861
		Total Liabilities and Shareholders' Equity	$	2,325,120	$	2,635,999	$	218,417		$	538,732	$	(2,487,613	)	$	3,230,655

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			Year Ended December 31, 2003
			Parent			Guarantors			Canada Company			Non-Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	712,862		$	45,841		$	116,332		$	—		$	875,035
	Service and Storage Material Sales			—			499,992			41,751			84,551			—			626,294
		Total Revenues		—			1,212,854			87,592			200,883			—			1,501,329
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			545,202			43,580			91,965			—			680,747
	Selling, General and Administrative			427			314,424			15,028			53,762			—			383,641
	Depreciation and Amortization			20			106,024			6,209			18,665			—			130,918
	Loss (Gain) on disposal/writedown of property, plant and equipment, net			—			1,771			238			(879	)		—			1,130
		Total Operating Expenses		447			967,421			65,055			163,513			—			1,196,436
	Operating (Loss) Income			(447	)		245,433			22,537			37,370			—			304,893
	Interest Expense, Net			23,809			91,881			13,481			21,297			—			150,468
	Equity in the Earnings of Subsidiaries			(159,933	)		(4,334	)		—			—			164,267			—
	Other Expense (Income), Net			51,040			(45,492	)		(8,612	)		500			—			(2,564	)
		Income from Continuing Operations Before Provision for Income Taxes and Minority Interest		84,637			203,378			17,668			15,573			(164,267	)		156,989
	Provision for Income Taxes			—			53,449			7,734			5,547			—			66,730
	Minority Interest in Earnings of Subsidiaries			—			—			—			5,622			—			5,622
		Net Income	$	84,637		$	149,929		$	9,934		$	4,404		$	(164,267	)	$	84,637

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			Year Ended December 31, 2002
			Parent			Guarantors			Canada Company			Non-Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	658,613		$	36,169		$	64,754		$	—		$	759,536
	Service and Storage Material Sales			—			473,077			38,947			46,937			—			558,961
		Total Revenues		—			1,131,690			75,116			111,691			—			1,318,497
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			527,215			37,464			57,620			—			622,299
	Selling, General and Administrative			57			295,435			13,756			23,802			—			333,050
	Depreciation and Amortization			—			95,622			5,714			7,656			—			108,992
	Merger-related Expenses			—			796			—			—			—			796
	Loss (Gain) on disposal/writedown of property, plant and equipment, net			—			2,706			(8	)		(1,924	)		—			774
		Total Operating Expenses		57			921,774			56,926			87,154			—			1,065,911
	Operating (Loss) Income			(57	)		209,916			18,190			24,537			—			252,586
	Interest Expense, Net			7,077			101,660			14,708			13,187			—			136,632
	Equity in the (Earnings) Losses of Subsidiaries			(72,104	)		3,320			—			—			68,784			—
	Other Expense (Income), Net			6,678			(4,189	)		(1,490	)		436			—			1,435
		Income from Continuing Operations Before Provision for Income Taxes and Minority Interest		58,292			109,125			4,972			10,914			(68,784	)		114,519
	Provision for Income Taxes			—			41,132			2,064			4,122			—			47,318
	Minority Interest in Earnings of Subsidiaries			—			—			—			3,629			—			3,629
		Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle		58,292			67,993			2,908			3,163			(68,784	)		63,572
	Income from Discontinued Operations (Net of Tax of $768)			—			1,116			—			—			—			1,116
	Cumulative Effect of Change in Accounting Principle (net of Minority Interest)			—			—			—			(6,396	)		—			(6,396	)
		Net Income (Loss)	$	58,292		$	69,109		$	2,908		$	(3,233	)	$	(68,784	)	$	58,292

90

			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			—			421,735		34,549			34,960			—			491,244
		Total Revenues		—			1,026,281		68,024			91,413			—			1,185,718
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			493,048		35,093			48,397			—			576,538
	Selling, General and Administrative			83			270,201		12,733			24,783			—			307,800
	Depreciation and Amortization			—			131,003		10,144			12,124			—			153,271
	Merger-Related Expenses			—			3,644		—			29			—			3,673
	Loss (Gain) on disposal/writedown of property, plant and equipment, net			—			339		(8	)		(11	)		—			320
		Total Operating Expenses		83			898,235		57,962			85,322			—			1,041,602
Operating (Loss) Income				(83	)		128,046		10,062			6,091			—			144,116
Interest Expense, Net				17,755			92,823		16,244			7,920			—			134,742
Equity in the Losses of Subsidiaries				(672	)		2,117		—			—			(1,445	)		—
Other Expense, Net				26,891			2,887		7,338			369			—			37,485
	(Loss) Income from Continuing Operations Before Provision for Income Taxes and Minority Interest			(44,057	)		30,219		(13,520	)		(2,198	)		1,445			(28,111	)
Provision (Benefit) for Income Taxes				—			16,077		(111	)		1,909			—			17,875
Minority Interest in Losses of Subsidiaries				—			—		—			(1,929	)		—			(1,929	)
		Net Loss	$	(44,057	)	$	14,142	$	(13,409	)	$	(2,178	)	$	1,445		$	(44,057	)

91

			Year Ended December 31, 2003
			Parent			Guarantors			Canada Company			Non-Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
	Cash Flows (Used in) Provided by Operating Activities		$	(3,823	)	$	252,175		$	23,486		$	16,855		$	—		$	288,693
Cash Flows from Investing Activities:
	Capital expenditures			—			(142,744	)		(17,829	)		(43,904	)		—			(204,477	)
	Cash paid for acquisitions, net of cash acquired			—			(66,707	)		—			(313,183	)		—			(379,890	)
	Intercompany loans to subsidiaries			(407,292	)		(324,980	)		—			—			732,272			—
	Investment in subsidiaries			(1,705	)		(1,705	)		—			—			3,410			—
	Additions to customer relationship and acquisition costs			—			(9,549	)		(797	)		(2,231	)		—			(12,577	)
	Investment in convertible preferred stock			—			(1,357	)		—			—			—			(1,357	)
	Proceeds from sales of property and equipment			—			9,423			47			2,197			—			11,667
		Cash Flows Used in Investing Activities		(408,997	)		(537,619	)		(18,579	)		(357,121	)		735,682			(586,634	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans			(600,445	)		(683	)		(53,955	)		(43,734	)		—			(698,817	)
	Proceeds from borrowings and term loans			643,784			—			49,569			50,663			—			744,016
	Early retirement of senior subordinated notes			(254,407	)		—			(119,851	)		—			—			(374,258	)
	Net proceeds from sales of senior subordinated notes			617,179			—			—			—			—			617,179
	Debt financing and equity contribution from minority shareholders, net			—			—			—			20,225			—			20,225
	Intercompany loans from parent			—			287,190			119,829			325,253			(732,272	)		—
	Equity contribution from parent			—			1,705			—			1,705			(3,410	)		—
	Other, net			6,709			—			—			—			—			6,709
		Cash Flows Provided by (Used in) Financing Activities		412,820			288,212			(4,408	)		354,112			(735,682	)		315,054
Effect of exchange rates on cash and cash equivalents				—			—			401			877			—			1,278
Increase in cash and cash equivalents				—			2,768			900			14,723			—			18,391
Cash and cash equivalents, beginning of year				—			52,025			1,759			2,508			—			56,292
Cash and cash equivalents, end of year			$	—		$	54,793		$	2,659		$	17,231		$	—		$	74,683

92

			Year Ended December 31, 2002
			Parent			Guarantors			Canada Company			Non-Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
	Cash Flows Provided by Operating Activities		$	2,259		$	223,446		$	11,174		$	18,069		$	—		$	254,948
Cash Flows from Investing Activities:
	Capital expenditures			—			(152,501	)		(8,125	)		(36,371	)		—			(196,997	)
	Cash paid for acquisitions, net of cash acquired			—			(28,041	)		(21	)		(21,299	)		—			(49,361	)
	Intercompany loans to subsidiaries			(19,365	)		(17,928	)		—			—			37,293			—
	Investment in subsidiaries			(1,940	)		(1,940	)		—			—			3,880			—
	Additions to customer relationship and acquisition costs			—			(7,137	)		(613	)		(669	)		—			(8,419	)
	Proceeds from sales of property and equipment			—			1,460			8			5,552			—			7,020
		Cash Flows Used in Investing Activities		(21,305	)		(206,087	)		(8,751	)		(52,787	)		41,173			(247,757	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans			(458,929	)		(606	)		(535	)		(2,173	)		—			(462,243	)
	Proceeds from borrowings and term loans			426,235			—			—			12,607			—			438,842
	Early retirement of senior subordinated notes			(54,380	)		—			—			—			—			(54,380	)
	Net proceeds from sales of senior subordinated notes			99,000			—			—			—			—			99,000
	Debt repayment and equity distribution to minority shareholders, net			—			—			—			(1,241	)		—			(1,241	)
	Intercompany loans from parent			—			21,937			(2,469	)		17,825			(37,293	)		—
	Equity contribution from parent			—			1,940			—			1,940			(3,880	)		—
	Other, net			7,120			—			—			—			—			7,120
		Cash Flows Provided by (Used in) Financing Activities		19,046			23,271			(3,004	)		28,958			(41,173	)		27,098
Effect of exchange rates on cash and cash equivalents				—			—			644			—			—			644
Increase (Decrease) in cash and cash equivalents				—			40,630			63			(5,760	)		—			34,933
Cash and cash equivalents, beginning of year				—			11,395			1,696			8,268			—			21,359
Cash and cash equivalents, end of year			$	—		$	52,025		$	1,759		$	2,508		$	—		$	56,292

93

			Year Ended December 31, 2001
			Parent			Guarantors			Canada Company			Non-Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities:
	Cash Flows Provided by Operating Activities		$	2,557		$	141,177		$	8,867		$	8,308		$	—		$	160,909
Cash Flows from Investing Activities:
	Capital expenditures			—			(164,335	)		(10,330	)		(22,374	)		—			(197,039	)
	Cash paid for acquisitions, net of cash acquired			—			(50,467	)		(177	)		(20,753	)		—			(71,397	)
	Intercompany loans to subsidiaries			(114,792	)		(15,836	)		—			—			130,628			—
	Investment in subsidiaries			(6,866	)		(6,866	)		—			—			13,732			—
	Additions to customer relationship and acquisition costs			—			(7,292	)		(319	)		(809	)		—			(8,420	)
	Investment in convertible preferred stock			—			(2,000	)		—			—			—			(2,000	)
	Proceeds from sales of property and equipment			—			87			21			612			—			720
		Cash Flows Used in Investing Activities		(121,658	)		(246,709	)		(10,805	)		(43,324	)		144,360			(278,136	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans			(110,869	)		(1,066	)		(2,590	)		(3,753	)		—			(118,278	)
	Proceeds from borrowings			103,411			73			—			2,111			—			105,595
	Early retirement of senior subordinated notes			(312,701	)		—			—			—			—			(312,701	)
	Net Proceeds from sales of senior subordinated notes			427,924			—			—			—			—			427,924
	Debt financing and equity contribution from minority shareholders, net			—			—			—			21,216			—			21,216
	Intercompany loans from parent			—			107,718			7,016			15,894			(130,628	)		—
	Equity contribution from parent			—			6,866			—			6,866			(13,732	)		—
	Other, net			11,145			—			—			—			—			11,145
	Cash Flows Provided by Financing Activities			118,910			113,591			4,426			42,334			(144,360	)		134,901
Effect of exchange rates on cash and cash equivalents				—			—			(1,094	)		(1,421	)		—			(2,515	)
(Decrease) Increase in cash and cash equivalents				(191	)		8,059			1,394			5,897			—			15,159
Cash and cash equivalents, beginning of year				191			3,336			302			2,371			—			6,200
Cash and cash equivalents, end of year			$	—		$	11,395		$	1,696		$	8,268		$	—		$	21,359

94

7. Acquisitions

        In July 2003, we and IME completed the acquisition of Hays IMS in two simultaneous transactions. IME acquired the European operations of Hays IMS for aggregate cash consideration (including transaction costs) of approximately 190,000 British pounds sterling ($309,000), while we acquired the U.S. operations of Hays IMS for aggregate cash consideration (including transaction costs) of approximately 14,500 British pounds sterling ($24,000). Both transactions were on a cash and debt free basis.

        We purchased substantially all of the assets and assumed certain liabilities of 16, 10 and 8 records management businesses during 2001, 2002 and 2003, 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 our consolidated results from their respective acquisition dates. Consideration for the various acquisitions included: (1) cash, which was provided through our credit facilities and (2) the issuance of certain of our senior subordinated notes.

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

		2001			2002			2003
Cash Paid (gross of cash acquired)		$	72,222	(1)	$	41,356	(2)	$	387,803	(3)
Fair Value of Debt Assumed/Issued			10,352			—			—
	Total Consideration		82,574			41,356			387,803
Fair Value of Identifiable Assets Acquired			19,504			10,440			244,950
Liabilities Assumed			(10,019	)		(4,868	)		(46,217	)
	Fair Value of Identifiable Net Assets Acquired		9,485			5,572			198,733
Recorded Goodwill		$	73,089		$	35,784		$	189,070

(1)

Included in cash paid for acquisitions in the consolidated statement of cash flows for the year ended December 31, 2001 is a $5,524 contingent payment that was paid during 2001 related to acquisitions made before 2001.

(2)

Included in cash paid for acquisitions in the consolidated statement of cash flows for the year ended December 31, 2002 is a $7,165 contingent payment that was paid during 2002 related to an acquisition made in 2000.

(3)

Included in cash paid for acquisitions in the consolidated statement of cash flows for the year ended December 31, 2003 is a $1,077 contingent payment that was paid in 2003 related to an acquisition made in 2001.

        Allocation of the purchase price for the 2003 acquisitions was based on estimates of the fair value of net assets acquired, and is subject to adjustment. The purchase price allocations of certain 2003 transactions are subject to finalization of the assessment of the fair value of property, plant and equipment, intangible assets, operating leases and deferred income taxes. We are not aware of any information that would indicate that the final purchase price allocations will differ meaningfully from preliminary estimates.

95

        In connection with each of our acquisitions, we have 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. The estimated cost of these restructuring activities were recorded as costs of the acquisitions and were provided in accordance with EITF No. 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." We finalize restructuring plans for each business no later than one year from the date of acquisition. Unresolved matters at December 31, 2003 primarily include completion of planned abandonments of facilities and severances for certain acquisitions.

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

	2002			2003
Reserves, beginning of the year	$	16,225		$	9,906
Reserves established		4,963			12,526
Expenditures		(6,745	)		(5,436	)
Adjustments to goodwill, including currency effect(1)		(4,537	)		(674	)
Reserves, end of the year	$	9,906		$	16,322

(1)

Includes adjustments to goodwill as a result of management finalizing its restructuring plans.

        At December 31, 2002, the restructuring reserves related to acquisitions consisted of lease losses on abandoned facilities ($5,146), severance costs for approximately two people ($578) and move and other exit costs ($4,182).

        At December 31, 2003, the restructuring reserves related to acquisitions consisted of lease losses on abandoned facilities ($6,849), severance costs for approximately 158 people ($3,593) and move and other exit costs ($5,880). These accruals are expected to be used prior to December 31, 2004 except for lease losses of $4,927 and severance contracts of $314, both of which are based on contracts that extend beyond one year.

        In connection with some of our acquisitions, we have potential earn-out obligations that would be payable in the event businesses we acquired meet certain operational objectives. These payments are based on the future results of these operations and our estimate of the maximum contingent earn-out payments we would be required to make under all such agreements as of December 31, 2003 is approximately $4,800.

96

8. Capital Stock and Stock Options

        a.     Capital Stock

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

			Number of Shares
			Authorized		Issued and Outstanding
Equity Type
	Par Value		2002	2003	2002	2003
Preferred stock	$	.01	10,000,000	10,000,000	—	—
Common stock		.01	150,000,000	150,000,000	85,049,624	85,575,254

        b.     Stock Options

        A total of 8,703,771 shares of common stock have been reserved for grants of options and other rights under our various stock incentive plans.

        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, 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
Granted	432,560			29.96
Exercised	(594,049	)		9.26
Canceled	(226,087	)		17.01
Options outstanding, December 31, 2002	3,896,816			18.08
Granted	458,567			37.20
Exercised	(440,868	)		13.27
Canceled	(52,346	)		26.40
Options outstanding, December 31, 2003	3,862,169			20.59

        Except for the options granted in connection with acquisitions, these options were granted with exercise prices equal to the market price of the stock at the date of grant. The majority of these options become exercisable ratably over a period of five years unless the holder terminates employment and generally have a contractual life of 10 years. The number of shares available for grant at December 31, 2003 was 969,331.

97

        The following table summarizes additional information regarding options outstanding and exercisable at December 31, 2003:

		Outstanding
		Weighted Average Remaining Contractual Life (in Years)			Exercisable
Range of Exercise Prices	Number		Weighted Average Exercise Price		Number	Weighted Average Exercise Price
$0.50 to $0.58	5,239	3.2	$	0.57	5,239	$	0.57
$2.88 to $3.84	245,968	2.2		3.04	245,968		3.04
$4.42 to $6.07	84,312	4.6		5.53	84,312		5.53
$6.83 to $7.29	456,098	2.5		6.93	456,098		6.93
$11.44 to $16.22	554,808	3.9		14.40	535,998		14.36
$18.11 to $26.30	1,541,204	6.4		22.51	929,659		22.17
$27.41 to $38.40	974,540	8.6		33.31	159,793		29.21
	3,862,169	5.8		20.59	2,417,067		15.45

9. Discontinued Operations

        In June 1999, in order to focus on our records and information management services business, we decided to sell our information technology staffing business, Arcus Staffing Resources, Inc., which was acquired in January 1998 as part of the acquisition of Arcus Group, Inc. Effective November 1, 1999, we 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 our continuing operations and reported as a separate line item on our consolidated statement of operations.

        In 1999, we 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. In 2002, we recorded income from discontinued operations of $1,116 (net of tax of $768) related to the reversal of remaining liabilities associated with certain contingencies which have been resolved.

98

10. Income Taxes

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

	2001			2002		2003
U.S. and Canada	$	(25,156	)	$	103,561	$	140,638
Foreign		(2,955	)		10,958		16,351
	$	(28,111	)	$	114,519	$	156,989

        We have estimated federal net operating loss carryforwards which begin to expire in 2018 through 2021 of $123,200 at December 31, 2003 to reduce future federal taxable income, if any. These net operating loss carryforwards do not include approximately $103,000 of potential preacquisition net operating loss carryforwards of Arcus Group, Inc. and certain 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 begin to expire in two years. We also have estimated state net operating loss carryforwards of $73,776. The state net operating loss carryforwards are subject to a valuation allowance of approximately 54%. Additionally, we have alternative minimum tax credit carryforwards of $1,187, 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,
		2002			2003
Deferred Tax Assets:
	Accrued liabilities	$	11,809		$	12,854
	Deferred rent		7,941			8,399
	Net operating loss carryforwards		63,445			46,611
	AMT credit		587			1,187
	Valuation Allowance		(5,804	)		(4,829	)
	Unrealized loss on hedging contracts		12,858			9,332
	Other		31,567			16,589
			122,403			90,143
Deferred Tax Liabilities:
	Other assets, principally due to differences in amortization		(47,274	)		(68,956	)
	Plant and equipment, principally due to differences in depreciation		(103,606	)		(115,061	)
	Customer acquisition costs		(15,795	)		(19,314	)
			(166,675	)		(203,331	)
	Net deferred tax liability	$	(44,272	)	$	(113,188	)

99

        We receive 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 2002 and 2003, we recognized $4,476 and $3,950 of tax benefit related to the exercise of non-qualified stock options, which was credited to equity.

        We file a consolidated federal income tax return with our U.S. subsidiaries. The provision for income taxes consists of the following components:

	Year Ended December 31,
	2001			2002		2003
Federal—deferred	$	8,332		$	33,629	$	43,856
State—current		(726	)		1,447		2,758
State—deferred		8,359			8,121		14,871
Foreign—current and deferred		1,910			4,121		5,245
	$	17,875		$	47,318	$	66,730

        A reconciliation of total income tax expense and the amount computed by applying the federal income tax rate of 35% to income (loss) from continuing operations before provision for income taxes and minority interests for the years ended December 31, 2001, 2002 and 2003, respectively, is as follows:

		Year Ended December 31,
		2001			2002			2003
Computed "expected" tax (benefit) provision		$	(9,838	)	$	40,082		$	54,946
Changes in income taxes resulting from:
	State taxes (net of federal tax benefit)		2,432			6,220			10,650
	Impact of retroactive state law change (net of federal tax benefit)		—			—			809
	Nondeductible expenses		18,066			—			—
	Increase in valuation allowance		4,832			210			—
	Foreign tax rate and tax law differential		598			(209	)		(540	)
	Other, net		1,785			1,015			865
		$	17,875		$	47,318		$	66,730

100

11. Quarterly Results of Operations (Unaudited)

Quarter Ended	March 31		June 30		Sept. 30		Dec. 31
2002
Total revenues	$	317,198	$	327,720	$	333,113	$	340,466
Gross profit		164,752		172,313		179,255		179,878
Income from continuing operations before discontinued operations and cumulative effect of change in accounting principle		12,518		19,989		15,697		15,368
Net income		6,122		19,989		15,697		16,484
Income from continuing operations per share before discontinued operations and cumulative effect of change in accounting principle—basic		0.15		0.24		0.19		0.18
Income from continuing operations per share before discontinued operations and cumulative effect of change in accounting principle—diluted		0.15		0.23		0.18		0.18
Net income per share—basic		0.07		0.24		0.19		0.19
Net income per share—diluted		0.07		0.23		0.18		0.19
2003
Total revenues	$	351,811	$	359,270	$	381,758	$	408,490
Gross profit		191,660		197,238		210,403		221,281
Net income		21,284		20,133		14,794		28,426
Net income per share—basic		0.25		0.24		0.17		0.33
Net income per share—diluted		0.25		0.23		0.17		0.33

12. Segment Information

        We operate in seven operating segments, based on their economic environment, geographic area, the nature of their services and the nature of their processes:

•

Business Records Management—throughout the United States and Canada, 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, courier operations, and the collection, handling and disposal of sensitive documents for corporate customers



•

Off-Site Data Protection—the storage and rotation of backup computer media as part of corporate disaster and business recovery plans, including service and courier operations



•

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

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•

Europe—records and information management services and off-site data protection services throughout Europe



•

South America—records and information management services throughout South America



•

Mexico—records and information management services throughout Mexico

        The South America and Mexico operating segments do not individually meet the quantitative thresholds for a reporting segment, but have been aggregated and reported with Europe as one reporting segment, "International," given their similar economic characteristics, products, customers and processes. The 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. Corporate items include non-operating overhead, corporate general and administrative expenses, non-allocated operating expenses and inter-segment eliminations. Corporate assets are principally cash and cash equivalents, prepaid items, certain non-operating fixed assets, deferred income taxes, certain non-trade receivables, certain inter-segment receivables, and deferred financing costs.

        An analysis of our 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
2001
Total Revenues	$	861,302	$	209,429	$	89,475	$	25,512		$	1,185,718
Contribution		227,164		50,254		16,250		7,712			301,380
Total Assets		2,277,836		348,181		265,968		(32,079	)		2,859,906
2002
Total Revenues		944,845		239,081		109,381		25,190			1,318,497
Contribution		262,541		61,729		21,988		16,890			363,148
Total Assets		2,358,459		359,339		317,073		195,784			3,230,655
2003
Total Revenues		1,022,335		251,141		198,068		29,785			1,501,329
Contribution		286,208		71,240		46,825		32,668			436,941
Total Assets		2,536,415		375,845		765,814		214,025			3,892,099

(1)

Total assets include the inter-segment elimination amounts of $1,564,730, $1,277,393 and $1,813,276 as of December 31, 2001, 2002 and 2003, respectively.

        The accounting policies of the reportable segments are the same as those described in Note 2 except that certain costs are allocated from Corporate to the other segments in 2001, 2002 and 2003, primarily to our Business Records Management and Off-Site Data Protection segments. These allocations, which include rent, worker's compensation, property, general liability, auto and other insurance, pension/medical costs, sick and vacation costs, incentive compensation, real estate property taxes and provision for bad debts, are based on rates set at the beginning of each year. Contribution for each segment is defined as total revenues less cost of sales (excluding depreciation) and selling,

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general and administrative expenses including the costs allocated to each segment as described above. Internally, we use Contribution as the basis for evaluating the performance of and allocating resources to our operating segments.

        A reconciliation of Contribution to net (loss) income on a consolidated basis is as follows:

			Years Ended December 31,
			2001			2002			2003
Contribution			$	301,380		$	363,148		$	436,941
	Less: Depreciation and Amortization			153,271			108,992			130,918
		Merger-related Expenses		3,673			796			—
		Loss on Disposal/Writedown of Property, Plant and Equipment, Net		320			774			1,130
		Interest Expense, Net		134,742			136,632			150,468
		Other Expense (Income), Net		37,485			1,435			(2,564	)
		Provision for Income Taxes		17,875			47,318			66,730
		Minority Interest in (Losses) Earnings of Subsidiaries		(1,929	)		3,629			5,622
		Income from Discontinued Operations, Net of Tax		—			(1,116	)		—
		Cumulative Effect of Change in Accounting Principle, Net of Minority Interest		—			6,396			—
Net (Loss) Income			$	(44,057	)	$	58,292		$	84,637

        Our consulting business, previously analyzed as part of Business Records Management, is now analyzed within the Corporate & Other category. Our secure shredding business, previously analyzed as part of Corporate & Other, is now analyzed within the Business Records Management segment. Our film and sound business, previously analyzed as part of Business Records Management, is now analyzed within the Off-Site Data Protection segment. Our electronic vaulting business, previously analyzed as part of Corporate & Other, is now analyzed within the Off-Site Data Protection segment. Our Canadian business, previously analyzed as part of our International segment, is now analyzed within the Business Records Management segment. 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 all of these changes.

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        Information as to our operations in different geographical areas is as follows:

		2001		2002		2003
Revenues:
United States		$	1,028,219	$	1,134,000	$	1,215,669
United Kingdom			59,226		79,228		145,735
Canada			68,024		75,116		87,592
Other International			30,249		30,153		52,333
	Total Revenues	$	1,185,718	$	1,318,497	$	1,501,329
Long-lived Assets:
United States		$	2,118,828	$	2,395,018	$	2,514,031
United Kingdom			165,443		216,040		551,924
Canada			200,425		200,461		253,874
Other International			65,893		52,096		100,687
	Total Long-lived Assets	$	2,550,589	$	2,863,615	$	3,420,516

13. Commitments and Contingencies

        a.     Leases

        We lease most of our 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. We also lease 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 $126,871, $125,866 and $134,371 for the years ended December 31, 2001, 2002 and 2003, respectively. There was $6,733, $5,915 and $0 related to synthetic lease facilities included in rent expense for the years ended December 31, 2001, 2002 and 2003, respectively. See Note 3.

        Minimum future lease payments, net of sublease income of $2,238, $1,650, $767, $414, $267 and $560 for 2004, 2005, 2006, 2007, 2008 and thereafter, respectively, are as follows:

Year	Operating
2004	$	135,512
2005		119,441
2006		102,797
2007		88,365
2008		70,357
Thereafter		386,412
Total minimum lease payments	$	902,884

        We have guaranteed the residual value of certain vehicle operating leases to which we are a party. The maximum net residual value guarantee obligation for these vehicles as of December 31, 2003 was

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$679. We believe that it is not reasonably likely that we will be required to perform under these guarantee agreements or that any performance requirement would have a material impact on our consolidated financial statements.

        b.     South Brunswick Fires Litigation

        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 another records and information services 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 one pending lawsuit filed by the insurers of an abutter of one of the South Brunswick facilities. Five of these six lawsuits have been consolidated for pre-trial purposes in the Middlesex County, New Jersey, Superior Court. The sixth lawsuit, brought by a single customer, is pending in the Supreme Court for New York County, New York. A seventh lawsuit, also brought by a single customer, was tried before a federal judge in New Jersey in February 2000, with a defendant's verdict entered in favor of Iron Mountain. An eighth lawsuit filed by an injured firefighter is currently being settled by our insurer for a nominal amount. Several other claims that were originally filed in relation to these lawsuits have been voluntarily dismissed without prejudice by the customers, abutting business owners, and/or their insurance carriers.

        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 intend to vigorously defend ourselves against these and any other lawsuits that may arise.

        Our professional liability insurer, together with our general liability and property insurance carriers, have entered into a binding agreement with us regarding reimbursement of defense costs and have agreed to ongoing discussions regarding any remaining coverage issues, further defense and/or settlement of these claims.

        c.     Sequedex, H-W Associates, Pioneer and Pierce Proceedings

        On March 28, 2002, Iron Mountain and Iron Mountain Information Management, Inc. ("IMIM"), one of our wholly owned subsidiaries, commenced an action in the Middlesex County, New Jersey, Superior Court, Chancery Division, captioned Iron Mountain Incorporated and Iron Mountain Information Management, Inc. v. J. Peter Pierce, Sr., Douglas B. Huntley, J. Michael Gold, Fred A. Mathewson, Jr., Michael DiIanni, J. Anthony Hayden, Pioneer Capital, LLC, and Sequedex, LLC. In the complaint, we alleged that defendant J. Peter Pierce, Sr., a former member of our Board of

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Directors and the former President of IMIM until his termination without cause effective June 30, 2000, violated his fiduciary obligations, as well as various noncompetition and other provisions of an employment agreement with Iron Mountain, dated February 1, 2000, by providing direct and/or indirect financial, management and other support to defendant Sequedex. Sequedex was established in October 2000, and competed directly with us in the records management information services industry. The complaint also alleged that Mr. Pierce and certain of the other defendants, who were employed by or affiliated with Pierce Leahy Corp. prior to the merger of Pierce Leahy with Iron Mountain in February 2000, misappropriated and used our trade secrets and other confidential information. Finally, the complaint asserted claims against Sequedex and others for tortious interference with contractual relations, against all of the defendants for civil conspiracy in respect of the matters described above, and against defendant Michael DiIanni for breach of his employment agreement with IMIM, dated September 6, 2000. The litigation seeks injunctions in respect of certain matters and recovery of damages against the defendants.

        On April 12, 2002, Iron Mountain also initiated a related arbitration proceeding against Mr. Pierce before the Philadelphia, Pennsylvania, Office of the American Arbitration Association (the "AAA") pursuant to an arbitration clause in the employment agreement between Iron Mountain and Mr. Pierce. In the arbitration, Mr. Pierce counterclaimed for indemnification of his expenses, including attorneys' fees. We disputed Mr. Pierce's claim. On July 19, 2002, the litigation was stayed pending the outcome of the arbitration proceeding. On February 25, 2003, in response to Iron Mountain's request, the AAA removed the arbitrator. The arbitration proceeding was transferred by agreement of the parties to ADR Options, Inc. On February 4, 2004, the arbitrator rendered a decision. The arbitrator did not find the evidence provided by us in our action against Mr. Pierce sufficient to rule in our favor on the particular claims at issue. In addition, the arbitrator ruled that, pursuant to an indemnification provision in Mr. Pierce's employment agreement, we must pay Mr. Pierce's attorneys fees and costs that are attributable to this single arbitration. The arbitrator has established a procedure to ascertain the amount of these fees and expenses, which, in any case are not expected to be material to our financial position or results of operations. We have recently filed a motion to vacate the arbitrator's decision and award in Middlesex County, New Jersey, where the pending action against Mr. Pierce and others is currently stayed.

        On December 16, 2002, Hartford Windsor Associates, L.P. ("H-W Associates"), Hartford General, LLC, J. Anthony Hayden, Mr. Pierce, Frank Seidman and John H. Greenwald, Jr. commenced an action in the Court of Common Pleas, Montgomery County, Pennsylvania, against Iron Mountain Incorporated. In the complaint, the plaintiffs allege that H-W Associates purchased a warehouse property in Connecticut to serve as a records storage facility, and entered into a lease for the facility with Sequedex, then a competitor of ours, and that the remaining plaintiffs were limited or general partners of H-W Associates. The plaintiffs also allege that we tortiously interfered with Sequedex's contractual relations with an actual or prospective customer of Sequedex and, as a result, caused Sequedex to default on its lease to H-W Associates. The complaint seeks damages in excess of $100,000. We have denied the material allegations in the complaint filed against us by H-W Associates and the other plaintiffs and have since filed counterclaims against the plaintiffs alleging tortious interference with our business relationship with one of our longstanding customers. Discovery is proceeding.

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        Also on December 16, 2002, Pioneer Capital L.P. ("Pioneer"), Pioneer Capital Genpar, Inc. ("PCG"), the general partner of Pioneer, and Mr. Pierce, the President of PCG, commenced an action in the Court of Common Pleas, Montgomery County, Pennsylvania, against Iron Mountain Incorporated, C. Richard Reese, John F. Kenny, Jr., Garry Watzke, Schooner Capital LLC ("Schooner") and Vincent J. Ryan. The named individuals are Directors and/or officers of Iron Mountain and Schooner is a shareholder of Iron Mountain. In the complaint, the plaintiffs allege that the defendants had numerous conversations and arrangements with Mr. Carr, one of Mr. Pierce's and Pioneer's business partners in a company named Logisteq LLC. The plaintiffs further allege that, as a result of such conversations and arrangements, defendants conspired to, and did intentionally, interfere with Pioneer's relationship with its partner and Logisteq. The plaintiffs also allege that defendants damaged Mr. Pierce's reputation in the community by telling Iron Mountain employees and other third parties that Mr. Pierce breached his employment agreement with Iron Mountain, misappropriated and used Iron Mountain's confidential information, breached his fiduciary duties to Iron Mountain's shareholders and assisted Sequedex, then a competitor of Iron Mountain, in unfairly competing with Iron Mountain. Finally, the complaint alleges that the business partner in Logisteq taped conversations with Mr. Pierce and others which allegedly violated privacy laws, that the defendants knew, or should have known, that the tapes were being made without the consent of the individuals and, as a result, Mr. Pierce was harmed. The complaint seeks damages in excess of $5,000,000. Iron Mountain and the other defendants have challenged the legal sufficiency of the plaintiffs' pleadings in each of these cases.

        On September 10, 2003, IMIM filed a complaint in the Court of Common Pleas, Montgomery County, Pennsylvania in a matter related to the litigation between the Company and Sequedex, Mr. Pierce and others disclosed above. The new matter names Sequedex, J. Michael Gold and Peter Hamilton as defendants, and alleges that in 2000 defendants Gold and Hamilton, both former IMIM employees, used confidential and proprietary business information that they had obtained while employed by IMIM to form their own records management company, Sequedex. The complaint also alleges unlawful interference with IMIM's contractual relationship with a certain customer and other matters. The defendants filed preliminary objections to our complaint and Iron Mountain has answered those preliminary objections.

        Prior to the litigation directly pertaining to Mr. Pierce having been filed, in approximately October 2000, three former management employees of IMIM became employed by or otherwise associated with Sequedex. IMIM commenced actions against these three former employees to enforce its rights under their confidentiality and non-competition agreements. IMIM has also asserted claims against Sequedex for tortious interference with these agreements, and against both Sequedex and the former employees for misappropriation and use of IMIM's trade secrets and confidential information.

        The defendants in all three cases have denied the material allegations in IMIM's complaints and asserted various affirmative defenses. In addition, Sequedex and the individual defendants filed counterclaims against IMIM and third party complaints against Iron Mountain. The counterclaims and third party complaints assert claims for tortious interference with certain contracts and prospective business relations between Sequedex and its current and potential customers as well as a claim for trade disparagement and defamation. The defendant in one of these actions sought a declaratory judgment regarding the enforceability of the confidentiality and non-competition agreements at issue in

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that case and filed a motion for summary judgment seeking to have the non-competition agreement declared void, or to limit its scope. IMIM and Iron Mountain filed motions in all three cases to dismiss the various counterclaims and third-party complaints. All of these motions, i.e., the defendants' motion for summary judgment and IMIM's and Iron Mountain's motions to dismiss, were denied by the court following a hearing on May 7, 2002. As previously disclosed in our quarterly report on Form 10-Q for the quarter ended September 30, 2003, Sequedex furnished a preliminary statement of damages with an estimate of compensatory damages of approximately $172 million and an indication that Sequedex intended to seek punitive damages of approximately $1.5 billion. Sequedex is no longer seeking damages in this amount and in connection with its proposed amended counterclaim, Sequedex has recently furnished a litigation expert's report of damages claiming approximately $59 million plus approximately $6.6 million of pre-judgment interest. Sequedex has indicated that it also intends to seek punitive damages in an undisclosed amount. Extensive discovery has been conducted in the three cases and is ongoing; on the basis of that discovery, it is our belief that Sequedex has not produced any material evidence that we or IMIM acted wrongfully in any respect. Further, limited discovery has been conducted in respect of Sequedex's damages claim; on the basis of that discovery, we do not believe that Sequedex has any foundation, and we believe that it cannot provide any foundation, for its damages calculations. We believe that the damages calculations submitted by Sequedex are not supported by credible evidence and are subject to serious legal, methodological and factual deficiencies. A trial of the three actions in which the Sequedex counterclaims and third party complaints have been asserted is scheduled to commence in April of 2004. IMIM, Sequedex and one of the individual defendants recently filed dispositive motions, including motions for summary judgment as to certain of the claims. All of these motions were denied by the court following a hearing on February 24, 2004.

        Discovery is proceeding in each of these cases, other than the arbitration. We intend to prosecute these actions vigorously, as well as to defend ourselves vigorously against the counterclaims and the third party complaints.

        d.     Other Litigation

        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.

        The outcome of the South Brunswick fires, Sequedex, H-W Associates, Pioneer and Pierce 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.

14. Related Party Transactions

        We lease space to an affiliated company, Schooner, for its corporate headquarters located in Boston, Massachusetts. For the years ended December 31, 2001, 2002 and 2003, Schooner paid rent to us totaling $101, $128 and $144, respectively. We lease facilities from an officer and three separate

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limited partnerships, whose general partner was a related party. Our aggregate rental payment for such facilities during 2001, 2002 and 2003 was $1,381, $1,372 and $1,309, respectively. In the opinion of management, all of these leases were entered into at market prices and terms.

        We have an agreement with Leo W. Pierce, Sr., our former Chairman Emeritus and the father of J. Peter Pierce, our former director, 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 in the amount of $922 as of December 31, 2003.

        At December 31, 2003, we have 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 our merger with Pierce Leahy.

15. Employee Benefit Plans

        a.     Iron Mountain Companies 401(k) Plan

        We have 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 25% of compensation per pay period up to the amount allowed by the Internal Revenue Code. In addition, IME operates a defined contribution plan, which is similar to the U.S.'s 401(k) Plan. We make matching contributions based on the amount of an employee's contribution in accordance with the plan document. We have expensed $2,466, $3,043 and $4,164 for the years ended December 31, 2001, 2002 and 2003, respectively.

        b.     Employee Stock Purchase Plan

        On March 23, 1998, we 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 our shareholders on May 28, 1998 and commenced operations on October 1, 1998. The Plan provided a way for our eligible employees to become shareholders on favorable terms. The Plan provided for the purchase of up to 562,500 shares of our common stock by eligible employees through successive offering periods. At the start of each offering period, participating employees were granted options to acquire our common stock. As there were no shares remaining in the Plan on December 31, 2002, a new employee stock purchase plan (the "2003 Plan"), which provides for the purchase of up to 750,000 shares of our common stock was approved by our shareholders in May 2003 and commenced operations on July 1, 2003. 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 our common stock. The price for shares purchased under the Plan was, and under the 2003 Plan is, 85% of their market price at either the beginning or the end of the offering period, whichever was or is lower. There were 186,152, 160,119 and 88,715 shares purchased under the Plan and the 2003 Plan for the years ended December 31, 2001, 2002 and 2003, respectively. The number of shares available for grant at December 31, 2003 was 661,285.

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16. Subsequent Events

        In February 2004, we completed the acquisition of Mentmore plc's 49.9% equity interest in IME for total consideration of 82,500 British pounds sterling ($154,000) in cash from proceeds of our 7¹/4% notes issued in January 2004. Included in this amount is the repayment of all trade and working capital funding owed to Mentmore by IME. Completion of the transaction gives us 100% ownership of IME, affording us full access to all future cash flows and greater strategic and financial flexibility. This transaction should have no impact on revenue or operating income since we already fully consolidate IME's financial results. Since we will be using the purchase method of accounting for this acquisition, 49.9% of the net assets of IME will be adjusted to reflect their fair market value if different from their current carrying value.

        In March 2004, IME and certain of its subsidiaries entered into a credit agreement (the "IME Credit Agreement") with a syndicate of European lenders. The IME Credit Agreement provides for maximum borrowing availability in the principal amount of 210,000 British pounds sterling, including a 100,000 British pounds sterling revolving credit facility (which includes the ability to borrow in certain other foreign currencies), a 100,000 British pounds sterling term loan, and a 10,000 British pounds sterling overdraft protection line. The revolving credit facility matures on March 2, 2009. The term loan facility is payable in three installments; two installments of 20,000 British pounds sterling on March 2, 2007 and 2008, respectively, and the final payment of the remaining balance on March 2, 2009. The interest rate on borrowings under the IME Credit Agreement is based on LIBOR and varies depending on IME's choice of interest rate period, plus an applicable margin. The IME Credit Agreement includes various financial covenants applicable to the results of IME, which may restrict IME's ability to incur indebtedness under the IME Credit Agreement and with third parties. Each of IME's subsidiaries will either guarantee the obligations or pledge shares to secure the IME Credit Agreement. We have not guaranteed or otherwise provided security for the IME Credit Agreement nor have any of our U.S., Canadian, Mexican and South American subsidiaries.

        In March 2004, IME borrowed approximately 147,000 British pounds sterling under the IME Credit Agreement, including the full amount of the term loan. IME used those proceeds to repay us 135,000 British pounds sterling related to our initial financing of the acquisition of the European operations of Hays IMS. We expect to use those proceeds to: (1) pay down approximately $104,000 of real estate term loans, (2) settle all obligations associated with terminating our two cross currency swaps used to hedge the foreign currency impact of our intercompany financing with IME, and (3) to pay down amounts outstanding under our Amended and Restated Credit Agreement. After the initial balance, IME's availability under the IME Credit Agreement, based on its current level of external debt and the leverage ratio under the IME Credit Agreement, was approximately 9,000 British pounds sterling.

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REPORT OF THE INDEPENDENT AUDITORS

To the Board of Directors of
Iron Mountain Europe Limited:

        We have audited the accompanying consolidated balance sheets of Iron Mountain Europe Limited as of October 31, 2002 and 2003, and the related consolidated statements of operations, stockholders' equity and comprehensive (loss)/income and cash flows for the three years ended October 31, 2003. 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 of America. 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, 2002 and 2003 and the consolidated results of their operations and their consolidated cash flows for the three years ended October 31, 2003, in conformity with generally accepted accounting principles in the United States of America.

RSM ROBSON RHODES LLP

Chartered Accountants
Birmingham, England

March 8, 2004

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        This is a copy of the audit report previously issued by Arthur Andersen LLP in connection with Iron Mountain Incorporated's filing of an Annual Report on Form 10-K for the year ended December 31, 2001. This audit report has not been reissued by Arthur Andersen LLP in connection with this Annual Report on Form 10-K for the year ended December 31, 2003. See Exhibit 23.3 to the December 31, 2002 Annual Report on Form 10-K filed with the SEC for further discussion.

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.

/s/ ARTHUR ANDERSEN LLP

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

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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:
2001	$	15,989	$	8,499	$	846	$	(8,248	)	$	17,086

(1)

Includes allowance of businesses acquired during the year as described in Note 7 to Notes to Consolidated Financial Statements and the impact associated with currency translation adjustments.

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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 11, 2004

        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 of the Board of Directors, Chief Executive Officer and President	March 11, 2004
/s/  JOHN F. KENNY, JR. John F. Kenny, Jr.	Executive Vice President, Chief Financial Officer and Director	March 11, 2004
/s/  JEAN A. BUA Jean A. Bua	Vice President and Corporate Controller (Chief Accounting Officer)	March 11, 2004
/s/  CLARKE H. BAILEY Clarke H. Bailey	Director	March 11, 2004
/s/  CONSTANTIN R. BODEN Constantin R. Boden	Director	March 11, 2004
/s/  KENT P. DAUTEN Kent P. Dauten	Director	March 11, 2004
/s/  EUGENE B. DOGGETT Eugene B. Doggett	Director	March 11, 2004
/s/  B. THOMAS GOLISANO B. Thomas Golisano	Director	March 11, 2004
/s/  ARTHUR D. LITTLE Arthur D. Little	Director	March 11, 2004
/s/  VINCENT J. RYAN Vincent J. Ryan	Director	March 11, 2004

114

INDEX TO EXHIBITS

        Certain exhibits indicated below are incorporated by reference to documents we have filed with 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	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)(19)
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)(16)
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)(17)
2.4	Agreement and Plan of Merger, dated as of October 20, 1999, by and between the Company and Pierce Leahy.	(2)(10)
2.5	Agreement, dated July 12, 2003, between Hays plc and Iron Mountain Europe Limited (portions of which have been omitted pursuant to a request for confidential treatment).	(2.1)(27)
3.1	Amended and Restated Articles of Incorporation of the Company.	(Annex D)(14)
3.2	Amended and Restated Bylaws of the Company.	(Annex E)(14)
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)(22)
3.4	Certificate of Trust of IM Capital Trust I.	(4.17)(22)
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)(7)
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))(13)
4.4	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)(20)
4.5	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)(20)
4.6	Second Supplemental Indenture, dated as of September 14, 2001, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	(4.7)(23)
4.7	Senior Subordinated Indenture for 73/4 Senior Subordinated Notes due 2015, dated as of December 30, 2002, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	(4.7)(26)

115

4.8	First Supplemental Indenture, dated as of December 30, 2002, among the Company, the Guarantors named therein and the Trustee.	(4.8)(26)
4.9	Second Supplemental Indenture, dated as of June 20, 2003, among the Company, the Guarantors named therein and the Trustee.	Filed herewith as Exhibit 4.9
4.10	Form of stock certificate representing shares of Common Stock, $.01 par value per share, of the Company.	(4.1)(15)
9	Amended and Restated Voting Trust Agreement, dated as of February 28, 1998, by and among the Company, certain shareholders of the Company and Leo W. Pierce, Sr. and J. Peter Pierce, as trustees. (#)	(9.0)(12)
10.1	Employment Agreement, dated as of February 1, 2000, by and between the Company and J. Peter Pierce. (#)	(10.5)(16)
10.2	Letter Agreement, dated as of June 27, 2000, by and between the Company and J. Peter Pierce. (#)	(10.6)(19)
10.3	Iron Mountain Incorporated Executive Deferred Compensation Plan, as amended. (#)	(10.7)(19)
10.4	Nonqualified Stock Option Plan of Pierce Leahy Corp. (#)	(10.3)(11)
10.5	Iron Mountain Incorporated 1997 Stock Option Plan, as amended. (#)	(10.9)(19)
10.6	Iron Mountain/ATSI 1995 Stock Option Plan. (#)	(10.2)(3)
10.7	Iron Mountain Incorporated 1995 Stock Incentive Plan, as amended. (#)	(10.3)(6)
10.8	Iron Mountain Incorporated 2002 Stock Incentive Plan. (#)	(10.8)(26)
10.9	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.	(10.10)(23)
10.10	Amended and Restated Registration Rights Agreement, dated as of June 12, 1997, by and among the Company and certain shareholders of the Company. (#)	(10.1)(1)
10.11	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)(5)
10.12	Lease Agreement, dated as of October 1, 1998, between Iron Mountain Statutory Trust—1998 and IMRM.	(10.20)(4)
10.13	Amendment No. 1 and Consent to Lease Agreement, dated March 15, 2002, between Iron Mountain Statutory Trust—1998 and IMIM	(10.1)(24)
10.14	Unconditional Guaranty, dated as of October 1, 1998, from the Company to Iron Mountain Statutory Trust—1998.	(10.21)(4)
10.15	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)(8)
10.16	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.	(10.17)(23)
10.17	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.	(10.18)(23)

116

10.18	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)(18)
10.19	Amendment No. 5 and Consent to Unconditional Guaranty, dated as of March 15, 2002 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.	(10.2)(24)
10.20	Guaranty Letter, dated December 31, 2002, to Scotiabanc, Inc. from Iron Mountain Information Services, Inc., as Lessee and the Company as Guarantor.	(10.20)(26)
10.21	Amended and Restated Agency Agreement, dated October 1, 1998, by and between Iron Mountain Statutory Trust—1998 and IMRM.	(10.22)(4)
10.22	Lease Agreement, dated as of July 1, 1999, by and between Iron Mountain Statutory Trust—1999 and IMRM.	(10.2)(9)
10.23	Amendment No. 1 and Consent to Lease Agreement, dated March 15, 2002, between Iron Mountain Statutory Trust—1999 and IMIM.	(10.3)(24)
10.24	Agency Agreement, dated as of July 1, 1999, by and between Iron Mountain Statutory Trust—1999 and IMRM.	(10.1)(9)
10.25	Unconditional Guaranty, dated as of July 1, 1999, from the Company to Iron Mountain Statutory Trust—1999.	(10.3)(9)
10.26	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.	(10.24)(23)
10.27	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.	(10.25)(23)
10.28	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)(18)
10.29	Amendment No. 4 to Unconditional Guaranty, dated as of March 20, 2001 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.	(10.4)(24)
10.30	Amendment No. 5 and Unconditional Consent to Guaranty, dated as of March 15, 2002 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.	(10.5)(24)
10.31	Guaranty Letter, dated December 31, 2002, to BTM Capital and JH Equity Realty Investors, Inc., from Iron Mountain Information Services, Inc., as Lessee and the Company as Guarantor.	(10.31)(26)
10.32	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)(21)
10.33	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.	(10.28)(23)

117

10.34	Amendment to Master Lease and Security Agreement and Unconditional Guaranty, dated March 15, 2002, between Iron Mountain Statutory Trust—2001, IMIM and the Company.	(10.6)(24)
10.35	Unconditional Guaranty, dated as of May 22, 2001, from the Company, as Guarantor, to Iron Mountain Statutory Trust—2001, as Lessor.	(10.2)(21)
10.36	Subsidiary Guaranty, dated as of May 22, 2001, from certain subsidiaries of the Company as guarantors, for the benefit of Iron Mountain Statutory Trust—2001 and consented to by Bank of Nova Scotia.	(10.36)(26)
10.37	Guaranty Letter, dated December 31, 2002, to Scotiabanc, Inc. from Iron Mountain Information Services, Inc., as Lessee and the Company as Guarantor.	(10.37)(26)
10.38	Master Construction Agency Agreement, dated as of May 22, 2001, between Iron Mountain Statutory Trust—2001, as Lessor, and IMRM, as Construction Agent.	(10.3)(21)
10.39	First Amendment, dated as of July 9, 2003, to the Fifth Amended and Restated Credit Agreement, dated as of March 15, 2002, among the Company, certain lenders party thereto and J.P. Morgan Chase Bank, as Administrative Agent.	(10.1)(27)
10.40	Multi-Currency Term, Revolving Credit Facilities Agreement, dated as of March 2004, among Iron Mountain Europe Limited, certain lenders party thereto, Barclays Capital and The Governor and Company of the Bank of Scotland, as arrangers, and The Bank of Scotland as the facility agent, security trustee and letter of credit issuing bank.	Filed herewith as Exhibit 10.40
12	Statement re: Computation of Ratios.	Filed herewith as Exhibit 12
16	Letter from Arthur Andersen LLP to the Securities and Exchange Commission, dated June 19, 2002, regarding the change in the Company's certifying accountant.	(16.1)(25)
21	Subsidiaries of the Company.	Filed herewith as Exhibit 21
23.1	Consent of Deloitte & Touche LLP (Iron Mountain Incorporated, Pennsylvania).	Filed herewith as Exhibit 23.1
23.2	Consent of RSM Robson Rhodes LLP (Iron Mountain Europe Limited).	Filed herewith as Exhibit 23.2
23.3	Notice Regarding Consent of Arthur Andersen LLP.	(23.3)(26)
31.1	Certification required by Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended.	Filed herewith as Exhibit 31.1
31.2	Certification required by Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended.	Filed herewith as Exhibit 31.2
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith as Exhibit 32.1
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith as Exhibit 32.2

(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.

118

(3)

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.

(4)

Filed as an Exhibit to Iron Mountain/DE's Registration Statement No. 333-67765, filed with Commission on November 23, 1998.

(5)

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.

(6)

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.

(7)

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.

(8)

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.

(9)

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.

(10)

Filed as an Exhibit to Pierce Leahy's Current Report on Form 8-K, dated October 20, 1999, filed with the Commission, File No.1-13045.

(11)

Filed as an Exhibit Amendment No. 1 to Pierce Leahy's Registration Statement No. 333-9963, filed with the Commission on October 4, 1996.

(12)

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.

(13)

Filed as an Exhibit to Pierce Leahy's Registration Statement No. 333-58569, filed with the Commission on July 6, 1998.

(14)

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.

(15)

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.

(16)

Filed as an Exhibit to the Company's Annual Report on Form 10-K405 for the year ended December 31, 1999, filed with the Commission, File No. 1-13045.

(17)

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.

(18)

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.

(19)

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.

(20)

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.

(21)

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.

(22)

Filed as an Exhibit to the Company's Registration Statement No. 333-75068, filed with the Commission on December 13, 2001.

(23)

Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the Commission, File No. 1-13045.

(24)

Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the Commission, File No. 1-13045.

119

(25)

Filed as an Exhibit to the Company's Current Report on Form 8-K dated June 19, 2002, filed with the Commission, File No. 1-13045.

(26)

Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2002, filed with the Commission, File No. 1-13045.

(27)

Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, filed with the Commission, File No. 1-13045.

120

EX-4.9

                                                                     EXHIBIT 4.9

                                                               EXECUTION VERSION

================================================================================


                           IRON MOUNTAIN INCORPORATED

                           THE GUARANTORS NAMED HEREIN

                                       AND

                              THE BANK OF NEW YORK,
                                   as Trustee


                    6-5/8% Senior Subordinated Notes due 2016


                          SECOND SUPPLEMENTAL INDENTURE


                            Dated as of June 20, 2003


                                       TO


                           SUBORDINATED DEBT INDENTURE


                          Dated as of December 30, 2002


================================================================================



                                TABLE OF CONTENTS



                                                                                                   Page
                                                                                                   ----
                                                                                                  
ARTICLE 1. DEFINITIONS................................................................................1

   Section 1.1.    DEFINITIONS........................................................................1

ARTICLE 2. FORM AND TERMS OF THE NOTES...............................................................15

   Section 2.1.    FORM AND DATING...................................................................15
   Section 2.2.    EXECUTION AND AUTHENTICATION......................................................16
   Section 2.3.    DEPOSITORY AND PAYING AGENT FOR NOTES.............................................16
   Section 2.4.    TRANSFER AND EXCHANGE OF NOTES....................................................16
   Section 2.5.    REDEMPTION........................................................................18
   Section 2.6.    COVENANTS.........................................................................21
      (a)     Restricted Payments....................................................................21
      (b)     Incurrence of Indebtedness and Issuance of Preferred Stock.............................24
      (c)     Liens..................................................................................25
      (d)     Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries..............25
      (e)     Transactions with Affiliates...........................................................26
      (f)     Certain Senior Subordinated Debt.......................................................27
      (g)     Additional Subsidiary Guarantees.......................................................27
      (h)     Designation of Unrestricted Subsidiaries...............................................28
      (i)     Limitation on Sale and Leaseback Transactions..........................................29
      (j)     Asset Sales............................................................................30
      (k)     Change of Control Offer................................................................32
   Section 2.7.    SUBSIDIARY GUARANTEES.............................................................33
   Section 2.8.    LEGAL DEFEASANCE AND COVENANT DEFEASANCE..........................................33
   Section 2.9.    SUBORDINATION.....................................................................34

ARTICLE 3. MISCELLANEOUS.............................................................................34

   Section 3.1.    EFFECT OF HEADINGS................................................................34
   Section 3.2.    SUCCESSORS AND ASSIGNS............................................................34
   Section 3.3.    SEPARABILITY CLAUSE...............................................................34
   Section 3.4.    GOVERNING LAW.....................................................................34
   Section 3.5.    FIRST SUPPLEMENT TO SUPERSEDE INDENTURE...........................................34



EXHIBITS

Exhibit A         FORM OF NOTES
Exhibit B         FORM OF SUPPLEMENTAL INDENTURE

                                        i


               THIS SECOND SUPPLEMENTAL INDENTURE, dated as of June 20, 2003
("SECOND SUPPLEMENTAL INDENTURE"), is by and between IRON MOUNTAIN INCORPORATED,
a Pennsylvania corporation (the "COMPANY"), having its principal office at 745
Atlantic Avenue, Boston, Massachusetts 02111, the Guarantors signatory hereto,
and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the
"TRUSTEE"), having its principal corporate trust office at 101 Barclay Street, 8
Floor West, New York, NY 10286.

                                   WITNESSETH:

               WHEREAS, the Company and The Bank of New York, acting as trustee,
executed and delivered a Subordinated Indenture, dated as of December 30, 2002
(the "INDENTURE"), to provide for the issuance by the Company from time to time
of Securities to be issued in one or more series as provided in the Indenture;

               WHEREAS, the issuance and sale of up to $250,000,000 aggregate
principal amount of a series of the Company's Securities (the "NOTES") have been
authorized by resolutions adopted by the Executive Committee of the Board of
Directors of the Company on June 16, 2003;

               WHEREAS, the Company desires to issue and sell $150,000,000
aggregate principal amount of the Notes on the date hereof;

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

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

                                   ARTICLE 1.

                                   DEFINITIONS

Section 1.1.   DEFINITIONS.

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

               "ACQUIRED DEBT" means, with respect to any specified Person:

               (1)    Indebtedness of any other Person, existing at the time
                      such other Person merged with or into or became a
                      Subsidiary of such specified Person, including
                      Indebtedness incurred in connection with, or in
                      contemplation of, such other Person merging with or into
                      or becoming a Subsidiary of such specified Person; and

               (2)    Indebtedness encumbering any asset acquired by such
                      specified Person.



               "ACQUISITION EBITDA" means, as of any date of determination, with
respect to an Acquisition EBITDA Entity, the sum of:

               (1)    EBITDA of such Acquisition EBITDA Entity for its last
                      fiscal quarter for which financial statements are
                      available at such date of determination (adjusted to give
                      pro forma effect to any acquisition or disposition of a
                      business or Person by such Acquisition EBITDA Entity
                      consummated during the period covered by, or after the
                      date of, such quarterly financial statements), multiplied
                      by four (or if such quarterly statements are not
                      available, EBITDA for the most recent fiscal year for
                      which financial statements are available), plus

               (2)    projected quantifiable improvements in operating results
                      (on an annualized basis) due to cost reductions calculated
                      in good faith by the Company or one of its Restricted
                      Subsidiaries, as certified by an Officers' Certificate
                      filed with the Trustee, without giving effect to any
                      operating losses of the acquired Person.

               "ACQUISITION EBITDA ENTITY" means, as of any date of
determination, a business or Person:

               (1)    which has been acquired by the Company or one of its
                      Restricted Subsidiaries and with respect to which
                      financial results on a consolidated basis with the Company
                      have not been made available for an entire fiscal quarter;
                      or

               (2)    which is to be acquired in whole or in part with
                      Indebtedness, the incurrence of which will require the
                      calculation on such date of the Acquisition EBITDA of such
                      Acquisition EBITDA Entity for purposes of Section 2.6(b)
                      of this Second Supplemental Indenture (Section 4.9 of the
                      Indenture).

               "ADDITIONAL NOTES" means such amount of the Company's 6-5/8%
Senior Subordinated Notes due 2016 (other than the Initial Notes) as the Company
may issue from time to time under this Second Supplemental Indenture in
accordance with Section 2.2 hereof as part of the same series as the Initial
Notes.

               "ADJUSTED EBITDA" means, as of any date of determination and
without duplication, the sum of:

               (1)    EBITDA of the Company and its Restricted Subsidiaries for
                      the most recent fiscal quarter for which internal
                      financial statements are available at such date of
                      determination, multiplied by four; and

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

                                        2


                      Subsidiary or an Acquisition EBITDA Entity occurring in
                      any period shall be excluded in the calculation of
                      Adjusted EBITDA.

               "AGENT MEMBERS" means members of, or participants in, the
               Depository.

               "ATTRIBUTABLE INDEBTEDNESS" in respect of a Sale and Leaseback
Transaction means, as of the time of determination, the greater of:

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

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

               "CANADA COMPANY" means Iron Mountain Canada Corporation, a Wholly
Owned Subsidiary of the Company, formerly known as Pierce Leahy Canada Company.

               "CASH EQUIVALENTS" means:

               (1)    securities with maturities of one year or less from the
                      date of acquisition, issued, fully guaranteed or insured
                      by the United States Government or any agency thereof;

               (2)    certificates of deposit, time deposits, overnight bank
                      deposits, bankers acceptances and repurchase agreements
                      issued by a Qualified Issuer having maturities of 270 days
                      or less from the date of acquisition;

               (3)    commercial paper of an issuer rated at least A-2 by
                      Standard & Poor's Rating Group, a division of McGraw Hill,
                      Inc., or P-2 by Moody's Investors Service, or carrying an
                      equivalent rating by a nationally recognized rating agency
                      if both of the two named rating agencies cease publishing
                      ratings of investments and having maturities of 270 days
                      or less from the date of acquisition;

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

               (5)    Investments in money market funds substantially all of the
                      assets of which are comprised of securities and other
                      obligations of the types described in clauses (1) through
                      (3) above.

               "CHANGE OF CONTROL" means the occurrence of any of the following
events:

               (1)    any "person" or "group" (as such terms are used in
                      Sections 13(d) and 14(d) of the Exchange Act), other than
                      the Principal Stockholders (or any of them), is or becomes
                      the "beneficial owner" (as defined in Rules 13d-3 and
                      13d-5 under the Exchange Act), directly or indirectly, of
                      more than a majority of the voting power of all classes of
                      Voting Stock of the Company;

               (2)    the Company consolidates with, or merges with or into,
                      another Person or conveys, transfers, leases or otherwise
                      disposes of all or substantially all of its

                                        3


                      assets to any Person, or any Person consolidates with,
                      or merges with or into, the Company, in any such event
                      pursuant to a transaction in which the outstanding Voting
                      Stock of the Company is converted into or exchanged for
                      cash, securities or other property, other than any such
                      transaction where (i) the outstanding Voting Stock of the
                      Company is not converted or exchanged at all (except to
                      the extent necessary to reflect a change in the
                      jurisdiction of incorporation) or is converted into or
                      exchanged for (A) Voting Stock (other than Disqualified
                      Stock) of the surviving or transferee Person or (B) cash,
                      securities and other property (other than Capital Stock
                      described in the foregoing clause (A)) of the surviving or
                      transferee Person in an amount that could be paid as a
                      Restricted Payment pursuant to Section 2.6(a) of the
                      Second Supplemental Indenture (Section 4.8 of the
                      Indenture) and (ii) immediately after such transaction, no
                      "person" or "group" (as such terms are used in Sections
                      13(d) and 14(d) of the Exchange Act), other than the
                      Principal Stockholders (or any of them), is the
                      "beneficial owner" (as defined in Rules 13d-3 and 13d-5
                      under the Exchange Act), directly or indirectly, of more
                      than a majority of the total outstanding Voting Stock of
                      the surviving or transferee Person;

               (3)    during any consecutive two-year period, individuals who at
                      the beginning of such period constituted the Board of
                      Directors (together with any new directors whose election
                      to such Board of Directors, or whose nomination for
                      election by the stockholders of the Company, was approved
                      by a vote of 66 2/3% of the directors then still in office
                      who were either directors at the beginning of such period
                      or whose election or nomination for election was
                      previously so approved) cease for any reason to constitute
                      a majority of the Board of Directors then in office; or

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

               "CONSOLIDATED ADJUSTED NET INCOME" means, for any period, the net
income (or net loss) of the Company and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP, adjusted
to the extent included in calculating such net income or loss by excluding:

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

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

               (3)    the portion of net income (or loss) of any Person (other
                      than the Company or a Restricted Subsidiary), including
                      Unrestricted Subsidiaries, in which the Company or any
                      Restricted Subsidiary has an ownership interest, except to
                      the extent of the amount of dividends or other
                      distributions actually paid to the Company or any
                      Restricted Subsidiary in cash dividends or distributions
                      by such Person during such period; and

                                        4


               (4)    the net income (or loss) of any Person combined with the
                      Company or any Restricted Subsidiary on a "pooling of
                      interests" basis attributable to any period prior to the
                      date of combination.

               "CONSOLIDATED INCOME TAX EXPENSE" means, for any period, the
provision for federal, state, local and foreign income taxes of the Company and
its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.

               "CONSOLIDATED INTEREST EXPENSE" means, for any period, without
duplication, the sum of:

               (1)    the amount which, in conformity with GAAP, would be set
                      forth opposite the caption "interest expense" (or any like
                      caption) on a consolidated statement of operations of the
                      Company and its Restricted Subsidiaries for such period,
                      including, without limitation:

                      (i)     amortization of debt discount;

                      (ii)    the net cost of interest rate contracts (including
                              amortization of discounts);

                      (iii)   the interest portion of any deferred payment
                              obligation;

                      (iv)    amortization of debt issuance costs; and

                      (v)     the interest component of Capital Lease
                              Obligations of the Company and its Restricted
                              Subsidiaries; plus

               (2)    all interest on any Indebtedness of any other Person
                      guaranteed and paid by the Company or any of its
                      Restricted Subsidiaries;

provided, however, that Consolidated Interest Expense will not include any gain
or loss from extinguishment of debt, including write-off of debt issuance costs.

               "CONSOLIDATED NON-CASH CHARGES" means, for any period, the
aggregate depreciation, amortization and other non-cash expenses of the Company
and its Restricted Subsidiaries (including without limitation any minority
interest) reducing Consolidated Adjusted Net Income for such period, determined
on a consolidated basis in accordance with GAAP (excluding any such non-cash
charge to the extent that it requires an accrual of or reserve for cash charges
for any future period).

               "CREDIT AGENT" means JPMorgan Chase Bank, in its capacity as
administrative agent for the lenders party to the Credit Agreement, or any
successor or successors party thereto.

               "CREDIT AGREEMENT" means that certain Fifth Amended and Restated
Credit Agreement, dated as of March 15, 2002, as amended, among the Company,
Canada Company, the lenders party thereto and the Credit Agent, as amended,
restated, supplemented, modified, renewed, refunded, increased, extended,
replaced or refinanced from time to time.

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

                                        5


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

               (1)    Consolidated Interest Expense for such period; plus

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

               (3)    Consolidated Non-Cash Charges for such period.

               "EQUITY INTERESTS" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).

               "EQUITY PROCEEDS" means:

               (1)    with respect to Equity Interests (or debt securities
                      converted into Equity Interests) issued or sold for cash
                      Dollars, the aggregate amount of such cash Dollars; and

               (2)    with respect to Equity Interests (or debt securities
                      converted into Equity Interests) issued or sold for any
                      consideration other than cash Dollars, the aggregate
                      Market Price thereof computed on the date of the issuance
                      or sale thereof.

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

               "EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries (other than under the Credit Agreement) in existence on the date of
the Indenture, until such amounts are repaid.

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

               "INITIAL NOTES" means the first $150,000,000 aggregate principal
amount of 6-5/8% Senior Subordinated Notes due 2016 that are issued under this
Second Supplemental Indenture, as amended or supplemented from time to time
pursuant to the Indenture.

               "INVESTMENTS" means, with respect to any Person, all investments
by such Person in other Persons (including Affiliates) in the forms of loans
(including Guarantees), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities and all other items that are
or would be classified as investments on a balance sheet prepared in accordance
with GAAP.

               "LEVERAGE RATIO" means, at any date, the ratio of:

               (1)    the aggregate principal amount of Indebtedness of the
                      Company and its Restricted Subsidiaries outstanding as of
                      the most recent available quarterly or annual balance
                      sheet, to

                                        6


               (2)    Adjusted EBITDA, after giving pro forma effect, without
                      duplication, to

                      (i)     the incurrence, repayment or retirement of any
                              Indebtedness by the Company or its Restricted
                              Subsidiaries since the last day of the most recent
                              full fiscal quarter of the Company;

                      (ii)    if the Leverage Ratio is being determined in
                              connection with the incurrence of Indebtedness by
                              the Company or a Restricted Subsidiary, such
                              Indebtedness; and

                      (iii)   the Indebtedness to be incurred in connection with
                              the acquisition of any Acquisition EBITDA Entity.

               "LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code, or equivalent statutes, of any
jurisdiction).

               "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of:

               (1)    the present value of the remaining principal, premium and
                      interest payments that would be payable with respect to
                      such Note if such Note were redeemed on July 1, 2008,
                      computed using a discount rate equal to the Treasury Rate
                      plus 75 basis points, over

               (2)    the outstanding principal amount of such Note.

               "MAKE-WHOLE AVERAGE LIFE" means, with respect to any date of
redemption of Notes, the number of years (calculated to the nearest one-twelfth)
from such redemption date to July 1, 2008.

               "MAKE-WHOLE PRICE" means, with respect to any Note, the greater
of:

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

               (2)    the redemption price of such Note on July 1, 2008.

               "MARKET PRICE" means:

               (1)    with respect to the calculation of Equity Proceeds from
                      the issuance or sale of debt securities which have been
                      converted into Equity Interests, the value received upon
                      the original issuance or sale of such converted debt
                      securities, as determined reasonably and in good faith by
                      the Board of Directors; and

               (2)    with respect to the calculation of Equity Proceeds from
                      the issuance or sale of Equity Interests, the average of
                      the daily closing prices for such Equity Interests for the
                      20 consecutive trading days preceding the date of such
                      computation.

                                        7


               The closing price for each day shall be:

               (1)    if such Equity Interests are then listed or admitted to
                      trading on the New York Stock Exchange, the closing price
                      on the NYSE Consolidated Tape (or any successor
                      consolidated tape reporting transactions on the New York
                      Stock Exchange) or, if such composite tape shall not be in
                      use or shall not report transactions in such Equity
                      Interests, or if such Equity Interests shall be listed on
                      a stock exchange other than the New York Stock Exchange
                      (including for this purpose the Nasdaq National Market),
                      the last reported sale price regular way for such day, or
                      in case no such reported sale takes place on such day, the
                      average of the closing bid and asked prices regular way
                      for such day, in each case on the principal national
                      securities exchange on which such Equity Interests are
                      listed or admitted to trading (which shall be the national
                      securities exchange on which the greatest number of such
                      Equity Interests have been traded during such 20
                      consecutive trading days); or

               (2)    if such Equity Interests are not listed or admitted to
                      trading on any such exchange, the average of the closing
                      bid and asked prices thereof in the over-the-counter
                      market as reported by the National Association of
                      Securities Dealers Automated Quotation System or any
                      successor system, or if not included therein, the average
                      of the closing bid and asked prices thereof furnished by
                      two members of the National Association of Securities
                      Dealers selected reasonably and in good faith by the Board
                      of Directors for that purpose. In the absence of one or
                      more such quotations, the Market Price for such Equity
                      Interests shall be determined reasonably and in good faith
                      by the Board of Directors.

               "NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale,
which amount is equal to the excess, if any, of:

               (1)    the cash received by the Company or such Restricted
                      Subsidiary (including any cash payments received by way of
                      deferred payment pursuant to, or monetization of, a note
                      or installment receivable or otherwise, but only as and
                      when received) in connection with such disposition, over

               (2)    the sum of:

                      (i)     the amount of any Indebtedness which is secured by
                              such asset and which is required to be repaid in
                              connection with the disposition thereof; plus

                      (ii)    the reasonable out-of-pocket expenses incurred by
                              the Company or such Restricted Subsidiary, as the
                              case may be, in connection with such disposition
                              or in connection with the transfer of such amount
                              from such Restricted Subsidiary to the Company;
                              plus

                      (iii)   provisions for taxes, including income taxes,
                              attributable to the disposition of such asset or
                              attributable to required prepayments or repayments
                              of Indebtedness with the proceeds thereof; plus

                                        8


                      (iv)    if the Company does not first receive a transfer
                              of such amount from the relevant Restricted
                              Subsidiary with respect to the disposition of an
                              asset by such Restricted Subsidiary and such
                              Restricted Subsidiary intends to make such
                              transfer as soon as practicable, the out-of-pocket
                              expenses and taxes that the Company reasonably
                              estimates will be incurred by the Company or such
                              Restricted Subsidiary in connection with such
                              transfer at the time such transfer is expected to
                              be received by the Company (including, without
                              limitation, withholding taxes on the remittance of
                              such amount).

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

               "PERMITTED INVESTMENTS" means:

               (1)    any Investments in the Company or in a Restricted
                      Subsidiary (other than an Excluded Restricted Subsidiary)
                      of the Company, including without limitation the Guarantee
                      of Indebtedness permitted under Section 2.6(b) of the
                      Second Supplemental Indenture (Section 4.9 of the
                      Indenture);

               (2)    any Investments in Cash Equivalents;

               (3)    Investments by the Company or any Restricted Subsidiary of
                      the Company in a Person, if as a result of such
                      Investment;

                      (i)     such Person becomes a Restricted Subsidiary (other
                              than an Excluded Restricted Subsidiary) of the
                              Company; or

                      (ii)    such Person is merged, consolidated or amalgamated
                              with or into, or transfers or conveys
                              substantially all of its assets to, or is
                              liquidated into, the Company or a Restricted
                              Subsidiary (other than an Excluded Restricted
                              Subsidiary) of the Company;

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

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

               (6)    Investments by the Company or a Restricted Subsidiary
                      (other than an Excluded Restricted Subsidiary) in one or
                      more Excluded Restricted Subsidiaries, the aggregate
                      outstanding amount of which does not exceed 10% of the
                      consolidated assets of the Company and its Restricted
                      Subsidiaries.

               "PERMITTED LIENS" means:

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

                                        9


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

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

               (4)    Liens securing the Notes or the Guarantees;

               (5)    any interest or title of a lessor under any Capital Lease
                      Obligation or Sale and Leaseback Transaction so long as
                      the Indebtedness, if any, secured by such Lien does not
                      exceed the principal amount of Indebtedness permitted
                      under Section 2.6(b) of the Second Supplemental Indenture
                      (Section 4.9 of the Indenture);

               (6)    Liens securing Acquired Debt created prior to (and not in
                      connection with or in contemplation of) the incurrence of
                      such Indebtedness by the Company or any Restricted
                      Subsidiary; provided that such Lien does not extend to any
                      property or assets of the Company or any Restricted
                      Subsidiary other than the assets acquired in connection
                      with the incurrence of such Acquired Debt;

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

               (8)    Liens arising from purchase money mortgages and purchase
                      money security interests, or in respect of the
                      construction of property or assets, incurred in the
                      ordinary course of the business of the Company or a
                      Restricted Subsidiary; provided that (i) the related
                      Indebtedness is not secured by any property or assets of
                      the Company or any Restricted Subsidiary other than the
                      property and assets so acquired or constructed and (ii)
                      the Lien securing such Indebtedness is created within 60
                      days of such acquisition or construction;

               (9)    statutory Liens or landlords' and carriers',
                      warehousemen's, mechanics', suppliers', materialmen's,
                      repairmen's or other like Liens arising in the ordinary
                      course of business and with respect to amounts not yet
                      delinquent or being contested in good faith by appropriate
                      proceedings, if a reserve or other appropriate provision,
                      if any, as shall be required in conformity with GAAP shall
                      have been made therefor;

               (10)   Liens for taxes, assessments, government charges or claims
                      with respect to amounts not yet delinquent or that are
                      being contested in good faith by appropriate proceedings
                      diligently conducted, if a reserve or other appropriate
                      provision, if any, as is required in conformity with GAAP
                      has been made therefor;

               (11)   Liens incurred or deposits made to secure the performance
                      of tenders, bids, leases, statutory obligations, surety
                      and appeal bonds, government contracts, performance bonds
                      and other obligations of a like nature incurred in the
                      ordinary course of business (other than contracts for the
                      payment of money);

                                       10


               (12)   easements, rights-of-way, restrictions and other similar
                      charges or encumbrances not interfering in any material
                      respect with the business of the Company or any Restricted
                      Subsidiary incurred in the ordinary course of business;

               (13)   Liens arising by reason of any judgment, decree or order
                      of any court so long as such Lien is adequately bonded and
                      any appropriate legal proceedings that may have been duly
                      initiated for the review of such judgment, decree or order
                      shall not have been finally terminated or the period
                      within which such proceedings may be initiated shall not
                      have expired;

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

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

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

               "PRINCIPAL STOCKHOLDERS" means each of Vincent J. Ryan, Schooner
Capital LLC, C. Richard Reese, Kent P. Dauten, B. Thomas Golisano and their
respective Affiliates.

               "QUALIFIED EQUITY OFFERING" means an offering of Capital Stock,
other than Disqualified Stock, of the Company for Dollars, whether registered or
exempt from registration under the Securities Act.

               "QUALIFIED ISSUER" means:

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

               (2)    any commercial bank:

                      (i)     which has capital and surplus in excess of
                              $500,000,000; and

                      (ii)    the outstanding short-term debt securities of
                              which are rated at least A-2 by Standard & Poor's
                              Rating Group, a division of McGraw-Hill, Inc. or
                              at least P-2 by Moody's Investors Service, or
                              carry an equivalent rating by a nationally
                              recognized rating agency if both of the two named
                              rating agencies cease publishing ratings of
                              investments.

               "QUALIFYING SALE AND LEASEBACK TRANSACTION" means any Sale and
Leaseback Transaction between the Company or any of its Restricted Subsidiaries
and any bank, insurance company or other lender or investor providing for the
leasing to the Company or such Restricted Subsidiary of any property (real or
personal) which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such lender or investor or to any Person to whom funds
have been or are to be advanced by such lender or investor and where the
property in question has been constructed or acquired after the date of the
Second Supplemental Indenture.

                                       11


               "REFINANCING INDEBTEDNESS" means new Indebtedness incurred or
given in exchange for, or the proceeds of which are used to repay, redeem,
defease, extend, refinance, renew, replace or refund, other Indebtedness;
provided, however, that:

               (1)    the principal amount of such new Indebtedness shall not
                      exceed the principal amount of Indebtedness so repaid,
                      redeemed, defeased, extended, refinanced, renewed,
                      replaced or refunded (plus the amount of fees, premiums,
                      consent fees, prepayment penalties and expenses incurred
                      in connection therewith);

               (2)    such Refinancing Indebtedness shall have a Weighted
                      Average Life to Maturity equal to or greater than the
                      Weighted Average Life to Maturity of the Indebtedness so
                      repaid, redeemed, defeased, extended, refinanced, renewed,
                      replaced or refunded or shall mature after the maturity
                      date of the Notes;

               (3)    to the extent such Refinancing Indebtedness refinances
                      Indebtedness that has a final maturity date occurring
                      after the initial scheduled maturity date of the Notes,
                      such new Indebtedness shall have a final scheduled
                      maturity not earlier than the final scheduled maturity of
                      the Indebtedness so repaid, redeemed, defeased, extended,
                      refinanced, renewed, replaced or refunded and shall not
                      permit redemption at the option of the holder earlier than
                      the earliest date of redemption at the option of the
                      holder of the Indebtedness so repaid, redeemed, defeased,
                      extended, refinanced, renewed, replaced or refunded;

               (4)    to the extent such Refinancing Indebtedness refinances
                      Indebtedness subordinate to the Notes, such Refinancing
                      Indebtedness shall be subordinated in right of payment to
                      the Notes and to the extent such Refinancing Indebtedness
                      refinances Notes or Indebtedness PARI PASSU with the
                      Notes, such Refinancing Indebtedness shall be PARI PASSU
                      with or subordinated in right of payment to the Notes, in
                      each case on terms at least as favorable to the holders of
                      Notes as those contained in the documentation governing
                      the Indebtedness so repaid, redeemed, defeased, extended,
                      refinanced, renewed, replaced or refunded; and

               (5)    with respect to Refinancing Indebtedness incurred by a
                      Restricted Subsidiary, such Refinancing Indebtedness shall
                      rank no more senior, and shall be at least as
                      subordinated, in right of payment to the Subsidiary
                      Guarantee of such Restricted Subsidiary as the
                      Indebtedness being extended, refinanced, renewed, replaced
                      or refunded.

               "RESTRICTED SUBSIDIARY" means:

               (1)    each direct or indirect Subsidiary of the Company existing
                      on the date of the Second Supplemental Indenture (other
                      than Iron Mountain (Netherlands) B.V. and its subsidiaries
                      (including Iron Mountain Europe Limited), Iron Mountain
                      Cayman Ltd. and its subsidiaries, Iron Mountain Mexico,
                      S.A. de R.L. de C.V. and its subsidiaries, Iron Mountain
                      Assurance Corporation and Upper Providence Venture I,
                      L.P.); and

               (2)    any other direct or indirect Subsidiary of the Company
                      formed, acquired or existing after the date of the Second
                      Supplemental Indenture (including an Excluded Restricted
                      Subsidiary),

                                       12


which, in the case of (1) or (2), is not designated by the Board of Directors as
an "Unrestricted Subsidiary."

               "SALE AND LEASEBACK TRANSACTION" means any transaction or series
of related transactions pursuant to which a Person sells or transfers any
property or asset in connection with the leasing, or the resale against
installment payments, of such property or asset to the seller or transferor.

               "SENIOR BANK DEBT" means all Obligations outstanding under or in
connection with the Credit Agreement (including Guarantees of such Obligations
by Subsidiaries of the Company).

               "SENIOR DEBT" means:

               (1)    the Senior Bank Debt; and

               (2)    any other Indebtedness permitted to be incurred by the
                      Company or any Restricted Subsidiary, as the case may be,
                      under the terms of the Second Supplemental Indenture or
                      the Indenture, unless the instrument under which such
                      Indebtedness is incurred expressly provides that it is:

                      (i)     on a parity with or subordinated in right of
                              payment to the Notes; or

                      (ii)    subordinated to Senior Debt on terms substantially
                              similar to those of the Notes.

               Notwithstanding anything to the contrary in the foregoing, Senior
Debt shall not include:

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

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

               (3)    any trade payables; or

               (4)    any Indebtedness that is incurred in violation of the
                      Second Supplemental Indenture or the Indenture, provided
                      that such Indebtedness shall be deemed not to have been
                      incurred in violation of the Second Supplemental Indenture
                      or the Indenture for purposes of this clause (4) if, in
                      the case of any obligations under the Credit Agreement,
                      the holders of such obligations or their agent or
                      representative shall have received a representation from
                      the Company to the effect that the incurrence of such
                      Indebtedness does not violate the provisions of the Second
                      Supplemental Indenture or the Indenture.

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

                                       13


Average Life is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.

               "UNRESTRICTED SUBSIDIARY" means:

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

               (2)    any Subsidiary of an Unrestricted Subsidiary.

               As of the date hereof, the following Subsidiaries of the Company
have been designated as Unrestricted Subsidiaries: Iron Mountain (Netherlands)
B.V. and its subsidiaries (including Iron Mountain Europe Limited), Iron
Mountain Cayman Ltd. and its subsidiaries, Iron Mountain Mexico, S.A. de R.L. de
C.V. and its subsidiaries, Iron Mountain Assurance Corporation and Upper
Providence Venture I, L.P.

               "VOTING STOCK" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of any Person (irrespective of whether or not, at the time,
stock of any other class or classes has, or might have, voting power by reason
of the happening of any contingency).

               "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:

               (1)    the sum of the products obtained by multiplying (x) the
                      amount of each then remaining installment, sinking fund,
                      serial maturity or other required payment of principal,
                      including payment at final maturity, in respect thereof,
                      by (y) the number of years (calculated to the nearest
                      one-twelfth) that will elapse between such date and the
                      making of such payment, by

               (2)    the then outstanding principal amount of such
                      Indebtedness.

               "WHOLLY OWNED RESTRICTED SUBSIDIARY" means any Restricted
Subsidiary of the Company all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by the Company or by one or more Wholly Owned Restricted
Subsidiaries of the Company.

               "1996 INDENTURE DATE" means October 1, 1996.

               "1999 INDENTURE DATE" means April 26, 1999.

               "7 3/4 % NOTES" means the Company's 7 3/4% Senior Subordinated
Notes due 2015 issued pursuant to the Indenture.

               "8 1/8% NOTES" means Canada Company's 8 1/8% Senior Notes due
2008 issued pursuant to the indenture dated as of April 7, 1998, by and among
Canada Company, as issuer, the Company and The Bank of New York, as trustee.

                                       14


               "8 1/4% NOTES" means the Company's 8 1/4% Senior Subordinated
Notes due 2011 issued pursuant to the indenture dated April 26, 1999, by and
among the Company, certain of its subsidiaries and The Bank of New York, as
trustee.

               "8 5/8% NOTES" means the Company's Senior Subordinated Notes
due 2013 issued pursuant to the indenture dated April 3, 2001, by and among the
Company, certain of its subsidiaries and The Bank of New York, as trustee.

               (b)    Other Definitions.

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



                      Term                                            Defined in Section
                                                                   
                      "Affiliate Transaction"                         2.6(e)
                      "Asset Sale"                                    2.6(j)
                      "Asset Sale Offer"                              2.6(j)
                      "Change of Control Offer"                       2.6(k)
                      "Change of Control Payment"                     2.6(k)
                      "Change of Control Payment Date"                2.6(k)
                      "Commencement Date"                             2.6(j)
                      "Company"                                       Preamble
                      "DTC"                                           2.3
                      "Excess Proceeds"                               2.6(j)
                      "Second Supplemental Indenture"                 Preamble
                      "Indenture"                                     Recitals
                      "Restricted Payments"                           2.6(a)
                      "Trustee"                                       Preamble


                                   ARTICLE 2.

                           FORM AND TERMS OF THE NOTES

Section2.1.    FORM AND DATING. GENERAL. The Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A
attached hereto. The Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.

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

               (b)    GLOBAL NOTES. Notes shall be issued initially in the form
of the Global Notes, which shall be deposited on behalf of the purchasers of the
Notes represented thereby with the Depository at its New York office, and
registered in the name of the Depository or a nominee of the Depository, duly

                                       15


executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Notes may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Depository or its nominee as hereinafter provided.

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

               (c)    BOOK-ENTRY PROVISIONS. This Section 2.1(c) shall apply
only to the Global Notes deposited with or on behalf of the Depository.

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

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

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

Section 2.2.   EXECUTION AND AUTHENTICATION.

               The Trustee shall, upon a written order of the Company signed by
an Officer, authenticate up to $150,000,000 aggregate principal amount of
Initial Notes and such amount of Additional Notes as the Company may issue from
time to time.

Section 2.3.   DEPOSITORY AND PAYING AGENT FOR NOTES.

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


Section 2.4.   TRANSFER AND EXCHANGE OF NOTES.

               (a)    TRANSFER AND EXCHANGE OF GLOBAL NOTES. The transfer and
exchange of beneficial interests in the Global Notes shall be effected through
the Depository, in accordance with the Second

                                       16


Supplemental Indenture and the Indenture and the procedures of the Depository
therefor. Beneficial interests in the Global Notes may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the Global
Notes.

               (b)    TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive
Notes are presented by a Holder to the Registrar with a request:

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

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

               (c)    RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provision of the Second Supplemental Indenture or the
Indenture (other than the provisions set forth in subsection (d) of this Section
2.4), the Global Notes may not be transferred as a whole except by the
Depository to a nominee of the Depository, by a nominee of the Depository to the
Depository or to another nominee of the Depository, or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository.

               (d)    AUTHENTICATION OF DEFINITIVE NOTES IN ABSENCE OF
DEPOSITORY. If at any time:

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

                      (ii)    the Company at its sole discretion, notifies the
                              Trustee in writing that it elects to cause the
                              issuance of Definitive Notes under the Second
                              Supplemental Indenture and the Indenture,

then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.2 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.

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

                                       17


in another Global Note, such other Global Note shall be increased accordingly
and an endorsement will be made on such Global Note by the Trustee or by the
Depository at the direction of the Trustee to reflect such increase.

               (f)    GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

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

                      (ii)    No service charge shall be made to a Holder of a
                              Global Note or to a Holder of a Definitive Note
                              for any registration of transfer or exchange, but
                              the Company may require payment of a sum
                              sufficient to cover any transfer tax or similar
                              governmental charge payable in connection
                              therewith (other than any such transfer taxes or
                              similar governmental charge payable upon exchange
                              or transfer pursuant to Section 2.4 hereof).

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

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

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

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

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

Section 2.5.   REDEMPTION.

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

                                       18


               Section  3.7.  OPTIONAL REDEMPTION.

               Prior to July 1, 2008, the Notes shall be subject to redemption
at any time at the option of the Company, in whole or in part, upon not less
than 10 nor more than 60 days' notice, at the Make-Whole Price, plus accrued and
unpaid interest, to but excluding the applicable redemption date. On and after
July 1, 2008, the Notes will be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 10 nor more than 60
days' notice, at the redemption price (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest to but excluding the
applicable redemption date, if redeemed during the twelve-month period beginning
on July 1 of the years indicated below:



               YEAR                                                 PERCENTAGE
               ----                                                 ----------
                                                                   
               2008..............................................     103.313%
               2009..............................................     102.208%
               2010..............................................     101.104%
               2011 and thereafter...............................     100.000%


               Notwithstanding the foregoing, at any time prior to July 1, 2006
the Company may on any one or more occasions redeem the Notes at a redemption
price of 106.625% of the principal amount thereof, plus accrued and unpaid
interest, and Liquidated Damages if any, to the redemption date, with the net
cash proceeds of one or more Qualified Equity Offerings; provided that:

               (1)    at least $100.0 million in the aggregate principal amount
                      of the Notes (including any Additional Notes) issued under
                      the Indenture remains outstanding immediately after the
                      occurrence of such redemption (excluding Notes held by the
                      Company and the Company's Subsidiaries); and

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

               Section 3.8.   MANDATORY REDEMPTION.

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

               Section 3.9    ASSET SALE OFFERS.

               In the event that the Company shall commence an Asset Sale Offer
pursuant to Section 4.17 hereof, it shall follow the procedures specified below:

               The Asset Sale Offer shall remain open for 20 Business Days after
the Commencement Date relating to such Asset Sale Offer, except to the extent
required to be extended by applicable law (as so extended, the "OFFER PERIOD").
No later than one Business Day after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount (the "OFFER
AMOUNT") of Notes required to be purchased in such Asset Sale Offer pursuant to
Sections 3.2 and 4.17 hereof or, if less than the Offer Amount has been
tendered, all Notes tendered in response to the Asset Sale Offer.

                                       19


               If the Purchase Date is on or after an interest payment record
date and on or before the related interest payment date, any interest accrued to
such Purchase Date shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.

               On the Commencement Date of any Asset Sale Offer, the Company
shall send or cause to be sent, by first class mail, a notice to each of the
Holders, with a copy to the Trustee. Such notice, which shall govern the terms
of the Asset Sale Offer, shall contain all instructions and materials necessary
to enable the Holders to tender Notes pursuant to the Asset Sale Offer and shall
state:

               (1)    that the Asset Sale Offer is being made pursuant to this
                      Section 3.9 and Section 4.17 hereof and the length of time
                      the Asset Sale Offer shall remain open;

               (2)    the Offer Amount, the purchase price and the Purchase
                      Date;

               (3)    that any Note not tendered or accepted for payment shall
                      continue to accrue interest;

               (4)    that, unless the Company defaults in the payment of the
                      purchase price, any Note accepted for payment pursuant to
                      the Asset Sale Offer shall cease to accrue interest after
                      the Purchase Date;

               (5)    that Holders electing to have a Note purchased pursuant to
                      any Asset Sale Offer shall be required to surrender the
                      Note, with the form entitled "Option of Holder to Elect
                      Purchase" on the reverse of the Note completed, to the
                      Company, a depositary, if appointed by the Company, or a
                      Paying Agent at the address specified in the notice prior
                      to the close of business on the Business Day preceding the
                      Purchase Date;

               (6)    that Holders shall be entitled to withdraw their election
                      if the Company, depositary or Paying Agent, as the case
                      may be, receives, not later than the close of business on
                      the Business Day preceding the termination of the Offer
                      Period, a facsimile transmission or letter setting forth
                      the name of the Holder, the principal amount of the Note
                      the Holder delivered for purchase and a statement that
                      such Holder is withdrawing such Holder's election to have
                      the Note purchased;

               (7)    that, if the aggregate principal amount of Notes
                      surrendered by Holders exceeds the Offer Amount, the
                      Trustee shall select the Notes to be purchased on a PRO
                      RATA basis (with such adjustments as may be deemed to be
                      appropriate by the Company so that only Notes in
                      denominations of $1,000, or integral multiples thereof,
                      shall be purchased); and

               (8)    that Holders whose Notes were purchased only in part shall
                      be issued new Notes equal in principal amount to the
                      unpurchased portion of the Notes surrendered.

               On or before 12:00 noon on each Purchase Date, the Company shall
irrevocably deposit with the Trustee or Paying Agent in immediately available
funds the aggregate purchase price with respect to a principal amount of Notes
equal to the Offer Amount, together with accrued interest thereon, to be held
for payment in accordance with the terms of this Section 3.9. On the Purchase
Date, the Company shall, to the extent lawful, (i) accept for payment, on a PRO
RATA basis to the extent necessary, an

                                       20


aggregate principal amount equal to the Offer Amount of Notes and other notes
(in accordance with the terms of Section 4.17 of the Indenture) tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Notes and such other notes or portions thereof tendered, (ii)
deliver or cause the Paying Agent or depositary, as the case may be, to deliver
to the Trustee Notes so accepted and (iii) deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 3.9. The
Company, depositary or Paying Agent, as the case may be, shall promptly (but in
any case not later than three Business Days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price with
respect to the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and the Trustee shall
authenticate and mail or deliver such new Note, to such Holder, equal in
principal amount to any unpurchased portion of such Holder's Notes surrendered.
Any Note not accepted in the Asset Sale Offer shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce in a newspaper of general circulation the results of the Asset Sale
Offer on the Purchase Date.

               The Asset Sale Offer shall be made by the Company in compliance
with all applicable laws, including, without limitation, Regulation 14E of the
Exchange Act and the rules thereunder, to the extent applicable, and all other
applicable federal and state securities laws.

               Each purchase pursuant to this Section 3.9 shall be made pursuant
to the provisions of Sections 3.1 through 3.6 hereof to the extent applicable.

               In the event the amount of Excess Proceeds to be applied to an
Asset Sale Offer would result in the purchase of a principal amount of Notes
which is not evenly divisible by $1,000, the Trustee shall promptly refund to
the Company the portion of such Excess Proceeds that is not necessary to
purchase the immediately lesser principal amount of Notes that is so divisible.

Section 2.6.   COVENANTS.

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

               (a)    RESTRICTED PAYMENTS.

               Section 4.8. RESTRICTED PAYMENTS. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

               (1)    declare or pay any dividend or make any distribution on
                      account of the Company's or any of its Restricted
                      Subsidiaries' Equity Interests (other than dividends or
                      distributions payable in Equity Interests (other than
                      Disqualified Stock) of the Company or such Restricted
                      Subsidiary or dividends or distributions payable to the
                      Company or any Restricted Subsidiary);

               (2)    purchase, redeem or otherwise acquire or retire for value
                      any Equity Interests of the Company or any Restricted
                      Subsidiary or other Affiliate of the Company (other than
                      any such Equity Interests owned by the Company or any
                      Restricted Subsidiary);

               (3)    purchase, redeem or otherwise acquire or retire prior to
                      scheduled maturity for value any Indebtedness that is
                      subordinated in right of payment to the Notes; or

                                       21


               (4)    make any Investment other than a Permitted Investment (all
                      such payments and other actions set forth in clauses (1)
                      through (4) above being collectively referred to as
                      "RESTRICTED PAYMENTS");

unless, at the time of such Restricted Payment:

                      (i)     no Default or Event of Default shall have occurred
                              and be continuing or would occur as a consequence
                              thereof; and

                      (ii)    the Company would, at the time of such Restricted
                              Payment and after giving pro forma effect thereto,
                              have been permitted to incur at least $1.00 of
                              additional Indebtedness pursuant to the test set
                              forth in the first paragraph of Section 4.9 of the
                              Indenture; and

                      (iii)   such Restricted Payment, together with the
                              aggregate of all other Restricted Payments made by
                              the Company and its Restricted Subsidiaries after
                              the 1996 Indenture Date is less than (x) the
                              cumulative EBITDA of the Company, minus 1.75 times
                              the cumulative Consolidated Interest Expense of
                              the Company, in each case for the period (taken as
                              one accounting period) from June 30, 1996, to the
                              end of the Company's most recently ended fiscal
                              quarter for which internal financial statements
                              are available at the time of such Restricted
                              Payment, plus (y) the aggregate net Equity
                              Proceeds received by the Company from the issuance
                              or sale since the 1996 Indenture Date of Equity
                              Interests of the Company or of debt securities of
                              the Company that have been converted into such
                              Equity Interests (other than Equity Interests or
                              convertible debt securities sold to a Restricted
                              Subsidiary of the Company and other than
                              Disqualified Stock or debt securities that have
                              been converted into Disqualified Stock), plus (z)
                              $2.0 million.

               The foregoing provisions will not prohibit:

               (1)    the payment of any dividend within 60 days after the date
                      of declaration thereof, if at said date of declaration
                      such payment would have complied with the provisions of
                      the Indenture;

               (2)    the redemption, repurchase, retirement or other
                      acquisition or retirement for value of any Equity
                      Interests of the Company in exchange for, or with the net
                      cash proceeds of, the substantially concurrent sale (other
                      than to a Restricted Subsidiary of the Company) of other
                      Equity Interests of the Company (other than any
                      Disqualified Stock);

               (3)    the defeasance, redemption, repurchase, retirement or
                      other acquisition or retirement for value of Indebtedness
                      that is subordinated in right of payment to the Notes in
                      exchange for, or with the net cash proceeds of, a
                      substantially concurrent issuance and sale (other than to
                      a Restricted Subsidiary of the Company) of Equity
                      Interests of the Company (other than Disqualified Stock);

               (4)    the defeasance, redemption, repurchase, retirement or
                      other acquisition or retirement for value of Indebtedness
                      that is subordinated in right of payment to

                                       22


                      the Notes in exchange for, or with the net cash proceeds
                      of, a substantially concurrent issue and sale (other than
                      to the Company or any of its Restricted Subsidiaries) of
                      Refinancing Indebtedness;

               (5)    the repurchase of any Indebtedness subordinated in right
                      of payment to the Notes at a purchase price not greater
                      than 101% of the principal amount of such Indebtedness in
                      the event of a Change of Control in accordance with
                      provisions similar to the covenant set forth in Section
                      4.18 of the Indenture, provided that prior to or
                      contemporaneously with such repurchase the Company has
                      made the Change of Control Offer as provided in such
                      covenant with respect to the Notes and has repurchased all
                      Notes validly tendered for payment in connection with such
                      Change of Control Offer; and

               (6)    additional payments to current or former employees or
                      directors of the Company for repurchases of stock, stock
                      options or other equity interests, provided that the
                      aggregate amount of all such payments under this clause
                      (6) does not exceed $0.5 million in any year and $2.0
                      million in the aggregate.

               The Restricted Payments described in clauses (2), (3), (5) and
(6) of the immediately preceding paragraph shall be Restricted Payments that
shall be permitted to be taken in accordance with such paragraph but shall
reduce the amount that would otherwise be available for Restricted Payments
under clause (iii) of the first paragraph of this Section, and the Restricted
Payments described in clauses (1) and (4) of the immediately preceding paragraph
shall be Restricted Payments that shall be permitted to be taken in accordance
with such paragraph and shall not reduce the amount that would otherwise be
available for Restricted Payments under clause (iii) of the first paragraph of
this Section.

               If an Investment results in the making of a Restricted Payment,
the aggregate amount of all Restricted Payments deemed to have been made as
calculated under the foregoing provision shall be reduced by the amount of any
net reduction in such Investment (resulting from the payment of interest or
dividends, loan repayment, transfer of assets or otherwise) to the extent such
net reduction is not included in the Company's EBITDA; PROVIDED, HOWEVER, that
the total amount by which the aggregate amount of all Restricted Payments may be
reduced may not exceed the lesser of (a) the cash proceeds received by the
Company and its Restricted Subsidiaries in connection with such net reduction
and (b) the initial amount of such Investment.

               If the aggregate amount of all Restricted Payments calculated
under the foregoing provision includes an Investment in an Unrestricted
Subsidiary or other Person that thereafter becomes a Restricted Subsidiary, such
Investment will no longer be counted as a Restricted Payment for purposes of
calculating the aggregate amount of Restricted Payments. For the purpose of
making any calculations under the Indenture:

               (1)    an Investment shall include the fair market value of the
                      net assets of any Restricted Subsidiary at the time that
                      such Restricted Subsidiary is designated an Unrestricted
                      Subsidiary and shall exclude the fair market value of the
                      net assets of any Unrestricted Subsidiary that is
                      designated as a Restricted Subsidiary;

               (2)    any property transferred to or from an Unrestricted
                      Subsidiary shall be valued at fair market value at the
                      time of such transfer, provided that, in each case, the
                      fair market value of an asset or property is as determined
                      by the Board of Directors in good faith; and

                                       23


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

               The Board of Directors may designate a Restricted Subsidiary to
be an Unrestricted Subsidiary in compliance with the Section 4.15 of the
Indenture. Upon such designation, all outstanding Investments by the Company and
its Restricted Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments made at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. Such designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.

               (b) INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.

               Section 4.9. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED
STOCK. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty
or otherwise become directly or indirectly liable with respect to (collectively,
"INCUR") any Indebtedness (including Acquired Debt) and the Company shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness and may permit
a Restricted Subsidiary to incur Indebtedness if at the time of such incurrence
and after giving effect thereto the Leverage Ratio would be less than 6.5 to
1.0.

               The foregoing limitations shall not apply to:

               (1)    the incurrence by the Company or any Restricted Subsidiary
                      of Senior Bank Debt in an aggregate amount not to exceed
                      $100.0 million at any one time outstanding;

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

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

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

               (5)    the incurrence by the Company and its Restricted
                      Subsidiaries of Capital Lease Obligations and/or
                      additional Indebtedness constituting purchase money
                      obligations up to an aggregate of $5.0 million at any one
                      time outstanding, provided that the Liens securing such
                      Indebtedness constitute Permitted Liens;

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

               (7)    Hedging Obligations that are incurred for the purpose of
                      fixing or hedging interest rate risk with respect to any
                      floating rate Indebtedness that is permitted by the terms
                      of the Indenture to be outstanding;

               (8)    the incurrence by the Company and its Restricted
                      Subsidiaries of Indebtedness arising out of letters of
                      credit, performance bonds, surety bonds and bankers'
                      acceptances incurred in the ordinary course of business up
                      to an aggregate of $5.0 million at any one time
                      outstanding;

                                       24


               (9)    the incurrence by the Company and its Restricted
                      Subsidiaries of Indebtedness consisting of guarantees,
                      indemnities or obligations in respect of purchase price
                      adjustments in connection with the acquisition or
                      disposition of assets, including, without limitation,
                      shares of Capital Stock; and

               (10)   the incurrence by the Company and its Restricted
                      Subsidiaries of Refinancing Indebtedness issued in
                      exchange for, or the proceeds of which are used to repay,
                      redeem, defease, extend, refinance, renew, replace or
                      refund, Indebtedness referred to in clauses (2) through
                      (5) above, and this clause (10) or that was otherwise
                      permitted to be incurred pursuant to the test set forth in
                      the first paragraph of this Section 4.9.

               (c)    LIENS.

               Section 4.10. LIENS. Neither the Company nor any of its
Restricted Subsidiaries may directly or indirectly create, incur, assume or
suffer to exist any Lien (other than a Permitted Lien) upon any property or
assets now owned or hereafter acquired, or any income, profits or proceeds
therefrom, or assign or otherwise convey any right to receive income therefrom,
unless (a) in the case of any Lien securing any Indebtedness that is subordinate
to the Notes, the Notes are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Lien and (b) in the case of any
other Lien, the Notes are equally and ratably secured with the obligation or
liability secured by such Lien.

               (d) DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.

          Section 4.11. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to:

               (1)    (i) pay dividends or make any other distributions to the
                      Company or any of its Restricted Subsidiaries (A) on its
                      Capital Stock or (B) with respect to any other interest or
                      participation in, or measured by, its profits, or (ii) pay
                      any Indebtedness owed to the Company or any of its
                      Restricted Subsidiaries;

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

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

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

               (1)    Existing Indebtedness;

               (2)    the Credit Agreement as in effect as of the date of the
                      Indenture, and any amendments, modifications,
                      restatements, renewals, increases, supplements,
                      refundings, replacements or refinancing thereof, provided
                      that such amendments, modifications, restatements,
                      renewals, increases, supplements, refundings, replacements
                      or refinancings are no more restrictive in the aggregate
                      with respect

                                       25


                      to such dividend and other payment restrictions than those
                      contained in the Credit Agreement as in effect on the date
                      of the Indenture;

               (3)    the Indenture and the Notes;

               (4)    applicable law;

               (5)    any instrument governing Indebtedness or Capital Stock of
                      a Person acquired by the Company or any of its Restricted
                      Subsidiaries as in effect at the time of such acquisition
                      (except to the extent such Indebtedness was incurred in
                      connection with or in contemplation of such acquisition),
                      which encumbrance or restriction is not applicable to any
                      Person, or the properties or assets of any Person, other
                      than the Person, or the property or assets of the Person,
                      so acquired, provided that the EBITDA of such Person is
                      not taken into account in determining whether such
                      acquisition was permitted by the terms of the Indenture;

               (6)    customary non-assignment provisions in leases entered into
                      in the ordinary course of business and consistent with
                      past practices;

               (7)    restrictions on the transfer of property subject to
                      purchase money obligations or Capital Lease Obligations
                      otherwise permitted by clause (5) of Section 4.9 of the
                      Indenture;

               (8)    permitted Refinancing Indebtedness, provided that the
                      restrictions contained in the agreements governing such
                      Refinancing Indebtedness are no more restrictive in the
                      aggregate than those contained in the agreements governing
                      the Indebtedness being refinanced; or

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

               (e) TRANSACTIONS WITH AFFILIATES.

               Section 4.12. TRANSACTIONS WITH AFFILIATES. The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless:

                                       26


               (a)    such Affiliate Transaction is on terms that are no less
                      favorable to the Company or the relevant Restricted
                      Subsidiary than those that would have been obtained in a
                      comparable transaction by the Company or such Restricted
                      Subsidiary with a non-Affiliated Person; and

               (b)    the Company delivers to the Trustee:

                      (i)     with respect to any Affiliate Transaction
                              involving aggregate payments in excess of $5.0
                              million, a resolution of the Board of Directors
                              set forth in an Officers' Certificate certifying
                              that such Affiliate Transaction complies with
                              clause (a) above and such Affiliate Transaction is
                              approved by a majority of the disinterested
                              members of the Board of Directors; and

                      (ii)    with respect to any Affiliate Transaction
                              involving aggregate payments in excess of $10.0
                              million, an opinion as to the fairness to the
                              Company or such Restricted Subsidiary from a
                              financial point of view issued by an investment
                              banking firm of national standing.

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

               (1)    any employment agreement entered into by the Company or
                      any of its Restricted Subsidiaries in the ordinary course
                      of business and consistent with the past practice of the
                      Company or such Restricted Subsidiary;

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

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

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

               The provisions set forth in clause (b) above shall not apply to
sales of inventory by the Company or any Restricted Subsidiary to any Affiliate
in the ordinary course of business. The provisions of clause (b) (ii) above
shall not apply to loans or advances to the Company or any Restricted Subsidiary
from, or equity investments in the Company or any Restricted Subsidiary by, any
Affiliate to the extent permitted by the provisions of Section 4.9 of the
Indenture.

               (f) CERTAIN SENIOR SUBORDINATED DEBT.

               Section 4.13. CERTAIN SENIOR SUBORDINATED DEBT. The Company shall
not incur any Indebtedness that is subordinated or junior in right of payment to
any Senior Debt of the Company and senior in any respect in right of payment to
the Notes. The Company shall not permit any Restricted Subsidiary to incur any
Indebtedness that is subordinated or junior in right of payment to its Senior
Debt and senior in any respect in right of payment to its Subsidiary Guarantee.

               (g) ADDITIONAL SUBSIDIARY GUARANTEES.

                                       27


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

               No Restricted Subsidiary (including any Excluded Restricted
Subsidiary) shall consolidate with or merge with or into (whether or not such
Restricted Subsidiary is the surviving Person), another Person (other than the
Company) whether or not affiliated with such Restricted Subsidiary unless:

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

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

               (3)    such Restricted Subsidiary, or any Person formed by or
                      surviving any such consolidation or merger, would be
                      permitted to incur, immediately after giving effect to
                      such transaction, at least $1.00 of additional
                      Indebtedness pursuant to the test set forth in the first
                      paragraph of Section 4.9 of the Indenture.

In the event of:

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

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

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

then such Restricted Subsidiary (in the event of a sale or other disposition, by
way of such a merger, consolidation or otherwise, of all of the capital stock of
such Restricted Subsidiary or in the event of the designation of such Restricted
Subsidiary as an Unrestricted Subsidiary) or the Person acquiring the property
(in the event of a sale or other disposition of all of the assets of such
Restricted Subsidiary) will be released and relieved of any obligations under
its Subsidiary Guarantee, provided that the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of Section
4.17 of the Indenture.

               (h) DESIGNATION OF UNRESTRICTED SUBSIDIARIES.

               Section 4.15. DESIGNATION OF UNRESTRICTED SUBSIDIARIES. The Board
of Directors may designate any Subsidiary (including any Restricted Subsidiary
or any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary so long as:

                                       28


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

               (2)    no default with respect to any Indebtedness of such
                      Subsidiary would permit (upon notice, lapse of time or
                      otherwise) any holder of any other Indebtedness of the
                      Company or any Restricted Subsidiary to declare a default
                      on such other Indebtedness or cause the payment thereof to
                      be accelerated or payable prior to its stated maturity;

               (3)    any Investment in such Subsidiary deemed to be made as a
                      result of designating such Subsidiary an Unrestricted
                      Subsidiary will not violate the provisions of Section 4.8
                      of the Indenture;

               (4)    neither the Company nor any Restricted Subsidiary has a
                      contract, agreement, arrangement, understanding or
                      obligation of any kind, whether written or oral, with such
                      Subsidiary other than (A) those that might be obtained at
                      the time from Persons who are not Affiliates of the
                      Company or (B) administrative, tax sharing and other
                      ordinary course contracts, agreements, arrangements and
                      understandings or obligations entered into in the ordinary
                      course of business; and

               (5)    neither the Company nor any Restricted Subsidiary has any
                      obligation to subscribe for additional shares of Capital
                      Stock or other Equity Interests in such Subsidiary, or to
                      maintain or preserve such Subsidiary's financial condition
                      or to cause such Subsidiary to achieve certain levels of
                      operating results other than as permitted under Section
                      4.8 of the Indenture.

               Notwithstanding the foregoing, the Company may not designate as
an Unrestricted Subsidiary any Subsidiary which, on the 1999 Indenture Date, was
a Significant Subsidiary, and may not sell, transfer or otherwise dispose of any
properties or assets of any such Significant Subsidiary to an Unrestricted
Subsidiary, other than in the ordinary course of business, in each case other
than Iron Mountain Global, Inc. and its Subsidiaries (including without
limitation Iron Mountain Europe Limited and its Subsidiaries).

               The Board of Directors may designate any Unrestricted Subsidiary
as a Restricted Subsidiary; provided that such designation will be deemed to be
an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if:

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

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

               (i) LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.


               Section 4.16. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The
Company will not, and will not permit any Restricted Subsidiary to, enter into
any Sale and Leaseback Transaction unless:

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

                                       29


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

               (j) ASSET SALES.

               Section 4.17. ASSET SALES. The Company shall not, and shall not
permit any of its Restricted Subsidiaries to:

               (1)    sell, lease, convey or otherwise dispose of any assets
                      (including by way of a Sale and Leaseback Transaction, but
                      excluding a Qualifying Sale and Leaseback Transaction)
                      other than sales of inventory in the ordinary course of
                      business (provided that the sale, lease, conveyance or
                      other disposition of all or substantially all of the
                      assets of the Company will be governed by the provisions
                      of Section 4.18 of the Indenture and/or the provisions of
                      Section 5.1 of the Indenture and not by the provisions of
                      this Section 4.17); or

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

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

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

               (ii)   result in Net Proceeds in excess of $2.0 million (each of
                      the foregoing, an "ASSET SALE"), unless (x) the Company
                      (or the Restricted Subsidiary, as the case may be)
                      receives consideration at the time of such Asset Sale at
                      least equal to the fair market value (evidenced by an
                      Officers' Certificate delivered to the Trustee, and for
                      Asset Sales having a fair market value or resulting in Net
                      Proceeds in excess of $10.0 million, evidenced by a
                      resolution of the Board of Directors set forth in an
                      Officers' Certificate delivered to the Trustee) of the
                      assets sold or otherwise disposed of and (y) at least 75%
                      of the consideration therefor received by the Company or
                      such Restricted Subsidiary is in the form of cash or
                      like-kind assets (in each case as determined in good faith
                      by the Company, evidenced by a resolution of the Board of
                      Directors and certified by an Officers' Certificate
                      delivered to the Trustee);

provided, however, that the amount of:

               (A)    any liabilities (as shown on the Company's or such
                      Restricted Subsidiary's most recent balance sheet or in
                      the notes thereto) of the Company or such Restricted
                      Subsidiary (other than liabilities that are by their terms
                      subordinated to the Notes or any Subsidiary Guarantee)
                      that are assumed by the transferee of any such assets; and

               (B)    any notes or other obligations received by the Company or
                      such Restricted Subsidiary from such transferee that are
                      immediately converted by the Company or such Restricted
                      Subsidiary into cash (to the extent of the cash received)
                      or Cash Equivalents,

                                       30


shall be deemed to be cash for purposes of this provision; and provided,
further, that the 75% limitation referred to in the foregoing clause (ii) (y)
shall not apply to any Asset Sale in which the cash portion of the consideration
received therefrom is equal to or greater than what the after-tax proceeds would
have been had such Asset Sale complied with the aforementioned 75% limitation.

               A transfer of assets or issuance of Equity Interests by the
Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary will
not be deemed to be an Asset Sale.

               Within 360 days of any Asset Sale, the Company may, at its
option, apply an amount equal to the Net Proceeds from such Asset Sale either:

               (1)    to permanently reduce Senior Debt; or

               (2)    to an investment in a Restricted Subsidiary or in another
                      business or capital expenditure or other
                      long-term/tangible assets, in each case, in the same line
                      of business as the Company or any of its Restricted
                      Subsidiaries was engaged in on the date of the Second
                      Supplemental Indenture or in businesses similar or
                      reasonably related thereto.

               Pending the final application of any such Net Proceeds, the
Company may temporarily reduce Senior Bank Debt or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds
from such Asset Sale that are not applied or invested as provided in the first
sentence of this paragraph will be deemed to constitute "EXCESS PROCEEDS." When
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall
make an offer to all Holders of the Notes, all holders of the 8 1/4% Notes, the
8 1/8% Notes, the 8 5/8% Notes and the 7 3/4% Notes and the holders of any
future Indebtedness ranking PARI PASSU with the Notes, which Indebtedness
contains similar provisions requiring the Company to repurchase such
Indebtedness (an "ASSET SALE OFFER"), to purchase the maximum principal amount
of Notes and such other Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase, in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes and other PARI PASSU Indebtedness
(including the 8 1/4% Notes, the 8 1/8% Notes, the 8 5/8% Notes and the 7 3/4%
Notes) tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes and such other
Indebtedness surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such other Indebtedness to be
purchased on a pro rata basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.

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

               An Asset Sale Offer shall be made pursuant to the provisions of
Section 3.9 hereof. No later than the date which is five Business Days after the
date on which the aggregate amount of Excess Proceeds exceeds $10.0 million, the
Company shall notify the Trustee of such Asset Sale Offer and provide the
Trustee with an Officers' Certificate setting forth the calculations used in
determining the

                                       31


amount of Net Proceeds to be applied to the purchase of Notes. The Company shall
commence or cause to be commenced the Asset Sale Offer on a date no later than
15 Business Days after such notice (the "COMMENCEMENT DATE").

               (k) CHANGE OF CONTROL OFFER.

               Section 4.18. CHANGE OF CONTROL OFFER.

               (a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "CHANGE OF CONTROL OFFER") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest to but excluding the date of repurchase (the "CHANGE
OF CONTROL PAYMENT").

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

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

               (2)    the purchase price and the purchase date, which shall be
                      no earlier than 30 calendar days nor later than 60
                      calendar days from the date such notice is mailed (the
                      "CHANGE OF CONTROL PAYMENT DATE");

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

               (4)    that, unless the Company defaults in the payment of the
                      Change of Control Payment, all Notes accepted for payment
                      pursuant to the Change of Control Offer shall cease to
                      accrue interest on and after the Change of Control Payment
                      Date;

               (5)    that Holders electing to have any Notes purchased pursuant
                      to a Change of Control Offer shall be required to
                      surrender the Notes, with the form entitled "Option of
                      Holder to Elect Purchase" on the reverse of the Notes
                      completed, to the Paying Agent at the address specified in
                      such notice prior to the close of business on the fifth
                      Business Day preceding the Change of Control Payment Date;

               (6)    that Holders will be entitled to withdraw their election
                      if the Paying Agent receives, not later than the close of
                      business on the second Business Day preceding the Change
                      of Control Payment Date, facsimile transmission or letter
                      setting forth the name of the Holder, the principal amount
                      of Notes delivered for purchase, and a statement that such
                      Holder is withdrawing its election to have such Notes
                      purchased; and

               (7)    that Holders whose Notes are being purchased only in part
                      will be issued new Notes equal in principal amount to the
                      unpurchased portion of the Notes surrendered, which
                      unpurchased portion must be equal to $1,000 in principal
                      amount or an integral multiple thereof.

               The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder,
to the extent such laws and regulations are

                                       32


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

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

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

               (2)    deposit with the Paying Agent an amount equal to the
                      Change of Control Payment in respect of all Notes or
                      portions thereof so tendered; and

               (3)    deliver or cause to be delivered to the Trustee the Notes
                      so accepted together with an Officers' Certificate stating
                      the Notes or portions thereof tendered to the Company.

               The Paying Agent shall promptly mail to each Holder of Notes so
accepted the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered, if any; provided
that each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. Prior to complying with the provisions of this Section 4.18,
but in any event within 90 calendar days following a Change of Control, the
Company shall either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Notes required by this Section 4.18. The Company shall
publicly announce in The Wall Street Journal, or if no longer published, a
national newspaper of general circulation, the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.

               The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.18 applicable to a Change of Control
Offer made by the Company and purchases all Notes properly tendered and not
withdrawn under the Change of Control Offer.

Section 2.7.   SUBSIDIARY GUARANTEES.

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

Section 2.8.   LEGAL DEFEASANCE AND COVENANT DEFEASANCE.

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

                                       33


Section 2.9.   SUBORDINATION

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

                                   ARTICLE 3.

                                  MISCELLANEOUS

Section 3.1.   EFFECT OF HEADINGS.

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

Section 3.2.   SUCCESSORS AND ASSIGNS.

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

Section 3.3.   SEPARABILITY CLAUSE.

               In case any provision in this Second Supplemental Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

Section 3.4.   GOVERNING LAW.

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

Section 3.5.   SECOND SUPPLEMENT TO SUPERSEDE INDENTURE.

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


           [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]

                                       34


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

                                         Iron Mountain Incorporated


                                         By:    /s/ C. Richard Reese
                                         Name:  C. Richard Reese
                                         Title: President


                                         COMAC, Inc., Data Security and
                                         Storage, Inc., DSI Technology
                                         Escrow Services, Inc., Iron
                                         Mountain Global, Inc., Iron
                                         Mountain Information Management,
                                         Inc., Mountain Real Estate Assets,
                                         Inc., Mountain Reserve I, Inc. and
                                         Mountain Reserve II, Inc.

                                         By:   /s/ C. Richard Reese
                                         Name: C. Richard Reese
                                         Title: Sole Director


                                         Iron Mountain Global, LLC

                                         By: Iron Mountain Global, Inc.,
                                                    its sole member

                                         By:   /s/ C. Richard Reese
                                         Name: C. Richard Reese
                                         Title: Sole Director


                                         Iron Mountain Business Trust #1

                                         By:   /s/ C. Richard Reese
                                         Name: C. Richard Reese
                                         Title: Trustee

                                         By:   /s/ John F. Kenny, Jr.
                                         Name: John F. Kenny, Jr.
                                         Title: Trustee

                                         By:   /s/ Garry B. Watzke
                                         Name: Garry B. Watzke
                                         Title: Trustee


                 [Second Supplemental Indenture Signature Page]



                                         THE BANK OF NEW YORK, as Trustee


                                         By:   /s/ Kisha A. Holder
                                         Name: Kisha A. Holder
                                         Title:  Assistant Vice President


                 [Second Supplemental Indenture Signature Page]



                                                                       Exhibit A

- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------

                                 [Face of Note]
                    6-5/8% Senior Subordinated Notes due 2016

CUSIP No.  462846 AC 0                                              $150,000,000


                           IRON MOUNTAIN INCORPORATED

promises to pay to CEDE & Co. or registered assigns, the principal sum of One
Hundred Fifty Million Dollars on January 1, 2016.

               Interest Payment Dates: January 1 and July 1

               Record Dates: December 15 and June 15

               Dated: June 20, 2003


                                         IRON MOUNTAIN INCORPORATED


                                         By:
                                               ---------------------------
                                         Name:
                                         Title:


                                         By:
                                               ---------------------------
                                         Name:
                                         Title


                                     (SEAL)

This is one of the Notes
referred to in the within-
mentioned Indenture:

THE BANK OF NEW YORK,
as Trustee


By:
     ------------------------------------
             Authorized Signature



                    6-5/8% Senior Subordinated Notes due 2016

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

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

               Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.

               1.     INTEREST. Iron Mountain Incorporated, a Pennsylvania
corporation (the "COMPANY") promises to pay interest on the principal amount of
this Note at 6-5/8% per annum from June 20, 2003 until January 1, 2016. The
Company shall pay interest, semi-annually in arrears on January 1 and July 1 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "INTEREST PAYMENT DATE"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; PROVIDED that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; PROVIDED, FURTHER, that the first Interest Payment Date shall be
January 1, 2004. The Company shall pay interest (including post-petition
interest to the extent allowed in any proceeding under any Bankruptcy Law) on
overdue principal from time to time on demand at a rate equal to the per annum
rate on the Notes then in effect; it shall pay interest (including post-petition
interest to the extent allowed in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

               2.     METHOD OF PAYMENT. The Company will pay principal,
premium, if any, and interest on the Notes in money of the United States that at
the time of payment is legal tender for payment of public and private debts. The
Company, however, may pay principal, premium, if any, and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.

               3.     PAYING AGENT, REGISTRAR AND SERVICE AGENT. Initially, The
Bank of New York, the Trustee under the Indenture, will act as Paying Agent,
Registrar and Service Agent. The Notes may be presented for registration of
transfer and exchange at the offices of the Registrar. The Company may change
any Paying Agent, Service Agent or Registrar without notice to any Holder. The
Company or any of its Subsidiaries may act in any such capacity.



               4.     INDENTURE. The Company issued the Notes under an Indenture
dated as of December 30, 2002 (the "BASE INDENTURE"), as supplemented by a
Second Supplemental Indenture dated as of June 20, 2003 (the "SUPPLEMENTAL
INDENTURE" and, together with the Base Indenture, the "INDENTURE"), among the
Company, the Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb).
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes
issued under the Indenture are subordinated unsecured obligations of the Company
limited to $150,000,000 in aggregate principal amount.

               5.     OPTIONAL REDEMPTION.

               Prior to July 1, 2008, the Notes shall be subject to redemption
at any time at the option of the Company, in whole or in part, upon not less
than 10 nor more than 60 days' notice, at the Make-Whole Price, plus accrued and
unpaid interest, to but excluding the applicable redemption date. On and after
July 1, 2008, the Notes will be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 10 nor more than 60
days' notice, at the redemption price (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest to but excluding the
applicable redemption date, if redeemed during the twelve-month period beginning
on July 1 of the years indicated below:



               YEAR                                               PERCENTAGE
               ----                                               ----------
                                                                 
               2008...........................................      103.313%
               2009...........................................      102.208%
               2010...........................................      101.104%
               2011 and thereafter............................      100.000%


               Notwithstanding the foregoing, at any time prior to July 1, 2006
the Company may on any one or more occasions redeem the Notes at a redemption
price of 106.625% of the principal amount thereof, plus accrued and unpaid
interest, and Liquidated Damages if any, to the redemption date, with the net
cash proceeds of one or more Qualified Equity Offerings; provided that (i) at
least $100.0 million in the aggregate principal amount of the Notes (including
any Additional Notes) issued under the Indenture remains outstanding immediately
after the occurrence of such redemption (excluding Notes held by the Company and
the Company's Subsidiaries) and (ii) the redemption must occur within six months
of the date of the closing of any such Qualified Equity Offering.

               6.     NOTICE OF REDEMPTION.

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

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



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

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

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

               10.    DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered
and Notes may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, the Company need not exchange or register the transfer
of any Notes for a period of 15 days before a selection of Notes to be redeemed
or during the period between a record date and the corresponding Interest
Payment Date.

               11.    PERSONS DEEMED OWNERS. The registered Holder of a Note may
be treated as its owner for all purposes.

               12.    AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture with respect to the Notes or the Notes may be amended
or supplemented with the written consent of the Holders of a majority in
principal amount of the Notes and any existing default or compliance with any
provision of the Indenture with respect to the Notes or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the Notes
(including, in each case, Additional Notes, if any). Without the consent of any
Holder of the Notes, the Indenture with respect to the Notes or the Notes may be
amended or supplemented to, in addition to other events more fully described in
the Indenture, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, provide
for the assumption of the Company's obligations to Holders of the Notes in the
case of a merger or consolidation, make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or
comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.

               13.    DEFAULTS AND REMEDIES. An Event of Default with respect to
the Notes occurs upon the occurrence of any of the following events: the default
for 30 days in the payment when due of interest on the Notes (whether or not
prohibited by the subordination provisions of the Indenture); the default in
payment when due of the principal of or premium, if any, on the Notes (whether
or not prohibited by the subordination provisions of the Indenture); the failure
by the Company to comply with Section 4.18 of the Indenture; the failure by the
Company or any Guarantor for 60 days after written notice from the Trustee or
Holders of not less than 25% of the aggregate principal amount of the Notes
(including Additional Notes, if any) outstanding to comply with any of its other
agreements in the Indenture, Notes or the Subsidiary Guarantees; the default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which is



guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee exists on the date of the Indenture or is created
thereafter, if: (i) such default results in the acceleration of such
Indebtedness prior to its express maturity or shall constitute a default in the
payment of such Indebtedness at final maturity of such Indebtedness; and (ii)
the principal amount of any such Indebtedness that has been accelerated or not
paid at maturity, when added to the aggregate principal amount of all other such
Indebtedness that has been accelerated or not paid at maturity, exceeds $10.0
million; the failure by the Company or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $10.0 million, which judgments remain
unpaid, undischarged or unstayed for a period of 60 days; certain events of
bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary; or except as permitted by the
Indenture or the Subsidiary Guarantees, any Subsidiary Guarantee issued by a
Restricted Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect, or any Restricted Subsidiary or any Person acting on behalf of any
Restricted Subsidiary shall deny or disaffirm in writing its obligations under
its Subsidiary Guarantee.

               If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
(including Additional Notes, if any) may declare all the Notes to be due and
payable immediately; provided, however, that if any Obligation with respect to
Senior Bank Debt is outstanding pursuant to the Credit Agreement upon a
declaration of acceleration of the Notes, the principal, premium, if any, and
interest on the Notes will not be payable until the earlier of: (1) the day
which is five business days after written notice of acceleration is received by
the Company and the Credit Agent; or (2) the date of acceleration of the
Indebtedness under the Credit Agreement. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any Restricted Subsidiary that is a
Significant Subsidiary, the principal of, and premium, if any, and any accrued
and unpaid interest on all outstanding Notes will become due and payable without
further action or notice. In the event of a declaration of acceleration of the
Notes because an Event of Default has occurred and is continuing as a result of
the acceleration of any Indebtedness described in Section 6.1(e) of the
Indenture, the declaration of acceleration of the Notes shall be automatically
annulled if the holders of any Indebtedness described in such section have
rescinded the declaration of acceleration in respect of such Indebtedness within
30 days from the date of such declaration and if: (1) the annulment of the
acceleration of the Notes would not conflict with any judgment or decree of a
competent jurisdiction; and (2) all existing Events of Default, except
non-payment of principal or interest on the Notes that became due solely because
of the acceleration of the Notes, have been cured or waived.

               Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required, upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default and what action the Company is taking or proposes to take
thereto.

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

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



               16.    NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator or stockholder, as such, of the
Company or any Guarantor shall have any liability for any obligations of the
Company or any Guarantor under the Notes, the Subsidiary Guarantees or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Note and the related
Subsidiary Guarantees waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.

               17.    AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.

               18.    ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).

               19.    CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

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

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



                                 ASSIGNMENT FORM

     To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to


- --------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)


- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint
                        --------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.


- --------------------------------------------------------------------------------


Date:
      ---------

Your Signature:
                 ---------------------------------------------------------------
(Sign exactly as your name appears on the face of this Note)



                       OPTION OF HOLDER TO ELECT PURCHASE

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

                             / /    Section 4.17

                             / /    Section 4.18

          If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.17 of the Supplemental Indenture, state the amount
you elect to have purchased: $
                               ---------


Date:                 Your Signature:
     ---------                        ----------------------------------------
                      (Sign exactly as your name appears on the Note)

                      Tax Identification No.:
                                             ---------------------------------



                         SCHEDULE OF EXCHANGES OF NOTES*


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



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





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



                                    EXHIBIT B

       FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY FUTURE GUARANTORS

               SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as
of ________________, _____, among _______________ (the "GUARANTEEING
SUBSIDIARY"), a subsidiary of Iron Mountain Incorporated (or its successor), a
Pennsylvania corporation (the "COMPANY"), the Company, and The Bank of New York,
a New York banking corporation, as trustee under the Indenture referred to below
(the "TRUSTEE").

                               W I T N E S S E T H

               WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture, dated as of December 30, 2002, as supplemented by the
Second Supplemental Indenture, dated as of June 20, 2003 (the indenture, as so
supplemented, the "INDENTURE") providing for the issuance of an aggregate
principal amount of up to $150,000,000 of 6-5/8% Senior Subordinated Notes due
2016 (the "NOTES");

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

               WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

               NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

               1.     CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

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

               3.     EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.

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

                      (b)     The delivery of any Note by the Trustee, after the
authentication thereof under the Indenture, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Supplemental Indenture on behalf of the
Guaranteeing Subsidiary.

               4.     NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator or stockholder of the Guaranteeing
Subsidiary, as such, shall have any liability for



any obligations of the Company or any Guarantor (including the Guaranteeing
Subsidiary) under the Notes, any Subsidiary Guarantee, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of the Notes by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes.

               5.     NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

               6.     COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.

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

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



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

               Dated: _______________, 20___

                                           [GUARANTEEING SUBSIDIARY]

                                           By:
                                              -----------------------------
                                           Name:
                                           Title:

                                           [COMPANY]

                                           By:
                                              -----------------------------
                                           Name:
                                           Title:

                                           [TRUSTEE],
                                           as Trustee

                                           By:
                                              -----------------------------
                                               Authorized Signatory

EX-10.40

                                                                   EXHIBIT 10.40

                                                                  EXECUTION COPY


          L200,000,000 MULTI-CURRENCY TERM, REVOLVING CREDIT FACILITIES
                                    AGREEMENT

                                dated MARCH 2004

                                       for

                          IRON MOUNTAIN EUROPE LIMITED

                                   arranged by

                                BARCLAYS CAPITAL

                                       and

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

                                      WITH

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
                            acting as Facility Agent

                                       and

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
                           acting as Security Trustee

                -------------------------------------------------

                   L200,000,000 MULTI-CURRENCY TERM, REVOLVING
                           CREDIT FACILITIES AGREEMENT

                -------------------------------------------------



                                    CONTENTS



CLAUSE                                                                                   PAGE
                                                                                        
1.   Definitions And Interpretation.........................................................1

2.   The Facilities........................................................................21

3.   Purpose...............................................................................22

4.   Conditions Of Utilisation.............................................................23

5.   Utilisation Of Loans..................................................................25

6.   Utilisation - Letters Of Credit.......................................................26

7.   Letters Of Credit.....................................................................28

8.   Optional Currencies...................................................................31

9.   Ancillary Facilities..................................................................31

10.  Repayment.............................................................................33

11.  Prepayment And Cancellation...........................................................34

12.  Interest..............................................................................40

13.  Interest Periods......................................................................41

14.  Changes To The Calculation Of Interest................................................41

15.  Fees..................................................................................43

16.  Tax Gross Up And Indemnities..........................................................45

17.  Increased Costs.......................................................................49

18.  Other Indemnities.....................................................................50

19.  Mitigation By The Lenders.............................................................51

20.  Costs And Expenses....................................................................52

21.  Guarantee And Indemnity...............................................................53

22.  Representations.......................................................................57

23.  Information Undertakings..............................................................62

24.  Financial Covenants...................................................................66

25.  General Undertakings..................................................................71

26.  Events Of Default.....................................................................83

27.  Changes To The Lenders................................................................88

28.  Changes To The Obligors...............................................................92

29.  Role Of The Facility Agent, The Arranger, The Issuing Bank And Others.................95

30.  Role Of Security Trustee.............................................................101

31.  Conduct Of Business By The Finance Parties...........................................110




                                                                                       
32.  Sharing Among The Finance Parties....................................................110

33.  Payment Mechanics....................................................................112

34.  Set-Off..............................................................................115

35.  Application Of Proceeds..............................................................115

36.  Notices..............................................................................117

37.  Calculations And Certificates........................................................120

38.  Partial Invalidity...................................................................120

39.  Remedies And Waivers.................................................................121

40.  Amendments And Waivers...............................................................121

41.  Counterparts.........................................................................122

42.  Governing Law........................................................................123

43.  Enforcement..........................................................................123

Schedule 1 THE ORIGINAL PARTIES...........................................................124
     Part I The Original Obligors.........................................................124
     Part II The Original Lenders.........................................................125
     Part III Dormant Subsidiaries........................................................126

Schedule 2 CONDITIONS PRECEDENT...........................................................127
     Part I Conditions Precedent To Initial Utilisation...................................127
     Part II Conditions Precedent Required To Be Delivered By An Additional Obligor.......133
     Part III Transaction Security Documents And Security Related Documents To Be
                 Delivered By Additional Obligors.........................................136

Schedule 3 REQUESTS.......................................................................137
     Part I A Utilisation Request.........................................................137
     Part I B Utilisation Request.........................................................139
     Part II Selection Notice.............................................................141

Schedule 4 MANDATORY COST FORMULAE........................................................142

Schedule 5 FORM OF TRANSFER CERTIFICATE...................................................145

Schedule 6 FORM OF ACCESSION LETTER.......................................................147

Schedule 7 FORM OF COMPLIANCE CERTIFICATE.................................................149

Schedule 8 TIMETABLES.....................................................................151
     Part I        .......................................................................151
     Part II Letters Of Credit............................................................153

Schedule 9 MATERIAL COMPANIES.............................................................154

Schedule 10 LMA CONFIDENTIALITY UNDERTAKING...............................................155





                                                                                       
Schedule 11...............................................................................160
     Part I Existing Retained Facilities..................................................160
     Part II Existing Retained Security...................................................162

Schedule 12 FORM OF LETTER OF CREDIT......................................................164





THIS AGREEMENT is dated             March 2004 and made

BETWEEN:

(1)     IRON MOUNTAIN EUROPE LIMITED (registration number 2321917) (the
        "PARENT");

(2)     THE PARENT AND THE SUBSIDIARIES of the Parent listed in Part I of
        Schedule 1 (THE ORIGINAL OBLIGORS) as original borrowers (the "ORIGINAL
        BORROWERS");

(3)     THE PARENT AND THE SUBSIDIARIES of the Parent listed in Part I of
        Schedule 1 (THE ORIGINAL OBLIGORS) as original guarantors (together with
        the Parent, the "ORIGINAL GUARANTORS");

(4)     BARCLAYS CAPITAL and THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
        (whether acting individually or together the "ARRANGER");

(5)     THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 (THE ORIGINAL
        LENDERS) as lenders (the "ORIGINAL LENDERS");

(6)     THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as Facility Agent of
        the Lenders (the "FACILITY AGENT");

(7)     THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as Security Trustee for
        the Secured Parties (the "SECURITY TRUSTEE"); and

(8)     THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as issuing bank (the
        "ISSUING BANK").

IT IS AGREED as follows:

                                    SECTION 1
                                 INTERPRETATION

1.      DEFINITIONS AND INTERPRETATION

1.1     DEFINITIONS
        In this Agreement:

        "ABN CHARGES" means the deeds of mortgage granted by Iron Mountain
        Nederland B.V. in favour of ABN Onroerend Goed Lease B.V. and listed in
        Part II (EXISTING RETAINED SECURITY) of Schedule 11.

        "ABN PLEDGES" means the pledges of bank accounts dated 25 November
        1996, 29 December 1997 and 31 October 2000 granted by Iron Mountain
        Nederland B.V. in favour of ABN Amro and listed in Part II
        (EXISTING RETAINED SECURITY) of Schedule 11.

        "ACCESSION LETTER" means a document substantially in the form set out in
        Schedule 6 (FORM OF ACCESSION LETTER).

        "ACCOUNTING PRINCIPLES" means generally accepted accounting principles
        in the United Kingdom.

        "ADDITIONAL BORROWER" means a company which becomes an Additional
        Borrower in accordance with Clause 28 (CHANGES TO THE OBLIGORS).

                                      - 1 -


        "ADDITIONAL COST RATE" has the meaning given to it in Schedule 4
        (MANDATORY COST FORMULAE).

        "ADDITIONAL GUARANTOR" means a company which becomes an Additional
        Guarantor in accordance with Clause 28 (CHANGES TO THE OBLIGORS).

        "ADDITIONAL OBLIGOR" means an Additional Borrower or an Additional
        Guarantor.

        "AFFILIATE" means, in relation to any person, a Subsidiary of that
        person or a Holding Company of that person or any other Subsidiary of
        that Holding Company.

        "AGENT'S SPOT RATE OF EXCHANGE" means the Facility Agent's spot rate of
        exchange for the purchase of the relevant currency with the Base
        Currency in the London foreign exchange market as of 11:00 a.m. on a
        particular day.

        "ANCILLARY COMMITMENT" means, in relation to an Ancillary Lender the
        maximum amount from time to time of the Ancillary Facilities made
        available by such Ancillary Lender to the extent not cancelled under
        this Agreement or the Ancillary Documents relating to that Ancillary
        Facility.

        "ANCILLARY DOCUMENT" means each document relating to or evidencing the
        terms of an Ancillary Facility.

        "ANCILLARY FACILITY" means any ancillary facility made available to any
        Obligor upon request as described in Clause 9 (ANCILLARY FACILITIES).
        The Facility Agent hereby confirms by its signature to this Agreement
        that the following are Ancillary Facilities at the date of this
        Agreement,

        (a)    a L5,000,000 multi option facility made between Bank of Scotland
               and certain Obligors dated on or about the date of this
               Agreement;

        (b)    a L5,000,000 facility made between Barclays Bank PLC and certain
               Obligors dated on or about the date of this Agreement.

        "ANCILLARY LENDER" means any Lender or Lenders selected as an Ancillary
        Lender by the Parent by notice to the Facility Agent. Barclays Bank PLC
        and The Governor and Company of the Bank of Scotland are Ancillary
        Lenders as at the date of this Agreement.

        "ANCILLARY OUTSTANDINGS" means, at any time, in relation to an Ancillary
        Facility the aggregate of the following amounts outstanding under that
        Ancillary Facility then in force:

        (a)    the principal amount under each overdraft facility and on demand
               short term loan facility calculated on a net basis;

        (b)    the face amount of each guarantee, bond and letter of credit
               under each guarantee, bonding or letter of credit facility; and

                                      - 2 -


        (c)    the amount fairly representing the aggregate exposure (excluding
               interest and similar charges) of that Ancillary Lender under each
               other type of accommodation provided under that Ancillary
               Facility as determined by such Ancillary Lender in accordance
               with the relevant Ancillary Document or market practice.

        "ANCILLARY UTILISATION" means an advance made or guarantee, bond or
        letter of credit issued under the Ancillary Facility.

        "ANNIVERSARY" means an anniversary of the date of signing of this
        Agreement.

        "APPROVED SUBORDINATED DEBT" means:

        (a)    Subordinated Loans under the Subordinated Loan Agreement; and

        (b)    any subordinated debt to which the Majority Lenders have given
               their prior written consent.

        "AUTHORISATION" means an authorisation, consent, approval, resolution,
        licence, exemption, filing, notarisation or registration.

        "AVAILABILITY PERIOD" means:

        (a)    in relation to the Term Facility, the period from and including
               the date of this Agreement to and including the date falling one
               Month after the date of this Agreement; and

        (b)    in relation to the Revolving Facility, the period from and
               including the date of this Agreement to and including the Final
               Maturity Date.

        "AVAILABLE COMMITMENT" means, in relation to a Facility, a Lender's
        Commitment under that Facility minus (subject as set out below):

        (a)    the Base Currency Amount of its participation in any outstanding
               Loans under that Facility; and

        (b)    in relation to any proposed Utilisation, the Base Currency Amount
               of its participation in any other Loans that are due to be made
               under that Facility on or before the proposed Utilisation Date.

        For the purposes of calculating a Lender's Available Commitment in
        relation to any proposed Utilisation under the Revolving Facility only,
        that Lender's participation in any Revolving Facility Utilisations that
        are due to be repaid or prepaid on or before the proposed Utilisation
        Date and the Lender's participation in any Revolving Loans that are due
        to be repaid or prepaid on or before the proposed Utilisation Date shall
        not be deducted from a Lender's Commitment under that Facility.

        "AVAILABLE FACILITY" means, in relation to a Facility, the aggregate for
        the time being of each Lender's Available Commitment in respect of that
        Facility.

                                      - 3 -


        "BASE CURRENCY" means sterling.

        "BASE CURRENCY AMOUNT" means in relation to a Utilisation, the amount
        specified in the Utilisation Request delivered by a Borrower for that
        Utilisation (or, if the amount requested is not denominated in the Base
        Currency, that amount converted into the Base Currency at the Agent's
        Spot Rate of Exchange on the date which is three Business Days before
        the Utilisation Date or, if later, on the date the Facility Agent
        receives the Utilisation Request in accordance with the terms of this
        Agreement) and, in the case of a Letter of Credit, as adjusted under
        Clause 6.7 (REVALUATION OF LETTERS OF CREDIT) at six monthly intervals,
        as adjusted to reflect any repayment, prepayment, consolidation or
        division of a Utilisation.

        "BORROWINGS" has the meaning ascribed to it in Clause 24.1 (FINANCIAL
        DEFINITIONS).

        "BORROWER" means an Original Borrower or an Additional Borrower unless
        it has ceased to be a Borrower in accordance with Clause 28 (CHANGES TO
        THE OBLIGORS).

        "BREAK COSTS" means the amount (if any) by which:

        (a)    the interest which a Lender should have received for the period
               from the date of receipt of all or any part of its participation
               in a Loan or Unpaid Sum to the last day of the current Interest
               Period in respect of that Loan or Unpaid Sum, had the principal
               amount or Unpaid Sum received been paid on the last day of that
               Interest Period;

        exceeds:

        (b)    the amount which that Lender would be able to obtain by placing
               an amount equal to the principal amount or Unpaid Sum received by
               it on deposit with a leading bank in the Relevant Interbank
               Market for a period starting on the Business Day following
               receipt or recovery and ending on the last day of the current
               Interest Period.

        "BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
        banks are open for general business in London and:

        (a)    (in relation to any date for payment or purchase of a currency
               other than euro) the principal financial centre of the country of
               that currency; or

        (b)    (in relation to any date for payment or purchase of euro) any
               TARGET Day.

        "CASH" means, at any time, cash at bank denominated in sterling, dollars
        or euro and credited to an account in the name of an Obligor with an
        Eligible Deposit Bank and to which an Obligor is alone beneficially
        entitled and for so long as:

        (a)    that cash is repayable on demand;

                                      - 4 -


        (b)    repayment of that cash is not contingent on the prior discharge
               of any other indebtedness of any Group member or of any other
               person whatsoever or on the satisfaction of any other condition;
               and

        (c)    there is no Security over that cash except Transaction Security.

        "CHARGED PROPERTY" means all of the assets of the Obligors which from
        time to time are, or are expressed to be, the subject of the Transaction
        Security.

        "CONFIDENTIALITY UNDERTAKING" means a confidentiality undertaking
        substantially in a recommended form of the LMA as set out in Schedule 10
        (CONFIDENTIALITY UNDERTAKING) or in any other form agreed between the
        Parent and the Facility Agent.

        "COMMITMENT" means a Term Commitment or a Revolving Commitment.

        "COMPLIANCE CERTIFICATE" means a certificate substantially in the form
        set out in Schedule 7 (FORM OF COMPLIANCE CERTIFICATE).

        "CONDITIONS SUBSEQUENT LONGSTOP DATE" has the meaning ascribed to it in
        Clause 25.23 (CONDITIONS SUBSEQUENT).

        "CONSOLIDATED TOTAL NET DEBT" has the meaning given to such term in
        Clause 24.1 (FINANCIAL DEFINITIONS).

        "CREDIT PARTICIPATION" means, in relation to a Lender, the aggregate of:

        (a)    its aggregate Commitments; and

        (b)    its aggregate Ancillary Commitments (if any).

        "DANGEROUS SUBSTANCES" means any radiation and any substance (whether in
        solid or liquid or gaseous form) capable (whether alone or in
        combination with any other substance) of causing harm to man or any
        other living organism or damaging property or the environment including,
        without limitation, any controlled, special, hazardous, toxic,
        radioactive or dangerous waste.

        "DEBENTURE" means any Transaction Security Document described as a
        debenture in paragraph 4 of Schedule 2 (CONDITIONS PRECEDENT).

        "DEBT OR EQUITY ISSUE" has the meaning ascribed to it in Clause 11.8
        (MANDATORY PREPAYMENT FROM DEBT OR EQUITY PROCEEDS).

        "DEBT OR EQUITY PROCEEDS" has the meaning ascribed to it in Clause 11.8
        (MANDATORY PREPAYMENT FROM DEBT OR EQUITY PROCEEDS).

        "DEFAULT" means an Event of Default or any event or circumstance which
        would (with the expiry of a grace period, the giving of notice, the
        making of any determination under the Finance Documents or any
        combination of any of the foregoing) be an Event of Default.

                                      - 5 -


        "DELEGATE" means any delegate, agent, attorney or co-trustee appointed
        by the Security Trustee.

        "DORMANT" has the meaning given to it in Section 249AA(4) of the
        Companies Act 1985.

        "DORMANT SUBSIDIARIES" means each of the members of the Group which are
        Dormant and which are listed in Part III of Schedule 1 (THE ORIGINAL
        PARTIES).

        "DUE DILIGENCE REPORT" means the due diligence report dated 27 January
        2004 prepared by RSM Robson Rhodes and addressed to and/or capable of
        being relied upon by the Arranger and the Secured Parties.

        "EBITDA" has the meaning given to such term in Clause 24.1 (FINANCIAL
        DEFINITIONS).

        "ELIGIBLE DEPOSIT BANK" means any bank or financial institution with a
        short term rating of at least A1 granted by Standard and Poor's
        Corporation or P1 granted by Moody's Investor's Services Inc..

        "ENVIRONMENTAL CLAIM" means any claim, proceeding or investigation by
        any person in respect of any Environmental Law.

        "ENVIRONMENTAL LAW" means any applicable law or regulation which relates
        to:

        (a)    the pollution or protection of the environment;

        (b)    harm to or the protection of human health; or

        (c)    the health of animals or plants.

        "ENVIRONMENTAL PERMITS" means any permit, licence, consent, approval and
        other authorisation and the filing of any notification, report or
        assessment required under any Environmental Law for the operation of the
        business of any member of the Group conducted on or from the properties
        owned or used by any member of the Group.

        "EUROSTORAGE ACQUISITION" means the acquisition of the assets, business
        and undertaking comprising Eurostorage Dossier & Archief Beheer B.V. by
        Iron Mountain Nederland B.V. on 27 February 2004.

        "EVENT OF DEFAULT" means any event or circumstance specified as such in
        Clause 26 (EVENTS OF DEFAULT).

        "EXISTING DEFERRED CONSIDERATION" means:

        (a)    the deferred consideration of up to euros 2,200,000 due on 12
               April 2004 by the Iron Mountain Holdings (Europe) Limited
               pursuant to the acquisition by Iron Mountain Holdings (Europe)
               Limited of the entire issued share capital of Iron Mountain
               Ireland (Holdings) Limited (formerly Beverley Records Management
               Limited);

                                      - 6 -


        (b)    the deferred consideration of up to euros 2,150,000 due on 1 July
               2004 by Iron Mountain Ireland Limited pursuant to the acquisition
               by Iron Mountain Ireland Limited of the entire issued share
               capital of Record Data Limited; and

        (c)    the deferred consideration of up to L6,200,000 due by Iron
               Mountain Holdings (Europe) Limited on demand pursuant to the
               acquisition by Iron Mountain Holdings (Europe) Limited of the
               entire issued share capital of Datavault Holdings Limited.

        "EXISTING FACILITIES" means the term loans and working capital facility
        of up to L43,000,000 provided to, INTER ALIA, the Parent pursuant to a
        facility agreement dated 7 May 2003.

        "EXISTING RETAINED FACILITIES" means the loan and other facilities
        detailed in Part I of Schedule 11 (EXISTING RETAINED FACILITIES AND
        EXISTING RETAINED SECURITY).

        "EXISTING RETAINED INTER-COMPANY FACILITIES" means:

        (a)    the loan agreement dated 12 July 2003 made between the Parent and
               Iron Mountain Group (Europe) Limited pursuant to which Iron
               Mountain Group (Europe) Limited made available to the Parent a
               loan facility of up to L35,070,000.

        (b)    the loan agreement dated 12 July 2003 made between the Parent and
               Iron Mountain Group (Europe) Limited pursuant to which Iron
               Mountain Group (Europe) Limited made available to the Parent a
               loan facility of up to L34,930,000.

        (c)    the demand promissory note dated 4 January 1999 made between the
               Parent (then Britannia Data Management Limited) and Iron Mountain
               Group (Europe) Limited.

        (d)    the senior subordinated bridge loan agreement dated 12 July 2003
               made between the Parent and Iron Mountain Group (Europe) Limited
               pursuant to which Iron Mountain Group (Europe) Limited made
               available to the Parent a loan facility of up to L160,000,000.

        "EXISTING RETAINED SECURITY" means the security set out in Part II of
        Schedule 11.

        "EXPIRY DATE" means for a Letter of Credit, the last day of its Term.

        "FACILITY" means the Term Facility or the Revolving Facility.

        "FACILITY OFFICE" means the office or offices notified by a Lender to
        the Facility Agent in writing on or before the date it becomes a Lender
        (or, following that date, by not less than five Business Days' written
        notice) as the office or offices through which it will perform its
        obligations under this Agreement.

                                      - 7 -


        "FEE LETTER" means:

        (a)    any letter or letters dated on or about the date of this
               Agreement between the Arranger and the Parent (or the Facility
               Agent and the Parent or the Security Trustee and the Parent)
               setting out any of the fees referred to in Clause 15 (FEES); and

        (b)    any other agreement setting out fees referred to in Clause 15.4
               (FEES PAYABLE IN RESPECT OF LETTERS OF CREDIT).

        "FINAL MATURITY DATE" means the date falling five years from the date of
        this Agreement.

        "FINANCE DOCUMENT" means this Agreement, any Fee Letter, any Accession
        Letter, any Resignation Letter, any Transaction Security Document, the
        Subordination Agreement, any Ancillary Document, any Hedging Agreement
        and any other document designated as a "FINANCE DOCUMENT" by the
        Facility Agent and the Parent.

        "FINANCE PARTY" means the Facility Agent, the Arranger, the Security
        Trustee, a Lender, the Issuing Bank, a Hedge Bank or any Ancillary
        Lender.

        "FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of:

        (a)    Borrowings;

        (b)    any derivative transaction entered into in connection with
               protection against or benefit from fluctuation in any rate or
               price (and, when calculating the value of any derivative
               transaction, only the marked to market value shall be taken into
               account); and

        (c)    (without double counting) the amount of any liability in respect
               of any guarantee or indemnity or similar assurance against
               financial loss for any of the items referred to in the preceding
               paragraphs of this definition and any agreement to maintain the
               solvency of any person whether by investing in, lending to or
               purchasing the assets of such person.

        "FINANCIAL QUARTER" has the meaning given to that term in Clause 24.1
        (FINANCIAL DEFINITIONS).

        "FORTIS PLEDGE" means the pledge of bank accounts granted by Iron
        Mountain Nederland B.V. in favour of Fortis Bank and listed in
        Part II (EXISTING RETAINED SECURITY) of Schedule II.

        "GROUP" means the Parent and its Subsidiaries for the time being.

        "GUARANTOR" means an Original Guarantor or an Additional Guarantor,
        unless it has ceased to be a Guarantor in accordance with Clause 28
        (CHANGES TO THE OBLIGORS).

        "HAYS IMS" means the information management services business acquired
        by the Parent from Hays plc and certain of its associated companies
        comprising business and assets within the United Kingdom and shares in
        other jurisdictions.

                                      - 8 -


        "HAYS IMS ACQUISITION" means the acquisition by the Group of the entire
        business and assets and certain shares comprising Hays IMS from Hays Plc
        on 16 July 2003, treated as effective as from 1 July 2003.

        "HAYS IMS ACQUISITION INDEBTEDNESS" has the meaning described to it in
        paragraph (a)(ii) of Clause 3.1 (PURPOSE).

        "HAYS' LEASES" means the leasehold interests to be assigned to certain
        members of the Group pursuant to the Hays IMS Acquisition.

        "HEDGE BANK" means any Lender or an Affiliate of a Lender which (if not
        a Lender) has acceded to this Agreement, which enters into a Hedging
        Agreement.

        "HEDGING AGREEMENT" means any agreement entered into or to be entered
        into by a Borrower and a Hedge Bank for the purpose of hedging interest
        rate liabilities in relation to the Facilities in accordance with the
        Hedging Strategy Letter.

        "HEDGING STRATEGY LETTER" means the letter in the agreed form from the
        Parent to the Facility Agent setting out the hedging strategy.

        "HOLDING COMPANY" means, in relation to a company or corporation, any
        other company or corporation in respect of which it is a Subsidiary.

        "ICC CHARGES" means the chattel mortgages and the debenture granted by
        Iron Mountain Ireland Limited in favour of Bank of Scotland (formerly
        ICC Bank plc) and listed in Part II (EXISTING RETAINED SECURITY) of
        Schedule 11.

        "INFORMATION MEMORANDUM" means the document in the form approved by the
        Parent which, at the request of the Parent and on its behalf was
        prepared in relation to this transaction and distributed by the Arranger
        to selected financial institutions before the date of this Agreement.

        "INTEREST PERIOD" means, in relation to a Loan, each period determined
        in accordance with Clause 13 (INTEREST PERIODS) and, in relation to an
        Unpaid Sum, each period determined in accordance with Clause 12.3
        (DEFAULT INTEREST).

        "JOINT VENTURE GROUP COMPANY" means any joint venture company,
        corporation, partnership, trust or other entity in any jurisdiction in
        which a member of the Group owns 75 per cent. or less of the issued
        share capital equity or voting rights.

        "L/C PROPORTION" means in relation to a Lender in respect of any Letter
        of Credit, the proportion (expressed as a percentage) borne by that
        Lender's Available Commitment to the relevant Available Facility
        immediately prior to the issue of that Letter of Credit.

        "LENDER" means:

        (a)    any Original Lender; and

        (b)    any bank, financial institution, trust, fund or other entity
               which has become a Party in accordance with Clause 27 (CHANGES TO
               THE LENDERS),

                                      - 9 -


        which in each case has not ceased to be a Party in accordance with the
        terms of this Agreement.

        "LETTER OF CREDIT" means:

        (a)    a letter of credit, substantially in the form set out in Schedule
               12 (FORM OF LETTER OF CREDIT) or in any other form requested by
               the Parent and agreed by the Facility Agent, the Issuing Bank and
               the Lenders; or

        (b)    any guarantee, indemnity or other instrument in a form requested
               by a Borrower (or the Parent on its behalf) and agreed by the
               Facility Agent, the Issuing Bank and the Lenders.

        "LIBOR" means, in relation to any Loan:

        (a)    the applicable Screen Rate; or

        (b)    (if no Screen Rate is available for the currency or Interest
               Period of that Loan) the arithmetic mean of the rates (rounded
               upwards to four decimal places) as supplied to the Facility Agent
               at its request quoted by the Reference Banks to leading banks in
               the London interbank market,

        as of the Specified Time on the Quotation Day for the offering of
        deposits in the currency of that Loan and for a period comparable to the
        Interest Period for that Loan.

        "LOAN" means a Term Loan or a Revolving Loan.

        "LMA" means the Loan Market Association.

        "MAJORITY CREDITORS" means, at any time, a Lender or Lenders whose
        Credit Participations at that time aggregate more than 66 2/3% of the
        total Credit Participations at that time.

        "MAJORITY LENDERS" means, at any time:

        (a)    a Lender or Lenders whose Commitments aggregate more than 66
               2/3% of the Total Commitments at that time; or

        (b)    if the Total Commitments have been reduced to zero, a Lender or
               Lenders whose Commitments aggregated more than 66 2/3% of the
               Total Commitments immediately prior to the reduction).

        "MANDATORY COST" means the percentage rate per annum calculated by the
        Facility Agent in accordance with Schedule 4 (MANDATORY COST FORMULAE).

        "MARGIN" means 1.75 per cent. per annum:

        but if:

        (a)    no Event of Default has occurred and is continuing;

                                     - 10 -


        (b)    a period of at least 12 months has expired since the date of this
               Agreement; and

        (c)    the ratio of Consolidated Total Net Debt at the end of the most
               recently completed Relevant Period to EBITDA for such Relevant
               Period is within the range set out below:

        then the Margin for each Loan will be the percentage per annum set out
        below opposite that range.



               COLUMN A                                      COLUMN B
        -----------------------------------------------------------------
               CONSOLIDATED TOTAL NET DEBT TO                MARGIN
               EBITDA                                        % P.A.
        -----------------------------------------------------------------
                                                          
               Greater than or equal to 3.5:1                1.75

               Less than 3.5:1 but greater than or           1.50
               equal to 3.0:1

               Less than 3.0:1                               1.25


        Any increase or reduction in the Margin shall take effect on the date of
        receipt by the Facility Agent of the Compliance Certificate for that
        Relevant Period pursuant to Clause 23.2 (COMPLIANCE CERTIFICATE)
        PROVIDED THAT:

        (a)    if the Parent does not deliver a Compliance Certificate to the
               Facility Agent in accordance with the terms of Clause 23.2
               (COMPLIANCE CERTIFICATE), the Margin shall as from the date
               immediately following the date on which such Compliance
               Certificate should have been delivered until the date such
               Compliance Certificate is delivered, be 1.75 per cent. per annum;
               or

        (b)    if an Event of Default has occurred and is continuing, the Margin
               shall, as from the date of the occurrence of the Event of Default
               until the date such Event of Default ceases to be continuing, be
               1.75 per cent. per annum.

        For the purpose of determining the Margin, Consolidated Total Net Debt
        to EBITDA and Relevant Period shall be determined in accordance with
        Clause 24.1 (FINANCIAL DEFINITIONS).

        "MATERIAL ADVERSE EFFECT" means a material adverse change in:

        (a)    the business, operations, property, condition (financial or
               otherwise) or prospects of the Group taken as a whole;

        (b)    the ability of an Obligor to perform its payment obligations
               under the Finance Documents and/or its obligations under Clause
               24.2 (FINANCIAL CONDITION); or

                                     - 11 -


        (c)    the validity or enforceability of the Finance Documents or the
               rights or remedies of any Finance Party under any of the Finance
               Documents.

        "MATERIAL COMPANY" means, at any time a Subsidiary of the Parent which:

        (a)    is listed in Schedule 9 (MATERIAL COMPANIES); or

        (b)    has earnings before interest, tax, depreciation and amortisation
               (calculated on the same basis as EBITDA, as defined in Clause 24
               (FINANCIAL COVENANTS)) representing 5 per cent. or more of
               EBITDA; or

        (c)    has gross assets or turnover (excluding intra-group items)
               representing 5 per cent. or more of the gross assets or turnover
               of the Group,

        in each case calculated on a consolidated basis.

        Compliance with the conditions set out in paragraphs (b) and (c) shall
        be determined by reference to the most recent Compliance Certificate
        supplied by the Parent and/or the latest audited financial statements of
        that Subsidiary (consolidated in the case of a Subsidiary which itself
        has Subsidiaries) and the latest audited consolidated financial
        statements of the Group.

        However if a Subsidiary has been acquired since the date as at which the
        latest audited consolidated financial statements of the Group were
        prepared, the financial statements shall be deemed to be adjusted in
        order to take into account the acquisition of that Subsidiary.

        A report by the auditors of the Parent that a Subsidiary is or is not a
        Material Company shall, in the absence of manifest error, be conclusive
        and binding on all Parties.

        "MENTMORE DISPOSAL" means the disposal on 27 February 2004 by Mentmore
        plc of all of its shareholding in the Parent to Iron Mountain Mayflower
        Limited.

        "MONTH" means a period starting on one day in a calendar month and
        ending on the numerically corresponding day in the next calendar month,
        except that:

        (a)    (subject to paragraph (c) below) if the numerically corresponding
               day is not a Business Day, that period shall end on the next
               Business Day in that calendar month in which that period is to
               end if there is one, or if there is not, on the immediately
               preceding Business Day;

        (b)    if there is no numerically corresponding day in the calendar
               month in which that period is to end, that period shall end on
               the last Business Day in that calendar month; and

        (c)    if an Interest Period begins on the last Business Day of a
               calendar month, that Interest Period shall end on the last
               Business Day in the calendar month in which that Interest Period
               is to end.

                                     - 12 -


        The above rules will only apply to the last Month of any period.
        "MONTHLY" shall be construed accordingly.

        "OBLIGOR" means a Borrower or a Guarantor.

        "OBLIGORS' AGENT" means the Parent, appointed to act on behalf of each
        Obligor in relation to the Finance Documents pursuant to Clause 2.3
        (OBLIGORS' AGENT).

        "OPTIONAL CURRENCY" means:

        (a)    euro and/or US dollars; and

        (b)    a currency (other than the Base Currency) which complies with the
               conditions set out in Clause 4.3 (CONDITIONS RELATING TO OPTIONAL
               CURRENCIES).

        "ORIGINAL FINANCIAL STATEMENTS" means the audited consolidated financial
        statements of the Parent.

        "ORIGINAL OBLIGOR" means an Original Borrower or an Original Guarantor.

        "OVERSEAS SUBSIDIARY" means those of the Subsidiaries incorporated in a
        jurisdiction other than the United Kingdom and Ireland.

        "PARTICIPATING MEMBER STATE" means any member state of the European
        Communities that adopts or has adopted the euro as its lawful currency
        in accordance with legislation of the European Community relating to
        Economic and Monetary Union.

        "PARTY" means a party to this Agreement.

        "PLEDGED COMPANY" means any direct or indirect Subsidiary of the Parent
        in respect of which 100% (or, in the case of Iron Mountain Espana S.A.,
        99.99%) of its voting and issued share capital is pledged pursuant to a
        Transaction Security Document PROVIDED THAT such Transaction Security
        Document creates a valid and effective fixed charge over such voting and
        issued share capital of such Subsidiary in its jurisdiction of
        incorporation.

        "QUALIFYING LENDER" has the meaning given to that term in Clause 16 (TAX
        GROSS-UP AND INDEMNITIES).

        "QUOTATION DAY" means, in relation to any period for which an interest
        rate is to be determined:

        (a)    (if the currency is sterling) the first day of that period;

        (b)    (if the currency is euro) two TARGET Days before the first day of
               that period; or

        (c)    (for any other currency) two Business Days before the first day
               of that period,

        unless market practice differs in the Relevant Interbank Market for a
        currency, in which case the Quotation Day for that currency will be
        determined by the Facility

                                     - 13 -


        Agent in accordance with market practice in the Relevant Interbank
        Market (and if quotations would normally be given by leading banks in
        the Relevant Interbank Market on more than one day, the Quotation Day
        will be the last of those days).

        "RECEIVER" means a receiver or receiver and manager or administrative
        receiver of the whole or any part of the Charged Property.

        "REFERENCE BANKS" means the principal London offices of Barclays Bank
        PLC, The Governor and Company of the Bank of Scotland and HSBC Bank plc
        or such other banks as may be appointed by the Facility Agent in
        consultation with the Parent.

        "REFINANCING PREMIUM" has the meaning ascribed to it in paragraph (c) of
        Clause 11.11 (RESTRICTIONS)

        "RELEVANT INTERBANK MARKET" means the London interbank market.

        "RELEVANT JURISDICTION" means, in relation to an Obligor:

        (a)    its jurisdiction of incorporation;

        (b)    any jurisdiction where any asset subject to or intended to be
               subject to the Transaction Security to be created by it is
               situated;

        (c)    any jurisdiction where it conducts its business; and

        (d)    the jurisdiction whose laws govern the perfection of any of the
               Transaction Security Documents entered into by it.

        "RENEWAL REQUEST" means a written notice delivered to the Facility Agent
        in accordance with Clause 6.6 (RENEWAL OF A LETTER OF CREDIT).

        "REPAYMENT DATE" means each of the dates specified in Clause 10.1
        (REPAYMENT OF TERM LOANS) as Repayment Dates.

        "REPAYMENT INSTALMENT" means each instalment for repayment of the Term
        Loans referred to in Clause 10.1 (REPAYMENT OF TERM LOANS).

        "REPEATING REPRESENTATIONS" means each of the representations set out in
        Clauses 22.1 (STATUS) to Clause 22.6 (GOVERNING LAW AND ENFORCEMENT),
        Clause 22.8 (NO DEFAULT), paragraph (e) of Clause 22.9 (NO MISLEADING
        INFORMATION), paragraphs (c) and (d) of Clause 22.10 (FINANCIAL
        STATEMENTS), Clause 22.11 (NO PROCEEDINGS PENDING OR THREATENED), Clause
        22.16 (PARI PASSU RANKING), Clause 22.17 (TRANSACTION SECURITY) to
        Clause 22.19 (SHARES).

        "REPORTS" means the Due Diligence Report.

        "REVOLVING COMMITMENT" means:

        (a)    in relation to an Original Lender, the amount in the Base
               Currency set opposite its name under the heading "Revolving
               Commitment" in Part II of

                                     - 14 -


               Schedule 1 (THE ORIGINAL PARTIES) and the amount of any other
               Revolving Commitment transferred to it under this Agreement; and

        (b)    in relation to any other Lender, the amount in the Base Currency
               of any Revolving Commitment transferred to it under this
               Agreement,

        to the extent not cancelled, reduced or transferred by it under this
        Agreement.

        "REVOLVING FACILITY" means the revolving credit facility made available
        under this Agreement as described in paragraph (a)(ii) of Clause 2.1
        (THE FACILITIES).

        "REVOLVING LOAN" means a loan made or to be made under the Revolving
        Facility or the principal amount outstanding for the time being of that
        loan.

        "REVOLVING FACILITY UTILISATION" means a Revolving Loan or a Letter of
        Credit.

        "ROLLOVER LOAN" means one or more Revolving Loans:

        (a)    made or to be made on the same day that:

               (i)    a maturing Revolving Loan is due to be repaid; or

               (ii)   a demand by the Facility Agent pursuant to a drawing in
                      respect of a Letter of Credit is due to be met;

        (b)    the aggregate amount of which is equal to or less than the
               maturing Revolving Loan or the relevant claim in respect of that
               Letter of Credit;

        (c)    in the same currency as the maturing Revolving Loan (unless it
               arose as a result of the operation of Clause 8.2 (UNAVAILABILITY
               OF A CURRENCY)) or the relevant claim in respect of that Letter
               of Credit; and

        (d)    made or to be made to the same Borrower for the purpose of:

               (i)    refinancing a maturing Revolving Loan; or

               (ii)   satisfying the relevant claim in respect of that Letter of
                      Credit.

        "SCREEN RATE" means in relation to LIBOR, the British Bankers'
        Association Interest Settlement Rate for the relevant currency and
        period in the British Bankers' Association Interest Settlement Rate for
        the relevant currency and period displayed on the appropriate page of
        the Telerate screen. If the agreed page is replaced or service ceases to
        be available, the Facility Agent may specify another page or service
        displaying the appropriate rate after consultation with the Parent and
        the Lenders.

        "SECURED OBLIGATIONS" means all obligations which any of the Obligors
        may at any time have to the Security Trustee (whether for its own
        account or as trustee for the Secured Parties) or any of the other
        Secured Parties under or pursuant to the Finance Documents, whether
        present or future, actual or contingent (and whether incurred solely or
        jointly and whether as principal or as surety or in some other
        capacity),

                                     - 15 -


        including the obligations set out in Clause 30.2 (PARALLEL DEBT
        (COVENANT TO PAY THE SECURITY TRUSTEE)) of the Facility Agreement.

        "SECURED PARTIES" means the Security Trustee, the Arrangers, the
        Facility Agent and each Lender, the Issuing Bank, each Ancillary Lender
        and each Hedge Bank from time to time party to this Agreement.

        "SECURITY" means a mortgage, charge, pledge, lien or other security
        interest securing any obligation of any person or any other agreement or
        arrangement having a similar effect.

        "SELECTION NOTICE" means a notice substantially in the form set out in
        Part II of Schedule 3 (SELECTION NOTICE) given in accordance with Clause
        13 (INTEREST PERIODS) in relation to a Term Facility.

        "SPANISH PUBLIC DOCUMENT" means documento publico.

        "SPECIFIED TIME" means a time determined in accordance with Schedule 8
        (TIMETABLES).

        "SUBORDINATED LOANS" means the unsecured loans made by the Subordinated
        Lender to the Parent under the Subordinated Loan Agreement.

        "SUBORDINATED LENDER" means Iron Mountain Inc.

        "SUBORDINATED LOAN AGREEMENT" means the loan agreement dated on or about
        the date of this Agreement made between the Subordinated Lender and the
        Parent pursuant to which the Subordinated Loans were made available.

        "SUBORDINATION AGREEMENT" means the deed of subordination dated the same
        date as this Agreement and made between the Security Trustee, Iron
        Mountain Inc and the Obligors.

        "SUBSIDIARY" means a subsidiary within the meaning of section 736 of the
        Companies Act 1985.

        "TARGET" means Trans-European Automated Real-time Gross Settlement
        Express Transfer payment system.

        "TARGET DAY" means any day on which TARGET is open for the settlement of
        payments in euro.

        "TAX" means any tax, levy, impost, duty or other charge or withholding
        of a similar nature (including any penalty or interest payable in
        connection with any failure to pay or any delay in paying any of the
        same).

        "TAXES ACT" means the Income and Corporation Taxes Act 1988.

        "TERM" means each period determined under this Agreement for which the
        Issuing Bank is under a liability under a Letter of Credit.

                                     - 16 -


        "TERM COMMITMENT" means:

        (a)    in relation to an Original Lender, the amount in the Base
               Currency set opposite its name under the heading "Term
               Commitment" in Part II of Schedule 1 (THE ORIGINAL PARTIES) and
               the amount of any other Term Commitment transferred to it under
               this Agreement; and

        (b)    in relation to any other Lender, the amount in the Base Currency
               of any Term Commitment transferred to it under this Agreement,

        to the extent not cancelled, reduced or transferred by it under this
        Agreement.

        "TERM FACILITY" means the term loan facility made available under this
        Agreement as described in paragraph (a)(i) of Clause 2.1 (THE
        FACILITIES).

        "TERM LOAN" means a loan made or to be made under the Term Facility or
        the principal amount outstanding for the time being of that loan.

        "TOTAL COMMITMENTS" means the aggregate of the Total Term Commitments
        and the Total Revolving Commitments.

        "TOTAL TERM COMMITMENTS" means the aggregate of the Term Commitments.

        "TOTAL REVOLVING COMMITMENTS" means the aggregate of the Revolving
        Commitments.

        "TRANSACTION SECURITY" means the Security created or expressed to be
        created in favour of the Security Trustee pursuant to the Transaction
        Security Documents.

        "TRANSACTION SECURITY DOCUMENTS" means each of the following documents:

        (a)    the charges, pledges and assignments and other security documents
               in form and substance acceptable to the Security Trustee and the
               Facility Agent and identified in and delivered to the Facility
               Agent under paragraph 3 of Part I of Schedule 2 (CONDITIONS
               PRECEDENT TO INITIAL UTILISATION) or under Part III of Schedule 2
               (TRANSACTION SECURITY DOCUMENTS AND SECURITY RELATED DOCUMENTS TO
               BE DELIVERED BY ADDITIONAL OBLIGORS); and

        (b)    any other document entered into by any Obligor creating or
               expressed to create any Security over all or any part of its
               assets in respect of the obligations of any of the Obligors under
               any of the Finance Documents.

        "TRANSFER CERTIFICATE" means a certificate substantially in the form set
        out in Schedule 5 (FORM OF TRANSFER CERTIFICATE) or any other form
        agreed between the Facility Agent and the Parent.

        "TRANSFER DATE" means, in relation to a transfer, the later of:

        (a)    the proposed Transfer Date specified in the Transfer Certificate;
               and

        (b)    the date on which the Facility Agent executes the Transfer
               Certificate.

                                     - 17 -


        "UNPAID SUM" means any sum due and payable but unpaid by an Obligor
        under the Finance Documents.

        "UTILISATION" means a utilisation of a Facility.

        "UTILISATION DATE" means the date on which a Utilisation is made.

        "UTILISATION REQUEST" means a notice substantially in the form set out
        in Part I of Schedule 3 (REQUESTS).

        "VAT" means value added tax as provided for in the Value Added Tax Act
        1994 and any other tax of a similar nature.

1.2     CONSTRUCTION
        (a)    Unless a contrary indication appears a reference in this
               Agreement to:

               (i)    the "FACILITY AGENT", the "ARRANGER", the "SECURITY
                      TRUSTEE", any "FINANCE PARTY", any "SECURED PARTY", any
                      "LENDER", any "OBLIGOR", any "PARTY" or any other person
                      shall be construed so as to include its successors in
                      title, permitted assigns and permitted transferees and, in
                      the case of the Security Trustee, any person for the time
                      being appointed as security trustee or security trustees
                      in accordance with this Agreement;

               (ii)   "ASSETS" includes present and future properties, revenues
                      and rights of any description;

               (iii)  the "EUROPEAN INTERBANK MARKET" means the interbank market
                      for euro operating in Participating Member States;

               (iv)   a "FINANCE DOCUMENT" or a "TRANSACTION SECURITY DOCUMENT"
                      or any other agreement or instrument is a reference to
                      that Finance Document or Transaction Security Document or
                      other agreement or instrument as amended or novated
                      (however fundamentally);

               (v)    "GUARANTEE" means (other than in Clause 21 (GUARANTEE AND
                      INDEMNITY)) any guarantee, letter of credit, bond,
                      indemnity or similar assurance against loss, or any
                      obligation, direct or indirect, actual or contingent, to
                      purchase or assume any indebtedness of any person or to
                      make an investment in or loan to any person or to purchase
                      assets of any person where, in each case, such obligation
                      is assumed in order to maintain or assist the ability of
                      such person to meet its indebtedness;

               (vi)   "INDEBTEDNESS" includes any obligation (whether incurred
                      as principal or as surety) for the payment or repayment of
                      money, whether present or future, actual or contingent;

                                     - 18 -


               (vii)  a "PARTICIPATION" of a Lender in a Loan means the amount
                      of such Loan which such Lender has made or is to make
                      available and thereafter that part of the Loan which is
                      owed to such Lender;

               (viii) a "PERSON" includes any person, firm, company,
                      corporation, government, state or agency of a state or any
                      association, trust or partnership (whether or not having
                      separate legal personality) of two or more of the
                      foregoing;

               (ix)   a "REGULATION" includes any regulation, rule, official
                      directive, request or guideline (whether or not having the
                      force of law) of any governmental, intergovernmental or
                      supranational body, agency, department or regulatory,
                      self-regulatory or other authority or organisation;

               (x)    a provision of law is a reference to that provision as
                      amended or re-enacted; and

               (xi)   a time of day is a reference to London time.

        (b)    Section, Clause and Schedule headings are for ease of reference
               only.

        (c)    Unless a contrary indication appears, a term used in any other
               Finance Document or in any notice given under or in connection
               with any Finance Document has the same meaning in that Finance
               Document or notice as in this Agreement.

        (d)    A Default is "CONTINUING" if it has not been remedied or waived.

        (e)    A Borrower providing "CASH COVER" for a Letter of Credit means a
               Borrower paying an amount in the currency of the Letter of Credit
               to an interest-bearing account in the name of the Borrower and
               the following conditions being met:

               (i)    the account is with the Facility Agent (if the cash cover
                      is to be provided for all the Lenders) or with a Lender
                      (if the cash cover is to be provided for that Lender);

               (ii)   until no amount is or may be outstanding under that Letter
                      of Credit, withdrawals from the account may only be made
                      to pay a Finance Party amounts due and payable to it under
                      this Agreement in respect of that Letter of Credit; and

               (iii)  the Borrower has executed a security document over that
                      account, in form and substance satisfactory to the
                      Facility Agent or the Lender with which that account is
                      held, creating a first ranking security interest over that
                      account.

        (f)    A Borrower "REPAYING" or "PREPAYING" a Letter of Credit means:

                                     - 19 -


               (i)    that Borrower providing cash cover for that Letter of
                      Credit;

               (ii)   the maximum amount payable under the Letter of Credit
                      being reduced or cancelled in accordance with its terms;
                      or

               (iii)  the Issuing Bank being satisfied that it has no further
                      liability under that Letter of Credit,

               and the amount by which a Letter of Credit is repaid, prepaid or
               cancelled under sub-paragraphs (f)(i) and (f)(ii) above is the
               amount of the relevant cash cover or reduction.

        (g)    An amount borrowed includes any amount utilised by way of Letter
               of Credit.

        (h)    A Lender funding its participation in a Utilisation includes a
               Lender participating in a Letter of Credit.

        (i)    An outstanding amount of a Letter of Credit at any time is the
               maximum amount that is or may be payable by the relevant Borrower
               in respect of that Letter of Credit at that time.

1.3     CURRENCY SYMBOLS AND DEFINITIONS
        "L" and "STERLING" denotes lawful currency of the United Kingdom and
        "EUR" and "EURO" means the single currency unit of the Participating
        Member States.

1.4     THIRD PARTY RIGHTS
        (a)    Unless expressly provided to the contrary in a Finance Document a
               person who is not a Party has no right under the Contracts
               (Rights of Third Parties) Act 1999 (the "THIRD PARTIES ACT") to
               enforce or enjoy the benefit of any term of any Finance Document.

        (b)    Notwithstanding any term of any Finance Document, the consent of
               any person who is not a Party is not required to rescind or vary
               any Finance Document at any time.

1.5     BARCLAYS CAPITAL
        References in the Finance Documents to "Barclays Capital" are references
        to Barclays Capital, the investment banking division of Barclays Bank
        PLC.

                                     - 20 -


                                    SECTION 2
                                 THE FACILITIES

2.      THE FACILITIES

2.1     THE FACILITIES
        (a)    Subject to the terms of this Agreement, the Lenders make
               available:

               (i)    a sterling term loan facility in an aggregate amount equal
                      to the Total Term Commitments being L100,000,000 at the
                      date of this Agreement; and

               (ii)   a multicurrency revolving credit facility in an aggregate
                      amount equal to the Total Revolving Commitments being
                      L100,000,000 at the date of this Agreement.

        (b)    The Revolving Facility will be available to all of the Borrowers.
               The Term Facility will only be available to the Parent.

        (c)    Subject to the terms of this Agreement and the Ancillary
               Documents, an Ancillary Lender may make available an Ancillary
               Facility to any of the Borrowers.

2.2     FINANCE PARTIES RIGHTS AND OBLIGATIONS
        (a)    The obligations of each Finance Party under the Finance Documents
               are several. Failure by a Finance Party to perform its
               obligations under the Finance Documents does not affect the
               obligations of any other Party under the Finance Documents. No
               Finance Party is responsible for the obligations of any other
               Finance Party under the Finance Documents.

        (b)    The rights of each Finance Party under or in connection with the
               Finance Documents are separate and independent rights and any
               debt arising under the Finance Documents to a Finance Party from
               an Obligor shall be a separate and independent debt.

        (c)    A Finance Party may, except as otherwise stated in the Finance
               Documents, separately enforce its rights under the Finance
               Documents.

2.3     OBLIGORS' AGENT
        (a)    Each Obligor (other than the Parent) by its execution of this
               Agreement or an Accession Letter irrevocably appoints the Parent
               to act on its behalf as its agent in relation to the Finance
               Documents and irrevocably authorises:

               (i)    the Parent on its behalf to supply all information
                      concerning itself contemplated by this Agreement to the
                      Finance Parties and to give all notices and instructions
                      (including, in the case of a Borrower, Utilisation
                      Requests), to execute on its behalf any Accession Letter,
                      to make such agreements and to effect the relevant
                      amendments, supplements and variations capable of being
                      given, made or effected by any Obligor

                                     - 21 -


                      notwithstanding that they may affect the Obligor, without
                      further reference to or the consent of that Obligor; and

               (ii)   each Finance Party to give any notice, demand or other
                      communication to that Obligor pursuant to the Finance
                      Documents to the Parent,

               and in each case the Obligor shall be bound as though the Obligor
               itself had given the notices and instructions (including, without
               limitation, any Utilisation Requests) or executed or made the
               agreements or effected the amendments, supplements or variations,
               or received the relevant notice, demand or other communication.

        (b)    Every act, omission, agreement, undertaking, settlement, waiver,
               amendment, supplement, variation, notice or other communication
               given or made by the Obligors' Agent or given to the Obligors'
               Agent under any Finance Document on behalf of another Obligor or
               in connection with any Finance Document (whether or not known to
               any other Obligor and whether occurring before or after such
               other Obligor became an Obligor under any Finance Document) shall
               be binding for all purposes on that Obligor as if that Obligor
               had expressly made, given or concurred with it. In the event of
               any conflict between any notices or other communications of the
               Obligors' Agent and any other Obligor, those of the Obligors'
               Agent shall prevail.

3.      PURPOSE

3.1     PURPOSE
        (a)    The Parent shall apply all amounts borrowed by it under the Term
               Facility towards:

               (i)    refinancing the Existing Facilities and all broken
                      funding, accrued interest and other costs and expenses
                      relating to such refinancing; and

               (ii)   general corporate and working capital purposes, including
                      without limitation the refinancing of Financial
                      Indebtedness owed by the Parent to Iron Mountain Inc. and
                      incurred in connection with the Hays IMS Acquisition (the
                      "HAYS IMS ACQUISITION INDEBTEDNESS").

        (b)    Each Borrower shall apply all amounts borrowed by it under the
               Revolving Facility towards the general corporate and working
               capital purposes of the Group including, without limitation,
               refinancing the Hays IMS Acquisition Indebtedness.

3.2     MONITORING
        No Finance Party is bound to monitor or verify the application of any
        amount borrowed pursuant to this Agreement.

                                     - 22 -


4.      CONDITIONS OF UTILISATION

4.1     INITIAL CONDITIONS PRECEDENT
        No Borrower may deliver a Utilisation Request unless the Facility Agent
        has received all of the documents and other evidence listed in Part I of
        Schedule 2 (CONDITIONS PRECEDENT TO INITIAL UTILISATION) in form and
        substance satisfactory to the Facility Agent. The Facility Agent shall
        notify the Parent and the Lenders promptly upon being so satisfied.

4.2     FURTHER CONDITIONS PRECEDENT
        The Lenders will only be obliged to comply with Clause 5.4 (LENDERS'
        PARTICIPATION) if on the date of the Utilisation Request and on the
        proposed Utilisation Date:

        (a)    in the case of a Rollover Loan, no Event of Default is continuing
               or would result from the proposed Loan and, in the case of any
               other Loan, no Default is continuing or would result from the
               proposed Loan; and

        (b)    the Repeating Representations to be made by each Obligor are true
               in all material respects.

4.3     CONDITIONS RELATING TO OPTIONAL CURRENCIES
        (a)    A currency will constitute an Optional Currency in relation to a
               Revolving Loan if:

               (i)    it is readily available in the amount required and freely
                      convertible into the Base Currency in the Relevant
                      Interbank Market on the Quotation Day and the Utilisation
                      Date for that Loan; and

               (ii)   it has been approved by the Facility Agent (acting on the
                      instructions of all the Lenders) on or prior to receipt by
                      the Facility Agent of the relevant Utilisation Request for
                      that Loan.

        (b)    If the Facility Agent has received a written request from the
               Parent for a currency to be approved under paragraph (a)(ii)
               above, the Facility Agent will confirm to the Parent by the
               Specified Time:

               (i)    whether or not the Lenders have granted their approval;
                      and

               (ii)   if approval has been granted, the minimum amount (and, if
                      required, integral multiples) for any subsequent Loan in
                      that currency.

4.4     MAXIMUM NUMBER OF UTILISATIONS
        (a)    The Parent may not deliver a Utilisation Request if as a result
               of the proposed Utilisation more than one Term Loan would be
               outstanding.

        (b)    A Borrower (or the Parent) may not deliver a Utilisation Request
               if as a result of the proposed Utilisation ten (10) or more
               Revolving Facility Utilisations would be outstanding.

                                     - 23 -


        (c)    Any Loan made by a single Lender under Clause 8.2 (UNAVAILABILITY
               OF A CURRENCY) shall not be taken into account in this Clause
               4.4.

                                     - 24 -


                                    SECTION 3
                                   UTILISATION

5.      UTILISATION OF LOANS

5.1     DELIVERY OF A UTILISATION REQUEST
        A Borrower may utilise a Facility by delivery to the Facility Agent of a
        duly completed Utilisation Request not later than the Specified Time.

5.2     COMPLETION OF A UTILISATION REQUEST
        (a)    Each Utilisation Request is irrevocable and will not be regarded
               as having been duly completed unless:

               (i)    it identifies the Facility to be utilised;

               (ii)   the proposed Utilisation Date is a Business Day within the
                      Availability Period applicable to that Facility;

               (iii)  the currency and amount of the Utilisation comply with
                      Clause 5.3 (CURRENCY AND AMOUNT); and

               (iv)   the proposed Interest Period complies with Clause 13
                      (INTEREST PERIODS).

        (b)    Only one Utilisation may be requested in each Utilisation
               Request.

5.3     CURRENCY AND AMOUNT
        (a)    The currency specified in a Utilisation Request must be:

               (i)    in relation to the Term Facility the Base Currency; and

               (ii)   in relation to the Revolving Facility the Base Currency or
                      an Optional Currency.

        (b)    The amount of the proposed Utilisation must be an amount whose
               Base Currency Amount is not more than the Available Facility and
               which is:

               (i)    if the currency selected is the Base Currency, a minimum
                      amount of L5,000,000 for the Term Facility or the
                      Revolving Facility or in any case, if less, the Available
                      Facility;

               (ii)   if the currency selected is euro, a minimum of euro
                      7,500,000 for the Revolving Facility or in any case, if
                      less, the Available Facility; or

               (iii)  if the currency selected is an Optional Currency, the
                      minimum amount specified by the Facility Agent for the
                      Revolving Facility pursuant to paragraph (b)(ii) of Clause
                      4.3 (CONDITIONS RELATING TO OPTIONAL CURRENCIES) or, if
                      less, the Available Facility.

                                     - 25 -


5.4     LENDERS' PARTICIPATION
        (a)    If the conditions set out in this Agreement have been met, each
               Lender shall make its participation in each Loan available by the
               Utilisation Date through its Facility Office.

        (b)    The amount of each Lender's participation in each Loan will be
               equal to the proportion borne by its Available Commitment to the
               Available Facility immediately prior to making the Loan.

        (c)    The Facility Agent shall determine the Base Currency Amount of
               each Revolving Loan which is to be made in an Optional Currency
               and notify each Lender of the amount, currency and the Base
               Currency Amount of each Loan and the amount of its participation
               in that Loan by the Specified Time.

5.5     LIMITATIONS ON UTILISATIONS
        The maximum aggregate amount of the actual and contingent liabilities of
        the Issuing Bank under all Letters of Credit shall not exceed
        L20,000,000 (or its equivalent in any other currency).

6.      UTILISATION - LETTERS OF CREDIT

6.1     THE REVOLVING FACILITY
        (a)    The Revolving Facility may be utilised by way of Letters of
               Credit.

        (b)    Other than Clause 5.5 (LIMITATIONS ON UTILISATIONS), Clause 5
               (UTILISATION OF LOANS) does not apply to utilisation by way of
               Letters of Credit.

6.2     DELIVERY OF A UTILISATION REQUEST FOR LETTERS OF CREDIT
        A Borrower (or the Parent on its behalf) may request a Letter of Credit
        to be issued by delivery to the Facility Agent of a duly completed
        Utilisation Request not later than the Specified Time.

6.3     COMPLETION OF A UTILISATION REQUEST FOR LETTERS OF CREDIT
        Each Utilisation Request for a Letter of Credit is irrevocable and will
        not be regarded as having been duly completed unless:

        (a)    it specifies that it is for a Letter of Credit;

        (b)    it identifies the Borrower of the Letter of Credit;

        (c)    the proposed Utilisation Date is a Business Day within the
               Availability Period applicable to the Revolving Facility;

        (d)    the currency and amount of the Letter of Credit comply with
               Clause 6.4 (CURRENCY AND AMOUNT);

        (e)    the form of Letter of Credit is attached;

        (f)    the Expiry Date of the Letter of Credit falls on or before the
               Final Maturity Date in relation to the Revolving Facility;

                                     - 26 -


        (g)    the Term of the Letter of Credit is 12 months or less;

        (h)    the delivery instructions for the Letter of Credit are specified;
               and

        (i)    the identity of the beneficiary of the Letter of Credit is
               approved by the Lenders.

6.4     CURRENCY AND AMOUNT
        (a)    The currency specified in a Utilisation Request must be the Base
               Currency or an Optional Currency.

        (b)    Subject to Clause 5.5 (LIMITATIONS ON UTILISATIONS), the amount
               of the proposed Letter of Credit must be an amount whose Base
               Currency Amount is not more than the Available Facility and which
               is:

               (i)    if the currency selected is the Base Currency, a minimum
                      of L1,000,000 of, if less, the Available Facility; or

               (ii)   if the currency selected is euro, a minimum of euro
                      1,500,000 or, if less, the Available Facility; or

               (iii)  if the currency selected is an Optional Currency, the
                      minimum amount specified by the Facility Agent pursuant to
                      paragraph (b)(ii) of Clause 4.3 (CONDITIONS RELATING TO
                      OPTIONAL CURRENCIES) or, if less, the Available Facility.

6.5     ISSUE OF LETTERS OF CREDIT
        (a)    If the conditions set out in this Agreement have been met, the
               Issuing Bank shall issue the Letter of Credit on the Utilisation
               Date.

        (b)    The Issuing Bank will only be obliged to comply with paragraph
               (a) above if on the date of the Utilisation Request or Renewal
               Request and on the proposed Utilisation Date:

               (i)    in the case of a Letter of Credit to be renewed in
                      accordance with Clause 6.6 (RENEWAL OF A LETTER OF CREDIT)
                      no Event of Default is continuing or would result from the
                      proposed Utilisation and, in the case of any other
                      Utilisation, no Default is continuing or would result from
                      the proposed Utilisation; and

               (ii)   the Repeating Representations to be made by each Obligor
                      are true in all material respects.

        (c)    The amount of each Lender's participation in each Letter of
               Credit will be equal to its L/C Proportion immediately prior to
               the issue of the Letter of Credit.

        (d)    The Facility Agent shall determine the Base Currency Amount of
               each Letter of Credit which is to be issued in an Optional
               Currency and shall notify the

                                     - 27 -


               Issuing Bank and each Lender of the details of the requested
               Letter of Credit and its participation in that Letter of Credit
               by the Specified Time.

6.6     RENEWAL OF A LETTER OF CREDIT
        (a)    A Borrower (or the Parent on its behalf) may request that any
               Letter of Credit issued on behalf of that Borrower be renewed by
               delivery to the Facility Agent of a Renewal Request in
               substantially similar form to a Utilisation Request for a Letter
               of Credit by the Specified Time.

        (b)    The Finance Parties shall treat any Renewal Request in the same
               way as a Utilisation Request for a Letter of Credit except that
               the conditions set out in paragraph (e) of Clause 6.3 (COMPLETION
               OF A UTILISATION REQUEST FOR LETTERS OF CREDIT) shall not apply.

        (c)    The terms of each renewed Letter of Credit shall be the same as
               those of the relevant Letter of Credit immediately prior to its
               renewal, except that:

               (i)    its amount may be less than the amount of the Letter of
                      Credit immediately prior to its renewal; and

               (ii)   its Term shall start on the date which was the Expiry Date
                      of the Letter of Credit immediately prior to its renewal,
                      and shall end on the proposed Expiry Date specified in the
                      Renewal Request.

        (d)    If the conditions set out in this Agreement have been met, the
               Issuing Bank shall amend and re-issue any Letter of Credit
               pursuant to a Renewal Request.

6.7     REVALUATION OF LETTERS OF CREDIT
        (a)    If any Letters of Credit are denominated in an Optional Currency,
               the Facility Agent shall at six monthly intervals after the date
               of the Letter of Credit recalculate the Base Currency Amount of
               each Letter of Credit by notionally converting into the Base
               Currency the outstanding amount of that Letter of Credit on the
               basis of the Agent's Spot Rate of Exchange on the date of
               calculation.

        (b)    The Parent shall, if requested by the Facility Agent within five
               days of any calculation under paragraph (a) above, ensure that
               within three Business Days sufficient Revolving Facility
               Utilisations are prepaid to prevent the Base Currency Amount of
               the Revolving Facility Utilisations exceeding the Total Revolving
               Facility Commitments following any adjustment to a Base Currency
               Amount under paragraph (a) of this Clause 6.7.

7.      LETTERS OF CREDIT

7.1     IMMEDIATELY PAYABLE
        If a Letter of Credit or any amount outstanding under a Letter of Credit
        is expressed to be immediately payable, the Borrower that requested (or
        on behalf of which the Parent requested) the issue of that Letter of
        Credit shall repay or prepay that amount immediately.

                                     - 28 -


7.2     CLAIMS UNDER A LETTER OF CREDIT
        (a)    Each Borrower irrevocably and unconditionally authorises the
               Issuing Bank to pay any claim made or purported to be made under
               a Letter of Credit requested by it (or requested by the Parent on
               its behalf) and which appears on its face to be in order (in this
               Clause 7, a "CLAIM").

        (b)    Each Borrower shall immediately on demand or, if such payment is
               being funded by a Revolving Facility Loan, shall within three
               Business Days of demand pay to the Facility Agent for the Issuing
               Bank an amount equal to the amount of any claim.

        (c)    Each Borrower acknowledges that the Issuing Bank:

               (i)    is not obliged to carry out any investigation or seek any
                      confirmation from any other person before paying a claim;
                      and

               (ii)   deals in documents only and will not be concerned with the
                      legality of a claim or any underlying transaction or any
                      available set-off, counterclaim or other defence of any
                      person.

        (d)    The obligations of a Borrower under this Clause 7 will not be
               affected by:

               (i)    the sufficiency, accuracy or genuineness of any claim or
                      any other document; or

               (ii)   any incapacity of, or limitation on the powers of, any
                      person signing a claim or other document.

7.3     INDEMNITIES
        (a)    Each Borrower shall immediately on demand indemnify the Issuing
               Bank against any cost, loss or liability incurred by the Issuing
               Bank (otherwise than by reason of the Issuing Bank's gross
               negligence or wilful misconduct) in acting as the Issuing Bank
               under any Letter of Credit requested by (or on behalf of) that
               Borrower.

        (b)    Each Lender shall (according to its L/C Proportion) immediately
               on demand indemnify the Issuing Bank against any cost, loss or
               liability incurred by the Issuing Bank (otherwise than by reason
               of the Issuing Bank's gross negligence or wilful misconduct) in
               acting as the Issuing Bank under any Letter of Credit (unless the
               Issuing Bank has been reimbursed by an Obligor pursuant to a
               Finance Document).

        (c)    The Borrower which requested (or on behalf of which the Parent
               requested) a Letter of Credit shall immediately on demand
               reimburse any Lender for any payment it makes to the Issuing Bank
               under this Clause 7.3 in respect of that Letter of Credit.

        (d)    The obligations of each Lender under this Clause are continuing
               obligations and will extend to the ultimate balance of sums
               payable by that Lender in

                                     - 29 -


               respect of any Letter of Credit, regardless of any intermediate
               payment or discharge in whole or in part.

        (e)    The obligations of any Lender or Borrower under this Clause will
               not be affected by any act, omission, matter or thing which, but
               for this Clause, would reduce, release or prejudice any of its
               obligations under this Clause (without limitation and whether or
               not known to it or any other person) including:

               (i)    any time, waiver or consent granted to, or composition
                      with, any Obligor, any beneficiary under a Letter of
                      Credit or any other person;

               (ii)   the release of any other Obligor or any other person under
                      the terms of any composition or arrangement with any
                      creditor or any member of the Group;

               (iii)  the taking, variation, compromise, exchange, renewal or
                      release of, or refusal or neglect to perfect, take up or
                      enforce, any rights against, or security over assets of,
                      any Obligor, any beneficiary under a Letter of Credit or
                      other person or any non-presentation or non-observance of
                      any formality or other requirement in respect of any
                      instrument or any failure to realise the full value of any
                      security;

               (iv)   any incapacity or lack of power, authority or legal
                      personality of or dissolution or change in the members or
                      status of an Obligor or any beneficiary under a Letter of
                      Credit or any other person;

               (v)    any amendment (however fundamental) or replacement of a
                      Finance Document, any Letter of Credit or any other
                      document or security;

               (vi)   any unenforceability, illegality or invalidity of any
                      obligation of any person under any Finance Document, any
                      Letter of Credit or any other document or security; or

               (vii)  any insolvency or similar proceedings.

7.4     RIGHTS OF CONTRIBUTION
        No Obligor will be entitled to any right of contribution or indemnity
        from any Finance Party in respect of any payment it may make under this
        Clause 7.

7.5     SETTLEMENT CONDITIONAL
        Any settlement or discharge between a Lender and the Issuing Bank shall
        be conditional upon no security or payment to the Issuing Bank by a
        Lender or any other person on behalf of a Lender being avoided or
        reduced by virtue of any laws relating to bankruptcy, insolvency,
        liquidation or similar laws of general application and, if any such
        security or payment is so avoided or reduced, the Issuing Bank shall be
        entitled to recover the value or amount of such security or payment from
        such Lender subsequently as if such settlement or discharge had not
        occurred.

                                     - 30 -


7.6     EXERCISE OF RIGHTS
        The Issuing Bank shall not be obliged before exercising any of the
        rights, powers or remedies conferred upon it in respect of any Lender by
        this Agreement or by law:

        (a)    to take any action or obtain judgment in any court against any
               Obligor;

        (b)    to make or file any claim or proof in a winding-up or dissolution
               of any Obligor; or

        (c)    to enforce or seek to enforce any other security taken in respect
               of any of the obligations of any Obligor under this Agreement.

8.      OPTIONAL CURRENCIES

8.1     SELECTION OF CURRENCY
        A Borrower shall select the currency of a Revolving Loan in a
        Utilisation Request.

8.2     UNAVAILABILITY OF A CURRENCY
        If before the Specified Time on any Quotation Day:

        (a)    a Lender notifies the Facility Agent that the Optional Currency
               requested is not readily available to it in the amount required;
               or

        (b)    a Lender notifies the Facility Agent that compliance with its
               obligation to participate in a Loan in the proposed Optional
               Currency would contravene a law or regulation applicable to it,

        the Facility Agent will give notice to the relevant Borrower to that
        effect by the Specified Time on that day. In this event, any Lender that
        gives notice pursuant to this Clause 8.2 will be required to participate
        in the Loan in the Base Currency (in an amount equal to that Lender's
        proportion of the Base Currency Amount, or in respect of a Rollover
        Loan, an amount equal to that Lender's proportion of the Base Currency
        Amount of the Rollover Loan that is due to be paid) and its
        participation will be treated as a separate Loan denominated in the Base
        Currency during that Interest Period.

8.3     FACILITY AGENT'S CALCULATIONS
        Each Lender's participation in a Loan will be determined in accordance
        with paragraph (b) of Clause 5.4 (LENDERS' PARTICIPATION).

9.      ANCILLARY FACILITIES

9.1     ANCILLARY FACILITIES
        (a)    Each Ancillary Lender makes available to the relevant Obligors,
               the Ancillary Facilities applicable to that Ancillary Lender on
               the terms set out in the relevant Ancillary Documents.

        (b)    Each Ancillary Lender and the relevant Obligor shall promptly
               notify the Facility Agent of:

               (i)    the establishment of any Ancillary Facility applicable to
                      it; and

                                     - 31 -


               (ii)   such information relating to the operation of any
                      Ancillary Facility applicable to it (including, without
                      limitation, the Ancillary Outstandings and Ancillary
                      Commitments thereunder) as the Facility Agent may from
                      time to time request and each Obligor hereby consents to
                      all such information being released to the Facility Agent
                      and each Lender.

        (c)    In case of any inconsistency between any term of any Ancillary
               Facility and this Agreement, the terms of this Agreement shall
               prevail.

        (d)    Each Ancillary Lender and each relevant Obligor acknowledge the
               terms of Clause 25.20 (ANCILLARY FACILITIES) and paragraph
               (b)(vi) of Clause 25.16 (FINANCIAL INDEBTEDNESS).

                                     - 32 -


                                    SECTION 4
                     REPAYMENT, PREPAYMENT AND CANCELLATION

10.     REPAYMENT

10.1    REPAYMENT OF TERM LOAN
        (a)    The Parent shall repay the Term Loan in instalments by repaying
               on each Repayment Date the amount set out opposite each Repayment
               Date below:



                REPAYMENT DATE                REPAYMENT INSTALMENT
                                           
                3 March 2007                  L20,000,000

                3 March 2008                  L20,000,000

                Final Maturity Date           L60,000,000


        (b)    The Parent may not reborrow any part of the Term Facility which
               is repaid.

        (c)    If the Parent cancels the whole or any part of the Term
               Commitments in accordance with Clause 11.6 (RIGHT OF REPAYMENT
               AND CANCELLATION IN RELATION TO A SINGLE LENDER OR ISSUING BANK)
               or if the Term Commitment of any Lender is reduced under Clause
               11.1 (ILLEGALITY OF A LENDER) then the amount of the Repayment
               Instalment for each Repayment Date falling after that
               cancellation will reduce PRO RATA by the amount cancelled.

        (d)    If the Parent cancels the whole or any part of the Term
               Commitments in accordance with Clause 11.3 (VOLUNTARY
               CANCELLATION) then the amount of the Repayment Instalment for
               each Repayment Date falling after that cancellation will reduce
               in inverse chronological order by the amount cancelled.

        (e)    If the Term Loan is prepaid in accordance with Clause 11.6 (RIGHT
               OF REPAYMENT AND CANCELLATION IN RELATION TO A SINGLE LENDER OR
               ISSUING BANK) or Clause 11.1 (ILLEGALITY OF A LENDER) then the
               amount of the Repayment Instalment for each Repayment Date
               falling after that prepayment will reduce PRO RATA by the amount
               of the Term Loan prepaid.

        (f)    If the Term Loan is prepaid in accordance with Clause 11.4
               (VOLUNTARY PREPAYMENT OF TERM LOANS), Clause 11.8 (MANDATORY
               PREPAYMENT FROM DEBT OR EQUITY PROCEEDS) or Clause 11.9
               (MANDATORY PREPAYMENT ON RECEIPT OF DISPOSAL PROCEEDS) then the
               amount of the Repayment Instalment for each Repayment Date
               falling after that prepayment will reduce in inverse
               chronological order by the amount of the Loan prepaid.

10.2    REPAYMENT OF REVOLVING LOANS
        Each Borrower which has drawn a Revolving Loan shall repay that Loan on
        the last day of its Interest Period.

                                     - 33 -


11.     PREPAYMENT AND CANCELLATION

11.1    ILLEGALITY OF A LENDER
        If it becomes unlawful in any applicable jurisdiction for a Lender to
        perform any of its obligations as contemplated by this Agreement or to
        make, fund, issue or maintain its participation in any Utilisation:

        (a)    that Lender shall promptly notify the Facility Agent upon
               becoming aware of that event;

        (b)    upon the Facility Agent notifying the Parent the Commitments of
               that Lender shall immediately be reduced to zero and cancelled;
               and

        (c)    each Borrower shall repay that Lender's participation in the
               Utilisations made to that Borrower on the last day of the
               Interest Period for each Utilisation occurring after the Facility
               Agent has notified the Parent or, if earlier, specified by that
               Lender in the notice delivered to the Facility Agent (being no
               earlier than the last day of any applicable grace period
               permitted by law).

11.2    ILLEGALITY IN RELATION TO ISSUING BANK
        If it becomes unlawful for an Issuing Bank to issue or leave outstanding
        any Letter of Credit, then:

        (a)    that Issuing Bank shall promptly notify the Facility Agent upon
               becoming aware of that event;

        (b)    upon the Facility Agent notifying the Parent, the Issuing Bank
               shall not be obliged to issue any Letter of Credit;

        (c)    the Parent shall procure that the relevant Borrower shall use its
               reasonable endeavours to procure the release of each Letter of
               Credit issued by that Issuing Bank and outstanding at such time;
               and

        (d)    unless any other Lender has agreed to be an Issuing Bank pursuant
               to the terms of this Agreement, the Revolving Facility shall
               cease to be available for the issue of Letters of Credit.

11.3    VOLUNTARY CANCELLATION
        The Parent may, if it gives the Facility Agent not less than 10 Business
        Days' (or such shorter period as the Majority Lenders may agree) prior
        notice, cancel the whole or any part (being a minimum amount of
        L10,000,000) of an Available Facility. Any cancellation under this
        Clause 11.3 shall reduce rateably the Commitments of the Lenders under
        that Facility.

11.4    VOLUNTARY PREPAYMENT OF TERM LOANS
        (a)    The Parent may, if it gives the Facility Agent not less than 10
               Business Days' (or such shorter period as the Majority Lenders
               may agree) prior notice, prepay the whole or any part of a Term
               Loan (but, if in part, being an amount

                                     - 34 -


               that reduces the amount of that Term Loan by a minimum amount of
               L10,000,000).

        (b)    Any prepayment of a Term Loan under this Clause 11.4 shall
               satisfy the obligations under paragraph (a) of Clause 10.1
               (REPAYMENT OF TERM LOANS) in inverse chronological order.

11.5    VOLUNTARY PREPAYMENT OF REVOLVING FACILITY UTILISATIONS
        The Borrower to which a Revolving Facility Utilisation has been made
        may, if it or the Parent gives the Facility Agent not less than 10
        Business Days' (or such shorter period as the Majority Lenders may
        agree) prior notice, prepay the whole or any part of a Revolving
        Facility Utilisation (but if in part, being an amount that reduces the
        Base Currency Amount of the Revolving Facility Utilisation by a minimum
        amount of L10,000,000).

11.6    RIGHT OF REPAYMENT AND CANCELLATION IN RELATION TO A SINGLE LENDER OR
        ISSUING BANK
        (a)    If:

               (i)    any sum payable to any Lender by an Obligor is required to
                      be increased under paragraph (c) of Clause 16.2 (TAX
                      GROSS-UP);

               (ii)   any Lender or Issuing Bank claims indemnification from the
                      Parent or an Obligor under Clause 16.3 (TAX INDEMNITY) or
                      Clause 17.1 (INCREASED COSTS); or

               (iii)  any Lender notifies the Facility Agent of its Additional
                      Cost Rate under paragraph 3 of Schedule 4 (MANDATORY COST
                      FORMULAE),

               the Parent may, whilst (in the case of paragraphs (i) and (ii)
               above) the circumstance giving rise to the requirement or
               indemnification continues or whilst (in the case of paragraph
               (iii) above) that Additional Cost Rate is greater than zero, give
               the Facility Agent notice:

               (i)    (if the circumstances relate to a Lender) of cancellation
                      of the Commitments of that Lender and its intention to
                      procure the repayment of that Lender's participation in
                      the Utilisations; or

               (ii)   (if the circumstances relate to the Issuing Bank) of
                      repayment of any outstanding Letter of Credit issued by it
                      and cancellation of its appointment as an Issuing Bank
                      under this Agreement in relation to any Letters of Credit
                      to be issued in the future.

        (b)    On receipt of a notice referred to in paragraph (a) above, the
               Commitments of that Lender shall immediately be reduced to zero.

        (c)    On the last day of each Interest Period which ends after the
               Parent has given notice under paragraph (a) above (or, if
               earlier, the date specified by the Parent in that notice), each
               Borrower to which a Utilisation is outstanding

                                     - 35 -


               shall repay that Lender's participation in that Utilisation
               together with all interest and other amounts accrued under the
               Finance Documents.

11.7    CHANGE OF CONTROL
        (a)    If any person or group of persons acting in concert gains control
               of the Parent, other than (1) persons having control of the
               Parent as at the date of this Agreement or (2) pursuant to the
               Mentmore Disposal:

               (i)    the Parent shall promptly notify the Facility Agent upon
                      becoming aware of that event;

               (ii)   a Lender shall not be obliged to fund a Utilisation
                      (except for a Rollover Loan);

               (iii)  if a Lender so requires and notifies the Facility Agent,
                      the Facility Agent shall, by not less than 30 days' notice
                      to the Borrower, cancel the Commitment of that Lender and
                      declare its participation in all outstanding Utilisations,
                      together with accrued interest and all other amounts
                      accrued under the Finance Documents immediately due and
                      payable, whereupon the Commitment of that Lender will be
                      cancelled and all such outstanding amounts will become
                      immediately due and payable.

        (b)    For the purpose of paragraph (a) above "CONTROL" means:

               (i)    the power (whether by way of ownership of shares, proxy,
                      contract, agency or otherwise) to:

                      (A)   cast, or control the casting of, more than one-half
                            of the maximum number of votes that might be cast at
                            a general meeting of the Parent; or

                      (B)   appoint or remove all, or the majority, of the
                            directors or other equivalent officers of the
                            Parent; or

                      (C)   give directions with respect to the operating and
                            financial policies of the Parent which the directors
                            or other equivalent officers of the Parent are
                            obliged to comply with; or

               (ii)   the holding of more than one-half of the issued share
                      capital of the Parent (excluding any part of that issued
                      share capital that carries no right to participate beyond
                      a specified amount in a distribution of either profits or
                      capital).

11.8    MANDATORY PREPAYMENT FROM DEBT OR EQUITY PROCEEDS
        For the purposes of this Clause 11.8:

                                     - 36 -


        "DEBT OR EQUITY ISSUE" means any issue or raising by the Parent or any
        other member of the Group of any shares or stock, publicly traded or
        privately placed debt securities or any other debt securities or equity
        securities or bank debt other than:

        (a)    Approved Subordinated Debt;

        (b)    Financial Indebtedness permitted in accordance with paragraph (b)
               of Clause 25.16 (FINANCIAL INDEBTEDNESS);

        (c)    an issue permitted pursuant to paragraph (b)(ii) of Clause 25.8
               (ACQUISITION); or

        (d)    an issue by a Joint Venture Group Company to its shareholder
               which is not a member of the Group.

        "DEBT OR EQUITY PROCEEDS" means the net cash consideration received by
        any member of the Group for any Debt or Equity Issue made by any member
        of the Group.

        If the Parent or any member of the Group receives any Debt or Equity
        Proceeds, the Parent shall procure that such Debt or Equity Proceeds are
        promptly applied in prepayment and/or cancellation of the Facilities in
        accordance with Clause 11.10 (APPLICATION OF PREPAYMENTS).

11.9    MANDATORY PREPAYMENT ON RECEIPT OF DISPOSAL PROCEEDS
        For the purposes of this Clause 11.9:

        "DISPOSAL" means a sale, lease, transfer, loan or other disposal by a
        person of any asset, undertaking or business (whether voluntary or
        involuntary and whether as a single transaction or a series of
        transactions).

        "DISPOSAL PROCEEDS" means the consideration received by any member of
        the Group (including any amount receivable in repayment of intercompany
        debt) for any Disposal made by any member of the Group after deducting:

        (a)    reasonable expenses incurred by any member of the Group with
               respect to that Disposal to person(s) who are not members of the
               Group; and

        (b)    any Tax incurred and required to be paid by the seller in
               connection with that Disposal (as reasonably determined by the
               seller, on the basis of existing rates and taking account of any
               available credit, deduction or allowance),

        but does not include:

        (i)    consideration for any Disposal referred to in paragraphs (b) (i),
               (iii), (iv), (v), (vii) or (viii) of Clause 25.11 (DISPOSALS);

        (ii)   cash proceeds received by a Joint Venture Group Company for any
               Disposal made by that Joint Venture Group Company, but only to
               the extent that such Disposal Proceeds are not transferred to
               another member of the Group which is not a Joint Venture Group
               Company; and

                                     - 37 -


        (iii)  the first L5,000,000 of cash proceeds from any Disposal not
               excluded pursuant to paragraph (i) above received by members of
               the Group in aggregate in any financial year of the Parent.

        The Parent shall ensure that the Borrowers prepay Utilisations in an
        amount equal to the Disposal Proceeds promptly upon receipt of those
        proceeds. The prepayments will be applied under Clause 11.10
        (APPLICATION OF PREPAYMENTS).

11.10   APPLICATION OF PREPAYMENTS
        A prepayment made under Clause 11.8 (MANDATORY PREPAYMENT FROM DEBT OR
        EQUITY PROCEEDS) or Clause 11.9 (MANDATORY PREPAYMENT ON RECEIPT OF
        DISPOSAL PROCEEDS) shall be applied in the following order of maturity:

        (a)    firstly, in prepayment of the Term Loans (in inverse order of
               maturity);

        (b)    secondly, in cancellation of the Revolving Commitments (with any
               such cancellation reducing the Revolving Commitments of the
               Lenders, rateably); and

        (c)    thirdly, in prepayment of a sufficient amount of Revolving
               Facility Utilisations to the extent necessary so that the
               aggregate of the Base Currency Amounts of the outstanding
               Revolving Facility Utilisations after that prepayment is equal to
               or less than the reduced amounts of the Revolving Commitments.

11.11   RESTRICTIONS
        (a)    Any notice of cancellation or prepayment given by any Party under
               this Clause 11 shall be irrevocable and, unless a contrary
               indication appears in this Agreement, shall specify the date or
               dates upon which the relevant cancellation or prepayment is to be
               made and the amount of that cancellation or prepayment.

        (b)    Any prepayment under this Agreement shall be made together with
               accrued interest on the amount prepaid and Break Costs.

        (c)    The Parent shall, on the prepayment of the whole or any part of a
               Term Loan or cancellation of any Revolving Commitment within 12
               months of the date of this Agreement, where such prepayment or
               cancellation is made using the proceeds of any bank debt or such
               cancellation is made pursuant to a refinancing by the Parent, pay
               to the Facility Agent for the account of each Lender an amount
               equal to 1 per cent of the amount prepaid or cancelled (the
               "REFINANCING PREMIUM") PROVIDED THAT no such Refinancing Premium
               shall be payable to any Lender which is participating as a Lender
               in such refinancing.

        (d)    The Parent may not reborrow any part of the Term Facility which
               is prepaid.

                                     - 38 -


        (e)    Unless a contrary indication appears in this Agreement, any part
               of the Revolving Facility which is prepaid may be reborrowed in
               accordance with the terms of this Agreement.

        (f)    The Borrowers shall not repay or prepay all or any part of the
               Loans or cancel all or any part of the Commitments except at the
               times and in the manner expressly provided for in this Agreement.

        (g)    No amount of the Total Commitments cancelled under this Agreement
               may be subsequently reinstated.

        (h)    If the Facility Agent receives a notice under this Clause 11 it
               shall promptly forward a copy of that notice to either the Parent
               or the affected Lenders, as appropriate.

                                     - 39 -


                                    SECTION 5
                              COSTS OF UTILISATION

12.     INTEREST

12.1    CALCULATION OF INTEREST
        The rate of interest on each Loan for each Interest Period is the
        percentage rate per annum which is the aggregate of the applicable:

        (a)    Margin;

        (b)    LIBOR; and

        (c)    Mandatory Cost, if any.

12.2    PAYMENT OF INTEREST
        (a)    The Borrower to which a Loan has been made shall pay accrued
               interest on that Loan on the last day of each Interest Period
               (and, if any Interest Period is longer than six Months, on the
               dates falling at six Monthly intervals after the first day of
               that Interest Period).

        (b)    If the annual audited financial statements of the Group and
               related Compliance Certificate received by the Facility Agent
               show that a Margin reduction should not have occurred during a
               certain period, the Parent shall (or shall ensure the relevant
               Borrower shall) promptly pay to the Facility Agent any amounts
               necessary to put the Facility Agent and the Lenders in the
               position they would have been in had the Margin reduction not
               occurred.

12.3    DEFAULT INTEREST
        (a)    If an Obligor fails to pay any amount payable by it under a
               Finance Document on its due date, interest shall accrue on the
               overdue amount from the due date up to the date of actual payment
               (both before and after judgment) at a rate which is two per cent
               higher than the rate which would have been payable if the overdue
               amount had, during the period of non-payment, constituted a Loan
               in the currency of the overdue amount for successive Interest
               Periods, each of a duration selected by the Facility Agent
               (acting reasonably). Any interest accruing under this Clause 12.3
               shall be immediately payable by the Obligor on demand by the
               Facility Agent.

        (b)    Default interest (if unpaid) arising on an overdue amount will be
               compounded with the overdue amount at the end of each Interest
               Period applicable to that overdue amount but will remain
               immediately due and payable.

12.4    NOTIFICATION OF RATES OF INTEREST
        The Facility Agent shall promptly notify the Lenders and the relevant
        Borrower (or the Parent) of the determination of a rate of interest
        under this Agreement.

                                     - 40 -


13.     INTEREST PERIODS

13.1    SELECTION OF INTEREST PERIODS
        (a)    A Borrower (or the Parent on behalf of a Borrower) may select an
               Interest Period for a Loan in the Utilisation Request for that
               Loan or (if the Loan is a Term Loan and has already been
               borrowed) in a Selection Notice.

        (b)    Each Selection Notice for a Term Loan is irrevocable and must be
               delivered to the Facility Agent by the Parent not later than the
               Specified Time.

        (c)    If the Parent fails to deliver a Selection Notice to the Facility
               Agent in accordance with paragraph (b) above, the relevant
               Interest Period will, subject to Clause 13.2 (CHANGES TO INTEREST
               PERIODS), be one Month.

        (d)    Subject to this Clause 13, a Borrower (or the Parent) may select
               an Interest Period of one, two, three or six Months or any other
               period agreed between the Parent and the Facility Agent (acting
               on the instructions of all the Lenders). In addition a Borrower
               (or the Parent on its behalf) may select an Interest Period of
               (in relation to the Term Facility) a period of less than one
               Month, if necessary to ensure that there are Term Loans (with an
               aggregate Base Currency Amount equal to or greater than the
               Repayment Instalment) which have an Interest Period ending on a
               Repayment Date for the Parent to make the Repayment Instalment
               due on that date.

        (e)    An Interest Period for a Loan shall not extend beyond the Final
               Maturity Date applicable to its Facility.

        (f)    Each Interest Period for a Term Loan shall start on the
               Utilisation Date or (if a Loan has already been made) on the last
               day of its preceding Interest Period.

        (g)    A Revolving Loan has one Interest Period only.

13.2    CHANGES TO INTEREST PERIODS
        (a)    Prior to determining the interest rate for a Term Loan, the
               Facility Agent may shorten an Interest Period for any Term Loan
               to ensure that there are sufficient Term Loans (with an aggregate
               Base Currency Amount equal to or greater than the Repayment
               Instalment) which have an Interest Period ending on a Term
               Repayment Date for the Parent to make the Repayment Instalment
               due on that date.

        (b)    If the Facility Agent makes any of the changes to an Interest
               Period referred to in this Clause 13.2, it shall promptly notify
               the Parent and the Lenders.

14.     CHANGES TO THE CALCULATION OF INTEREST

14.1    ABSENCE OF QUOTATIONS
        Subject to Clause 14.2 (MARKET DISRUPTION), if LIBOR is to be determined
        by reference to the Reference Banks but a Reference Bank does not supply
        a quotation by the

                                     - 41 -


        Specified Time on the Quotation Day, the applicable LIBOR shall be
        determined on the basis of the quotations of the remaining Reference
        Banks.

14.2    MARKET DISRUPTION
        (a)    If a Market Disruption Event occurs in relation to a Loan for any
               Interest Period, then the rate of interest on each Lender's share
               of that Loan for the Interest Period shall be the rate per annum
               which is the sum of:

               (i)    the Margin;

               (ii)   the rate notified to the Facility Agent by that Lender as
                      soon as practicable and in any event before interest is
                      due to be paid in respect of that Interest Period, to be
                      that which expresses as a percentage rate per annum the
                      cost to that Lender of funding its participation in that
                      Loan from whatever source it may reasonably select; and

               (iii)  the Mandatory Cost, if any, applicable to that Lender's
                      participation in the Loan.

        (b)    In this Agreement "MARKET DISRUPTION EVENT" means:

               (i)    at or about noon on the Quotation Day for the relevant
                      Interest Period the Screen Rate not being available and
                      none or only one of the Reference Banks supplying a rate
                      to the Facility Agent to determine LIBOR for the relevant
                      currency and Interest Period; or

               (ii)   before close of business in London on the Quotation Day
                      for the relevant Interest Period, the Facility Agent
                      receiving notifications from a Lender or Lenders (whose
                      participations in a Loan exceed 50 per cent. of that Loan)
                      that the cost to it of obtaining matching deposits in the
                      Relevant Interbank Market would be in excess of LIBOR.

14.3    ALTERNATIVE BASIS OF INTEREST OR FUNDING
        (a)    If a Market Disruption Event occurs and the Facility Agent or the
               Parent so requires, the Facility Agent and the Parent shall enter
               into negotiations (for a period of not more than thirty days)
               with a view to agreeing a substitute basis for determining the
               rate of interest.

        (b)    Any alternative basis agreed pursuant to paragraph (a) above
               shall, with the prior consent of all the Lenders and the Parent,
               be binding on all Parties.

14.4    BREAK COSTS
        (a)    Each Borrower shall, within five Business Days of demand by a
               Finance Party, pay to that Finance Party its Break Costs
               attributable to all or any part of a Loan or Unpaid Sum being
               paid by that Borrower on a day other than the last day of an
               Interest Period for that Loan or Unpaid Sum.

                                     - 42 -


        (b)    Each Lender shall, as soon as reasonably practicable after a
               demand by the Facility Agent, provide a certificate confirming
               the amount of its Break Costs for any Interest Period in which
               they accrue.

15.     FEES

15.1    COMMITMENT FEE
        (a)    The Parent shall pay to the Facility Agent (for the account of
               each Lender) a fee in the Base Currency computed at the rate of:

               (i)    50 per cent. per annum of the applicable Margin on that
                      Lender's Available Commitment under the Term Facility
                        for the Term Availability Period; and

               (ii)   50 per cent. per annum of the applicable Margin on that
                      Lender's Available Commitment under the Revolving Facility
                      for the Availability Period applicable to the Revolving
                      Facility.

        (b)    The accrued commitment fee is payable:

               (i)    on the last day of each successive period of three Months
                      which ends during the relevant Availability Period;

               (ii)   on the last day of the relevant Availability Period; and

               (iii)  on the cancelled amount of the relevant Lender's
                      Commitment at the time the cancellation is effective.

15.2    ARRANGEMENT FEE
        The Parent shall pay to the Arranger an arrangement fee in the amount
        and at the times agreed in a Fee Letter.

15.3    AGENCY AND SECURITY TRUSTEE FEE
        The Parent shall pay to (or procure payment to) the Facility Agent (for
        its own account) an agency fee and Security Trustee fee in the amount
        and at the times agreed in a Fee Letter.

15.4    FEES PAYABLE IN RESPECT OF LETTERS OF CREDIT
        (a)    The Parent or each Borrower shall pay to the Issuing Bank a
               fronting fee at the rate of 0.125 per cent. per annum on the
               outstanding amount which is counter-indemnified by the other
               Lenders of each Letter of Credit requested by it for the period
               from the issue of that Letter of Credit until its Expiry Date.

        (b)    The Parent or each Borrower shall pay to the Facility Agent (for
               the account of each Lender) a Letter of Credit fee in the Base
               Currency (computed at the rate equal to the Margin applicable to
               a Revolving Loan) on the outstanding amount of each Letter of
               Credit requested by it for the period from the issue

                                     - 43 -


               of that Letter of Credit until its Expiry Date. This fee shall be
               distributed according to each Lender's L/C Proportion of that
               Letter of Credit.

        (c)    The accrued fronting fee and Letter of Credit fee on a Letter of
               Credit shall be payable on the first day of each successive
               period of three Months (or such shorter period as shall end on
               the Expiry Date for that Letter of Credit) starting on the date
               of issue of that Letter of Credit.

        (d)    If the Parent or a Borrower cash covers any part of a Letter of
               Credit then:

               (i)    the fronting fee payable to the Issuing Bank and the
                      Letter of Credit fee payable for the account of each
                      Lender shall continue to be payable until the expiry or
                      cancellation of the Letter of Credit; and

               (ii)   the Parent or each Borrower will be entitled to withdraw
                      the interest accrued on the cash cover to pay the fees set
                      out in paragraph (i) above.

                                     - 44 -


                                    SECTION 6
                         ADDITIONAL PAYMENT OBLIGATIONS

16.     TAX GROSS UP AND INDEMNITIES

16.1    DEFINITIONS
        In this Clause 16:

        "PROTECTED PARTY" means a Finance Party which is or will be, for or on
        account of Tax, subject to any liability or required to make any payment
        in relation to a sum received or receivable (or any sum deemed for the
        purposes of Tax to be received or receivable) under a Finance Document.

        "QUALIFYING LENDER" means a Lender which is beneficially entitled to
        interest payable to that Lender in respect of an advance under a Finance
        Document and is:

        (a)    a Lender:

               (i)    which is a bank (as defined for the purpose of section 349
                      of the Taxes Act) making an advance under a Finance
                        Document; or

               (ii)   in respect of an advance made under a Finance Document by
                      a person that was a bank (as defined for the purpose of
                      section 349 of the Taxes Act) at the time that that
                      advance was made,

               and which is within the charge to United Kingdom corporation tax
               as respects any payments of interest made in respect of that
               advance; or

        (b)    a Treaty Lender.

        "TAX CONFIRMATION" means a confirmation by a Lender that the person
        beneficially entitled to interest payable to that Lender in respect of
        an advance under a Finance Document is either:

        (a)    a company resident in the United Kingdom, or a partnership each
               member of which is a company resident in the United Kingdom, for
               United Kingdom tax purposes; or

        (b)    a company not so resident in the United Kingdom which carries on
               a trade in the United Kingdom through a branch or agency and that
               interest payable in respect of that advance falls to be brought
               into account in computing the chargeable profits of that company
               for the purposes of section 11(2) of the Taxes Act.

        "TAX CREDIT" means a credit against, relief or remission for, or
        repayment of, any Tax.

        "TAX DEDUCTION" means a deduction or withholding for or on account of
        Tax from a payment under a Finance Document.

                                     - 45 -


        "TAX PAYMENT" means either the increase in a payment made by an Obligor
        to a Finance Party under Clause 16.2 (TAX GROSS-UP) or a payment under
        Clause 16.3 (TAX INDEMNITY).

        "TREATY LENDER" means a Lender which:

        (a)    is treated as a resident of a Treaty State for the purposes of
               the Treaty;

        (b)    does not carry on a business in the United Kingdom through a
               permanent establishment with which that Lender's participation in
               the Loan is effectively connected.

        "TREATY STATE" means a jurisdiction having a double taxation agreement
        (a "TREATY") with the United Kingdom which makes provision for full
        exemption from tax imposed by the United Kingdom on interest.

        Unless a contrary indication appears, in this Clause 16 a reference to
        "DETERMINES" or "DETERMINED" means a determination made in the absolute
        discretion of the person making the determination.

16.2    TAX GROSS-UP
        (a)    Each Obligor shall make all payments to be made by it without any
               Tax Deduction, unless a Tax Deduction is required by law. Each
               Lender hereby represents to each Obligor, on the date of this
               Agreement (if a New Lender) or the date it becomes a Party, that
               it is a Qualifying Lender.

        (b)    The Parent shall promptly upon becoming aware that an Obligor
               must make a Tax Deduction (or that there is any change in the
               rate or the basis of a Tax Deduction) notify the Facility Agent
               accordingly. Similarly, a Lender shall notify the Facility Agent
               on becoming so aware in respect of a payment to that Lender. If
               the Facility Agent receives such notification from a Lender it
               shall notify the Parent and that Obligor.

        (c)    If a Tax Deduction is required by law to be made by an Obligor
               the amount of the payment due from that Obligor shall be
               increased to an amount which (after making any Tax Deduction)
               leaves an amount equal to the payment which would have been due
               if no Tax Deduction had been required.

        (d)    An Obligor is not required to make an increased payment to a
               Lender under paragraph (c) above for a Tax Deduction in respect
               of tax imposed by the United Kingdom from a payment of interest
               on a Loan, if on the date on which the payment falls due:

               (i)    the payment could have been made to the relevant Lender
                      without a Tax Deduction if it was a Qualifying Lender, but
                      on that date that Lender is not or has ceased to be a
                      Qualifying Lender other than as a result of any change
                      after the date it became a Lender under this Agreement in
                      (or in the interpretation, administration, or application
                      of) any law or Treaty,

                                     - 46 -


                      or any published practice or concession of any relevant
                      taxing authority; or

               (ii)   the relevant Lender is a Treaty Lender and the Obligor
                      making the payment is able to demonstrate that the payment
                      could have been made to the Lender without the Tax
                      Deduction had that Lender complied with its obligations
                      under paragraph (g) below.

        (e)    If an Obligor is required to make a Tax Deduction, that Obligor
               shall make that Tax Deduction and any payment required in
               connection with that Tax Deduction within the time allowed and in
               the minimum amount required by law.

        (f)    Within thirty days of making either a Tax Deduction or any
               payment required in connection with that Tax Deduction, the
               Obligor making that Tax Deduction shall deliver to the Facility
               Agent for the Finance Party entitled to the payment evidence
               reasonably satisfactory to that Finance Party that the Tax
               Deduction has been made or (as applicable) any appropriate
               payment paid to the relevant taxing authority.

        (g)    A Treaty Lender and each Obligor which makes a payment to which
               that Treaty Lender is entitled shall co-operate in completing any
               procedural formalities necessary for that Obligor to obtain
               authorisation to make that payment without a Tax Deduction.

16.3    TAX INDEMNITY
        (a)    The Parent shall (within three Business Days of demand by the
               Facility Agent) pay (or procure payment) to a Protected Party an
               amount equal to the loss, liability or cost which that Protected
               Party determines will be or has been (directly or indirectly)
               suffered for or on account of Tax by that Protected Party in
               respect of a Finance Document.

        (b)    Paragraph (a) above shall not apply:

               (i)    with respect to any Tax assessed on a Finance Party:

                      (A)   under the law of the jurisdiction in which that
                            Finance Party is incorporated or, if different, the
                            jurisdiction (or jurisdictions) in which that
                            Finance Party is treated as resident for tax
                            purposes; or

                      (B)   under the law of the jurisdiction in which that
                            Finance Party's Facility Office is located in
                            respect of amounts received or receivable in that
                            jurisdiction,

                      if that Tax is imposed on or calculated by reference to
                      the net income received or receivable (but not any sum
                      deemed to be received or receivable) by that Finance
                      Party; and

                                     - 47 -


               (ii)   to the extent a loss, liability or cost:

                      (A)   is compensated for by an increased payment under
                            Clause 16.2 (TAX GROSS-UP); or

                      (B)   would have been compensated for by an increased
                            payment under Clause 16.2 (TAX GROSS-UP) but was not
                            so compensated solely because one of the exclusions
                            in paragraph (d) of Clause 16.2 (TAX GROSS-UP)
                            applied.

        (c)    A Protected Party making, or intending to make a claim pursuant
               to paragraph (a) above shall promptly notify the Facility Agent
               of the event which will give, or has given, rise to the claim,
               following which the Facility Agent shall notify the Parent.

        (d)    A Protected Party shall, on receiving a payment from an Obligor
               under this Clause 16.3, notify the Facility Agent.

16.4    TAX CREDIT
        If an Obligor makes a Tax Payment and the relevant Finance Party
        determines that:

        (a)    a Tax Credit is attributable to that Tax Payment; and

        (b)    that Finance Party has obtained, utilised and retained that Tax
               Credit,

        the Finance Party shall pay an amount to the Obligor which that Finance
        Party determines will leave it (after that payment) in the same
        after-Tax position as it would have been in had the Tax Payment not been
        made by the Obligor.

16.5    STAMP TAXES
        The Parent shall pay and, within three Business Days of demand,
        indemnify each Secured Party and Arranger against any cost, loss or
        liability that Secured Party or Arranger incurs in relation to all stamp
        duty, registration and other similar Taxes payable in respect of any
        Finance Document.

16.6    VALUE ADDED TAX
        (a)    All consideration expressed to be payable under a Finance
               Document by any Party to a Finance Party shall be deemed to be
               exclusive of any VAT. If VAT is chargeable on any supply made by
               any Finance Party to any Party in connection with a Finance
               Document, that Party shall pay to the Finance Party (in addition
               to and at the same time as paying the consideration) an amount
               equal to the amount of the VAT.

        (b)    Where a Finance Document requires any Party to reimburse a
               Finance Party for any costs or expenses, that Party shall also at
               the same time pay and indemnify that Finance Party against all
               VAT incurred by the Finance Party in respect of the costs or
               expenses to the extent that the Finance Party is not entitled to
               credit or repayment of the VAT.

                                     - 48 -


17.     INCREASED COSTS

17.1    INCREASED COSTS
        (a)    Subject to Clause 17.3 (EXCEPTIONS) the Parent shall, within
               three Business Days of a demand by the Facility Agent, pay for
               the account of a Finance Party the amount of any Increased Costs
               incurred by that Finance Party or any of its Affiliates as a
               result of (i) the introduction of or any change in (or in the
               interpretation, administration or application of) any law or
               regulation or (ii) compliance with any law or regulation made
               after the date of this Agreement.

        (b)    In this Agreement "INCREASED COSTS" means:

               (i)    a reduction in the rate of return from a Facility or on a
                      Finance Party's (or its Affiliate's) overall capital;

               (ii)   an additional or increased cost; or

               (iii)  a reduction of any amount due and payable under any
                      Finance Document,

               which is incurred or suffered by a Finance Party or any of its
               Affiliates to the extent that it is attributable to that Finance
               Party having entered into its Commitments or an Ancillary
               Commitment or funding or performing its obligations under any
               Finance Document or Letter of Credit.

17.2    INCREASED COST CLAIMS
        (a)    A Finance Party intending to make a claim pursuant to Clause 17.1
               (INCREASED COSTS) shall notify the Facility Agent of the event
               giving rise to the claim, following which the Facility Agent
               shall promptly notify the Parent.

        (b)    Each Finance Party shall, as soon as practicable after a demand
               by the Facility Agent, provide a certificate confirming the
               amount of its Increased Costs.

17.3    EXCEPTIONS
        (a)    Clause 17.1 (INCREASED COSTS) does not apply to the extent any
               Increased Cost is:

               (i)    attributable to a Tax Deduction required by law to be made
                      by an Obligor;

               (ii)   compensated for by Clause 16.3 (TAX INDEMNITY) (or would
                      have been compensated for under Clause 16.3 (TAX
                      INDEMNITY) but was not so compensated solely because any
                      of the exclusions in paragraph (b) of Clause 16.3 (TAX
                      INDEMNITY) applied);

               (iii)  compensated for by the payment of the Mandatory Cost; or

               (iv)   attributable to the wilful breach by the relevant Finance
                      Party or its Affiliates of any law or regulation.

                                     - 49 -


        (b)    In this Clause 17.3 reference to a "TAX DEDUCTION" has the same
               meaning given to the term in Clause 16.1 (DEFINITIONS).

18.     OTHER INDEMNITIES

18.1    CURRENCY INDEMNITY
        (a)    If any sum due from an Obligor under the Finance Documents (a
               "SUM"), or any order, judgment or award given or made in relation
               to a Sum, has to be converted from the currency (the "FIRST
               CURRENCY") in which that Sum is payable into another currency
               (the "SECOND CURRENCY") for the purpose of:

               (i)    making or filing a claim or proof against that Obligor; or

               (ii)   obtaining or enforcing an order, judgment or award in
                      relation to any litigation or arbitration proceedings,

               that Obligor shall as an independent obligation, within three
               Business Days of demand, indemnify each Secured Party and the
               Arranger to whom that Sum is due against any cost, loss or
               liability arising out of or as a result of the conversion
               including any discrepancy between (A) the rate of exchange used
               to convert that Sum from the First Currency into the Second
               Currency and (B) the rate or rates of exchange available to that
               person at the time of its receipt of that Sum.

        (b)    Each Obligor waives any right it may have in any jurisdiction to
               pay any amount under the Finance Documents in a currency or
               currency unit other than that in which it is expressed to be
               payable.

18.2    OTHER INDEMNITIES
        (a)    The Parent shall (or shall procure that an Obligor will), within
               three Business Days of demand, indemnify each Secured Party and
               the Arranger against any cost, loss or liability incurred by that
               Secured Party or Arranger as a result of:

               (i)    the occurrence of any Event of Default;

               (ii)   a failure by an Obligor to pay any amount due under a
                      Finance Document on its due date, including without
                      limitation, any cost, loss or liability arising as a
                      result of Clause 32 (SHARING AMONG THE FINANCE PARTIES);

               (iii)  funding, or making arrangements to fund, its participation
                      in a Utilisation requested by the Parent or a Borrower in
                      a Utilisation Request but not made by reason of the
                      operation of any one or more of the provisions of this
                      Agreement (other than by reason of default or negligence
                      by that Finance Party alone);

               (iv)   issuing or making arrangements to issue a Letter of Credit
                      requested by a Borrower in a Utilisation Request but not
                      issued by reason of the operation of any one or more of
                      the provisions of this Agreement; or

                                     - 50 -


               (v)    a Utilisation (or part of a Utilisation) not being prepaid
                      in accordance with a notice of prepayment given by a
                      Borrower or the Parent.

18.3    INDEMNITY TO THE FACILITY AGENT
        The Parent shall (or shall procure that an Obligor will) promptly
        indemnify the Facility Agent against any cost, loss or liability
        incurred by the Facility Agent (acting reasonably) as a result of:

        (a)    investigating any event which it reasonably believes is an Event
               of Default;

        (b)    entering into or performing any foreign exchange contract for the
               purposes of paragraph (b) of Clause 33.9 (CHANGE OF CURRENCY); or

        (c)    acting or relying on any notice, request or instruction which it
               reasonably believes to be genuine, correct and appropriately
               authorised.

18.4    INDEMNITY TO THE SECURITY TRUSTEE
        (a)    Each Obligor shall promptly indemnify the Security Trustee and
               every Receiver and Delegate against any cost, loss or liability
               incurred by any of them as a result of:

               (i)    the taking, holding, protection or enforcement of the
                      Transaction Security,

               (ii)   the exercise of any of the rights, powers, discretions and
                      remedies vested in the Security Trustee and each Receiver
                      and Delegate by the Finance Documents or by law; and

               (iii)  any default by any Obligor in the performance of any of
                      the obligations expressed to be assumed by it in the
                      Finance Documents.

        (b)    The Security Trustee may, in priority to any payment to the
               Secured Parties, indemnify itself out of the Charged Property in
               respect of, and pay and retain, all sums necessary to give effect
               to the indemnity in this Clause 18.4 and shall have a lien on the
               Transaction Security and the proceeds of the enforcement of the
               Transaction Security for all monies payable to it.

19.     MITIGATION BY THE LENDERS

19.1    MITIGATION
        (a)    Each Finance Party shall, in consultation with the Parent, take
               all reasonable steps to mitigate any circumstances which arise
               and which would result in any amount becoming payable under or
               pursuant to, or cancelled pursuant to, any of Clause 11.1
               (ILLEGALITY OF A LENDER) (or, in respect of the Issuing Bank,
               Clause 11.2 (ILLEGALITY IN RELATION TO ISSUING BANK)), Clause 16
               (TAX GROSS-UP AND INDEMNITIES) or Clause 17 (INCREASED COSTS) or
               paragraph 3 of Schedule 4 (MANDATORY COST FORMULAE) including
               (but not limited to) transferring its rights and obligations
               under the Finance Documents to another Affiliate or Facility
               Office.

                                     - 51 -


        (b)    Paragraph (a) above does not in any way limit the obligations of
               any Obligor under the Finance Documents.

19.2    LIMITATION OF LIABILITY
        (a)    The Parent shall (or shall procure that an Obligor will)
               indemnify each Finance Party for all costs and expenses
               reasonably incurred by that Finance Party as a result of steps
               taken by it under Clause 19.1 (MITIGATION).

        (b)    A Finance Party is not obliged to take any steps under Clause
               19.1 (MITIGATION) if, in the opinion of that Finance Party
               (acting reasonably), to do so might be prejudicial to it.

20.     COSTS AND EXPENSES

20.1    TRANSACTION EXPENSES
        The Parent shall promptly on demand pay (or shall procure that an
        Obligor will pay) the Facility Agent, the Arranger and the Security
        Trustee the amount of all costs and expenses (including legal fees)
        reasonably incurred by any of them in connection with the negotiation,
        preparation, printing, execution, syndication and perfection of:

        (a)    this Agreement and any other documents referred to in this
               Agreement and the Transaction Security; and

        (b)    any other Finance Documents executed after the date of this
               Agreement.

20.2    AMENDMENT COSTS
        If (a) an Obligor requests an amendment, waiver or consent or (b) an
        amendment is required pursuant to Clause 33.9 (CHANGE OF CURRENCY), the
        Parent shall, within three Business Days of demand, reimburse (or
        procure reimbursement of) each of the Facility Agent and the Security
        Trustee for the amount of all costs and expenses (including legal fees)
        reasonably incurred by the Facility Agent and the Security Trustee in
        responding to, evaluating, negotiating or complying with that request or
        requirement.

20.3    ENFORCEMENT AND PRESERVATION COSTS
        The Parent shall, within three Business Days of demand, pay (or procure
        payment) to each Secured Party and the Arranger the amount of all costs
        and expenses (including legal fees) incurred by that Secured Party or
        Arranger in connection with the enforcement of or the preservation of
        any rights, powers and remedies under any Finance Document and the
        Transaction Security and any proceedings instituted by or against the
        Security Trustee as a consequence of taking or holding the Transaction
        Security or enforcing these rights, powers and remedies.

                                     - 52 -


                                    SECTION 7
                                    GUARANTEE

21.     GUARANTEE AND INDEMNITY

21.1    GUARANTEE AND INDEMNITY
        Each Guarantor irrevocably and unconditionally jointly and severally:

        (a)    guarantees to each Finance Party punctual performance by each
               other Obligor of all that Obligor's obligations under the Finance
               Documents;

        (b)    undertakes with each Finance Party that whenever another Obligor
               does not pay any amount when due under or in connection with any
               Finance Document, that Guarantor shall immediately on demand pay
               that amount as if it was the principal obligor; and

        (c)    indemnifies each Finance Party immediately on demand against any
               cost, loss or liability suffered by that Finance Party if any
               obligation guaranteed by it is or becomes unenforceable, invalid
               or illegal. The amount of the cost, loss or liability shall be
               equal to the amount which that Finance Party would otherwise have
               been entitled to recover.

21.2    CONTINUING GUARANTEE
        This guarantee is a continuing guarantee and will extend to the ultimate
        balance of sums payable by any Obligor under the Finance Documents,
        regardless of any intermediate payment or discharge in whole or in part.

21.3    REINSTATEMENT
        If any payment by an Obligor or any discharge given by a Finance Party
        (whether in respect of the obligations of any Obligor or any security
        for those obligations or otherwise) is avoided or reduced as a result of
        insolvency or any similar event:

        (a)    the liability of each Obligor shall continue as if the payment,
               discharge, avoidance or reduction had not occurred; and

        (b)    each Finance Party shall be entitled to recover the value or
               amount of that security or payment from the Obligor, as if the
               payment, discharge, avoidance or reduction had not occurred.

21.4    WAIVER OF DEFENCES
        The obligations of each Guarantor under this Clause 21 will not be
        affected by any act, omission, matter or thing which, but for this
        Clause 21, would reduce, release or prejudice any of its obligations
        under this Clause 21 (without limitation and whether or not known to it
        or any Finance Party) including:

        (a)    any time, waiver or consent granted to, or composition with, any
               Obligor or other person;

                                     - 53 -


        (b)    the release of any other Obligor or any other person under the
               terms of any composition or arrangement with any creditor of any
               member of the Group;

        (c)    the taking, variation, compromise, exchange, renewal or release
               of, or refusal or neglect to perfect, take up or enforce, any
               rights against, or security over assets of, any Obligor or other
               person or any non-presentation or non-observance of any formality
               or other requirement in respect of any instrument or any failure
               to realise the full value of any security;

        (d)    any incapacity or lack of power, authority or legal personality
               of or dissolution or change in the members or status of an
               Obligor or any other person;

        (e)    any amendment (however fundamental) or replacement of a Finance
               Document or any other document or security;

        (f)    any unenforceability, illegality or invalidity of any obligation
               of any person under any Finance Document or any other document or
               security; or

        (g)    any insolvency or similar proceedings.

21.5    IMMEDIATE RECOURSE
        Each Guarantor waives any right it may have of first requiring any
        Finance Party (or any trustee or agent on its behalf) to proceed against
        or enforce any other rights or security or claim payment from any person
        before claiming from that Guarantor under this Clause 21. This waiver
        applies irrespective of any law or any provision of a Finance Document
        to the contrary.

21.6    APPROPRIATIONS
        Until all amounts which may be or become payable by the Obligors under
        or in connection with the Finance Documents have been irrevocably paid
        in full, each Finance Party (or any trustee or agent on its behalf) may:

        (a)    refrain from applying or enforcing any other monies, security or
               rights held or received by that Finance Party (or any trustee or
               agent on its behalf) in respect of those amounts, or apply and
               enforce the same in such manner and order as it sees fit (whether
               against those amounts or otherwise) and no Guarantor shall be
               entitled to the benefit of the same; and

        (b)    hold in an interest-bearing suspense account any monies received
               from any Guarantor or on account of any Guarantor's liability
               under this Clause 21.

21.7    DEFERRAL OF GUARANTOR'S RIGHTS
        Until all amounts which may be or become payable by the Obligors under
        or in connection with the Finance Documents have been irrevocably paid
        in full and unless the Facility Agent otherwise directs, no Guarantor
        will exercise any rights which it may have by reason of performance by
        it of its obligations under the Finance Documents:

                                     - 54 -


        (a)    to be indemnified by an Obligor;

        (b)    to claim any contribution from any other guarantor of any
               Obligor's obligations under the Finance Documents; and/or

        (c)    to take the benefit (in whole or in part and whether by way of
               subrogation or otherwise) of any rights of the Finance Parties
               under the Finance Documents or of any other guarantee or security
               taken pursuant to, or in connection with, the Finance Documents
               by any Finance Party.

21.8    RELEASE OF GUARANTORS' RIGHT OF CONTRIBUTION
        If any Guarantor (a "RETIRING GUARANTOR") ceases to be a Guarantor in
        accordance with the terms of the Finance Documents for the purpose of
        any sale or other disposal of that Retiring Guarantor then on the date
        such Retiring Guarantor ceases to be a Guarantor:

        (a)    that Retiring Guarantor is released by each other Guarantor from
               any liability (whether past, present or future and whether actual
               or contingent) to make a contribution to any other Guarantor
               arising by reason of the performance by any other Guarantor of
               its obligations under the Finance Documents; and

        (b)    each other Guarantor waives any rights it may have by reason of
               the performance of its obligations under the Finance Documents to
               take the benefit (in whole or in part and whether by way of
               subrogation or otherwise) of any rights of the Finance Parties
               under any Finance Document or of any other security taken
               pursuant to, or in connection with, any Finance Document where
               such rights or security are granted by or in relation to the
               assets of the Retiring Guarantor.

21.9    ADDITIONAL SECURITY
        This guarantee is in addition to and is not in any way prejudiced by any
        other guarantee or security now or subsequently held by any Finance
        Party.

21.10   IRELAND - SCHEME OF ARRANGEMENT
        The guarantee and indemnity contained in Clause 21.1 (GUARANTEE AND
        INDEMNITY) shall not be discharged nor shall any Obligor's liability be
        affected by any reduction occurring in, or other arrangement being made
        relating to the Obligors' liabilities or any of them to the Finance
        Parties as a result of any arrangement or composition made pursuant to
        any of the provisions of the Companies (Amendment) Act, 1990 of Ireland
        or any analogous provisions or made pursuant to any proceedings or
        actions whatsoever and whether or not following the appointment of an
        administrator, administrative receiver, trustee, liquidator, receiver or
        examiner or any similar officer or any analogous event occurring under
        the laws of any relevant jurisdiction to any Obligor or over all or any
        substantial part of the assets (as the case may be) of any Obligor and
        each Obligor agrees with the Finance Parties that the amount recoverable
        by the Finance Parties from such Obligor under the Finance Documents
        will be and will continue to be the full amount which would have been
        recoverable by the Finance

                                     - 55 -


        Parties from such Obligor in respect of its liabilities and any of them
        had no such arrangement or composition or event as aforesaid been
        entered into.

21.11   LIMITATIONS APPLICABLE TO GUARANTEES FROM DUTCH GUARANTORS
        Any guarantee, indemnity obligation, liability and/or undertaking
        granted or assumed pursuant to this Agreement (including but not limited
        to this Clause 21 (GUARANTEE AND INDEMNITY) and 18 (OTHER INDEMNITIES))
        or pursuant to any other Finance Document by any Obligor incorporated in
        The Netherlands shall be deemed not to be undertaken or incurred by such
        Obligor to the extent that the same would constitute unlawful financial
        assistance within the meaning of Section 2:207(c) of the Dutch Civil
        Code. For the avoidance of doubt any guarantee, obligation, indemnity,
        liability and/or undertaking granted or assumed hereunder or under any
        other Finance Document by:

        (a)    Iron Mountain Nederland Holdings B.V., shall not be deemed to be
               undertaken or incurred to the extent relating to an amount of
               euros 23,700 of the Hays IMS Acquisition Indebtedness used for
               the acquisition of the shares in the capital of Iron Mountain
               Nederland Holdings B.V.; and

        (b)    Iron Mountain Nederland B.V., shall not be deemed to be
               undertaken or incurred to the extent relating to (i) an amount of
               L20,150,000 of the Hays IMS Acquisition Indebtedness used for the
               acquisition of the shares in the capital of Iron Mountain
               Nederland B.V. (ii) an amount of euros 23,700 of the Hays IMS
               Acquisition Indebtedness used for the acquisition of the shares
               in the capital of Iron Mountain Nederland Holdings B.V.

21.12   SPANISH GUARANTORS
        The guarantee given by any Obligor incorporated in Spain expressly
        acknowledges that this guarantee takes the form of a first demand
        guarantee and not a FIANZA under sections 1,822 and following of the
        Spanish Civil Code (CODIGO CIVIL) and, therefore, the benefits conferred
        by Spanish law to a FIADOR (benefits of priority, exhaustion of remedies
        against the principal debtor and division) shall not apply to this
        guarantee.

                                     - 56 -


                                    SECTION 8
               REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

22.     REPRESENTATIONS
        Each Obligor makes the following representations and warranties to each
        Finance Party at the times specified in Clause 22.20 (TIMES ON WHICH
        REPRESENTATIONS ARE MADE):

22.1    STATUS
        (a)    It and each of its Subsidiaries is a LIMITED LIABILITY
               corporation or company (as the case may be), duly incorporated
               and validly existing under the law of its jurisdiction of
               incorporation.

        (b)    It and each of its Subsidiaries has the power to own its assets
               and carry on its business as it is being conducted.

22.2    BINDING OBLIGATIONS
        The obligations expressed to be assumed by it in each Finance Document
        are legal, valid, binding and enforceable obligations.

22.3    NON-CONFLICT WITH OTHER OBLIGATIONS
        The entry into and performance by it of, and the transactions
        contemplated by, the Finance Documents and the granting of the
        Transaction Security do not and will not conflict with:

        (a)    any law or regulation applicable to it;

        (b)    constitutional documents of any Obligor or Pledged Company; or

        (c)    any agreement or instrument binding upon any Obligor or Pledged
               Company or any Obligor's or any Pledged Company's assets, breach
               of which could reasonably be expected to have a Material Adverse
               Effect.

22.4    POWER AND AUTHORITY
        (a)    It has the power to enter into, perform and deliver, and has
               taken all necessary action to authorise its entry into,
               performance and delivery of, the Finance Documents to which it is
               a party and the transactions contemplated by those Finance
               Documents.

        (b)    No limit on its powers will be exceeded as a result of the
               borrowing, granting of security or giving of guarantees or
               indemnities contemplated by the Finance Documents to which it is
               a party.

22.5    VALIDITY AND ADMISSIBILITY IN EVIDENCE
        (a)    All Authorisations required:

               (i)    to enable it lawfully to enter into, exercise its rights
                      and comply with its obligations in the Finance Documents
                      to which it is a party; and

                                     - 57 -


               (ii)   to make the Finance Documents to which it is a party
                      admissible in evidence in its Relevant Jurisdictions,

               have been obtained or effected and are in full force and effect.

22.6    GOVERNING LAW AND ENFORCEMENT

        (a)    The choice of English law as the governing law of the Finance
               Documents will be recognised and enforced in its Relevant
               Jurisdictions.

        (b)    Any judgment obtained in England in relation to a Finance
               Document will be recognised and enforced in its Relevant
               Jurisdictions.

22.7    NO FILING OR STAMP TAXES
        Under the laws of the Relevant Jurisdictions it is not necessary that
        the Finance Documents be filed, recorded or enrolled with any court or
        other authority in that jurisdiction or that any stamp, registration,
        notarial or similar Taxes or fees be paid on or in relation to the
        Finance Documents or the transactions contemplated by the Finance
        Documents except:

        (a)    due presentation for registration of the Transaction Security
               Documents governed by English law in accordance with The
               Companies Act 1985;

        (b)    the payment of applicable Belgian stamp duty on the Transaction
               Security Documents governed by Belgian law;

        (c)    the payment of applicable notarial fees on the Transaction
               Security Documents governed by Spanish law;

        (d)    due presentation for registration of the Transaction Security
               Documents governed by French law with the French tax authorities;

        (e)    due presentation for registration of the Transaction Security
               Documents governed by the Dutch law: rights of pledge
               (PANDRECHTEN) with the Dutch tax authorities and rights of
               mortgage (HYPOTHEEKRECHTEN) the land register (KADASTER);

        (f)    due presentation for registration of the Transaction Security
               Documents governed by Irish law in accordance with the Irish
               Companies Acts 1963 - 2001; and

        (g)    the payment of applicable Irish stamp duty on the Transaction
               Security Documents governed by Irish law,

        each of which will be made promptly after the date of this Agreement.

22.8    NO DEFAULT
        (a)    No Event of Default is continuing or might reasonably be expected
               to result from the making of any Utilisation.

                                     - 58 -


        (b)    No other event or circumstance is outstanding which constitutes a
               default under any other agreement or instrument which is binding
               on it or any of its Subsidiaries or to which its (or its
               Subsidiaries') assets are subject which could reasonably be
               expected to have a Material Adverse Effect.

22.9    NO MISLEADING INFORMATION
        (a)    Any factual information contained in the Information Memorandum
               was true and accurate in all material respects as at the date of
               the relevant report or document containing the information.

        (b)    Any financial projections or forecasts contained in the
               Information Memorandum have been prepared on the basis of recent
               historical information and on the basis of reasonable assumptions
               and were fair (as at the date of the relevant report or document
               containing the projection or forecast) and arrived at after
               careful consideration.

        (c)    The written expressions of opinion or intention provided by or on
               behalf of an Obligor for the purposes of the Information
               Memorandum were arrived at after careful consideration and were
               fair and based on reasonable grounds.

        (d)    No event or circumstance has occurred or arisen and no
               information has been omitted from the Information Memorandum and
               no information has been given or withheld that results in the
               information, opinions, intentions, forecasts or projections
               contained in the Information Memorandum being untrue or
               misleading or other than fair and reasonable in any material
               respect.

        (e)    All other written information provided by any member of the Group
               (including its advisers) was true, complete and accurate in all
               material respects as at the date it was provided and is not
               misleading in any material respect.

        The representations and warranties made with respect to the Information
        Memorandum are made by each Obligor in this Clause 22.9 only so far as
        it is aware after making reasonable enquiries.

22.10   FINANCIAL STATEMENTS
        (a)    Its Original Financial Statements were prepared in accordance
               with the Accounting Principles consistently applied.

        (b)    Its unaudited Original Financial Statements fairly represent its
               financial condition and operations (consolidated in the case of
               the Parent) during the relevant financial year.

        (c)    There has been no change in its property, assets, business or
               financial condition (or the property, assets, business or
               consolidated financial condition of the Group, in the case of the
               Parent) since the date of the most recent financial statements
               delivered pursuant to paragraph (a)(i) of Clause 23.1 (FINANCIAL
               STATEMENTS) which could reasonably be expected to have a Material
               Adverse Effect.

                                     - 59 -


        (d)    Each set of financial statements delivered pursuant to Clause
               23.1 (FINANCIAL STATEMENTS) gives a true and fair view of (in the
               case of audited financial statements) or fairly represents (in
               the case of unaudited financial statements) its financial
               condition and operations as at the date at which those financial
               statements were drawn up.

22.11   NO PROCEEDINGS PENDING OR THREATENED
        No litigation, arbitration or administrative proceedings or
        investigations of or before any court, arbitral body or agency which, if
        adversely determined, could reasonably be expected to have a Material
        Adverse Effect have (to the best of its knowledge and belief) been
        started or threatened against it or any of its Subsidiaries.

22.12   ENVIRONMENTAL AND OTHER LAWS
        (a)    Each Obligor and Pledged Company is in compliance with Clause
               25.3 (ENVIRONMENTAL COMPLIANCE) and to the best of its knowledge
               and belief no circumstances have occurred which would prevent
               that performance or observation.

        (b)    No Environmental Claim has been commenced or (to the best of its
               knowledge and belief) is threatened against any Obligor or
               Pledged Company where that claim could reasonably be expected, if
               adversely determined, to have a Material Adverse Effect.

        (c)    No Obligor or Pledged Company is in breach of any other law or
               regulation in a manner or to an extent which could reasonably be
               expected to have a Material Adverse Effect.

22.13   DANGEROUS SUBSTANCES
        No Dangerous Substance has been used, disposed of, generated, stored,
        transported, dumped, released, deposited, buried or emitted at, or from,
        or under, any premises (whether or not owned, leased, occupied, or
        controlled by it) in circumstances where this might reasonably be
        expected to result in a liability on it which if enforced could have a
        Material Adverse Effect.

22.14   TAXATION
        (a)    It has duly and punctually paid and discharged all Taxes imposed
               on it or its assets within the time period allowed without
               incurring penalties (save to the extent that (i) the payment is
               being contested in good faith, (ii) it has maintained adequate
               reserves for those Taxes and (iii) payment can be lawfully
               withheld);

        (b)    No Obligor or Pledged Company is materially overdue in the filing
               of any Tax returns;

        (c)    No claims are being or are reasonably likely to be asserted
               against any Obligor or Pledged Company with respect to Taxes
               which, if adversely determined, could reasonably be expected to
               have a Material Adverse Effect.

                                     - 60 -


22.15   SECURITY AND FINANCIAL INDEBTEDNESS
        (a)    No Security exists over all or any of the present or future
               assets of any member of the Group other than any Security
               permitted under Clause 25.10 (NEGATIVE PLEDGE).

        (b)    No member of the Group has any actual or contingent Financial
               Indebtedness outstanding other than as permitted by this
               Agreement.

22.16   PARI PASSU RANKING
        Its payment obligations under the Finance Documents rank at least PARI
        PASSU with the claims of all its other unsecured and unsubordinated
        creditors, except for obligations mandatorily preferred by law applying
        to companies generally.

22.17   TRANSACTION SECURITY
        Each Transaction Security Document to which it is a party validly
        creates the Security which is expressed to be created by that
        Transaction Security Document and evidences the Security it is expressed
        to evidence and those security interests are valid and effective.

22.18   GOOD TITLE ASSETS
        Subject to any Security permitted pursuant to paragraph (c) of Clause
        25.10 (NEGATIVE PLEDGE) and with the exception of the Hays' Leases at
        any time prior to the Conditions Subsequent Longstop Date, each Obligor
        and Pledged Company has a good, valid and marketable title to, or valid
        leases or licences of, and all appropriate Authorisations to use, all
        assets necessary to carry on its business as presently conducted and to
        perform its obligations under the Finance Documents, save in each case
        to the extent that the absence of such good, valid and marketable title
        to, or valid leases or licences of or appropriate Authorisations could
        not reasonably be expected to be likely to have a Material Adverse
        Effect.

22.19   SHARES
        The shares of any member of the Group which are subject to the
        Transaction Security are fully paid and not subject to any option to
        purchase or similar rights. The constitutional documents of companies
        whose shares are subject to the Transaction Security do not and could
        not restrict or inhibit any transfer of those shares on creation or on
        enforcement of the Transaction Security.

22.20   TIMES ON WHICH REPRESENTATIONS ARE MADE
        (a)    All the representations and warranties in this Clause 22 are made
               to each Finance Party on the date of this Agreement except for
               the representations and warranties set out in paragraphs (a) to
               (d) of Clause 22.9 (NO MISLEADING INFORMATION) relating to the
               Information Memorandum which are deemed to be made by each
               Obligor on the date that the Information Memorandum is approved
               by the Parent.

        (b)    The Repeating Representations are deemed to be made by each
               Obligor to each Finance Party on the date of each Utilisation
               Request and on the first day of each Interest Period.

                                     - 61 -


        (c)    All the representations and warranties in this Clause 22 except
               paragraphs (a) to (d) of Clause 22.9 (NO MISLEADING INFORMATION),
               are deemed to be made by each Additional Obligor to each Finance
               Party on the day on which it becomes an Additional Obligor.

        (d)    Each representation or warranty deemed to be made after the date
               of this Agreement shall be made by reference to the facts and
               circumstances existing at the date the representation or warranty
               is made.

23.     INFORMATION UNDERTAKINGS
        The undertakings in this Clause 23 remain in force from the date of this
        Agreement for so long as any amount is outstanding under the Finance
        Documents or any Commitment is in force.

23.1    FINANCIAL STATEMENTS
        The Parent shall supply to the Facility Agent in sufficient copies for
        all the Lenders:

        (a)    as soon as they are available, but in any event within 150 days
               after the end of each of its financial years:

               (i)    its audited consolidated financial statements for that
                      financial year; and

               (ii)   the financial statements (consolidated if appropriate) of
                      each Obligor for that financial year audited (if that
                      Obligor produces audited financial statements);

        (b)    as soon as they are available, but in any event within 42 days
               after the end of each Financial Quarter of each of its financial
               years its consolidated financial statements for that Financial
               Quarter; and

        (c)    within 30 days after the commencement of each of its financial
               years a consolidated annual budget (including profit and loss
               account, balance sheet, cashflow forecasts and capital
               expenditure forecasts) for the next financial year.

23.2    COMPLIANCE CERTIFICATE
        (a)    The Parent shall supply a Compliance Certificate to the Facility
               Agent with each set of its audited consolidated annual financial
               statements and each set of its consolidated quarterly financial
               statements delivered pursuant to paragraph (b) of Clause 23.1
               (FINANCIAL STATEMENTS).

        (b)    Each Compliance Certificate shall:

               (i)    set out (in reasonable detail) computations as to
                      compliance with Clause 24 (FINANCIAL COVENANTS) and the
                      Margin computations set out in the definition "Margin" as
                      at the date as at which those financial statements were
                      drawn up;

                                     - 62 -


               (ii)   confirm compliance with Clause 25.18 (GUARANTOR GROUP AND
                      SECURITY COVERAGE); and

               (iii)  confirm no Default has occurred and is continuing or, if a
                      Default has occurred, what Default has occurred and the
                      steps being taken to remedy that Default.

        (c)    Each Compliance Certificate shall be signed by the finance
               director and any other director of the Parent.

        (d)    The first Compliance Certificate required to be delivered under
               this Agreement shall be in respect of the Relevant Period ending
               31 July 2004.

23.3    REQUIREMENTS AS TO FINANCIAL STATEMENTS
        (a)    Each set of financial statements delivered pursuant to Clause
               23.1 (FINANCIAL STATEMENTS):

               (i)    shall be certified by a director of the relevant company
                      as giving a true and fair view (in the case of annual
                      financial statements delivered pursuant to paragraph (a)
                      of Clause 23.1 (FINANCIAL STATEMENTS)) or fairly
                      representing (in other cases) its financial condition and
                      operations as at the date as at which those financial
                      statements were drawn up;

               (ii)   shall be prepared using the Accounting Principles,
                      accounting practices and financial reference periods
                      consistent with those applied in the case of any Obligor,
                      in the preparation of the Original Financial Statements
                      for that Obligor,

                      unless, in relation to any set of financial statements,
                      the Parent notifies the Facility Agent that there has been
                      a change in the Accounting Principles, the accounting
                      practices or reference periods and its auditors (or, if
                      appropriate, the auditors of the Obligor) deliver to the
                      Facility Agent:

                      (A)   a description of any change necessary for those
                            financial statements to reflect the Accounting
                            Principles, accounting practices and reference
                            periods upon which that Obligor's Original Financial
                            Statements were prepared; and

                      (B)   sufficient information, in form and substance as may
                            be reasonably required by the Facility Agent, to
                            enable the Lenders to determine whether Clause 24
                            (FINANCIAL COVENANTS) has been complied with, to
                            determine the Margin as set out in the definition of
                            "Margin" and to make an accurate comparison between
                            the financial position indicated in those financial
                            statements and the Original Financial Statements.

                                     - 63 -


        (b)    If the Parent notifies the Facility Agent of a change in
               accordance with paragraph (a)(ii) above then the Parent and
               Facility Agent shall enter into negotiations in good faith with a
               view to agreeing:

               (i)    whether or not the change might result in any material
                      alteration in the commercial effect of any of the terms
                        of this Agreement; and

               (ii)   if so, any amendments to this Agreement which may be
                      necessary to ensure that the change does not result in any
                      material alteration in the commercial effect of those
                      terms,

               and if any amendments are agreed they shall take effect and be
               binding on each of the Parties in accordance with their terms.

               If no such agreement is reached within 30 days of that
               notification of change, the Facility Agent shall (if so requested
               by the Majority Lenders) instruct the auditors of the Parent or
               independent accountants (approved by the Parent or, in the
               absence of such approval within 5 days of request by the Facility
               Agent of such approval, a firm with recognised expertise) to
               determine any amendment to Clause 24.2 (FINANCIAL CONDITION) the
               Margin computations set out in the definition of "Margin" and any
               other terms of this Agreement which those auditors or, as the
               case may be, accountants (acting as experts and not arbitrators)
               consider appropriate to ensure the change does not result in any
               material alteration in the commercial effect of the terms of this
               Agreement. Those amendments shall take effect when so determined
               by those auditors, or as the case may be, accountants. The cost
               and expense of those auditors or accountants shall be for the
               account of the Parent.

               Any reference in this Agreement to those financial statements
               shall be construed as a reference to those financial statements
               as adjusted to reflect the basis upon which the Original
               Financial Statements were prepared.

        (c)    The Parent shall procure that each set of annual financial
               statements delivered pursuant to paragraph (a) of Clause 23.1
               (FINANCIAL STATEMENTS) shall be audited by an internationally
               recognised firm of independent auditors (which shall, for the
               purposes of this Agreement, include RSM Robson Rhodes) licensed
               to practice in the jurisdiction of incorporation of the relevant
               member of the Group.

        (d)    The Parent shall procure that each set of consolidated quarterly
               financial statements delivered pursuant to paragraph (b) of
               Clause 23.1 (FINANCIAL STATEMENTS) includes a cashflow forecast
               in respect of the Group relating to the 3 month period commencing
               at the end of the relevant Financial Quarter.

23.4    GROUP COMPANIES
        The Parent shall, at the request of the Facility Agent, supply to the
        Facility Agent a report stating which of its Subsidiaries are Material
        Companies.

                                     - 64 -


23.5    YEAR-END
        With the exception of the proposed change of its year-end (and that of
        any applicable member of the Group) to accord with the year-end of Iron
        Mountain Inc, the Parent must not change its financial year-end without
        the prior written consent of the Facility Agent.

23.6    INFORMATION: MISCELLANEOUS
        The Parent shall supply to the Facility Agent (in sufficient copies for
        all the Lenders, if the Facility Agent so requests):

        (a)    all documents dispatched by the Parent to its shareholders (or
               any class of them) or dispatched by the Parent or any Obligor to
               its creditors generally at the same time as they are dispatched;

        (b)    promptly upon becoming aware of them, the details of any
               litigation, arbitration or administrative proceedings which are
               current, threatened or pending against any member of the Group,
               and which could reasonably be expected, if adversely determined,
               to have a Material Adverse Effect.

        (c)    promptly, such information or projections regarding the financial
               condition, business, operations, of any member of the Group as
               any Finance Party (through the Facility Agent) may reasonably
               request;

23.7    NOTIFICATION OF DEFAULT
        (a)    Each Obligor shall notify the Facility Agent of any Default (and
               the steps, if any, being taken to remedy it) promptly upon
               becoming aware of its occurrence (unless that Obligor is aware
               that a notification has already been provided by another
               Obligor).

        (b)    Promptly upon a request by the Facility Agent (acting
               reasonably), the Parent shall supply to the Facility Agent a
               certificate signed by the finance director and any other director
               of the Parent on its behalf certifying that no Default is
               continuing (or if a Default is continuing, specifying the Default
               and the steps, if any, being taken to remedy it).

23.8    "KNOW YOUR CUSTOMER" CHECKS
        (a)    If:

               (i)    the introduction of or any change in (or in the
                      interpretation, administration or application of) any law
                      or
                        regulation made after the date of this Agreement;

               (ii)   any change in the status of an Obligor or the composition
                      of the shareholders of an Obligor after the date of this
                      Agreement; or

               (iii)  a proposed assignment or transfer by a Lender of any of
                      its rights and/or obligations under this Agreement to a
                      party that is not a Lender prior to such assignment or
                      transfer,

                                     - 65 -


               obliges the Facility Agent or any Lender (or, in the case of
               paragraph (iii) above, any prospective new Lender) to comply with
               "know your customer" or similar identification procedures in
               circumstances where the necessary information is not already
               available to it, each Obligor shall promptly upon the request of
               the Facility Agent or any Lender supply, or procure the supply
               of, such documentation and other evidence as is reasonably
               requested by the Facility Agent (for itself or on behalf of any
               Lender) or any Lender (for itself or, in the case of the event
               described in paragraph (iii) above, on behalf of any prospective
               new Lender) in order for the Facility Agent, such Lender or, in
               the case of the event described in paragraph (iii) above, any
               prospective new Lender to carry out and be satisfied with the
               results of all necessary "know your customer" or other checks in
               relation to any relevant person pursuant to the transactions
               contemplated in the Finance Documents.

        (b)    Each Lender shall promptly upon the request of the Facility Agent
               supply, or procure the supply of, such documentation and other
               evidence as is reasonably requested by the Facility Agent (for
               itself) in order for the Facility Agent to carry out and be
               satisfied with the results of all necessary "know your customer"
               or other checks on Lenders or prospective new Lenders pursuant to
               the transactions contemplated in the Finance Documents.

        (c)    The Parent shall, by not less than 10 Business Days' prior
               written notice to the Facility Agent, notify the Facility Agent
               (which shall promptly notify the Lenders) of its intention to
               request that one of its Subsidiaries becomes an Additional
               Obligor pursuant to Clause 28 (CHANGES TO THE OBLIGORS).

        (d)    Following the giving of any notice pursuant to paragraph ((c)
               above, if the accession of such Additional Obligor obliges the
               Facility Agent or any Lender to comply with "know your customer"
               or similar identification procedures in circumstances where the
               necessary information is not already available to it, the Parent
               shall promptly upon the request of the Facility Agent or any
               Lender supply, or procure the supply of, such documentation and
               other evidence as is reasonably requested by the Facility Agent
               (for itself or on behalf of any Lender) or any Lender (for itself
               or on behalf of any prospective new Lender) in order for the
               Facility Agent or such Lender or any prospective new Lender to
               carry out and be satisfied with the results of all necessary
               "know your customer" or other checks in relation to any relevant
               person pursuant to the accession of such Subsidiary to this
               Agreement as an Additional Obligor.

24.     FINANCIAL COVENANTS

24.1    FINANCIAL DEFINITIONS
        In this Clause 24:

        "BORROWINGS" means, at any time, the outstanding principal, capital or
        nominal amount and any fixed or minimum premium payable on prepayment or
        redemption of any indebtedness for or in respect of:

                                     - 66 -


        (a)    moneys borrowed or raised;

        (b)    any amount raised by acceptance under any acceptance credit
               facility;

        (c)    any amount raised pursuant to any note purchase facility or the
               issue of bonds, notes, debentures, loan stock or any similar
               instrument;

        (d)    the amount of any liability in respect of any lease or hire
               purchase contract which would, in accordance with the Accounting
               Principles, be treated as a finance or capital lease;

        (e)    receivables sold or discounted (other than any receivables to the
               extent they are sold on a non-recourse basis);

        (f)    any counter-indemnity obligation in respect of a guarantee,
               indemnity, bond, standby or documentary letter of credit or any
               other instrument issued by a bank or financial institution
               (excluding any given in respect of trade credit arising in the
               ordinary course of business);

        (g)    any amount raised by the issue of redeemable shares which are
               redeemable before the Final Maturity Date;

        (h)    any amount of any liability under an advance or deferred purchase
               agreement if one of the primary reasons behind the entry into the
               agreement is to raise finance;

        (i)    any amount raised under any other transaction (including any
               forward sale or purchase agreement) having the commercial effect
               of a borrowing; and

        (j)    (without double counting) the amount of any liability in respect
               of any guarantee or indemnity for any of the items referred to in
               paragraphs (a) to (i) above.

        "CONSOLIDATED NET FINANCE CHARGES" means, for any Relevant Period, the
        aggregate amount of the accrued interest (including capitalised
        interest), commission, fees, discounts, prepayment penalties or premiums
        and other finance payments in respect of Borrowings whether paid,
        payable or capitalised by any member of the Group in respect of that
        Relevant Period:

        (a)    EXCLUDING any such obligations owed to any other member of the
               Group;

        (b)    INCLUDING the interest element of leasing and hire purchase
               payments;

        (c)    INCLUDING any accrued commission, fees, discounts and other
               finance payments payable by any member of the Group under any
               interest rate hedging arrangement;

        (d)    DEDUCTING any accrued commission, fees, discounts and other
               finance payments owing to any member of the Group under any
               interest rate hedging instrument;

                                     - 67 -


        (e)    DEDUCTING any accrued interest owing to any member of the Group
               on any deposit or bank account; and

        (f)    EXCLUDING any interest due under the Subordinated Loan Agreement
               or, as the case may be, the Existing Retained Inter-company
               Facilities to the extent that the payment of such interest is
               funded by a further drawdown under the Subordinated Loan
               Agreement;

        together with the amount of any cash dividends or distributions paid or
        made by the Parent in respect of that Relevant Period.

        "CONSOLIDATED TOTAL NET DEBT" means, at any time, the aggregate amount
        of all obligations of the Group for or in respect of Borrowings but:

        (a)    EXCLUDING any obligations owed by a member of the Group to
               another member of the Group;

        (b)    EXCLUDING any amounts owed by any member of the Group pursuant to
               the Subordinated Loan Agreement and the Existing Retained
               Inter-company Facilities; but

        (c)    DEDUCTING the aggregate amount of freely available Cash at such
               time;

        and so that no amount shall be included or excluded more than once.

        "EBIT" means the consolidated profits of the Group from ordinary
        activities before taxation:

        (a)    BEFORE DEDUCTING any Consolidated Net Finance Charges;

        (b)    BEFORE TAKING INTO ACCOUNT any items treated as exceptional or
               extraordinary items;

        in each case, to the extent added, deducted or taken into account, as
        the case may be, for the purposes of determining profits of the Group
        from ordinary activities before taxation.

        "EBITDA" means EBIT BEFORE DEDUCTING any amount attributable to the
        amortisation of intangible assets or the depreciation of tangible
        assets.

        "FINANCIAL QUARTER" means the period commencing on the day after one
        Quarter Date and ending on the next Quarter Date.

        "QUARTER DATE" means each of 30 April, 31 July, 31 October and 31
        January.

        "RELEVANT PERIOD" means each period of twelve months ending on the last
        day of the Parent's financial year and each period of twelve months
        ending on the last day of each Financial Quarter of the Parent's
        financial year.

                                     - 68 -


24.2    FINANCIAL CONDITION
        The Parent shall ensure that:

        (a)    INTEREST COVER: The ratio of EBITDA to Consolidated Net Finance
               Charges in respect of any Relevant Period specified in Column 1
               below shall not be less than 4.0:1.

        (b)    DEBT COVER: The ratio of Consolidated Total Net Debt on each date
               set out in Column 1 below to EBITDA in respect of any Relevant
               Period ending on such date shall not exceed the ratio set out in
               Column 2 below opposite such date.



               COLUMN 1                                               COLUMN 2
               RELEVANT PERIOD                                        RATIO
                                                                   
               Relevant Period expiring 31 July 2004                  4.0:1

               Relevant Period expiring 31 October 2004               4.0:1

               Relevant Period expiring 31 January 2005               4.0:1

               Relevant Period expiring 30 April 2005                 4.0:1

               Relevant Period expiring 31 July 2005                  3.75:1

               Relevant Period expiring 31 October 2005               3.75:1

               Relevant Period expiring 31 January 2006               3.75:1

               Relevant Period expiring 30 April 2006                 3.75:1

               Relevant Period expiring 31 July 2006                  3.50:1

               Relevant Period expiring 31 October 2006               3.50:1

               Relevant Period expiring 31 January 2007               3.50:1

               Relevant Period expiring 30 April 2007                 3.50:1

               Relevant Period expiring 31 July 2007                  3.25:1

               Relevant Period expiring 31 October 2007               3.25:1

               Relevant Period expiring 31 January 2008               3.25:1

               Relevant Period expiring 30 April 2008                 3.25:1

               All Relevant Periods thereafter                        3.0:1


24.3    FINANCIAL TESTING
        (a)    The financial covenants set out in Clause 24.2 (FINANCIAL
               CONDITION) shall be tested by reference to each of the financial
               statements and/or each Compliance Certificate delivered pursuant
               to Clause 23.2 (COMPLIANCE CERTIFICATE).

                                     - 69 -


        (b)    For the purpose of testing the ratios set out in paragraphs (a)
               and (b) of Clause 24.2 (FINANCIAL CONDITION), EBITDA in respect
               of each Relevant Period ending on 31 July 2004, 31 October 2004,
               31 January 2005 and 30 April 2005 shall be increased by an amount
               equal to the annualised synergies achieved in respect of the Hays
               IMS Acquisition prior to 31 July 2004 (without double counting),
               as certified by RSM Robson Rhodes and shown in:

               (i)    the pro forma statement set out in the Due Diligence
                      Report; and

               (ii)   the updated pro forma statement delivered to the Facility
                      Agent by RSM Robson Rhodes after 31 July 2004 but in any
                      event no later than the date of the first Compliance
                      Certificate delivered pursuant to Clause 23.2 (COMPLIANCE
                      CERTIFICATE).

        (c)    For the purpose of testing the ratio set out in paragraph (b) of
               Clause 24.2 (FINANCIAL CONDITION), EBITDA shall also;

               (i)    in the case of any business or company acquired (a
                      "RELEVANT ACQUISITION") in accordance with the terms of
                      this Agreement on a date (the "ACQUISITION DATE") during a
                      Relevant Period, have added to it:

                      (A)   the Parent's good faith estimate (as certified to
                            the Facility Agent by two directors of the Parent
                            together with reasonable supporting evidence and
                            calculations) of EBITDA of the company(ies) or
                            business comprising the Relevant Acquisition for the
                            period from the start of that Relevant Period to the
                            Acquisition Date and for this purpose the
                            definitions of EBIT and EBITDA in Clause 24.1
                            (FINANCIAL DEFINITIONS) shall be applied, MUTATIS
                            MUTANDIS, to the company(ies) or business comprising
                            the Relevant Acquisition; and

                      (B)   on the four Quarter Dates, immediately following the
                            Acquisition Date, an amount equal to the annualised
                            synergies achieved in respect of the Relevant
                            Acquisition (without double counting) as certified
                            by an internationally recognised firm of independent
                            auditors;

               (ii)   in the case of any businesses or company(ies) sold (a
                      "RELEVANT DISPOSAL") in accordance with this Agreement
                      during a Relevant Period, have deducted from it the
                      Parent's good faith estimate (as confirmed to the Facility
                      Agent by two directors of the Parent together with
                      reasonable supporting evidence and calculations) of EBITDA
                      of the company(ies) or businesses comprising the Relevant
                      Disposal for the period from the start of that Relevant
                      Period to the date of such disposal and for this purpose
                      the definitions of EBIT and EBITDA in Clause 24.1
                      (FINANCIAL DEFINITIONS) shall be applied, MUTATIS
                      MUTANDIS, to the company(ies) or business comprising the
                      Relevant Disposal.

                                     - 70 -


25.     GENERAL UNDERTAKINGS
        The undertakings in this Clause 25 remain in force from the date of this
        Agreement for so long as any amount is outstanding under the Finance
        Documents or any Commitment is in force.

25.1    AUTHORISATIONS
        Each Obligor shall promptly:

        (a)    obtain, comply with and do all that is necessary to maintain in
               full force and effect; and

        (b)    supply certified copies to the Facility Agent of,

               any Authorisation required under any law or regulation of a
               Relevant Jurisdiction to:

               (i)    enable it to perform its obligations under the Finance
                      Documents; and

               (ii)   ensure the legality, validity, enforceability or
                      admissibility in evidence of any Finance Document.

25.2    COMPLIANCE WITH LAWS
        Each Obligor shall comply in all respects with all laws to which it may
        be subject, if failure so to comply would, or could reasonably be
        expected to have, a Material Adverse Effect.

25.3    ENVIRONMENTAL COMPLIANCE
        Each Obligor shall (and the Parent shall ensure that each Pledged
        Company shall):

        (a)    comply with all Environmental Law;

        (b)    obtain and maintain and ensure compliance with any Environmental
               Permits;

        (c)    comply with all other covenants, conditions, restrictions or
               agreements directly or indirectly concerned with any
               contamination, pollution or waste or the release or discharge of
               any toxic or hazardous substance in connection with any real
               property which is or was at any time owned, leased or occupied by
               any Obligor or Pledged Company or on which any Obligor or Pledged
               Company has conducted any activity; and

        (d)    take all reasonable steps in anticipation of known or expected
               future changes to or obligations under Environmental Law or
               Environmental Permits,

        where failure to do so could reasonably be expected to have a Material
        Adverse Effect.

25.4    ENVIRONMENTAL CLAIMS
        Each Obligor shall (through the Parent) inform the Facility Agent in
        writing as soon as reasonably practicable upon becoming aware of the
        same if any Environmental Claim has been commenced or (to the best of an
        Obligor's knowledge and belief) is threatened against any Obligor or
        Pledged Company where the claim could reasonably

                                     - 71 -


        be expected, if determined against that Obligor or Pledged Company, to
        have a Material Adverse Effect.

25.5    TAXATION

        Each Obligor shall (and the Parent shall ensure that each Pledged
        Company shall) duly and punctually pay and discharge all Taxes imposed
        upon it or its assets within the time period allowed without incurring
        penalties unless and only to the extent that:

        (a)    such payment is being contested in good faith;

        (b)    adequate reserves are being maintained for those Taxes which have
               been disclosed in its latest financial statements delivered to
               the Facility Agent under Clause 23.1 (FINANCIAL STATEMENTS); and

        (c)    such payment can be lawfully withheld.

25.6    MERGER
        No Obligor shall (and the Parent shall ensure that no Pledged Company
        will) enter into any amalgamation, demerger, merger or corporate
        reconstruction except pursuant to any acquisition or disposal permitted
        by paragraph (b) of Clause 25.8 (ACQUISITIONS) or paragraph (b) of
        Clause 25.11 (DISPOSALS).

25.7    CHANGE OF BUSINESS
        The Parent shall procure that no substantial change is made to the
        general nature of the business of the Parent, the other Obligors or the
        Group from that carried on at the date of this Agreement being the
        records and information management business or activities related
        thereto (including ownership of 100% of the issued share capital of
        limited liability companies whose assets consist substantially of such
        assets).

25.8    ACQUISITIONS
        (a)    No Obligor shall (and the Parent shall ensure that no other
               member of the Group (other than a Joint Venture Group Company)
               will) incorporate or acquire a company or acquire (or acquire an
               interest in) shares or securities or a business or undertaking.

        (b)    Paragraph (a) above shall not apply to:

               (i)    the proposed share acquisition by the Parent of a European
                      company codenamed "Project Mont Blanc";

               (ii)   an acquisition of (A) all of the issued share capital of a
                      limited liability company or (B) any shares in a Joint
                      Venture Group Company or (C) a business or undertaking,
                      but only if:

                      (1)   the consideration for the acquisition does not
                            exceed L7,500,000 and when aggregated with the
                            consideration for all other acquisitions which are
                            not otherwise permitted by paragraph (i) above does
                            not exceed L15,000,000 in any financial year; and

                                     - 72 -


                      (2)   the consideration for the acquisition when
                            aggregated with the consideration for all other
                            acquisitions which are not otherwise permitted by
                            the preceding paragraphs does not exceed L20,000,000
                            in any financial year but only to the extent that
                            all such acquisitions are fully funded by a specific
                            issue of equity shares or by Approved Subordinated
                            Debt;

               (iii)  any acquisition with the prior written consent of the
                      Majority Lenders.

25.9    PARI PASSU RANKING
        (a)    Each Obligor shall ensure that at all times any unsecured and
               unsubordinated claims of a Finance Party held against it under
               the Finance Documents rank at least PARI PASSU with the claims of
               all its other unsecured and unsubordinated creditors except those
               creditors whose claims are mandatorily preferred by laws of
               general application to companies.

        (b)    Each Obligor which is incorporated in Spain shall not raise to
               the status of a Spanish Public Document any unsecured and
               unsubordinated indebtedness.

25.10   NEGATIVE PLEDGE
        Except as permitted under paragraph (c) below:

        (a)    No Obligor shall (and the Parent shall ensure that no other
               member of the Group will) create or permit to subsist any
               Security over any of its assets.

        (b)    No Obligor shall (and the Parent shall ensure that no other
               member of the Group will):

               (i)    sell, transfer or otherwise dispose of any of its assets
                      on terms whereby they are or may be leased to or
                      re-acquired by an Obligor or any other member of the
                      Group;

               (ii)   sell, transfer or otherwise dispose of any of its
                      receivables on recourse terms;

               (iii)  enter into any arrangement under which money or the
                      benefit of a bank or other account may be applied, set-off
                      or made subject to a combination of accounts; or

               (iv)   enter into any other preferential arrangement having a
                      similar effect,

               in circumstances where the arrangement or transaction is entered
               into primarily as a method of raising Financial Indebtedness or
               of financing the acquisition of an asset.

        (c)    Paragraphs (a) and (b) above do not apply to:

               (i)    Existing Retained Security;

                                     - 73 -


               (ii)   any netting or set-off arrangement entered into by any
                      member of the Group in the ordinary course of its banking
                      arrangements for the purpose of netting debit and credit
                      balances of members of the Group;

               (iii)  any lien arising by operation of law in the ordinary
                      course of trading which is discharged within 90 days or is
                      in respect of an amount less than L10,000;

               (iv)   any retention of title, hire purchase or conditional sale
                      arrangement or arrangements having similar effect in
                      respect of goods supplied to a member of the Group in the
                      ordinary course of trading and on the suppliers standard
                      or usual terms;

               (v)    any sale, transfer or other disposal of any assets
                      prohibited pursuant to paragraph (b)(i) and (b)(ii) of
                      this Clause 25.10 (NEGATIVE PLEDGE) where an amount equal
                      to the Disposal Proceeds thereof is used in or towards
                      making a prepayment and cancellation of the Facility under
                      Clause 11.9 (MANDATORY PREPAYMENT ON RECEIPT OF DISPOSAL
                      PROCEEDS); and

               (vi)   the Transaction Security.

25.11   DISPOSALS
        (a)    Except as permitted under paragraph (b) below, no Obligor shall
               (and the Parent shall ensure that no other member of the Group
               will) enter into a single transaction or a series of transactions
               (whether related or not and whether voluntary or involuntary) to
               sell, lease, transfer or otherwise dispose of any asset.

        (b)    Paragraph (a) above does not apply to any sale, lease, transfer
               or other disposal:

               (i)    of assets made in the ordinary course of trading of the
                      disposing entity;

               (ii)   of assets on arms length terms for market value;

               (iii)  arising as a result of any Security permitted under Clause
                      25.10 (NEGATIVE PLEDGE);

               (iv)   of assets where the proceeds of disposal are used within 6
                      months of that disposal to purchase assets utilised in the
                      records management business;

               (v)    of any asset (which is not the subject of Transaction
                      Security) in exchange for other assets comparable or
                      superior as to type, value and quantity;

               (vi)   of any surplus or obsolete assets not required for the
                      efficient operation of the business of the Group by any
                      member of the Group;

               (vii)  of cash where such disposal is not otherwise prohibited by
                      this Agreement; and

                                     - 74 -


               (viii) of assets between Obligors.

25.12   ARM'S LENGTH BASIS
        (a)    Except as permitted by paragraph (b) below, no Obligor shall (and
               the Parent shall ensure no member of the Group will) enter into
               any transaction with the Parent or its shareholders except on
               arm's length terms.

        (b)    The following transactions shall not be a breach of this Clause
               25.12:

               (i)    the Mentmore Disposal; and

               (ii)   intra-Group loans permitted under Clause 25.13 (LOANS,
                      CREDIT OR GUARANTEES).

25.13   LOANS, CREDIT OR GUARANTEES
        (a)    Except as permitted under paragraph (b) below, no Obligor shall
               (and the Parent shall ensure that no member of the Group will)

               (i)    make any loans or grant any credit to or for the benefit
                      of any person;

               (ii)   give any guarantee or indemnity (except as required under
                      any of the Finance Documents); or

               (iii)  otherwise voluntarily assume any liability, whether actual
                      or contingent, in respect of any obligation of any person.

        (b)    Paragraph (a) above does not apply to:

               (i)    any Subordinated Loans under the Subordinated Loan
                      Agreement;

               (ii)   a loan by an Obligor to an Obligor;

               (iii)  any loan made by a member of the Group which is not an
                      Obligor to an Obligor which is a direct or indirect
                      Holding Company of such member of the Group where such
                      loan is to fund obligations under the Finance Documents or
                      working capital requirements of that Obligor;

               (iv)   a loan by a member of the Group which is not an Obligor to
                      another member of the Group which is not an Obligor;

               (v)    any loan, grant of credit or guarantee granted to any
                      customer of a member of the Group in the ordinary course
                      of trading and on arm's length terms;

               (vi)   the giving by any member of the Group of any guarantee,
                      bond or indemnity in respect of the liabilities or
                      obligations of any other member of the Group PROVIDED THAT
                      no Obligor shall give any guarantee, bond or indemnity in
                      respect of the liabilities or obligations of any member of
                      the Group which is not an Obligor; or

                                     - 75 -


               (vii)  any loan by the Parent to a Joint Venture Group Company,
                      the aggregate amount of which does not exceed L5,000,000
                      in any financial year of the Parent but only to the extent
                      that the proceeds of any such loans are applied towards
                      working capital purposes and capital expenditure which,
                      for the avoidance of doubt, shall not include any
                      acquisitions as contemplated by paragraph (a) of Clause
                      25.8(ACQUISITIONS); or

               (viii) the loan of euros 9,758,643 made by Document and
                      Information Management Services Limited to Iron Mountain
                      Holdings (France) SNC.

25.14   DIVIDENDS
        (a)    The Parent shall not:

               (i)    declare, make or pay any dividend, charge, fee or other
                      distribution (or interest on any unpaid dividend, fee or
                      distribution) (whether in cash or in kind) on or in
                      respect of its share capital (or any class of its share
                      capital);

               (ii)   repay or distribute any dividend or share premium reserve;

               (iii)  pay or allow any member of the Group to pay any
                      management, advisory or other fee to or to the order of
                      any of the shareholders of the Parent unless such payment
                      is on arms length terms; or

               (iv)   redeem, repurchase, defease, retire or repay any of its
                      share capital or resolve to do so,

        save for any such distribution which the Parent is obliged to pay in
        terms of its Articles of Association, as approved by the Facility Agent.

25.15   SUBORDINATED FACILITIES
        (a)    Except as permitted under paragraph (b) below, no Obligor shall
               (and the Parent shall ensure that no member of the Group will):

               (i)    pay, prepay, defease, repay, redeem, purchase, exchange or
                      enter into any sub-participation arrangements in respect
                      of any principal amount or amount representing capitalised
                      interest under the Subordinated Loans; or

               (ii)   pay any interest or any other amounts payable in
                      connection with the Subordinated Loans or the Existing
                      Retained Inter-company Facilities.

        (b)    Paragraph (a) shall not apply to a payment which:

               (i)    is made when no Default has occurred and is continuing and
                      no Default would occur immediately after that payment is
                      made; and

               (ii)   is permitted by the Subordination Agreement.

                                     - 76 -


25.16   FINANCIAL INDEBTEDNESS
        (a)    Except as permitted under paragraph (b) below, no Obligor shall
               (and the Parent shall ensure that no member of the Group will)
               incur or allow to remain outstanding any Financial Indebtedness.

        (b)    Paragraph (a) above does not apply to Financial Indebtedness
               which is:

               (i)    monies borrowed or guarantees or indemnities or counter -
                      indemnities given under the Finance Documents or subject
                      to paragraph (vi) below, Financial Indebtedness under the
                      Ancillary Documents;

               (ii)   monies borrowed under the Subordinated Loan Agreement;

               (iii)  monies borrowed under a loan from another member of the
                      Group which is permitted under Clause 25.13 (LOANS, CREDIT
                      OR GUARANTEES);

               (iv)   monies borrowed by a Joint Venture Group Company under a
                      loan from its shareholder which is not a member of the
                      Group;

               (v)    a guarantee in respect of Financial Indebtedness of
                      another member of the Group which is permitted under
                      paragraph b(v) of Clause 25.13 (LOANS, CREDIT OR
                      GUARANTEES);

               (vi)   Financial Indebtedness incurred under the Ancillary
                      Documents PROVIDED THAT the aggregate amount of Ancillary
                      Outstandings does not at any time exceed L10,000,000 (or
                      its equivalent in other currencies);

               (vii)  Financial Indebtedness incurred under any finance lease,
                      hire purchase or conditional sale agreements or
                      arrangements which do not at any time exceed L3,000,000 in
                      aggregate;

               (viii) indebtedness in respect of any derivative transaction
                      which is a Hedging Agreement;

               (ix)   a guarantee or indemnity entered into by a member of the
                      Group in favour of a bank in the ordinary course of its
                      banking arrangements for the purpose of netting debit and
                      credit balances of members of the Group;

               (x)    any liability incurred in connection with the requirement
                      of any member of the Group to pay local municipal or local
                      or governmental authority or its equivalent thereof
                      charges or such charges designated as such by the Parent
                      or any member of the Group, where any payment thereof is
                      deferred for a period of more than 90 days;

               (xi)   the Existing Retained Facilities to the extent of the
                      commitments under such Existing Retained Facilities at the
                      date of this Agreement; or

                                     - 77 -


               (xii)  interest accrued but unpaid under the Existing Retained
                      Inter-company Facilities PROVIDED THAT the aggregate
                      amount of such interest does not at any time exceed
                      L18,400,000;

               (xiii) Financial Indebtedness incurred in respect of the Existing
                      Deferred Consideration; or

               (xiv)  any Financial Indebtedness incurred by Overseas
                      Subsidiaries, the aggregate amount of which does not at
                      any time exceed EURO 5,000,000 (or its equivalent in other
                      currencies).

25.17   INSURANCE
        Each Obligor shall (and the Parent shall ensure that each member of the
        Group will):

        (a)    maintain insurances on and in relation to its business and assets
               against fire and such other risks to the extent as is usual for
               companies carrying on the same or substantially similar business
               and reasonably satisfactory to the Facility Agent;

        (b)    ensure that all insurances must be with reputable independent
               insurance companies or underwriters;

        (c)    ensure that the interest of the Security Trustee (on behalf of
               the Secured Parties) is noted on any policy of insurance;

        (d)    promptly pay all premiums and do all such other things within its
               power required to keep each insurance in full force and effect
               and not liable to be avoided or to have any claim thereunder
               refused; and

        (e)    promptly and when requested by the Facility Agent supply to or
               make available to the Facility Agent copies of all such policies
               of insurance.

25.18   GUARANTOR GROUP AND SECURITY COVERAGE
        (a)    The Parent shall ensure that at all times after the date of this
               Agreement:

               (i)    the aggregate of the unconsolidated earnings before
                      interest, tax, depreciation and amortisation calculated on
                      the same basis as EBITDA (as defined in Clause 24
                      (FINANCIAL COVENANTS)) of each of the Guarantors (but
                      ignoring losses before interest and tax of any Guarantor)
                      and the aggregate gross assets and turnover (without
                      double counting) of the Guarantors represents not less
                      than (as appropriate) 75% of EBITDA (as defined in Clause
                      24 (FINANCIAL COVENANTS)) consolidated gross assets and
                      consolidated turnover of the Group; and

               (ii)   the aggregate of the unconsolidated or, in the case of
                      Pledged Companies, consolidated earnings before interest,
                      tax, depreciation and amortisation calculated on the same
                      basis as EBITDA (as defined in Clause 24.1 (FINANCIAL
                      DEFINITIONS)) of each of the Guarantors and Pledged
                      Companies (but ignoring losses before interest and tax of
                      any

                                     - 78 -


                      Guarantor) and the aggregate gross assets and turnover
                      (without double counting and consolidated in respect of a
                      Pledged Company of the Guarantors and Pledged Companies
                      represents not less than (as appropriate) 90% of the
                      EBITDA (as defined in Clause 24.1 (FINANCIAL DEFINITIONS))
                      consolidated gross assets and consolidated turnover of the
                      Group.

25.19   SECURITY
        Each Obligor shall:

        (a)    take whatever steps and execute whatever documents the Facility
               Agent may reasonable require in order to give effect to the
               Transaction Security Documents; and

        (b)    grant such further security in favour of the Security Trustee as
               may be required by the Security Trustee, acting on the
               instructions of the Majority Lenders, from time to time and all
               such further security will secure the obligations of each
               Borrower under the Finance Documents.

25.20   ANCILLARY FACILITIES

        (a)    Each Lender which is an Ancillary Lender agrees that:

               (i)    until service of a notice by the Facility Agent under
                      Clause 26.15 (ACCELERATION), that Ancillary Lender will
                      not, unless the Facility Agent (acting on the instructions
                      of the Majority Creditors) otherwise agrees:

                      (A)   exercise any right it might otherwise have pursuant
                            to the Ancillary Facilities provided by it to cancel
                            or otherwise terminate those Ancillary Facilities;
                            or

                      (B)   demand repayment of or otherwise take any
                            enforcement action in respect of the Ancillary
                            Facilities provided by it (or require the Facility
                            Agent or Security Agent or any other person to
                            exercise any enforcement rights under the Finance
                            Documents in respect of amounts owing under the
                            Ancillary Facilities provided by it);

               (ii)   it will, promptly after service of a notice by the
                      Facility Agent under Clause 26.15 (ACCELERATION), exercise
                      any and all rights it may have to cancel the Ancillary
                      Facilities provided by it and demand payment of all
                      amounts outstanding in respect of the Ancillary Facilities
                      provided by it, unless the Facility Agent (acting on the
                      instructions of the Majority Creditors) otherwise agrees
                      or requires.

        (b)    The provisions of this Clause 25.21 shall cease to apply after
               the Utilisations have been prepaid or repaid in full and the
               Lenders are under no obligation to participate in any further
               Utilisations.

                                     - 79 -


25.21   HEDGING ARRANGEMENTS
        (a)    The Parent shall procure that, within 45 days of the date of this
               Agreement, a Borrower or Borrowers acceptable to the Facility
               Agent enter into hedging agreements with a Lender or Lenders
               implementing the hedging strategy set out in the Hedging Strategy
               Letter.

        (b)    Each Borrower will ensure, and each Hedging Bank agrees, that:

               (i)    any Hedging Agreement to which it is at any time party
                      will be in the form of the ISDA 1992 Master Agreement and
                      will provide for the "Second Method" (that is, two way
                      payments) in the event of a termination of any hedging
                      transaction entered into under such Hedging Agreement
                      whether upon a Termination Event or an Event of Default
                      (as defined therein);

               (ii)   if, on termination of any hedging transaction under any
                      Hedging Agreement to which any Borrower is a party, a
                      settlement amount or other amount falls due from a Hedging
                      Bank to any Borrower then, if any of the Transaction
                      Security has become enforceable, that amount shall be paid
                      by such Hedging Bank to the Security Trustee and treated
                      as proceeds of enforcement of the Transaction Security for
                      application in the order prescribed by Clause 35.1 (ORDER
                      OF APPLICATION);

               (iii)  each Hedging Agreement (and any amendment to any Hedging
                      Agreement) shall be delivered to the Facility Agent as
                      soon as reasonably practicable after it has been entered
                      into;

               (iv)   the Hedging Agreements to which they are party will not
                      (unless the Majority Lenders have otherwise consented in
                      writing) be amended, varied or supplemented in a manner
                      which would result in:

                      (A)   any payment under any such Hedging Agreement being
                            required to be made by a Borrower earlier than the
                            date originally provided for in the relevant Hedging
                            Agreement; or

                      (B)   any Borrower becoming liable to make an additional
                            payment (or increase an existing payment) under any
                            such Hedging Agreement which liability does not
                            arise from the original provisions of that Hedging
                            Agreement,

               if, in either case that would be inconsistent with the Hedging
               Strategy Letter or the requirements of this Clause 25.21.

        (c)    Each Lender which is a Hedging Bank undertakes that it will not
               (unless the Majority Creditors have otherwise consented in
               writing) demand (other than as may be necessary in order to
               exercise any right to terminate or close out any hedging
               transaction as provided in and permitted under paragraph (d)
               below) payment, prepayment or repayment of, or any distribution
               in respect of, or on

                                     - 80 -


               account of, any of the obligations of the relevant Borrower to it
               under any Hedging Agreement to which it is party in cash or in
               kind except:

               (i)    for scheduled payments arising under the original terms of
                      any Hedging Agreement to which it is party (without regard
                      to any amendments made after the date of such Hedging
                      Agreement prohibited by paragraph (b)(iii)) of this Clause
                      25.21); and/or

               (ii)   for the proceeds of enforcement of the Transaction
                      Security Documents received and applied in the order
                      permitted by Clause 35.1 (ORDER OF APPLICATION); and/or

               (iii)  payments due under any Hedging Agreement to which it is a
                      party which has been terminated or closed-out by the
                      relevant Borrower.

        (d)    Each Lender which is a Hedging Bank undertakes that it will not
               (unless the Majority Creditors have otherwise consented in
               writing) exercise any right to terminate or close out any hedging
               transaction under any Hedging Agreements to which it is party
               prior to its stated maturity (whether by reason of the Borrower
               counterparty becoming a Defaulting Party or Affected Party
               thereunder (and as defined therein) or otherwise) unless:

               (i)    such Borrower has defaulted on a payment due under such
                      Hedging Agreement, after allowing for any required notice
                      and any applicable days of grace, and such default
                      continues for more than 21 days after notice of such
                      default being given to the Facility Agent; or

               (ii)   an Illegality or a Tax Event (each as defined in the ISDA
                      1992 Master Agreement) has occurred; or

               (iii)  the Facility Agent has served a notice under Clause 26.15
                      (ACCELERATION); or

               (iv)   all Utilisations have been prepaid or repaid in full and
                      the Lenders are no longer under any obligation to
                      participate in further Utilisations; or

               (v)    there is a prepayment of the Term Facility pursuant to
                      Clause 11 (PREPAYMENT AND CANCELLATION); PROVIDED THAT the
                      Hedging Bank may only exercise its right to terminate or
                      close out that element of the hedging transaction (if any)
                      which corresponds to the amount so prepaid; or

               (vi)   the parties to the Hedging Agreement have voluntarily
                      agreed to close out any hedging transaction in that
                      Hedging Agreement and the relevant Borrower has
                      demonstrated to the Facility Agent that it will be in
                      compliance with the terms of the Hedging Strategy Letter.

        (e)    Each Lender which is a Hedging Bank will, promptly after the
               Facility Agent has served a notice under Clause 26.15
               (ACCELERATION), exercise any and all

                                     - 81 -


               rights it may have to terminate the hedging transactions under
               each Hedging Agreement to which it is party, unless the Facility
               Agent (acting on the instructions of the Majority Creditors)
               otherwise agrees or requires.

        (f)    Each Lender which is a Hedging Bank agrees that (unless the
               Majority Creditors have otherwise agreed in writing) it will not
               enforce any Transaction Security or require any other person to
               enforce the same in respect of amounts owing under any Hedging
               Agreement to which it is party.

25.22   JOINT VENTURES
        The Parent shall ensure that at all times the aggregate EBITDA of the
        Joint Venture Group Companies, the aggregate gross assets and aggregate
        turnover of the Joint Venture Group Companies represents not more than 5
        per cent. of EBITDA, consolidated gross assets and consolidated turnover
        of the Group provided that the EBITDA, gross assets and turnover of any
        Joint Venture Group Company shall be the proportion of EBITDA, gross
        assets and turnover which the Parent's (direct or indirect) shareholding
        in such Joint Venture Group Company bears to the entire issued share
        capital of that Joint Venture Group Company and for this purpose the
        definitions of EBIT and EBITDA in Clause 24.1 (FINANCIAL DEFINITIONS)
        shall be applied, MUTATIS MUTANDIS, to each Joint Venture Group Company.

25.23   CONDITIONS SUBSEQUENT
        The Parent shall procure that:

        (a)    within 12 months after the date of this Agreement (such date
               being the "CONDITIONS SUBSEQUENT LONGSTOP DATE") there are
               obtained landlords' consents to the assignment and transfer of
               such number of the Hays' Leases as will ensure that there could
               not reasonably be expected to be likely to be a Material Adverse
               Effect by reason of the remainder of such consents in respect of
               the Hays' Leases not having been obtained by such date;

        (b)    within 1 month after the date of this Agreement, the share
               certificate in respect of Iron Mountain Ireland (Holdings)
               Limited is delivered to the Facility Agent by Iron Mountain
               Holdings (Europe) Limted;

        (c)    within 1 month after the date of this Agreement, Iron Mountain
               Nederland B.V. shall have entered into the Transaction Security
               Documents in favour of the Security Trustee for the benefit of
               the Secured Parties over all the assets, business and undertaking
               acquired by it in connection with the Eurostorage Acquisition
               which are required by the Facility Agent;

        (d)    within 10 Business Days after the date of this Agreement:

               (i)    the ICC Charges are discharged and released: and

               (ii)   Iron Mountain Ireland Limited shall have entered into the
                      Transaction Security Documents in favour of the Security
                      Trustee for the benefit of the Secured Parties which are
                      required by the Facility Agent; and

                                     - 82 -


        (e)    within 1 month after the date of this Agreement:

               (i)    the ABN Charges are discharged and released; and

               (ii)   Iron Mountain Nederland B.V. shall have entered into the
                      Transaction Security Documents in favour of the Security
                      Trustee for the benefit of the Secured Parties over the
                      assets comprising the charged property under the ABN
                      Charges which are required by the Facility Agent.

        (f)    within 10 Business Days after the date of this Agreement, each
               of the ABN Pledges and the Fortis Pledge are discharged and
               released.

26.     EVENTS OF DEFAULT
        Each of the events or circumstances set out in Clause 26 is an Event of
        Default.

26.1    NON-PAYMENT
        An Obligor does not pay on the due date any amount payable pursuant to a
        Finance Document at the place at and in the currency in which it is
        expressed to be payable unless:

        (a)    its failure to pay is caused by administrative or technical
               error; and

        (b)    payment is made within two Business Days of its due date.

26.2    BREACH OF FINANCIAL COVENANTS
        Any requirement of Clause 24 (FINANCIAL COVENANTS) is not satisfied.

26.3    OTHER OBLIGATIONS
        (a)    An Obligor does not comply with any provision of the Finance
               Documents (other than those referred to in Clause 26.1
               (NON-PAYMENT) and Clause 26.2 (BREACH OF FINANCIAL COVENANTS)).

        (b)    No Event of Default under paragraph (a) above in relation to
               Clause 23 (INFORMATION UNDERTAKINGS) or Clause 25 (GENERAL
               UNDERTAKINGS) (excluding Clause 25.9 (PARI PASSU RANKING), Clause
               25.10 (NEGATIVE PLEDGE), Clause 25.11 (DISPOSALS), Clause 25.14
               (DIVIDENDS) and Clause 25.15 (SUBORDINATED FACILITIES)) and will
               occur if the failure to comply is capable of remedy and is
               remedied within:

               (i)    in relation to Clause 23.1 (FINANCIAL STATEMENTS), 23.2
                      (COMPLIANCE CERTIFICATE), paragraph (a) of Clause 23.6
                      (INFORMATION: MISCELLANEOUS) and paragraph (b) of Clause
                      25.1 (AUTHORISATIONS), 5 Business Days;

               (ii)   or otherwise, 20 Business Days,

               of the earlier of the Facility Agent giving notice to the Parent
               or relevant Obligor or the Parent or an Obligor becoming aware of
               the failure to comply.

26.4    MISREPRESENTATION
        Any representation or statement made or deemed to be made by an Obligor
        in the Finance Documents or in any other document delivered by or on
        behalf of any Obligor

                                     - 83 -


        under or in connection with any Finance Document is or proves to have
        been incorrect or misleading in any material respect when made or deemed
        to be made.

26.5    CROSS DEFAULT
        (a)    Any Financial Indebtedness of any member of the Group (other than
               a Joint Venture Group Company) is not paid when due nor within
               any originally applicable grace period and in respect of any on
               demand Financial Indebtedness is not paid within five Business
               Days after such demand.

        (b)    Any Financial Indebtedness of any member of the Group (other than
               a Joint Venture Group Company) is declared to be or otherwise
               becomes due and payable prior to its specified maturity as a
               result of an event of default (however described).

        (c)    Any commitment for any Financial Indebtedness of any member of
               the Group (other than a Joint Venture Group Company) is cancelled
               or suspended by a creditor of any member of the Group (other than
               a Joint Venture Group Company) as a result of an event of default
               (however described).

        (d)    Any creditor of any member of the Group (other than a Joint
               Venture Group Company) becomes entitled to declare any Financial
               Indebtedness of any member of the Group (other than a Joint
               Venture Group Company) due and payable prior to its specified
               maturity as a result of an event of default (however described).

        (e)    No Event of Default will occur under this Clause 26.5 if the
               aggregate amount of Financial Indebtedness or commitment for
               Financial Indebtedness falling within paragraphs (a) to (d) above
               is less than L2,500,000 (or its equivalent in any other
               currency).

26.6    INSOLVENCY
        (a)    A member of the Group (other than a Joint Venture Group Company)
               is unable or admits inability to pay its debts as they fall due
               or is deemed to or declared to be unable to pay its debts under
               applicable law (but, in the case of deemed inability to pay debts
               under Section 123(1)(a) of the Insolvency Act, this clause shall
               be construed as if the figure of L750 was replaced with
               L1,000,000), suspends making payments on any of its debts or, by
               reason of actual or anticipated financial difficulties, commences
               negotiations with one or more of its creditors with a view to
               rescheduling any of its indebtedness.

        (b)    The value of the assets of any member of the Group (other than a
               Joint Venture Group Company) is less than its liabilities (taking
               into account contingent and prospective liabilities).

        (c)    A moratorium is declared in respect of any indebtedness of any
               member of the Group (other than a Joint Venture Group Company).

                                     - 84 -


26.7    INSOLVENCY PROCEEDINGS
        (a)    Any corporate action, legal proceedings or other procedure or
               step is taken in relation to:

               (i)    the suspension of payments, bankruptcy, a moratorium of
                      any indebtedness, winding-up, dissolution, administration,
                      examination or reorganisation (by way of voluntary
                      arrangement, scheme of arrangement or otherwise) of any
                      member of the Group (other than a Joint Venture Group
                      Company) other than a solvent liquidation or
                      reorganisation of any member of the Group which is not an
                      Obligor;

               (ii)   a composition, assignment or arrangement with any creditor
                      of any member of the Group (other than a Joint Venture
                      Group Company);

               (iii)  the appointment of a provisional liquidator, a liquidator
                      (other than in respect of a solvent liquidation of a
                      member of the Group which is not an Obligor), receiver,
                      receiver or manager, administrative receiver,
                      administrator, examiner, compulsory or interim manager or
                      other similar officer in respect of any member of the
                      Group (other than a Joint Venture Group Company) or any of
                      its assets; or

               (iv)   enforcement of any Security over any assets valued at more
                      than L500,000 (or its equivalent in any other currency or
                      currencies) of any member of the Group (other than a Joint
                      Venture Group Company),

               or any analogous procedure or step is taken in any jurisdiction.

        (b)    Paragraph (a) shall not apply to:

               (i)    any procedure or step in relation to a Dormant Subsidiary;
                      or

               (ii)   any winding-up petition which is frivolous or vexatious or
                      which is being contested in good faith and is discharged,
                      stayed or dismissed within 28 days of commencement.

26.8    CREDITORS' PROCESS
        Any expropriation, attachment, sequestration, distress or execution or
        any analogous process in any jurisdiction affects any asset or assets of
        a member of the Group (other than a Joint Venture Group Company) valued
        at more than L500,000 (or its equivalent in any other currency or
        currencies) and is not discharged within 7 days.

26.9    UNLAWFULNESS AND INVALIDITY
        (a)    It is or becomes unlawful for an Obligor to perform any of its
               material obligations under the Finance Documents or any
               Transaction Security created or expressed to be created or
               evidenced by the Transaction Security Documents ceases to be
               effective or subordination created under the Subordination
               Agreement is or becomes unlawful.

                                     - 85 -


        (b)    Any obligation or obligations of any Obligor under any Finance
               Documents are not or cease to be legal, valid, binding or
               enforceable and the cessation individually or cumulatively
               materially and adversely effects the interests of the Lenders
               under the Finance Documents.

        (c)    Any Finance Document ceases to be in full force and effect or any
               Transaction Security or subordination created under the
               Subordination Agreement ceases to be legal, valid, binding,
               enforceable or effective or the subordination created thereunder
               is alleged by a party to it (other than a Finance Party) to be
               ineffective.

26.10   SUBORDINATION AGREEMENT
        (a)    Any party to the Subordination Agreement (other than a Finance
               Party or an Obligor) fails to comply with the provisions of, or
               does not perform its obligations under, the Subordination
               Agreement; or

        (b)    a representation or warranty given by that party in the
               Subordination Agreement is incorrect in any material respect,

        and, if the non-compliance or circumstances giving rise to the
        misrepresentation are capable of remedy, it is not remedied within 7
        days of the earlier of the Facility Agent giving notice to that party or
        that party becoming aware of the non-compliance or misrepresentation.

26.11   REPUDIATION
        An Obligor (or any other relevant party) repudiates a Finance Document
        or any of the Transaction Security or evidences in writing an intention
        to repudiate a Finance Document or any Transaction Security.

26.12   CESSATION OF BUSINESS
        An Obligor ceases, or threatens or proposes to cease, to carry on all or
        a substantial part of its business, except:

        (a)    in consequence of any reorganisation, reconstruction or
               amalgamation permitted under this Agreement; or

        (b)    as may result from any disposal of assets or wind-down of
               business activities not otherwise prohibited by the terms of this
               Agreement; or

        (c)    as previously approved in writing by the Majority Lenders.

26.13   CHANGE OF OWNERSHIP
        An Obligor (other than the Parent) ceases to be a wholly-owned
        Subsidiary of the Parent other than with the permission of the Facility
        Agent, acting on the instructions of the Majority Lenders.

26.14   MATERIAL ADVERSE CHANGE
        Any event or circumstance occurs which the Majority Lenders reasonably
        believe might have a Material Adverse Effect.

                                     - 86 -


26.15   ACCELERATION
        On and at any time after the occurrence of an Event of Default which is
        continuing the Facility Agent may, and shall if so directed by the
        Majority Lenders, by notice to the Parent:

        (a)    cancel the Total Commitments whereupon they shall immediately be
               cancelled and any fees payable under the Finance Documents in
               connection with those Commitments shall be immediately due and
               payable;

        (b)    declare that all or part of the Utilisations, together with
               accrued interest, and all other amounts accrued or outstanding
               under the Finance Documents be immediately due and payable,
               whereupon they shall become immediately due and payable;

        (c)    declare that all or part of the Utilisations be payable on
               demand, whereupon they shall immediately become payable on demand
               by the Facility Agent on the instructions of the Lenders;

        (d)    declare that cash cover in respect of each Letter of Credit is
               immediately due and payable at which time it shall become
               immediately due and payable;

        (e)    declare that cash cover in respect of each Letter of Credit is
               payable on demand at which time it shall immediately become due
               and payable on demand by the Facility Agent on the instructions
               of the Majority Lenders;

        (f)    exercise or direct the Security Trustee to exercise any or all of
               its rights, remedies, powers or discretions under the Finance
               Documents PROVIDED THAT the Facility Agent is not obliged to
               direct the Security Trustee to take any enforcement action in
               relation to the Transaction Security unless the Majority
               Creditors have so directed the Facility Agent.

                                     - 87 -


                                    SECTION 9
                               CHANGES TO PARTIES

27.     CHANGES TO THE LENDERS

27.1    ASSIGNMENTS AND TRANSFERS BY THE LENDERS
        Subject to this Clause 27, a Lender (the "EXISTING LENDER") may:

        (a)    assign any of its rights and benefits; or

        (b)    transfer by novation any of its rights, benefits and obligations,

        to another bank or financial institution (the "NEW LENDER").

27.2    CONDITIONS OF ASSIGNMENT OR TRANSFER
        (a)    The consent of the Parent is required for an assignment or
               transfer by an Existing Lender, unless an Event of Default has
               occurred and is continuing or unless the assignment or transfer
               is to another Lender or an Affiliate of a Lender.

        (b)    The consent of the Parent to an assignment or transfer must not
               be unreasonably withheld or delayed. The Parent will be deemed to
               have given its consent ten Business Days after the Existing
               Lender has requested it unless consent is expressly refused by
               the Parent within that time.

        (c)    The consent of the Parent to an assignment or transfer must not
               be withheld solely because the assignment or transfer may result
               in an increase to the Mandatory Cost.

        (d)    An assignment will only be effective on:

               (i)    receipt by the Facility Agent of a written confirmation
                      from the New Lender (in form and substance satisfactory to
                      the Facility Agent) that the New Lender will assume the
                      same obligations to the other Finance Parties and the
                      other Secured Parties as it would have been under if it
                      was an Original Lender; and

               (ii)   performance by the Facility Agent of all "know your
                      customer" or other checks relating to any person that it
                      is required to carry out in relation to such assignment to
                      a New Lender, the completion of which the Facility Agent
                      shall promptly notify to the Existing Lender and the New
                      Lender.

        (e)    A transfer will only be effective on receipt by the Facility
               Agent if the procedure set out in Clause 27.5 (PROCEDURE FOR
               TRANSFER) is complied with.

        (f)    Any assignment or transfer of part of its Commitment shall be in
               a minimum amount of L5,000,000.

                                     - 88 -


        (g)    If:

               (i)    a Lender assigns or transfers any of its rights, benefits
                      or obligations under the Finance Documents or changes its
                      Facility Office; and

               (ii)   as a result of circumstances existing at the date the
                      assignment, transfer or change occurs, an Obligor would be
                      obliged to make a payment to the New Lender or Lender
                      acting through its new Facility Office under Clause 16
                      (TAX GROSS-UP AND INDEMNITIES) or Clause 17 (INCREASED
                      COSTS),

               then the New Lender or Lender acting through its new Facility
               Office is only entitled to receive payment under those Clauses to
               the same extent as the Existing Lender or Lender acting through
               its previous Facility Office would have been if the assignment,
               transfer or change had not occurred.

27.3    ASSIGNMENT OR TRANSFER FEE
        The New Lender shall, on the date upon which an assignment or transfer
        takes effect, pay to the Facility Agent (for its own account) a fee of
        L1,000.

27.4    LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
        (a)    Unless expressly agreed to the contrary, an Existing Lender makes
               no representation or warranty and assumes no responsibility to a
               New Lender for:

               (i)    the legality, validity, effectiveness, adequacy or
                      enforceability of the Finance Documents, the Transaction
                      Security or any other documents;

               (ii)   the financial condition of any Obligor;

               (iii)  the performance and observance by any Obligor or any other
                      member of the Group of its obligations under the Finance
                      Documents or any other documents; or

               (iv)   the accuracy of any statements (whether written or oral)
                      made in or in connection with any Finance Document or any
                      other document,

               and any representations or warranties implied by law are
               excluded.

        (b)    Each New Lender confirms to the Existing Lender, the other
               Finance Parties and the Secured Parties that it:

               (i)    has made (and shall continue to make) its own independent
                      investigation and assessment of the financial condition
                      and affairs of each Obligor and its related entities in
                      connection with its participation in this Agreement and
                      has not relied exclusively on any information provided to
                      it by the Existing Lender or any other Finance Party in
                      connection with any Finance Document or the Transaction
                      Security; and

               (ii)   will continue to make its own independent appraisal of the
                      creditworthiness of each Obligor and its related entities
                      whilst any

                                     - 89 -


                      amount is or may be outstanding under the Finance
                      Documents or any Commitment is in force.

        (c)    Nothing in any Finance Document obliges an Existing Lender to:

               (i)    accept a re-transfer from a New Lender of any of the
                      rights and obligations assigned or transferred under this
                      Clause 27; or

               (ii)   support any losses directly or indirectly incurred by the
                      New Lender by reason of the non-performance by any Obligor
                      of its obligations under the Finance Documents or
                      otherwise.

27.5    PROCEDURE FOR TRANSFER
        (a)    Subject to the conditions set out in Clause 27.2 (CONDITIONS OF
               ASSIGNMENT OR TRANSFER) a transfer is effected in accordance with
               paragraph (b) below when the Facility Agent executes an otherwise
               duly completed Transfer Certificate delivered to it by the
               Existing Lender and the New Lender. The Facility Agent shall,
               subject to paragraph (b) below, as soon as reasonably practicable
               after receipt by it of a duly completed Transfer Certificate
               appearing on its face to comply with the terms of this Agreement
               and delivered in accordance with the terms of this Agreement,
               execute that Transfer Certificate.

        (b)    The Facility Agent shall only be obliged to execute a Transfer
               Certificate delivered to it by the Existing Lender and the New
               Lender upon its completion of all "know your customer" or other
               checks relating to any person that it is required to carry out in
               relation to the transfer to such New Lender.

        (c)    On the Transfer Date:

               (i)    to the extent that in the Transfer Certificate the
                      Existing Lender seeks to transfer by novation its rights,
                      benefits and obligations under the Finance Documents and
                      in respect of the Transaction Security each of the
                      Obligors and other members of the Group party to any
                      Finance Document or the Transaction Security and the
                      Existing Lender shall be released from further obligations
                      towards one another under the Finance Documents and in
                      respect of the Transaction Security and their respective
                      rights against one another under the Finance Documents and
                      in respect of the Transaction Security shall be cancelled
                      (being the "DISCHARGED RIGHTS AND OBLIGATIONS");

               (ii)   each of the Obligors and other members of the Group party
                      to any Finance Document and the New Lender shall assume
                      obligations towards one another and/or acquire rights and
                      benefits against one another which differ from the
                      Discharged Rights and Obligations only insofar as that
                      Obligor or other member of the Group and the New Lender
                      have assumed and/or acquired the same in place of that
                      Obligor and the Existing Lender;

                                     - 90 -


               (iii)  the Facility Agent, the Arranger, the Security Trustee,
                      the New Lender, the other Lenders, the Issuing Bank, any
                      Hedge Bank and any relevant Ancillary Lender shall acquire
                      the same rights and assume the same obligations between
                      themselves and in respect of the Transaction Security as
                      they would have acquired and assumed had the New Lender
                      been an Original Lender with the rights, and/or
                      obligations acquired or assumed by it as a result of the
                      transfer and to that extent the Facility Agent, the
                      Arranger, the Security Trustee, the Issuing Bank, any
                      Hedge Bank and any relevant Ancillary Lender and the
                      Existing Lender shall each be released from further
                      obligations to each other under this Agreement; and

               (iv)   the New Lender shall become a Party as a "Lender".

27.6    COPY OF TRANSFER CERTIFICATE TO PARENT
        The Facility Agent shall, as soon as reasonably practicable after it has
        executed a Transfer Certificate, send to the Parent a copy of that
        Transfer Certificate.

27.7    DISCLOSURE OF INFORMATION
        (a)    Any Lender may disclose to any of its Affiliates and any other
               person:

               (i)    to (or through) whom that Lender assigns or transfers (or
                      may potentially assign or transfer) all or any of its
                      rights and obligations under the Finance Documents;

               (ii)   with (or through) whom that Lender enters into (or may
                      potentially enter into) any sub-participation in relation
                      to, or any other transaction under which payments are to
                      be made by reference to, the Finance Documents or any
                      Obligor; or

               (iii)  to whom, and to the extent that, information is required
                      to be disclosed by any applicable law or regulation; and

        (b)    any Finance Party may disclose to a rating agency,

        any information about any Obligor, the Group and the Finance Documents
        as that Lender shall consider appropriate, if, in relation to paragraphs
        (a)(i) and (ii) and (b) above, the person to whom the information is to
        be given has entered into a Confidentiality Undertaking.

27.8    AFFILIATES OF LENDERS AS HEDGE BANKS
        (a)    An Affiliate of a Lender which becomes a Hedge Bank shall accede
               to this Agreement by delivery to the Facility Agent of a duly
               completed Accession Letter.

        (b)    Where this Agreement or any other Finance Document imposes an
               obligation on a Hedge Bank and the relevant Hedge Bank is an
               Affiliate of a Lender and is not a party to that document, the
               relevant Lender shall ensure that the obligation is performed by
               its Affiliate.

                                     - 91 -


28.     CHANGES TO THE OBLIGORS

28.1    ASSIGNMENT AND TRANSFERS BY OBLIGORS
        No Obligor may assign any of its rights or transfer any of its rights
        or obligations under the Finance Documents.

28.2    ADDITIONAL BORROWERS
        (a)    Subject to compliance with the provisions of paragraphs (c) and
               (d) of Clause 23.8 ("KNOW YOUR CUSTOMER" CHECKS) the Parent may
               request that any of its wholly owned Subsidiaries which is not a
               Dormant Subsidiary becomes an Additional Borrower. That
               Subsidiary shall become an Additional Borrower if:

               (i)    all the Lenders approve the addition of that Subsidiary
                      other than a wholly-owned Subsidiary incorporated in
                      England and Wales, or Scotland;

               (ii)   the Parent delivers to the Facility Agent a duly completed
                      and executed Accession Letter;

               (iii)  the Parent confirms that no Default is continuing or would
                      occur as a result of that Subsidiary becoming an
                      Additional Borrower; and

               (iv)   the Facility Agent has received all of the documents and
                      other evidence listed in Part II (CONDITIONS PRECEDENT
                      REQUIRED TO BE DELIVERED BY AN ADDITIONAL OBLIGOR) and, if
                      applicable, Part III (TRANSACTION SECURITY DOCUMENTS AND
                      SECURITY RELATED DOCUMENTS TO BE DELIVERED BY ADDITIONAL
                      OBLIGORS) of Schedule 2 (CONDITIONS PRECEDENT) in relation
                      to that Additional Borrower, each in form and substance
                      satisfactory to the Facility Agent.

        (b)    The Facility Agent shall notify the Parent and the Lenders
               promptly upon being satisfied that it has received (in form and
               substance satisfactory to it) all the documents and other
               evidence listed in Part II (CONDITIONS PRECEDENT REQUIRED TO BE
               DELIVERED BY AN ADDITIONAL OBLIGOR) and, if applicable, Part III
               (TRANSACTION SECURITY DOCUMENTS AND SECURITY RELATED DOCUMENTS TO
               BE DELIVERED BY ADDITIONAL OBLIGORS) of Schedule 2 (CONDITIONS
               PRECEDENT).

28.3    ADDITIONAL GUARANTORS
        (a)    Subject to compliance with the provisions of paragraphs (c) and
               (d) of Clause 23.8 ("KNOW YOUR CUSTOMER" CHECKS) the Parent may
               request that any wholly owned Subsidiaries become an Additional
               Guarantor.

        (b)    The Parent shall ensure that any member of the Group which is a
               Material Company shall, as soon as possible after becoming a
               Material Company become an Additional Guarantor and shall accede
               to the Subordination Agreement unless legal counsel to the
               Facility Agent has confirmed there is a provision of law
               prohibiting such member of the Group becoming an Additional
               Guarantor and there are no applicable exemptions or exceptions to

                                     - 92 -


               that prohibition which would permit such member to become an
               Additional Guarantor. The Parent shall procure that the Group
               uses reasonable endeavours to overcome that prohibition.

        (c)    If required by the Agent (and to the extent permitted under
               applicable law), each entity which is to become an Additional
               Guarantor shall enter into Transaction Security Documents in
               favour of the Security Trustee for the benefit of the Secured
               Parties (or, if applicable, directly in favour of the Secured
               Parties) over all its assets, business and undertaking as
               Security for all indebtedness under the Finance Documents, such
               Security to provide (to the extent permissible and practicable
               under applicable law) equivalent security over such assets,
               business and undertaking (together "RELEVANT ASSETS") as granted
               to the Security Trustee (or, as applicable, the Secured Parties)
               by members of the Group with similar Relevant Assets incorporated
               in the same jurisdiction as such Additional Guarantor and, if
               such Additional Guarantor is incorporated in a jurisdiction in
               which no other member of the Group incorporated in that
               jurisdiction with similar Relevant Assets has granted Security,
               the Transaction Security Documents shall be in such form and
               substance as may be required by the Facility Agent (having due
               regard to the practicality and costs involved in taking any such
               Security).

        (d)    In addition, in order to maintain the requirements of Clause
               25.18 (GUARANTOR GROUP AND SECURITY COVERAGE) the Parent may
               request that any of its Subsidiaries which is not a Material
               Company becomes an Additional Guarantor.

        (e)    A member of the Group shall become an Additional Guarantor if:

               (i)    the Parent delivers to the Facility Agent a duly completed
                      and executed Accession Letter; and

               (ii)   the Facility Agent has received all of the documents and
                      other evidence listed in Part II (CONDITIONS PRECEDENT
                      REQUIRED TO BE DELIVERED BY AN ADDITIONAL OBLIGOR) and, if
                      applicable, Part III (TRANSACTION SECURITY DOCUMENTS AND
                      SECURITY RELATED DOCUMENTS TO BE DELIVERED BY ADDITIONAL
                      OBLIGORS) of Schedule 2 (CONDITIONS PRECEDENT) in relation
                      to that Additional Guarantor, each in form and substance
                      satisfactory to the Facility Agent.

        (f)    The Facility Agent shall notify the Parent and the Lenders
               promptly upon being satisfied that it has received (in form and
               substance satisfactory to it) all the documents and other
               evidence listed in Part II (CONDITIONS PRECEDENT REQUIRED TO BE
               DELIVERED BY AN ADDITIONAL OBLIGOR) and, if applicable, Part III
               (TRANSACTION SECURITY DOCUMENTS AND SECURITY RELATED DOCUMENTS TO
               BE DELIVERED BY ADDITIONAL OBLIGORS) of Schedule 2 (CONDITIONS
               PRECEDENT).

                                     - 93 -


        (g)    The Facility Agent may (but shall not be obliged to) agree a
               limit on the amount of the liability of the potential Additional
               Guarantor or other changes to the Finance Documents which in the
               opinion of the Facility Agent, based on the advice of its legal
               counsel, are necessary to overcome a prohibition referred to in
               paragraph (c) above or a risk that a guarantee by the potential
               Additional Guarantor will not be legal, valid, binding,
               enforceable and effective. The cost of the advice of legal
               counsel obtained pursuant to this paragraph (f) shall be for the
               account of the Parent.

28.4    REPETITION OF REPRESENTATIONS
        Delivery of an Accession Letter constitutes confirmation by the relevant
        Subsidiary that the representations and warranties referred to in Clause
        22 (REPRESENTATIONS) are true and correct in relation to it as at the
        date of delivery as if made by reference to the facts and circumstances
        then existing.

                                     - 94 -


                                   SECTION 10
                               THE FINANCE PARTIES

29.     ROLE OF THE FACILITY AGENT, THE ARRANGER, THE ISSUING BANK AND OTHERS

29.1    APPOINTMENT OF THE FACILITY AGENT
        (a)    Each of the Arranger and the Lenders and the Issuing Bank
               appoints the Facility Agent to act as its agent under and in
               connection with the Finance Documents.

        (b)    Each of the Arranger and the Lenders and the Issuing Bank
               authorises the Facility Agent to exercise the rights, powers,
               authorities and discretions specifically given to the Facility
               Agent under or in connection with the Finance Documents together
               with any other incidental rights, powers, authorities and
               discretions.

29.2    DUTIES OF THE FACILITY AGENT
        (a)    The Facility Agent shall promptly forward to a Party the original
               or a copy of any document which is delivered to the Facility
               Agent for that Party by any other Party.

        (b)    Except where a Finance Document specifically provides otherwise,
               the Facility Agent is not obliged to review or check the
               adequacy, accuracy or completeness of any document it forwards to
               another Party.

        (c)    If the Facility Agent receives notice from a Party referring to
               this Agreement, describing a Default and stating that the
               circumstance described is a Default, it shall promptly notify the
               other Finance Parties.

        (d)    If the Facility Agent is aware of the non-payment of any
               principal, interest, commitment fee or other fee payable to a
               Finance Party (other than the Facility Agent, the Arranger or the
               Security Trustee) under this Agreement it shall promptly notify
               the other Finance Parties.

        (e)    The Facility Agent's duties under the Finance Documents are
               solely mechanical and administrative in nature.

29.3    ROLE OF THE ARRANGER
        Except as specifically provided in the Finance Documents, the Arranger
        has no obligations of any kind to any other Party under or in connection
        with any Finance Document.

29.4    NO FIDUCIARY DUTIES
        (a)    Nothing in this Agreement constitutes the Facility Agent, the
               Arranger and/or the Issuing Bank as a trustee or fiduciary of any
               other person.

                                     - 95 -


        (b)    None of the Facility Agent, the Security Trustee, the Arranger or
               the Issuing Bank shall be bound to account to any Lender for any
               sum or the profit element of any sum received by it for its own
               account.

29.5    BUSINESS WITH THE GROUP
        The Facility Agent, the Security Trustee, the Arranger and the Issuing
        Bank may accept deposits from, lend money to and generally engage in any
        kind of banking or other business with any member of the Group.

29.6    RIGHTS AND DISCRETIONS
        (a)    The Facility Agent and the Issuing Bank may rely on:

               (i)    any representation, notice or document believed by it to
                      be genuine, correct and appropriately authorised; and

               (ii)   any statement made by a director, authorised signatory or
                      employee of any person regarding any matters which may
                      reasonably be assumed to be within his knowledge or within
                      his power to verify.

        (b)    The Facility Agent may assume (unless it has received notice to
               the contrary in its capacity as agent for the Lenders) that:

               (i)    no Default has occurred (unless it has actual knowledge of
                      a Default arising under Clause 26.1 (NON-PAYMENT));

               (ii)   any right, power, authority or discretion vested in any
                      Party or the Majority Lenders has not been exercised; and

               (iii)  any notice or request made by the Parent (other than a
                      Utilisation Request or Selection Notice) is made on behalf
                      of and with the consent and knowledge of all the Obligors.

        (c)    The Facility Agent may engage, pay for and rely on the advice or
               services of any lawyers, accountants, surveyors or other experts.

        (d)    The Facility Agent may act in relation to the Finance Documents
               through its personnel and agents. The Facility Agent shall not be
               liable for the negligence or misconduct of such agents.

        (e)    The Facility Agent may disclose to any other Party any
               information it reasonably believes it has received as agent under
               this Agreement.

        (f)    Notwithstanding any other provision of any Finance Document to
               the contrary, none of the Facility Agent, the Arranger or the
               Issuing Bank is obliged to do or omit to do anything if it would
               or might in its reasonable opinion constitute a breach of any law
               or regulation or a breach of a fiduciary duty or duty of
               confidentiality.

                                     - 96 -


29.7    MAJORITY LENDERS' INSTRUCTIONS
        (a)    Unless a contrary indication appears in a Finance Document, the
               Facility Agent shall (a) act in accordance with any instructions
               given to it by the Majority Lenders (or, if so instructed by the
               Majority Lenders, refrain from acting or exercising any right,
               power, authority or discretion vested in it as Facility Agent)
               and (b) not be liable for any act (or omission) if it acts (or
               refrains from taking any action) in accordance with such an
               instruction of the Majority Lenders.

        (b)    Unless a contrary indication appears in a Finance Document, any
               instructions given by the Majority Lenders will be binding on all
               the Finance Parties other than the Security Trustee.

        (c)    The Facility Agent may refrain from acting in accordance with the
               instructions of the Majority Lenders (or, if appropriate, the
               Lenders) until it has received such security as it may require
               for any cost, loss or liability (together with any associated
               VAT) which it may incur in complying with the instructions.

        (d)    In the absence of instructions from the Majority Lenders, (or, if
               appropriate, the Lenders) the Facility Agent may act (or refrain
               from taking action) as it considers to be in the best interest of
               the Lenders.

        (e)    The Facility Agent is not authorised to act on behalf of a Lender
               (without first obtaining that Lender's consent) in any legal or
               arbitration proceedings relating to any Finance Document. This
               paragraph (e) shall not apply to any legal or arbitration
               proceeding relating to the perfection, preservation or protection
               of rights under the Transaction Security Documents or enforcement
               of the Transaction Security or Transaction Security Documents.

29.8    RESPONSIBILITY FOR DOCUMENTATION
        None of the Facility Agent, the Arranger or the Issuing Bank:

        (a)    is responsible for the adequacy, accuracy and/or completeness of
               any information (whether oral or written) supplied by the
               Facility Agent, the Arranger, the Issuing Bank, an Obligor or any
               other person given in or in connection with any Finance Document
               or the Information Memorandum or the Reports or the transactions
               contemplated in the Finance Documents; or

        (b)    is responsible for the legality, validity, effectiveness,
               adequacy or enforceability of any Finance Document or the
               Transaction Security or any other agreement, arrangement or
               document entered into, made or executed in anticipation of or in
               connection with any Finance Document or the Transaction Security.

29.9    EXCLUSION OF LIABILITY
        (a)    Without limiting paragraph (b) below, none of the Facility Agent
               or the Issuing Bank will be liable for any action taken by it
               under or in connection

                                     - 97 -


               with any Finance Document or the Transaction Security, unless
               directly caused by its gross negligence or wilful misconduct.

        (b)    No Party (other than the Facility Agent or the Issuing Bank (as
               applicable)) may take any proceedings against any officer,
               employee or agent of the Facility Agent, the Security Trustee or
               the Issuing Bank, in respect of any claim it might have against
               the Facility Agent, the Security Trustee or the Issuing Bank or
               in respect of any act or omission of any kind by that officer,
               employee or agent in relation to any Finance Document or any
               Transaction Document and any officer, employee or agent of the
               Facility Agent, the Security Trustee or the Issuing Bank may rely
               on this Clause subject to Clause 1.4 (THIRD PARTY RIGHTS) and the
               provisions of the Third Parties Act.

        (c)    The Facility Agent will not be liable for any delay (or any
               related consequences) in crediting an account with an amount
               required under the Finance Documents to be paid by the Facility
               Agent if the Facility Agent has taken all necessary steps as soon
               as reasonably practicable to comply with the regulations or
               operating procedures of any recognised clearing or settlement
               system used by the Facility Agent for that purpose.

        (d)    Nothing in this Agreement shall oblige the Facility Agent or the
               Arranger to carry out any "know your customer" or other checks in
               relation to any person on behalf of any Lender and each Lender
               confirms to the Facility Agent and the Arranger that it is solely
               responsible for any such checks it is required to carry out and
               that it may not rely on any statement in relation to such checks
               made by the Facility Agent or the Arranger.

29.10   LENDERS' INDEMNITY TO THE FACILITY AGENT AND THE SECURITY TRUSTEE
        Each Lender and Ancillary Lender shall (in proportion to its share of
        the Total Commitments or, if the Total Commitments are then zero, to its
        share of the Total Commitments immediately prior to their reduction to
        zero) indemnify each of the Facility Agent and the Security Trustee,
        within three Business Days of demand, against any cost, loss or
        liability incurred by the Facility Agent or the Security Trustee
        (otherwise than by reason of the Facility Agent's or the Security
        Trustee's gross negligence or wilful misconduct) in acting as Facility
        Agent or as Security Trustee under the Finance Documents (unless the
        Facility Agent or the Security Trustee has been reimbursed by an Obligor
        pursuant to a Finance Document).

29.11   RESIGNATION OF THE FACILITY AGENT
        (a)    The Facility Agent may resign and appoint one of its Affiliates
               acting through an office in the United Kingdom as successor by
               giving notice to the Lenders and the Parent.

        (b)    Alternatively the Facility Agent may resign by giving notice to
               the Lenders and the Parent, in which case the Majority Lenders
               (after consultation with the Parent) may appoint a successor
               Facility Agent.

                                     - 98 -


        (c)    If the Majority Lenders have not appointed a successor Facility
               Agent in accordance with paragraph (b) above within 30 days after
               notice of resignation was given, the Facility Agent (after
               consultation with the Parent) may appoint a successor Facility
               Agent (acting through an office in the United Kingdom).

        (d)    The retiring Facility Agent shall, at its own cost, make
               available to the successor Facility Agent such documents and
               records and provide such assistance as the successor Facility
               Agent may reasonably request for the purposes of performing its
               functions as Facility Agent under the Finance Documents.

        (e)    The Facility Agent's resignation notice shall only take effect
               upon the appointment of a successor.

        (f)    Upon the appointment of a successor, the retiring Facility Agent
               shall be discharged from any further obligation in respect of the
               Finance Documents but shall remain entitled to the benefit of
               this Clause 29.11. Its successor and each of the other Parties
               shall have the same rights and obligations amongst themselves as
               they would have had if such successor had been an original Party.

        (g)    After consultation with the Parent, the Majority Lenders may, by
               notice to the Facility Agent, require it to resign in accordance
               with paragraph (b) above. In this event, the Facility Agent shall
               resign in accordance with paragraph (b) above.

29.12   CONFIDENTIALITY
        (a)    In acting as agent for the Finance Parties or, as the case may
               be, Security Trustee for the Secured Parties, the Facility Agent
               and the Security Trustee shall be regarded as acting through its
               agency division, or as appropriate, Security Trustee division
               which shall be treated as a separate entity from any other of its
               divisions or departments.

        (b)    If information is received by another division or department of
               the Facility Agent or the Security Trustee, it may be treated as
               confidential to that division or department and neither the
               Facility Agent nor the Security Trustee shall be deemed to have
               notice of it.

        (c)    Notwithstanding any other provision of any Finance Document to
               the contrary, none of the Facility Agent, the Security Trustee,
               and the Arranger are obliged to disclose to any other person (i)
               any confidential information or (ii) any other information if the
               disclosure would or might in its reasonable opinion constitute a
               breach of any law or a breach of a fiduciary duty.

29.13   RELATIONSHIP WITH THE LENDERS
        (a)    The Facility Agent may treat each Lender as a Lender, entitled to
               payments under this Agreement and acting through its Facility
               Office unless it has

                                     - 99 -


               received not less than five Business Days prior notice from that
               Lender to the contrary in accordance with the terms of this
               Agreement.

        (b)    Each Lender shall supply the Facility Agent with any information
               required by the Facility Agent in order to calculate the
               Mandatory Cost in accordance with Schedule 4 (MANDATORY COST
               FORMULAE).

        (c)    Each Secured Party shall supply the Facility Agent with any
               information that the Security Trustee may reasonably specify
               (through the Facility Agent) as being necessary or desirable to
               enable the Security Trustee to perform its functions as Security
               Trustee. Each Lender shall deal with the Security Trustee
               exclusively through the Facility Agent and shall not deal
               directly with the Security Trustee.

29.14   CREDIT APPRAISAL BY THE SECURED PARTIES
        Without affecting the responsibility of any Obligor for information
        supplied by it or on its behalf in connection with any Finance Document,
        each Secured Party confirms to the Facility Agent, the Arranger, the
        Security Trustee and each Ancillary Lender that it has been, and will
        continue to be, solely responsible for making its own independent
        appraisal and investigation of all risks arising under or in connection
        with any Finance Document including but not limited to:

        (a)    the financial condition, status and nature of each member of the
               Group;

        (b)    the legality, validity, effectiveness, adequacy or enforceability
               of any Finance Document and the Transaction Security and any
               other agreement, arrangement or document entered into, made or
               executed in anticipation of, under or in connection with any
               Finance Document or the Transaction Security;

        (c)    whether that Secured Party has recourse, and the nature and
               extent of that recourse, against any Party or any of its
               respective assets under or in connection with any Finance
               Document, the Transaction Security, the transactions contemplated
               by the Finance Documents or any other agreement, arrangement or
               document entered into, made or executed in anticipation of, under
               or in connection with any Finance Document;

        (d)    the adequacy, accuracy and/or completeness of the Information
               Memorandum and any other information provided by the Facility
               Agent, the Security Trustee, any Party or by any other person
               under or in connection with any Finance Document, the
               transactions contemplated by the Finance Documents or any other
               agreement, arrangement or document entered into, made or executed
               in anticipation of, under or in connection with any Finance
               Document; and

        (e)    the right or title of any person in or to, or the value or
               sufficiency of any part of the Charged Property, the priority of
               any of the Transaction Security or the existence of any Security
               affecting the Charged Property.

                                     - 100 -


29.15   REFERENCE BANKS
        If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender
        of which it is an Affiliate) ceases to be a Lender, the Facility Agent
        shall (in consultation with the Parent) appoint another Lender or an
        Affiliate of a Lender to replace that Reference Bank.

29.16   FACILITY AGENT'S MANAGEMENT TIME
        Any amount payable to the Facility Agent under Clause 18.3 (INDEMNITY TO
        THE FACILITY AGENT), Clause 20 (COSTS AND EXPENSES) and Clause 29.10
        (LENDERS' INDEMNITY TO THE FACILITY AGENT AND THE SECURITY TRUSTEE)
        shall include the cost of utilising the Facility Agent's management time
        or other resources and will be calculated on the basis of such
        reasonable daily or hourly rates as the Facility Agent may notify to the
        Parent and the Lenders, and is in addition to any fee paid or payable to
        the Facility Agent under Clause 15 (FEES).

29.17   DEDUCTION FROM AMOUNTS PAYABLE BY THE FACILITY AGENT
        If any Party owes an amount to the Facility Agent under the Finance
        Documents the Facility Agent may, after giving notice to that Party,
        deduct an amount no exceeding that amount from any payment to that Party
        which the Facility Agent would otherwise be obliged to make under the
        Finance Documents and apply the amount deducted in or towards
        satisfaction of the amount owed. For the purposes of the Finance
        Documents that Party shall be regarded as having received any amount so
        deducted.

29.18   RELIANCE AND ENGAGEMENT LETTERS
        Each Finance Party and Secured Party confirms that each of the Arranger
        and the Facility Agent has authority to accept on its behalf the terms
        of any reliance letter or engagement letters relating to the Reports or
        any reports or letters provided by accountants in connection with the
        Finance Documents or the transactions contemplated in the Finance
        Documents and to bind it in respect of those Reports, reports or letters
        and to sign such letters on its behalf and further confirms that it
        accepts the terms and qualifications set out in such letters.

30.     ROLE OF SECURITY TRUSTEE

30.1    TRUST
        The Security Trustee declares that it shall hold the Transaction
        Security on trust for the Secured Parties on the terms contained in this
        Agreement. Each of the parties to this Agreement agrees that the
        Security Trustee shall have only those duties, obligations and
        responsibilities expressly specified in this Agreement or in the
        Transaction Security Trustee Documents (and no others shall be implied).

30.2    PARALLEL DEBT (COVENANT TO PAY THE SECURITY TRUSTEE)
        (a)    Notwithstanding any other provision of this Agreement, each
               Obligor hereby irrevocably and unconditionally undertakes to pay
               to the Security Trustee, as creditor in its own right and not as
               representative of the other Secured Parties, sums equal to and in
               the currency of each amount payable by such Obligor to each of
               the Secured Parties under each of the Finance Documents as and
               when

                                     - 101 -


               that amount falls due for payment under the relevant Finance
               Document or would have fallen due but for any discharge resulting
               from the failure of another Secured Party to take appropriate
               steps, in insolvency proceedings affecting that Obligor, to
               preserve its entitlement to be paid that amount.

        (b)    The Security Trustee shall have its own independent right to
               demand payment of the amounts payable by each Obligor under this
               Clause 30.2, irrespective of any discharge of such Obligor's
               obligation to pay those amounts to the other Secured Parties
               resulting from failure by them to take appropriate steps, in
               insolvency proceedings affecting that Obligor, to preserve their
               entitlement to be paid those amounts.

        (c)    Any amount due and payable by an Obligor to the Security Trustee
               under this Clause 30.2 (PARALLEL DEBT (COVENANT TO PAY THE
               SECURITY TRUSTEE)) shall be decreased to the extent that the
               other Secured Parties have received (and are able to retain)
               payment in full of the corresponding amount under the other
               provisions of the Finance Documents and any amount due and
               payable by an Obligor to the other Secured Parties under those
               provisions shall be decreased to the extent that the Security
               Trustee has received (and is able to retain) payment in full of
               the corresponding amount under this Clause 30.2 (PARALLEL DEBT
               (COVENANT TO PAY THE SECURITY TRUSTEE)),

        (d)    The rights of the Secured Parties (other than the Security
               Trustee) to receive payment of amounts payable by each Obligor
               under the Finance Documents are several and separate and
               independent from, and without prejudice to, the rights of the
               Security Trustee to receive payment under this Clause 30.2
               (PARALLEL DEBT (COVENANT TO PAY THE SECURITY TRUSTEE)).

30.3    NO INDEPENDENT POWER
        The Secured Parties shall not have any independent power to enforce, or
        have recourse to, any of the Transaction Security Trustee or to exercise
        any rights or powers arising under the Transaction Security Trustee
        Documents except through the Security Trustee.

30.4    SECURITY TRUSTEE'S INSTRUCTIONS
        The Security Trustee shall:

        (a)    unless a contrary indication appears in a Finance Document, act
               in accordance with any instructions given to it by the Facility
               Agent and shall be entitled to assume that (i) any instructions
               received by it from the Facility Agent are duly given by or on
               behalf of the Majority Lenders or, as the case may be, the
               Lenders in accordance with the terms of the Finance Documents and
               (ii) unless it has received actual notice of revocation that any
               instructions or directions given by the Facility Agent have not
               been revoked;

        (b)    be entitled to request instructions, or clarification of any
               direction, from the Facility Agent as to whether, and in what
               manner, it should exercise or refrain from exercising any rights,
               powers and discretions and the Security Trustee

                                     - 102 -


               may refrain from acting unless and until those instructions or
               clarification are received by it; and

        (c)    be entitled to, carry out all dealings with the Lenders through
               the Facility Agent and may give to the Facility Agent any notice
               or other communication required to be given by the Security
               Trustee to the Lenders.

30.5    SECURITY TRUSTEE'S ACTIONS
        Subject to the provisions of this Clause 30:

        (a)    the Security Trustee may, in the absence of any instructions to
               the contrary, take such action in the exercise of any of its
               powers and duties under the Finance Documents which in its
               absolute discretion it considers to be for the protection and
               benefit of all the Secured Parties; and

        (b)    at any time after receipt by the Security Trustee of notice from
               the Facility Agent directing the Security Trustee to exercise all
               or any of its rights, remedies, powers or discretions under any
               of the Finance Documents, the Security Trustee may, and shall if
               so directed by the Facility Agent, take any action as in its sole
               discretion it thinks fit to enforce the Transaction Security
               Trustee.

30.6    SECURITY TRUSTEE'S DISCRETIONS
        (a)    The Security Trustee may assume (unless it has received actual
               notice to the contrary in its capacity as Security Trustee for
               the Secured Parties) that:

               (i)    no Default has occurred and no Obligor is in breach of or
                      default under its obligations under any of the Finance
                      Documents; and

               (ii)   any right, power, authority or discretion vested in any
                      person has not been exercised.

        (b)    The Security Trustee may, if it receives any instructions or
               directions from the Facility Agent to take any action in relation
               to the Transaction Security Trustee, assume that all applicable
               conditions under the Finance Documents for taking that action
               have been satisfied.

        (c)    The Security Trustee may engage, pay for and rely on the advice
               or services of any lawyers, accountants, surveyors or other
               experts (whether obtained by the Security Trustee or by any other
               Secured Party).

        (d)    The Security Trustee may rely upon any communication or document
               believed by it to be genuine and, as to any matters of fact which
               might reasonably be expected to be within the knowledge of a
               Secured Party or an Obligor, upon a certificate signed by or on
               behalf of that person.

        (e)    The Security Trustee may refrain from acting in accordance with
               the instructions of the Facility Agent or Lenders (including
               bringing any legal action or proceeding arising out of or in
               connection with the Finance

                                     - 103 -


               Documents) until it has received any indemnification and/or
               security that it may in its absolute discretion require (whether
               by way of payment in advance or otherwise) for all costs, losses
               and liabilities which it may incur in bringing such action or
               proceedings.

30.7    SECURITY TRUSTEE'S OBLIGATIONS
        The Security Trustee shall promptly inform the Facility Agent of:

        (a)    the contents of any notice or document received by it in its
               capacity as Security Trustee from any Obligor under any Finance
               Document; and

        (b)    the occurrence of any Default of which the Security Trustee has
               received notice from any other party to this Agreement.

30.8    EXCLUDED OBLIGATIONS
        The Security Trustee shall not:

        (a)    be bound to enquire as to the occurrence or otherwise of any
               Default or the performance, default or any breach by an Obligor
               of its obligations under any of the Finance Documents;

        (b)    be bound to account to any other Secured Party for any sum or the
               profit element of any sum received by it for its own account;

        (c)    be bound to disclose to any other person (including any Secured
               Party) (i) any confidential information or (ii) any other
               information if disclosure would, or might in its reasonable
               opinion, constitute a breach of any law or be a breach of
               fiduciary duty;

        (d)    be under any obligations other than those which are specifically
               provided for in the Finance Documents; or

        (e)    have or be deemed to have any duty, obligation or responsibility
               to, or relationship of trust or agency with, any Obligor.

30.9    EXCLUSION OF SECURITY TRUSTEE'S LIABILITY
        Unless caused directly by its gross negligence or wilful misconduct the
        Security Trustee shall not accept responsibility or be liable for:

        (a)    the adequacy, accuracy and/or completeness of any information
               supplied by the Security Trustee or any other person in
               connection with the Finance Documents or the transactions
               contemplated in the Finance Documents, or any other agreement,
               arrangement or document entered into, made or executed in
               anticipation of, under or in connection with the Finance
               Documents;

        (b)    the legality, validity, effectiveness, adequacy or enforceability
               of any Finance Document or the Transaction Security or any other
               agreement, arrangement or document entered into, made or executed
               in anticipation of, under or in connection with any Finance
               Document or the Transaction Security;

                                     - 104 -


        (c)    any losses to any person or any liability arising as a result of
               taking or refraining from taking any action in relation to any of
               the Finance Documents or the Transaction Security or otherwise,
               whether in accordance with an instruction from the Facility Agent
               or otherwise;

        (d)    the exercise of, or the failure to exercise, any judgment,
               discretion or power given to it by or in connection with any of
               the Finance Documents, the Transaction Security or any other
               agreement, arrangement or document entered into, made or executed
               in anticipation of, under or in connection with the Finance
               Documents or the Transaction Security; or

        (e)    any shortfall which arises on the enforcement of the Transaction
               Security.

30.10   NO PROCEEDINGS
        No Party (other than the Security Trustee) may take any proceedings
        against any officer, employee or agent of the Security Trustee in
        respect of any claim it might have against the Security Trustee or in
        respect of any act or omission of any kind by that officer, employee or
        agent in relation to any Finance Document and any officer, employee or
        agent of the Security Trustee may rely on this Clause subject to Clause
        1.4 (THIRD PARTY RIGHTS) and the provisions of the Third Parties Act.

30.11   OWN RESPONSIBILITY

        It is understood and agreed by each Secured Party that at all times that
        Secured Party has itself been, and will continue to be, solely
        responsible for making its own independent appraisal of and
        investigation into all risks arising under or in connection with the
        Finance Documents including but not limited to:

        (a)    the financial condition, creditworthiness, condition, affairs,
               status and nature of each of the Obligors;

        (b)    the legality, validity, effectiveness, adequacy and
               enforceability of each of the Finance Documents and the
               Transaction Security and any other agreement, arrangement or
               document entered into, made or executed in anticipation of, under
               or in connection with the Finance Documents or the Transaction
               Security;

        (c)    whether that Secured Party has recourse, and the nature and
               extent of that recourse, against any Obligor or any other person
               or any of their respective assets under or in connection with the
               Finance Documents, the transactions contemplated in the Finance
               Documents or any other agreement, arrangement or document entered
               into, made or executed in anticipation of, under to or in
               connection with the Finance Documents;

        (d)    the adequacy, accuracy and/or completeness of any information
               provided by any person in connection with the Finance Documents,
               the transactions contemplated in the Finance Documents or any
               other agreement, arrangement or document entered into, made or
               executed in anticipation of, under or in connection with the
               Finance Documents; and

                                     - 105 -


        (e)    the right or title of any person in or to, or the value or
               sufficiency of any part of the Charged Property, the priority of
               any of the Transaction Security or the existence of any security
               interest affecting the Charged Property,

        and each Secured Party warrants to the Security Trustee that it has not
        relied on and will not at any time rely on the Security Trustee in
        respect of any of these matters.

30.12   NO RESPONSIBILITY TO PERFECT TRANSACTION SECURITY
        The Security Trustee shall not be liable for any failure to:

        (a)    require the deposit with it of any deed or document certifying,
               representing or constituting the title of any Obligor to any of
               the Charged Property;

        (b)    obtain any licence, consent or other authority for the execution,
               delivery, legality, validity, enforceability or admissibility in
               evidence of any of the Finance Documents or the Transaction
               Security Trustee;

        (c)    register, file or record or otherwise protect any of the
               Transaction Security Trustee (or the priority of any of the
               Transaction Security Trustee) under any applicable laws in any
               jurisdiction or to give notice to any person of the execution of
               any of the Finance Documents or of the Transaction Security
               Trustee;

        (d)    take, or to require any of the Obligors to take, any steps to
               perfect its title to any of the Charged Property or to render the
               Transaction Security Trustee effective or to secure the creation
               of any ancillary Security Trustee under the laws of any
               jurisdiction; or

        (e)    require any further assurances in relation to any of the
               Transaction Security Trustee Documents.

30.13   INSURANCE BY SECURITY TRUSTEE
        (a)    The Security Trustee shall not be under any obligation to insure
               any of the Charged Property, to require any other person to
               maintain any insurance or to verify any obligation to arrange or
               maintain insurance contained in the Finance Documents. The
               Security Trustee shall not be responsible for any loss which may
               be suffered by any person as a result of the lack of or
               inadequacy of any such insurance.

        (b)    Where the Security Trustee is named on any insurance policy as an
               insured party, it shall not be responsible for any loss which may
               be suffered by reason of, directly or indirectly, its failure to
               notify the insurers of any material fact relating to the risk
               assumed by the insurers or any other information of any kind,
               unless any Secured Party has requested it to do so in writing and
               the Security Trustee has failed to do so within fourteen days
               after receipt of that request.

                                     - 106 -


30.14   CUSTODIANS AND NOMINEES
        The Security Trustee may appoint and pay any person to act as a
        custodian or nominee on any terms in relation to any assets of the trust
        as the Security Trustee may determine, including for the purpose of
        depositing with a custodian this Agreement or any document relating to
        the trust created under this Agreement and the Security Trustee shall
        not be responsible for any loss, liability, expense, demand, cost, claim
        or proceedings incurred by reason of the misconduct, omission or default
        on the part of any person appointed by it under this Agreement or be
        bound to supervise the proceedings or acts of any person.

30.15   ACCEPTANCE OF TITLE
        The Security Trustee shall be entitled to accept without enquiry, and
        shall not be obliged to investigate, the right and title as each of the
        Obligors may have to any of the Charged Property and shall not be liable
        for or bound to require any Obligor to remedy any defect in its right or
        title.

30.16   REFRAIN FROM ILLEGALITY
        The Security Trustee may refrain from doing anything which in its
        opinion will or may be contrary to any relevant law, directive or
        regulation of any jurisdiction which would or might otherwise render it
        liable to any person, and the Security Trustee may do anything which is,
        in its opinion, necessary to comply with any law, directive or
        regulation.

30.17   BUSINESS WITH THE OBLIGORS
        The Security Trustee may accept deposits from, lend money to, and
        generally engage in any kind of banking or other business with any of
        the Obligors.

30.18   RELEASES
        Upon a disposal of any of the Charged Property:

        (a)    pursuant to the enforcement of the Transaction Security by a
               Receiver or the Security Trustee; or

        (b)    if that disposal is permitted under the Finance Documents,

        the Security Trustee shall (at the cost of the Obligors) release that
        property from the Transaction Security Trustee and is authorised to
        execute, without the need for any further authority from the Secured
        Parties, any release of the Transaction Security Trustee or other claim
        over that asset and to issue any certificates of non-crystallisation of
        floating charges that may be required or desirable.

30.19   WINDING UP OF TRUST
        If the Security Trustee, with the approval of the Majority Lenders,
        determines that (a) all of the Secured Obligations and all other
        obligations secured by any of the Transaction Security Trustee Documents
        have been fully and finally discharged and (b) none of the Secured
        Parties is under any commitment, obligation or liability (actual or
        contingent) to make advances or provide other financial accommodation to
        any Obligor pursuant to the Finance Documents, the trusts set out in
        this Agreement shall be wound

                                     - 107 -


        up and the Security Trustee shall release, without recourse or
        warranty, all of the Transaction Security Trustee and the rights of
        the Security Trustee under each of the Transaction Security Trustee
        Documents.

30.20   PERPETUITY PERIOD
        The perpetuity period under the rule against perpetuities, if applicable
        to this Agreement, shall be the period of eighty years from the date of
        this Agreement.

30.21   POWERS SUPPLEMENTAL
        The rights, powers and discretions conferred upon the Security Trustee
        by this Agreement shall be supplemental to the Security Trustee Acts
        1925 and 2000 and in addition to any which may be vested in the Security
        Trustee by general law or otherwise.

30.22   DISAPPLICATION
        Section 1 of the Security Trustee Act 2000 shall not apply to the duties
        of the Security Trustee in relation to the trusts constituted by this
        Agreement. Where there are any inconsistencies between the Security
        Trustee Acts 1925 and 2000 and the provisions of this Agreement, the
        provisions of this Agreement shall, to the extent allowed by law,
        prevail and, in the case of any inconsistency with the Security Trustee
        Act 2000, the provisions of this Agreement shall constitute a
        restriction or exclusion for the purposes of that Act.

30.23   RESIGNATION OF SECURITY TRUSTEE
        (a)    The Security Trustee may resign and appoint one of its Affiliates
               as successor by giving notice to the other Parties (or to the
               Facility Agent on behalf of the Lenders).

        (b)    Alternatively the Security Trustee may resign by giving notice to
               the other Parties (or to the Facility Agent on behalf of the
               Lenders) in which case the Majority Lenders may appoint a
               successor Security Trustee.

        (c)    If the Majority Lenders have not appointed a successor Security
               Trustee in accordance with paragraph (b) above within 30 days
               after the notice of resignation was given, the Security Trustee
               (after consultation with the Facility Agent) may appoint a
               successor Security Trustee.

        (d)    The retiring Security Trustee shall, at its own cost, make
               available to the successor Security Trustee such documents and
               records and provide such assistance as the successor Security
               Trustee may reasonably request for the purposes of performing its
               functions as Security Trustee under the Finance Documents.

        (e)    The Security Trustee's resignation notice shall only take effect
               upon (i) the appointment of a successor and (ii) the transfer of
               all of the Transaction Security Trustee to that successor.

                                     - 108 -


        (f)    Upon the appointment of a successor, the retiring Security
               Trustee shall be discharged from any further obligation in
               respect of the Finance Documents but shall remain entitled to the
               benefit of Clauses 29 (ROLE OF THE FACILITY AGENT, THE ARRANGER,
               THE ISSUING BANK AND OTHERS) and this Clause 30. Its successor
               and each of the other Parties shall have the same rights and
               obligations amongst themselves as they would have had if such
               successor had been an original Party.

        (g)    The Majority Lenders may, by notice to the Security Trustee,
               require it to resign in accordance with paragraph (b) above. In
               this event, the Security Trustee shall resign in accordance with
               paragraph (b) above.

30.24   DELEGATION
        (a)    The Security Trustee may, at any time, delegate by power of
               attorney or otherwise to any person for any period, all or any of
               the rights, powers and discretions vested in it by any of the
               Finance Documents.

        (b)    The delegation may be made upon any terms and conditions
               (including the power to sub-delegate) and subject to any
               restrictions as the Security Trustee may think fit in the
               interests of the Secured Parties and it shall not be bound to
               supervise, or be in any way responsible for any loss incurred by
               reason of any misconduct or default on the part of any delegate
               or sub-delegate.

30.25   ADDITIONAL SECURITIES
        (a)    The Security Trustee may at any time appoint (and subsequently
               remove) any person to act as a separate security or as a
               co-security jointly with it (i) if it considers that appointment
               to be in the interests of the Secured Parties or (ii) for the
               purposes of conforming to any legal requirements, restrictions or
               conditions which the Security Trustee deems to be relevant or
               (iii) for obtaining or enforcing any judgment in any
               jurisdiction, and the Security Trustee shall give prior notice to
               the Borrower and the Facility Agent of that appointment.

        (b)    Any person so appointed shall have the rights, powers and
               discretions (not exceeding those conferred on the Security
               Trustee by this Agreement) and the duties and obligations that
               are conferred or imposed by the instrument of appointment.

        (c)    The remuneration that the Security Trustee may pay to any person,
               and any costs and expenses incurred by that person in performing
               its functions pursuant to that appointment shall, for the
               purposes of this Agreement, be treated as costs and expenses
               incurred by the Security Trustee.

                                     - 109 -


31.     CONDUCT OF BUSINESS BY THE FINANCE PARTIES

        No provision of this Agreement will:

        (a)    interfere with the right of any Finance Party to arrange its
               affairs (tax or otherwise) in whatever manner it thinks fit;

        (b)    oblige any Finance Party to investigate or claim any credit,
               relief, remission or repayment available to it or the extent,
               order and manner of any claim; or

        (c)    oblige any Finance Party to disclose any information relating to
               its affairs (tax or otherwise) or any computations in respect of
               Tax.


32.     SHARING AMONG THE FINANCE PARTIES

32.1    PAYMENTS TO FINANCE PARTIES
        If a Finance Party (a "RECOVERING FINANCE PARTY") receives or recovers
        any amount from an Obligor other than in accordance with Clause 33
        (PAYMENT MECHANICS) or Clause 35 (APPLICATION OF PROCEEDS) and applies
        that amount to a payment due under the Finance Documents then:

        (a)    the Recovering Finance Party shall, within three Business Days,
               notify details of the receipt or recovery to the Facility Agent;

        (b)    the Facility Agent shall determine whether the receipt or
               recovery is in excess of the amount the Recovering Finance Party
               would have been paid had the receipt or recovery been received or
               made by the Facility Agent and distributed in accordance with
               Clause 33 (PAYMENT MECHANICS), without taking account of any Tax
               which would be imposed on the Facility Agent in relation to the
               receipt, recovery or distribution; and

        (c)    the Recovering Finance Party shall, within three Business Days of
               demand by the Facility Agent, pay to the Facility Agent an amount
               (the "SHARING PAYMENT") equal to such receipt or recovery less
               any amount which the Facility Agent determines may be retained by
               the Recovering Finance Party as its share of any payment to be
               made, in accordance with Clause 33.5 (PARTIAL PAYMENTS).

32.2    REDISTRIBUTION OF PAYMENTS
        The Facility Agent shall treat the Sharing Payment as if it had been
        paid by the relevant Obligor and distribute it between the Finance
        Parties (other than the Recovering Finance Party) in accordance with
        Clause 33.5 (PARTIAL PAYMENTS).

32.3    RECOVERING FINANCE PARTY'S RIGHTS
        (a)    On a distribution by the Facility Agent under Clause 32.2
               (REDISTRIBUTION OF PAYMENTS), the Recovering Finance Party will
               be subrogated to the rights of the Finance Parties which have
               shared in the redistribution.

        (b)    If and to the extent that the Recovering Finance Party is not
               able to rely on its rights under paragraph (a) above, the
               relevant Obligor shall be liable to the

                                     - 110 -


               Recovering Finance Party for a debt equal to the Sharing Payment
               which is immediately due and payable.

32.4    REVERSAL OF REDISTRIBUTION
        If any part of the Sharing Payment received or recovered by a Recovering
        Finance Party becomes repayable and is repaid by that Recovering Finance
        Party, then:

        (a)    each Finance Party which has received a share of the relevant
               Sharing Payment pursuant to Clause 32.2 (REDISTRIBUTION OF
               PAYMENTS) shall, upon request of the Facility Agent, pay to the
               Facility Agent for account of that Recovering Finance Party an
               amount equal to its share of the Sharing Payment (together with
               an amount as is necessary to reimburse that Recovering Finance
               Party for its proportion of any interest on the Sharing Payment
               which that Recovering Finance Party is required to pay); and

        (b)    that Recovering Finance Party's rights of subrogation in respect
               of any reimbursement shall be cancelled and the relevant Obligor
               will be liable to the reimbursing Finance Party for the amount so
               reimbursed.

32.5    EXCEPTIONS
        (a)    This Clause 32 shall not apply to the extent that the Recovering
               Finance Party would not, after making any payment pursuant to
               this Clause, have a valid and enforceable claim against the
               relevant Obligor.

        (b)    A Recovering Finance Party is not obliged to share with any other
               Finance Party any amount which the Recovering Finance Party has
               received or recovered as a result of taking legal or arbitration
               proceedings, if:

               (i)    it notified the other Finance Party of the legal or
                      arbitration proceedings; and

               (ii)   the other Finance Party had an opportunity to participate
                      in those legal or arbitration proceedings but did not do
                      so as soon as reasonably practicable having received
                      notice or did not take separate legal or arbitration
                      proceedings.

        (c)    This Clause 32 shall not apply to the extent that the Recovering
               Finance Party is an Ancillary Lender or a Hedging Bank and the
               amounts recovered are amounts which are owing under an Ancillary
               Facility or, as the case may be, a Hedging Agreement and are
               received at a time when no notice has been served by the Facility
               Agent under Clause 26.15 (ACCELERATION).

                                     - 111 -


                                   SECTION 11
                                 ADMINISTRATION

33.     PAYMENT MECHANICS

33.1    PAYMENTS TO THE FACILITY AGENT
        (a)    On each date on which an Obligor or a Lender is required to make
               a payment under a Finance Document, that Obligor or Lender shall
               make the same available to the Facility Agent (unless a contrary
               indication appears in a Finance Document) for value on the due
               date at the time and in such funds specified by the Facility
               Agent as being customary at the time for settlement of
               transactions in the relevant currency in the place of payment.

        (b)    Payment shall be made to such account in the principal financial
               centre of the country of that currency (or, in relation to euro,
               in a principal financial centre in a Participating Member State
               or London) with such bank as the Facility Agent specifies.

33.2    DISTRIBUTIONS BY THE FACILITY AGENT
        Each payment received by the Facility Agent under the Finance Documents
        for another Party shall, subject to Clause 33.3 (DISTRIBUTIONS TO AN
        OBLIGOR) and Clause 33.4 (CLAWBACK) be made available by the Facility
        Agent as soon as practicable after receipt to the Party entitled to
        receive payment in accordance with this Agreement (in the case of a
        Lender, for the account of its Facility Office), to such account as that
        Party may notify to the Facility Agent by not less than five Business
        Days' notice with a bank in the principal financial centre of the
        country of that currency (or, in relation to euro, in the principal
        financial centre of a Participating Member State or London).

33.3    DISTRIBUTIONS TO AN OBLIGOR
        (a)    The Facility Agent may (with the consent of the Obligor or in
               accordance with Clause 34 (SET-OFF)) apply any amount received by
               it for that Obligor in or towards payment (on the date and in the
               currency and funds of receipt) of any amount due from that
               Obligor under the Finance Documents or in or towards purchase of
               any amount of any currency to be so applied.

        (b)    Each payment to an Obligor shall be made to such account with
               such bank as the Parent specifies.

33.4    CLAWBACK
        (a)    Where a sum is to be paid to the Facility Agent under the Finance
               Documents for another Party, the Facility Agent is not obliged to
               pay that sum to that other Party (or to enter into or perform any
               related exchange contract) until it has been able to establish to
               its satisfaction that it has actually received that sum.

        (b)    If the Facility Agent pays an amount to another Party and it
               proves to be the case that the Facility Agent had not actually
               received that amount, then the Party to whom that amount (or the
               proceeds of any related exchange contract)

                                     - 112 -


               was paid by the Facility Agent shall on demand refund the same to
               the Facility Agent together with interest on that amount from the
               date of payment to the date of receipt by the Facility Agent,
               calculated by the Facility Agent to reflect its cost of funds.

33.5    PARTIAL PAYMENTS
        (a)    If the Facility Agent receives a payment that is insufficient to
               discharge all the amounts then due and payable by an Obligor
               under the Finance Documents, the Facility Agent shall apply that
               payment towards the obligations of that Obligor under the Finance
               Documents in the following order:

               (i)    FIRST, in or towards payment pro rata of any unpaid fees,
                      costs and expenses of the Facility Agent, the Issuing
                      Bank, the Arranger and the Security Trustee under those
                      Finance Documents;

               (ii)   SECONDLY, in or towards payment pro rata of any accrued
                      interest, fee or commission due but unpaid under those
                      Finance Documents;

               (iii)  THIRDLY, in or towards payment pro rata of any principal
                      outstandings due but unpaid under those Finance Documents
                      and any amount due but unpaid under Clause 7.2 (CLAIMS
                      UNDER A LETTER OF CREDIT) and Clause 7.3 (INDEMNITIES);
                      and

               (iv)   FOURTHLY, in or towards payment pro rata of any other sum
                      due but unpaid under the Finance Documents.

        (b)    The Facility Agent shall, if so directed by the Majority Lenders,
               vary the order set out in paragraphs (a)(ii) to (iv) above.

        (c)    If after the service of a notice by the Facility Agent under
               Clause 26.15 (ACCELERATION) or pursuant to the provisions of
               Clause 35.1 (ORDER OF APPLICATION) the Facility Agent receives a
               payment that is insufficient to discharge all the amounts then
               due and payable by an Obligor under the Finance Documents, the
               Facility Agent shall apply that payment towards the obligations
               of that Obligor under the Finance Documents in the following
               order:

               (i)    FIRST, in or towards payment pro rata of any unpaid fees,
                      costs and expenses of the Facility Agent, the Issuing
                      Bank, the Security Trustee and the Arranger under the
                      Finance Documents;

               (ii)   SECONDLY, in or towards payment pro rata of any accrued
                      interest or commission due but unpaid under the Finance
                      Documents;

               (iii)  THIRDLY, in or towards payment pro rata of any principal
                      due but unpaid under the Finance Documents (including
                      without limitation provisions of cash cover in respect of
                      contingent liabilities and payments due under the
                      Ancillary Facilities and Hedging Agreements); and

                                     - 113 -


               (iv)   FOURTHLY, in or towards payment pro rata of any other sum
                      due but unpaid under the Finance Documents.

        (d)    The Facility Agent shall, if so directed by the Majority
               Creditors, vary the order set out in paragraphs (c)(ii) to (iv)
               above.

        (e)    Paragraphs (a), (b), (c) and (d) above will override any
               appropriation made by an Obligor.

33.6    NO SET-OFF BY OBLIGORS
        All payments to be made by an Obligor under the Finance Documents shall
        be calculated and be made without (and free and clear of any deduction
        for) set-off or counterclaim.

33.7    BUSINESS DAYS
        (a)    Any payment or reduction which is due to be made, or an Interest
               Period which would otherwise end, on a day that is not a Business
               Day shall be made or will end, as the case may be, on the next
               Business Day in the same calendar month (if there is one) or the
               preceding Business Day (if there is not).

        (b)    During any extension of the due date for payment of any principal
               or an Unpaid Sum under this Agreement interest is payable on the
               principal at the rate payable on the original due date.

33.8    CURRENCY OF ACCOUNT
        (a)    Subject to paragraphs (b) to (e) below, the Base Currency is the
               currency of account and payment for any sum due from an Obligor
               under any Finance Document.

        (b)    A repayment of a Utilisation or Unpaid Sum or a part of a
               Utilisation or Unpaid Sum shall be made in the currency in which
               that Utilisation or Unpaid Sum is denominated on its due date.

        (c)    Each payment of interest shall be made in the currency in which
               the sum in respect of which the interest is payable was
               denominated when that interest accrued.

        (d)    Each payment in respect of costs, expenses or Taxes shall be made
               in the currency in which the costs, expenses or Taxes are
               incurred.

        (e)    Any amount expressed to be payable in a currency other than the
               Base Currency shall be paid in that other currency.

                                     - 114 -


33.9    CHANGE OF CURRENCY
        (a)    Unless otherwise prohibited by law, if more than one currency or
               currency unit are at the same time recognised by the central bank
               of any country as the lawful currency of that country, then:

               (i)    any reference in the Finance Documents to, and any
                      obligations arising under the Finance Documents in, the
                      currency of that country shall be translated into, or paid
                      in, the currency or currency unit of that country
                      designated by the Facility Agent (after consultation with
                      the Parent); and

               (ii)   any translation from one currency or currency unit to
                      another shall be at the official rate of exchange
                      recognised by the central bank for the conversion of that
                      currency or currency unit into the other, rounded up or
                      down by the Facility Agent (acting reasonably).

        (b)    If a change in any currency of a country occurs, this Agreement
               will, to the extent the Facility Agent (acting reasonably and
               after consultation with the Parent) specifies to be necessary, be
               amended to comply with any generally accepted conventions and
               market practice in the Relevant Interbank Market and otherwise to
               reflect the change in currency.

34.     SET-OFF

        A Finance Party may set off any matured obligation due from an Obligor
        under the Finance Documents (to the extent beneficially owned by that
        Finance Party) against any matured obligation owed by that Finance Party
        to that Obligor, regardless of the place of payment, booking branch or
        currency of either obligation. If the obligations are in different
        currencies, the Finance Party may convert either obligation at a market
        rate of exchange in its usual course of business for the purpose of the
        set-off.

35.     APPLICATION OF PROCEEDS

35.1    ORDER OF APPLICATION
        All monies from time to time received or recovered by the Security
        Trustee under Clause 30.2 (PARALLEL DEBT (COVENANT TO PAY THE SECURITY
        TRUSTEE)) and/or in connection with the realisation or enforcement of
        all or any part of the Transaction Security shall be held by the
        Security Trustee on trust to apply them, to the extent permitted by
        applicable law in the following order of priority:

        (a)    in discharging any sums owing to the Security Trustee (in its
               capacity as Security Trustee);

        (b)    in payment to the Facility Agent, on behalf of the Secured
               Parties, for application towards the discharge of all sums due
               and payable by any Obligor under any of the Finance Documents in
               the order set out in paragraph (c) of Clause 33.5 (PARTIAL
               PAYMENTS).

                                     - 115 -


        (c)    if none of the Obligors is under any further actual or contingent
               liability under any Finance Document, in payment to any person to
               whom the Security Trustee is obliged to pay in priority to any
               Obligor; and

        (d)    the balance, if any, in payment to the relevant Obligor.

35.2    INVESTMENT OF PROCEEDS
        Prior to the application of the proceeds of the Transaction Security in
        accordance with Clause 35.1 (ORDER OF APPLICATION) the Security Trustee
        may, at its discretion, hold all or part of those proceeds in an
        interest bearing suspense or impersonal account(s) in the name of the
        Security Trustee or Facility Agent with such financial institution
        (including itself) for so long as the Security Trustee thinks fit (the
        interest being credited to the relevant account) pending the application
        from time to time of those monies at the Security Trustee's discretion
        in accordance with the provisions of this Clause 35.

35.3    CURRENCY CONVERSION
        (a)    For the purpose of or pending the discharge of any of the
               obligations owed by the Obligors to the Finance Parties under the
               Finance Documents the Security Trustee may convert any monies
               received or recovered by the Security Trustee from one currency
               to another, at the spot rate at which the Security Trustee is
               able to purchase the currency in which such obligations owed by
               the Obligors are due with the amount received.

        (b)    The obligations of any Obligor to pay in the due currency shall
               only be satisfied to the extent of the amount of the due currency
               purchased after deducting the costs of conversion.

35.4    PERMITTED DEDUCTIONS
        The Security Trustee shall be entitled (a) to set aside by way of
        reserve amounts required to meet and (b) to make and pay, any deductions
        and withholdings (on account of Taxes or otherwise) which it is or may
        be required by any applicable law to make from any distribution or
        payment made by it under this Agreement, and to pay all Taxes which may
        be assessed against it in respect of any of the Charged Property, or as
        a consequence of performing its duties, or by virtue of its capacity as
        Security Trustee under any of the Finance Documents or otherwise (except
        in connection with its remuneration for performing its duties under any
        Finance Document).

35.5    DISCHARGE OF OBLIGATIONS
        (a)    Any payment to be made in respect of the obligations owed by the
               Obligors to the Finance Parties under the Finance Documents by
               the Security Trustee may be made to the Facility Agent and any
               payment so made shall be a good discharge to the extent of that
               payment, to the Security Trustee.

        (b)    The Security Trustee is under no obligation to make payment to
               the Facility Agent in the same currency as that in which any
               Unpaid Sum is denominated.

                                     - 116 -


35.6    SUMS RECEIVED BY OBLIGORS
        If any of the Obligors receives any sum which, pursuant to any of the
        Finance Documents, should have been paid to the Security Trustee, that
        sum shall promptly be paid to the Security Trustee for application in
        accordance with this Clause 35.

35.7    APPLICATION AND CONSIDERATION
        In consideration for the covenants given to the Security Trustee by each
        Obligor in Clause 30.2 (PARALLEL DEBT (COVENANT TO PAY THE SECURITY
        TRUSTEE)), the Security Trustee agrees with each Obligor to apply all
        moneys from time to time paid by such Obligor to the Security Trustee in
        accordance with the provisions of Clause 35.1 (ORDER OF APPLICATION).

36.     NOTICES

36.1    COMMUNICATIONS IN WRITING
        Any communication to be made under or in connection with the Finance
        Documents shall be made in writing and, unless otherwise stated, may be
        made by fax or letter.

36.2    ADDRESSES
        The address and fax number (and the department or officer, if any, for
        whose attention the communication is to be made) of each Party for any
        communication or document to be made or delivered under or in connection
        with the Finance Documents is:

        (a)    in the case of the Parent, that identified with its name below;

        (b)    in the case of each Lender, each Ancillary Lender or any other
               Obligor, that notified in writing to the Facility Agent on or
               prior to the date on which it becomes a Party; and

        (c)    in the case of the Facility Agent or the Security Trustee, that
               identified with its name below,

        or any substitute address, fax number, telex number or department or
        officer as the Party may notify to the Facility Agent (or the Facility
        Agent may notify to the other Parties, if a change is made by the
        Facility Agent) by not less than five Business Days' notice.

36.3    DELIVERY
        (a)    Any communication or document made or delivered by one person to
               another under or in connection with the Finance Documents will
               only be effective:

               (i)    if by way of fax, when received in legible form; or

               (ii)   if by way of letter, when it has been left at the relevant
                      address or five Business Days after being deposited in the
                      post postage prepaid in an envelope addressed to it at
                      that address,

                                     - 117 -


                      and, if a particular department or officer is specified as
                      part of its address details provided under Clause 36.2
                      (ADDRESSES), if addressed to that department or officer.

        (b)    Any communication or document to be made or delivered to the
               Facility Agent or the Security Trustee will be effective only
               when actually received by the Facility Agent or Security Trustee
               and then only if it is expressly marked for the attention of the
               department or officer identified with the Facility Agent's or
               Security Trustee's signature below (or any substitute department
               or officer as the Facility Agent or Security Trustee shall
               specify for this purpose).

        (c)    All notices from or to an Obligor shall be sent through the
               Facility Agent. The Parent may make and/or deliver as agent of
               each Obligor notices and/or requests on behalf of each Obligor.

        (d)    Any communication or document made or delivered to the Parent in
               accordance with this Clause 36.3 will be deemed to have been made
               or delivered to each of the Obligors.

36.4    NOTIFICATION OF ADDRESS, FAX NUMBER AND TELEX NUMBER
        Promptly upon receipt of notification of an address, fax number and
        telex number or change of address, fax number or telex number pursuant
        to Clause 36.2 (ADDRESSES) or changing its own address, fax number or
        telex number, the Facility Agent shall notify the other Parties.

36.5    ELECTRONIC COMMUNICATION

        (a)    Any communication to be made between the Facility Agent or the
               Security Trustee and a Lender under or in connection with the
               Finance Documents may be made by electronic mail or other
               electronic means, if the Facility Agent, the Security Trustee and
               the relevant Lender:

               (i)    agree that, unless and until notified to the contrary,
                      this is to be an accepted form of communication;

               (ii)   notify each other in writing of their electronic mail
                      address and/or any other information required to enable
                      the sending and receipt of information by that means; and

               (iii)  notify each other of any change to their address or any
                      other such information supplied by them.

        (b)    Any electronic communication made between the Facility Agent and
               a Lender or the Security Trustee will be effective only when
               actually received in readable form and in the case of any
               electronic communication made by a Lender to the Facility Agent
               or the Security Trustee only if it is addressed in such a manner
               as the Facility Agent or Security Trustee shall specify for this
               purpose.

                                     - 118 -


36.6    ENGLISH LANGUAGE
        (a)    Any notice given under or in connection with any Finance Document
               must be in English.

        (b)    All other documents provided under or in connection with any
               Finance Document must be:

               (i)    in English; or

               (ii)   if not in English, and if so required by the Facility
                      Agent, accompanied by a certified English translation and,
                      in this case, the English translation will prevail unless
                      the document is a constitutional, statutory or other
                      official document.

36.7    USE OF WEBSITES
        (a)    The Parent may satisfy its obligation under this Agreement to
               deliver any information in relation to those Lenders (the
               "WEBSITE LENDERS") who accept this method of communication by
               posting this information onto an electronic website designated by
               the Parent and the Facility Agent (the "DESIGNATED WEBSITE") if:

               (i)    the Facility Agent expressly agrees (after consultation
                      with each of the Lenders) that it will accept
                      communication of the information by this method;

               (ii)   both the Parent and the Facility Agent are aware of the
                      address of and any relevant password specifications for
                      the Designated Website; and

               (iii)  the information is in a format previously agreed between
                      the Parent and the Facility Agent.

               If any Lender (a "PAPER FORM LENDER") does not agree to the
               delivery of information electronically then the Facility Agent
               shall notify the Parent accordingly and the Parent shall supply
               the information to the Facility Agent (in sufficient copies for
               each Paper Form Lender) in paper form. In any event the Parent
               shall supply the Facility Agent with at least one copy in paper
               form of any information required to be provided by it.

        (b)    The Facility Agent shall supply each Website Lender with the
               address of and any relevant password specifications for the
               Designated Website following designation of that website by the
               Parent and the Facility Agent.

        (c)    The Parent shall promptly upon becoming aware of its occurrence
               notify the Facility Agent if:

               (i)    the Designated Website cannot be accessed due to technical
                      failure;

               (ii)   the password specifications for the Designated Website
                      change;

                                     - 119 -


               (iii)  any new information which is required to be provided under
                      this Agreement is posted onto the Designated Website;

               (iv)   any existing information which has been provided under
                      this Agreement and posted onto the Designated Website is
                      amended; or

               (v)    the Parent becomes aware that the Designated Website or
                      any information posted onto the Designated Website is or
                      has been infected by any electronic virus or similar
                      software.

               If the Parent notifies the Facility Agent under paragraph (c)(i)
               or paragraph (c)(v) above, all information to be provided by the
               Parent under this Agreement after the date of that notice shall
               be supplied in paper form unless and until the Facility Agent and
               each Website Lender is satisfied that the circumstances giving
               rise to the notification are no longer continuing.

        (d)    Any Website Lender may request, through the Facility Agent, one
               paper copy of any information required to be provided under this
               Agreement which is posted onto the Designated Website. The Parent
               shall comply with any such request within ten Business Days.

37.     CALCULATIONS AND CERTIFICATES

37.1    ACCOUNTS
        In any litigation or arbitration proceedings arising out of or in
        connection with a Finance Document, the entries made in the accounts
        maintained by a Finance Party are PRIMA FACIE evidence of the matters to
        which they relate.

37.2    CERTIFICATES AND DETERMINATIONS
        Any certification or determination by a Finance Party of a rate or
        amount under any Finance Document is, in the absence of manifest error,
        conclusive evidence of the matters to which it relates.

37.3    DAY COUNT CONVENTION
        Any interest, commission or fee accruing under a Finance Document will
        accrue from day to day and is calculated on the basis of the actual
        number of days elapsed and a year of 360 days (or in the case of any
        Utilisation denominated in sterling, 365 days) or, in any case where the
        practice in the Relevant Interbank Market differs, in accordance with
        that market practice.

38.     PARTIAL INVALIDITY
        If, at any time, any provision of the Finance Documents is or becomes
        illegal, invalid or unenforceable in any respect under any law of any
        jurisdiction, neither the legality, validity or enforceability of the
        remaining provisions nor the legality, validity or enforceability of
        such provision under the law of any other jurisdiction will in any way
        be affected or impaired.

                                     - 120 -


39.     REMEDIES AND WAIVERS
        No failure to exercise, nor any delay in exercising, on the part of any
        Finance Party or Secured Party, any right or remedy under the Finance
        Documents shall operate as a waiver, nor shall any single or partial
        exercise of any right or remedy prevent any further or other exercise or
        the exercise of any other right or remedy. The rights and remedies
        provided in this Agreement are cumulative and not exclusive of any
        rights or remedies provided by law.

40.     AMENDMENTS AND WAIVERS

40.1    REQUIRED CONSENTS
        (a)    Subject to Clause 40.2 (EXCEPTIONS) any term of the Finance
               Documents may be amended or waived only with the consent of the
               Majority Lenders and the Parent and any such amendment or waiver
               will be binding on all Parties.

        (b)    The Facility Agent may effect, on behalf of any Finance Party,
               any amendment or waiver permitted by this Clause 40.

        (c)    The Parent may effect, as agent of each Obligor, any amendment or
               waiver permitted by this Clause 40.

40.2    EXCEPTIONS
        (a)    An amendment or waiver that has the effect of changing or which
               relates to:

               (i)    the definition of "Majority Lenders" in Clause 1.1
                      (DEFINITIONS);

               (ii)   an extension to the date of payment of any amount under
                      the Finance Documents;

               (iii)  a reduction in the Margin or a reduction in the amount of
                      any payment of principal, interest, fees or commission
                      payable;

               (iv)   an increase in or an extension of any Commitment;

               (v)    a change to the Borrowers or Guarantors other than in
                      accordance with Clause 28 (CHANGES TO THE OBLIGORS);

               (vi)   any provision which expressly requires the consent of all
                      the Lenders;

               (vii)  Clause 2.2 (FINANCE PARTIES RIGHTS AND OBLIGATIONS),
                      Clause 27 (CHANGES TO THE LENDERS) or this Clause 40;

               (viii) the nature or scope of the Charged Property or the manner
                      in which the proceeds of enforcement of the Transaction
                      Security are distributed,

               shall not be made without the prior consent of all the Lenders.

        (b)    An amendment or waiver which relates to the rights or obligations
               of the Facility Agent, the Arranger, the Security Trustee or any
               Ancillary Lender

                                     - 121 -


               may not be effected without the consent of the Facility Agent,
               the Arranger, the Security Trustee or the Ancillary Lenders at
               such time.

40.3    AMENDMENTS BY SECURITY TRUSTEE
        Unless the provisions of any Finance Document expressly provide
        otherwise, the Security Trustee may, if authorised by the Majority
        Creditors, amend the terms of, waive any of the requirements of, or
        grant consents under, any of the Transaction Security Documents, any
        such amendment, waiver or consent being binding on all the parties to
        this Agreement EXCEPT THAT:

        (a)    the prior consent of all of the Lenders is required to authorise
               any amendment of any Transaction Security Document which would
               affect the nature or the scope of the Charged Property or the
               manner in which proceeds of enforcement are distributed; and

        (b)    no waiver or amendment may impose any new or additional
               obligations on any person without the consent of that person.

41.     COUNTERPARTS
        Each Finance Document may be executed in any number of counterparts, and
        this has the same effect as if the signatures on the counterparts were
        on a single copy of the Finance Document.

                                     - 122 -


                                   SECTION 12
                          GOVERNING LAW AND ENFORCEMENT

42.     GOVERNING LAW
        This Agreement is governed by English law.

43.     ENFORCEMENT

43.1    JURISDICTION OF ENGLISH COURTS
        (a)    The courts of England have exclusive jurisdiction to settle any
               dispute arising out of or in connection with this Agreement
               (including a dispute regarding the existence, validity or
               termination of this Agreement) (a "DISPUTE").

        (b)    The Parties agree that the courts of England are the most
               appropriate and convenient courts to settle Disputes and
               accordingly no Party will argue to the contrary.

        (c)    This Clause 43.1 is for the benefit of the Finance Parties and
               Secured Parties only. As a result, no Finance Party or Secured
               Party shall be prevented from taking proceedings relating to a
               Dispute in any other courts with jurisdiction. To the extent
               allowed by law, the Finance Parties and Secured Parties may take
               concurrent proceedings in any number of jurisdictions.

43.2    SERVICE OF PROCESS
        Without prejudice to any other mode of service allowed under any
        relevant law, each Obligor (other than an Obligor incorporated in
        England and Wales):

        (a)    irrevocably appoints the Parent as its agent for service of
               process in relation to any proceedings before the English courts
               in connection with any Finance Document (and the Parent by its
               execution of this Agreement, accepts that appointment); and

        (b)    agrees that failure by a process agent to notify the relevant
               Obligor of the process will not invalidate the proceedings
               concerned.

THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF THIS
AGREEMENT.

                                     - 123 -


                                   SCHEDULE 1

                              THE ORIGINAL PARTIES


                                     PART I

                              THE ORIGINAL OBLIGORS



                                           REGISTRATION NUMBER (OR
NAME OF ORIGINAL BORROWER                  EQUIVALENT, IF ANY)                    JURISDICTION
                                                                      
Iron Mountain Europe Limited               2321917                          England

Iron Mountain (UK) Limited                 1478540                          England

Document and Information Management
Services Limited                           02760301                         England


                                           REGISTRATION NUMBER (OR
NAME OF ORIGINAL GUARANTOR                 EQUIVALENT, IF ANY)                    JURISDICTION
                                                                      
Iron Mountain Europe Limited               2321917                          England

Iron Mountain (UK) Limited                 1478540                          England

Document and Information Management
Services Limited                           02760301                         England

The Document Storage Company Limited       02109452                         England

Iron Mountain Holdings (Europe) Limited    03847309                         England

Miller Data Management Limited             01447686                         England

Iron Mountain Ireland (Holdings) Limited   289489                           Ireland

Iron Mountain Ireland Limited              236398                           Ireland

Iron Mountain Nederland Holdings B.V.      32095962                         The Netherlands

Iron Mountain Nederland B.V.               24244203                         The Netherlands


                                     - 124 -


                                     PART II

                              THE ORIGINAL LENDERS



                                                           TERM         REVOLVING
                                                        COMMITMENT     COMMITMENT
NAME OF ORIGINAL LENDER                                     L              L
                                                                
Allied Irish Banks, P.L.C.                               8,750,000      8,750,000

Barclays Bank PLC                                       20,000,000     20,000,000

Bear Stearns Corporate Lending Inc.                     15,000,000     15,000,000

HSBC Bank plc                                           15,000,000     15,000,000

Lloyds TSB Bank PLC                                      8,750,000      8,750,000

The Governor and Company of the Bank of Scotland        20,000,000     20,000,000

The Governor and Company of the Bank of Ireland         12,500,000     12,500,000

                                                       -----------    -----------
Total                                                  100,000,000    100,000,000


                                     - 125 -


                                    PART III

                              DORMANT SUBSIDIARIES



                                                     REGISTRATION NUMBER (OR
NAME OF DORMANT SUBSIDIARY                           EQUIVALENT, IF ANY)              JURISDICTION
                                                                                    
Iron Mountain Scotland (Holdings) Ltd                      SC15007                        Scotland

JAD 93 Ltd                                                SC143870                        Scotland

Datavault Holdings Ltd                                     3638141                         England

Datavault Ltd                                             SC080642                        Scotland

Archive Services Ltd                                       230753                          England

Datavault Southwest Ltd                                    2693403                         England

Datavault Northwest Limited                               SC142441                        Scotland

Arcus Data Security Ltd                                    2640804                         England

Jones & Crossland                                          641974                          England

Kestrel Reprographics Ltd                                  1558086                         England

Britannia Data Management Ltd                              1575446                         England

Iron Mountain Scotland Ltd                                SC096145                        Scotland

Kestrel Data Services Ltd                                  1177562                         England

Kestrel Data UK Ltd                                        1575457                         England


                                     - 126 -


                                   SCHEDULE 2

                              CONDITIONS PRECEDENT


                                     PART I

                   CONDITIONS PRECEDENT TO INITIAL UTILISATION

1.      OBLIGORS

        (a)    A certified copy of the constitutional documents of each Original
               Obligor.

        (b)    A copy of a resolution of the board of directors of each Original
               Obligor:

               (i)    approving the terms of, and the transactions contemplated
                      by, the Finance Documents to which it is a party and
                      resolving that it execute the Finance Documents to which
                      it is a party;

               (ii)   authorising a specified person or persons to execute the
                      Finance Documents to which it is a party on its behalf;

               (iii)  authorising a specified person or persons, on its behalf,
                      to sign and/or despatch all documents and notices
                      (including, if relevant, any Utilisation Request and
                      Selection Notice) to be signed and/or despatched by it
                      under or in connection with the Finance Documents to which
                      it is a party; and

               (iv)   in the case of an Original Obligor other than the Parent,
                      authorising the Parent to act as its agent in connection
                      with the Finance Documents.

        (c)    A specimen of the signature of each person authorised by the
               resolution referred to in paragraph (b) above in relation to the
               Finance Documents.

        (d)    A copy of a resolution signed by all the holders of the issued
               shares in each Original Guarantor, approving the terms of, and
               the transactions contemplated by, the Finance Documents to which
               the Original Guarantor is a party.

        (e)    A certificate of the Parent (signed by a director) confirming
               that borrowing or guaranteeing or securing, as appropriate, the
               Total Commitments would not cause any borrowing, guarantee,
               security or similar limit binding on any Original Obligor to be
               exceeded.

        (f)    A certificate of an authorised signatory of the relevant Original
               Obligor certifying that each copy document relating to it
               specified in this Schedule 2 is correct, complete and in full
               force and effect as at a date no earlier than the date of this
               Agreement.

                                     - 127 -


        (g)    In relation to Original Obligors incorporated in England and
               Wales or Scotland either:

               (i)    a letter from the Parent to the Facility Agent (attaching
                      supporting advice from the Parent's English Solicitors)
                      confirming that no Original Obligor is prohibited by
                      Section 151 of the Companies Act 1985 from entering into
                      the Finance Documents; and/or

               (ii)   evidence that members of the Group incorporated in England
                      and Wales and Scotland have done all that is necessary
                      (including, without limitation, by re-registering as a
                      private company) to follow the procedures set out in
                      Sections 151 to 158 of the Companies Act 1985 (the "ACT")
                      in order to enable each Original Obligor to enter into the
                      Finance Documents and perform its obligations under the
                      Finance Documents.

        (h)    In relation to Original Obligors incorporated in Ireland either:

               (i)    a letter from the Parent to the Facility Agent (attaching
                      supporting advice from the Parent's Irish Solicitors)
                      confirming that no Original Borrower is prohibited by
                      Section 60 of the Irish Companies Act 1963 from entering
                      into the Finance Documents; and/or

               (ii)   evidence that members of the Group incorporated in Ireland
                      have done all that is necessary to follow the procedures
                      set out in Section 60 of the Irish Companies Act 1963 in
                      order to enable each such Original Obligor to enter into
                      the Finance Documents and perform its obligations under
                      the Finance Documents.

2.      FINANCE DOCUMENTS

        (a)    The Subordination Agreement executed by the members of the Group
               party to that Agreement and the Parties under the Subordinated
               Loan Agreement.

        (b)    This Agreement executed by the members of the Group party to this
               Agreement.

        (c)    The Fee Letters executed by the Parent.

3.      TRANSACTION SECURITY DOCUMENTS

        The following Transaction Security Documents executed by the Original
        Obligors:



        NAME OF ORIGINAL OBLIGOR                             TRANSACTION SECURITY DOCUMENT
        ---------------------------------------------------------------------------------------------------------------------
                                                          
        Iron Mountain Europe Limited                         Debenture

        Iron Mountain (UK) Limited                           Debenture


                                     - 128 -




        NAME OF ORIGINAL OBLIGOR                             TRANSACTION SECURITY DOCUMENT
        ---------------------------------------------------------------------------------------------------------------------
                                                          
        Document and Information Management Services         (i)    Debenture.
        Limited                                              (ii)   French share pledge in respect of 99.9% of the issued share
                                                                    capital of Iron Mountain Holdings (France) SNC.

        The Document Storage Company Limited                 Debenture

        Iron Mountain Holdings (Europe) Limited              (i)    Debenture

                                                             (i)    Belgian Share Pledge.

                                                             (iii)  Spanish share pledge in respect of the entire issued share
                                                                    capital of Iron Mountain Espana, S.A..

        Miller Data Management Limited                       (i)    Debenture

                                                             (ii)   French share pledge in respect of 0.1% of the issued share
                                                                    capital of Iron Mountain Holdings (France) SNC.

        Iron Mountain Ireland (Holdings) Limited             Irish debenture.

        Iron Mountain Ireland Limited                        AN IRISH DEBENTURE WILL BE GRANTED PURSUANT TO CLAUSE 25.23
                                                             (CONDITIONS SUBSEQUENT).

        Iron Mountain Nederland Holdings B.V.                (i)    Dutch share pledge in respect of the entire issued share
                                                                    capital of Iron Mountain Nederland B.V..

                                                             (ii)   An undisclosed pledge of receivables.

                                                             (iii)  A pledge of bank accounts.

                                                             (iv)   A pledge of moveable assets.

        Iron Mountain Nederland B.V.                         (i)    A deed of mortgage of real property.


                                     - 129 -




        NAME OF ORIGINAL OBLIGOR                             TRANSACTION SECURITY DOCUMENT
        ---------------------------------------------------------------------------------------------------------------------
                                                          
                                                             (ii)   A pledge of bank accounts.

                                                             (iii)  An undisclosed pledge of receivables.

                                                             (iv)   A pledge of moveable assets.


4.      PLEDGED COMPANIES

        (a)    In relation to Iron Mountain Holdings (France) SNC:

               (i)    a copy, certified as true, of the by-laws (STATUTS) of
                      Iron Mountain Holdings (France) SNC and an original
                      EXTRACT K-BIS of Iron Mountain Holdings (France) SNC dated
                      no more than 15 days earlier than the date of receipt by
                      the Facility Agent.

               (ii)   a copy, certified as true, of the shareholders' resolution
                      of Iron Mountain Holdings (France) SNC approving the
                      Security Trustee as a shareholder upon enforcement of the
                      share pledge agreement over its shares.

        (b)    In relation to Iron Mountain Belgium NV:

               (i)    a certified copy of the latest coordinated statutes of
                      Iron Mountain Belgium NV;

               (ii)   registered share certificate in respect of the shares in
                      Iron Mountain Belgium NV, bearing the notice referred to
                      in the Belgian share pledge agreement (the "BELGIAN SHARE
                      PLEDGE") in respect of the entire issues share capital of
                      Iron Mountain Belgium NV;

               (iii)  a photocopy of the relevant pages of the share register
                      bearing the notice referred to in the Belgian Share
                      Pledge;

               (iv)   a certificate substantially in the form of Schedule 2 of
                      the Belgian Share Pledge.

        (c)    In relation to Iron Mountain Norge A.S.:

               (i)    a certified copy of the notification from Iron Mountain
                      Holdings (Europe) Limited to Iron Mountain Norge A.S. in
                      respect of the pledge by Iron Mountain Holdings (Europe)
                      of the entire issued share capital of Iron Mountain Norge
                      A.S.;

                                     - 130 -


               (ii)   a certified copy of the confirmation from Iron Mountain
                      Norge A.S. that the notification of the pledge detailed in
                      (i) above has been received by it and that its shares have
                      been pledged;

               (iii)  a certified copy of the confirmation from Iron Mountain
                      Norge A.S. that it is not aware of any right or
                      restriction attaching to the shares which are the subject
                      of the pledge; and

               (iv)   certified transcripts of the updated register of
                      shareholders of Iron Mountain Norge A.S. in which the
                      pledge has been registered.

5.      SHARES

        (a)    All share certificates (other than Iron Mountain Ireland
               (Holdings) Limited) and stock transfer forms duly executed by the
               relevant Original Obligor in blank in relation to the
               certificated shares subject to or expressed to be subject to the
               Transaction Security.

        (b)    A copy of the register of members of each member of the Group,
               whose shares are subject to or expressed to be subject to the
               Transaction Security.

        (c)    To the extent not delivered under paragraph 1(a) above, a copy of
               the constitutional documents of each member of the Group whose
               shares are expressed to be subject to the Transaction Security.

6.      LEGAL OPINIONS

        The following legal opinions, each addressed to the Facility Agent,
        the Security Trustee and the Original Lenders.

        (a)    A legal opinion of Clifford Chance LLP, legal advisers to the
               Arranger and the Facility Agent in England, as to English law
               substantially in the form distributed to the Original Lenders
               prior to signing this Agreement.

        (b)    A legal opinion of the following legal advisers to the Facility
               Agent and Arranger:

               (i)    Clifford Chance LLP as to Belgian law;

               (ii)   Clifford Chance SELAFA as to French law;

               (iii)  Clifford Chance LLP as to Dutch law;

               (iv)   Clifford Chance S.C as to Spanish law;

               (v)    McCann FitzGerald as to Irish law; and

               (vi)   BA-HR as to Norwegian law.

               each substantially in the form distributed to the Original
               Lenders prior to signing this Agreement.

                                     - 131 -


7.      OTHER DOCUMENTS AND EVIDENCE

        A copy of any other Authorisation or other document, opinion or
        assurance which the Facility Agent considers to be necessary (if it has
        notified the Parent accordingly) in connection with the entry into and
        performance of the transactions contemplated by any Finance Document or
        for the validity and enforceability of any Finance Document.

        (a)    Evidence that the fees, costs and expenses then due from the
               Parent pursuant to Clause 15 (FEES), Clause 20 (COSTS AND
               EXPENSES) and Clause 16.5 (STAMP TAXES) have been paid or will be
               paid by the first Utilisation Date.

        (b)    Due Diligence Report in a form capable of being relied on by the
               Lenders.

        (c)    A copy, certified by an authorised signatory of the Parent to be
               a true copy, of the Original Financial Statements of each
               Original Obligor.

        (d)    A copy of the Subordinated Loan Agreement duly executed by the
               parties thereto.

        (e)    A certificate of the Parent (signed by a director) certifying
               that a utilisation request requesting an advance of L123,956,000
               on or before the date of the first Utilisation has been made by
               the Parent in accordance with Clause 2.1 of the Subordinated Loan
               Agreement.

        (f)    The Hedging Strategy Letter duly executed by the Parent.

        (g)    Evidence that upon the date that the first Loan is made:

               (i)    all Financial Indebtedness under the Existing Facilities
                      will be immediately repaid in full and all commitments
                      under the Existing Facilities cancelled; and

               (ii)   all of the existing Security relating to the Existing
                      Facilities will be immediately released.

        (h)    A Certificate from a director of the Parent that at the time the
               Parent and each of the Obligors incorporated in Ireland executed
               this Agreement they form a "group of companies" for the purposes
               of Section 35 of the Irish Companies Act 1990.

        (i)    A letter from AON addressed to the Agent, the Arrangers, the
               Security Trustee, the Lenders, the Ancillary Lenders and the
               Hedge Banks confirming that the insurance for the Group at the
               date of this Agreement is at a level acceptable to the Agent and
               covering appropriate risks carried out by the Group.

        (j)    Funds flow statement in a form agreed by the Parent and the Agent
               detailing the proposed movement of funds on the first Utilisation
               Date.

        (k)    Pro-forma balance sheet as at the first Utilisation Date.

                                     - 132 -


                                     PART II

                       CONDITIONS PRECEDENT REQUIRED TO BE

                       DELIVERED BY AN ADDITIONAL OBLIGOR

1.      An Accession Letter executed by the Additional Obligor and the Parent.

2.      A copy of the constitutional documents of the Additional Obligor.

3.      A copy of a resolution of the board of directors of the Additional
        Obligor:

        (a)    approving the terms of, and the transactions contemplated by, the
               Accession Letter and the Finance Documents and resolving that it
               execute the Accession Letter and any other Finance Document to
               which it is a party;

        (b)    authorising a specified person or persons to execute the
               Accession Letter and other Finance Documents on its behalf; and

        (c)    authorising a specified person or persons, on its behalf, to sign
               and/or despatch all other documents and notices (including, in
               relation to an Additional Borrower, any Utilisation Request or
               Selection Notice) to be signed and/or despatched by it under or
               in connection with the Finance Documents to which it is a party;
               and

        (d)    authorising the Parent to act as its agent in connection with the
               Finance Documents.

4.      A specimen of the signature of each person authorised by the resolution
        referred to in paragraph 3 above.

5.      A copy of a resolution signed by all the holders of the issued shares of
        the Additional Guarantor, approving the terms of, and the transactions
        contemplated by, the Finance Documents to which the Additional Guarantor
        is a party.

6.      A certificate of the Additional Obligor (signed by a director)
        confirming that borrowing or guaranteeing or securing, as appropriate,
        the Total Commitments would not cause any borrowing, guarantee, security
        or similar limit binding on it to be exceeded.

7.      A certificate of an authorised signatory of the Additional Obligor
        certifying that each copy document listed in:

        (a)    this Part II of Schedule 2; and

        (b)    if the Additional Obligor is listed in Part III (TRANSACTION
               SECURITY DOCUMENTS AND SECURITY RELATED DOCUMENTS TO BE DELIVERED
               BY ADDITIONAL OBLIGORS) of Schedule 2, Part III of Schedule 2
               relating to it,

        is correct, complete and in full force and effect as at a date no
        earlier than the date of the Accession Letter.

8.      If available, the latest audited financial statements of the Additional
        Obligor.

                                     - 133 -


9.      The following legal opinions, each addressed to the Facility Agent, the
        Security Trustee and the Lenders:

        (a)    A legal opinion of the legal advisers to the Facility Agent in
               England, as to English law in the form distributed to the
               Facility Agent prior to signing the Accession Letter.

        (b)    If the Additional Obligor is incorporated in a jurisdiction other
               than England and Wales or executing a Finance Document which is
               governed by a law other than English law, a legal opinion of the
               legal advisers to the Facility Agent in the jurisdiction of
               incorporation of that Additional Obligor or, as the case may be,
               the jurisdiction of the governing law of that Finance Document
               (the "RELEVANT JURISDICTION") as to the law of the Relevant
               Jurisdiction and in the form distributed to the Facility Agent
               prior to signing the Accession Letter.

10.     If the proposed Additional Obligor is incorporated in a jurisdiction
        other than England and Wales, evidence that the process agent specified
        in Clause 43.2 (SERVICE OF PROCESS), if not an Original Obligor, has
        accepted its appointment in relation to the proposed Additional Obligor.

11.     In the case of an Additional Obligor incorporated in Spain, the
        resolutions referred to in paragraphs 3 and 5 above, shall be certified
        by the secretary or vice-secretary of the board of directors of such
        Additional Obligor and endorsed by its chairman or vice-chairman, whose
        signatures shall be legalised by a Spanish notary. In the case of an
        Additional Borrower incorporated in Spain, a copy of the "NUMERO DE
        OPERACION FINANCIERA" ("NOF") (Financial transaction number) allocated
        by the Bank of Spain to its borrowings.

12.     The Transaction Security Documents executed by the Additional Obligor
        which are required by the Facility Agent.

13.     Any notices or documents required to be given or executed or made under
        the terms of those Transaction Security Documents.

14.     An accession memorandum to the Subordination Agreement executed by the
        Additional Obligor.

15.

        (a)    If the Additional Obligor is incorporated in England and Wales or
               Scotland:

               (i)    either a letter from the Parent to the Facility Agent
                      (attaching supporting evidence from the Parent's English
                      Solicitors) confirming that the Additional Obligor is not
                      prohibited by Section 151 of the Companies Act 1985 from
                      entering into the Finance Documents; and/or

               (ii)   evidence that the Additional Obligor has done all that is
                      necessary (including, without limitation, by
                      re-registering as a private company) to follow the
                      procedures set out in Sections 151 to 158 of the Companies

                                     - 134 -


                      Act 1985 in order to enable that Additional Obligor to
                      enter into the Finance Documents and perform its
                      obligations under the Finance Documents. The following
                      documentary evidence shall be supplied: a copy of the
                      statutory declarations and annexed auditors reports, board
                      resolutions, shareholders resolutions (if applicable), a
                      certificate of that Additional Obligor listing all
                      directors at the time the statutory declarations are made
                      and a non-statutory comfort letter from its auditors
                      regarding its net asset position. The copy documents shall
                      be certified by an authorised signatory of the Additional
                      Obligor as correct, complete and in full force and effect
                      at a date no earlier than the date of the Accession
                      Letter.

        (b)    If the Additional Obligor is not incorporated in England and
               Wales or Scotland, such documentary evidence as legal counsel to
               the Facility Agent may require, that such Additional Obligor has
               complied with any law in its jurisdiction relating to financial
               assistance or analogous process.

16.     A copy of any other Authorisation or other document, opinion or
        assurance which the Facility Agent considers to be necessary or
        desirable in connection with the entry into and performance of the
        transactions contemplated by the Accession Letter and each Finance
        Document to which the Additional Obligor is a party or for the validity
        and enforceability of any Finance Document or of any Transaction
        Security created or intended to be created by the Additional Obligor.

                                     - 135 -


                                    PART III

  TRANSACTION SECURITY DOCUMENTS AND SECURITY RELATED DOCUMENTS TO BE DELIVERED
                             BY ADDITIONAL OBLIGORS



                                                                              Description of Security
                                                                               related documents and
                                                                              other action to be taken
                                                          Description of      by Additional Obligor to
                                                      Transaction Security     protect or perfect or
Name of Additional          Capacity (Borrower            Document and           give priority to
      Obligor                and/or Guarantor)        Transaction Security      Transaction Security
- -------------------------------------------------------------------------------------------------------
                                                                     
   [insert name]          [Borrower] [Guarantor]      [insert description]


                                     - 136 -


                                   SCHEDULE 3

                                    REQUESTS

                                     PART IA

                               UTILISATION REQUEST

                                      LOANS

From:   [BORROWER] [PARENT]*

To:     [FACILITY AGENT]

Dated:

Dear Sirs

  IRON MOUNTAIN EUROPE LIMITED - L200,000,000 MULTICURRENCY TERM AND REVOLVING
       CREDIT FACILITIES AGREEMENT DATED [-] (THE "FACILITIES AGREEMENT")

1.      [We wish a Loan to be made on the following terms:

                                      
        (a)    Borrower:                         [-]

        (b)    Proposed Utilisation Date:        [-]

        (c)    Facility to be utilised:          [Term Facility]/[Revolving Facility]**

        (d)    Currency of Loan:                 [-]

        (e)    Amount:                           [-]

        (f)    Interest Period:                  [-]

        

2.      We confirm  that each  condition  specified  in Clause 4.2  (FURTHER
        CONDITIONS PRECEDENT) is satisfied on the date of this Utilisation
        Request.

3.      [The proceeds of this Loan should be credited to [ACCOUNT]].

4.      This Utilisation Request is irrevocable.

5.      Terms used in this Request which are not defined in this Request but are
        defined in the Facilities Agreement shall have the meaning given to
        those terms in the Facilities Agreement.

                                Yours faithfully

                      -------------------------------------
                            authorised signatory for

  [the Parent on behalf of [INSERT NAME OF RELEVANT BORROWER]]/ [INSERT NAME OF
                                   BORROWER]*

NOTES:

*       Amend as appropriate.  The Request can be given by the Borrower or by
        the Parent.

                                     - 137 -


**      Select the Facility to be utilised and delete references to the other
        Facilities.

                                     - 138 -


                                     PART IB

                               UTILISATION REQUEST

                                LETTERS OF CREDIT

From:   [BORROWER] [PARENT](1)

To:     [FACILITY AGENT]

Dated:


Dear Sirs

  IRON MOUNTAIN EUROPE LIMITED - L200,000,000 MULTICURRENCY TERM AND REVOLVING
       CREDIT FACILITIES AGREEMENT DATED [-] (THE "FACILITIES AGREEMENT")

1.      We refer to the Facilities Agreement. This is a Utilisation Request.
        Terms defined in the Facilities Agreement have the same meaning in this
        Utilisation Request unless given a different meaning in this Utilisation
        Request.

2.      We wish to arrange for a Letter of Credit to be [issued]/[renewed] by
        the Issuing Bank specified below (which has agreed to do so) on the
        following terms:

                                      
        (a)    Borrower:                                  [-]

        (b)    Issuing Bank:                              [-]

        (c)    Proposed Utilisation Date:                 [-]

        (d)    Facility to be utilised:                   Revolving Facility

        (e)    Currency of Letter of Credit:              [-]

        (f)    Amount:                                    [-]

        (g)    Term:                                      [-]

        

3.      We confirm that each condition specified in paragraph (c) of Clause 6.5
        (ISSUE OF LETTERS OF CREDIT) is satisfied on the date of this
        Utilisation Request.

4.      We attach a copy of the proposed Letter of Credit.

5.      [The purpose of this proposed Letter of Credit is [-].](2)


(1) Not required for a renewal.

(2) Amend as appropriate.  The Utilisation Request can be given by the Borrower
    or by the Parent.

                                     - 139 -


6.      This Utilisation Request is irrevocable.

                        ---------------------------------
                            authorised signatory for

                                     - 140 -


                                     PART II

                                SELECTION NOTICE

                            APPLICABLE TO A TERM LOAN

From:   Iron Mountain Europe Limited

To:     [FACILITY AGENT]

Dated:

Dear Sirs

  IRON MOUNTAIN EUROPE LIMITED - L200,000,000 MULTICURRENCY TERM AND REVOLVING
       CREDIT FACILITIES AGREEMENT DATED [-] (THE "FACILITIES AGREEMENT")

1.      We refer to the following Term Loan[s] with an Interest Period ending on
        [-]**.

2.      We request that the next Interest Period for the above Term Loan[s] is
        [-].

3.      This Selection Notice is irrevocable.

4.      Terms used in this Request which are not defined in this Request but are
        defined in the Facilities Agreement shall have the meaning given to
        those terms in the Facilities Agreement.

                                Yours faithfully

                       ----------------------------------
                            authorised signatory for
                          Iron Mountain Europe Limited

NOTES:

**      Insert details of all Term Loans which have an Interest Period ending
        on the same date.

                                     - 141 -


                                   SCHEDULE 4

                             MANDATORY COST FORMULAE

1.      The Mandatory Cost is an addition to the interest rate to compensate
        Lenders for the cost of compliance with (a) the requirements of the Bank
        of England and/or the Financial Services Authority (or, in either case,
        any other authority which replaces all or any of its functions) or (b)
        the requirements of the European Central Bank.

2.      On the first day of each Interest Period (or as soon as possible
        thereafter) the Facility Agent shall calculate, as a percentage rate, a
        rate (the "ADDITIONAL COST RATE") for each Lender, in accordance with
        the paragraphs set out below. The Mandatory Cost will be calculated by
        the Facility Agent as a weighted average of the Lenders' Additional Cost
        Rates (weighted in proportion to the percentage participation of each
        Lender in the relevant Loan) and will be expressed as a percentage rate
        per annum.

3.      The Additional Cost Rate for any Lender lending from a Facility Office
        in a Participating Member State will be the percentage notified by that
        Lender to the Facility Agent. This percentage will be certified by that
        Lender in its notice to the Facility Agent to be its reasonable
        determination of the cost (expressed as a percentage of that Lender's
        participation in all Loans made from that Facility Office) of complying
        with the minimum reserve requirements of the European Central Bank in
        respect of loans made from that Facility Office.

4.      The Additional Cost Rate for any Lender lending from a Facility Office
        in the United Kingdom will be calculated by the Facility Agent as
        follows:

        (a)    in relation to a sterling Loan:

                          AB + C(B-D) + E x 0.01
                          ---------------------- PER CENT. PER ANNUM
                               100-(A + C)

        (b)    in relation to a Loan in any currency other than sterling:

                          E X 0.01
                          -------- PER CENT. PER ANNUM
                            300

        Where:

        A      is the percentage of Eligible Liabilities (assuming these to be
               in excess of any stated minimum) which that Lender is from time
               to time required to maintain as an interest free cash ratio
               deposit with the Bank of England to comply with cash ratio
               requirements.

        B      is the percentage rate of interest (excluding the Margin and the
               Mandatory Cost and, if the Loan is an Unpaid Sum, the additional
               rate of interest specified in paragraph (a) of Clause 12.3
               (DEFAULT INTEREST)) payable for the relevant Interest Period on
               the Loan.

                                     - 142 -


        C      is the percentage (if any) of Eligible Liabilities which that
               Lender is required from time to time to maintain as interest
               bearing Special Deposits with the Bank of England.

        D      is the percentage rate per annum payable by the Bank of England
               to the Facility Agent on interest bearing Special Deposits.

        E      is designed to compensate Lenders for amounts payable under the
               Fees Rules and is calculated by the Facility Agent as being the
               average of the most recent rates of charge supplied by the
               Reference Banks to the Facility Agent pursuant to paragraph 7
               below and expressed in pounds per L1,000,000.

5.      For the purposes of this Schedule:

        (a)    "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the meanings
               given to them from time to time under or pursuant to the Bank of
               England Act 1998 or (as may be appropriate) by the Bank of
               England;

        (b)    "FEES RULES" means the rules on periodic fees contained in the
               FSA Supervision Manual or such other law or regulation as may be
               in force from time to time in respect of the payment of fees for
               the acceptance of deposits;

        (c)    "FEE TARIFFS" means the fee tariffs specified in the Fees Rules
               under the activity group A.1 Deposit acceptors (ignoring any
               minimum fee or zero rated fee required pursuant to the Fees Rules
               but taking into account any applicable discount rate); and

        (d)    "TARIFF BASE" has the meaning given to it in, and will be
               calculated in accordance with, the Fees Rules.

6.      In application of the above formulae, A, B, C and D will be included in
        the formulae as percentages (i.e. 5 per cent. will be included in the
        formula as 5 and not as 0.05). A negative result obtained by subtracting
        D from B shall be taken as zero. The resulting figures shall be rounded
        to four decimal places.

7.      If requested by the Facility Agent, each Reference Bank shall, as soon
        as practicable after publication by the Financial Services Authority,
        supply to the Facility Agent, the rate of charge payable by that
        Reference Bank to the Financial Services Authority pursuant to the Fees
        Rules in respect of the relevant financial year of the Financial
        Services Authority (calculated for this purpose by that Reference Bank
        as being the average of the Fee Tariffs applicable to that Reference
        Bank for that financial year) and expressed in pounds per L1,000,000 of
        the Tariff Base of that Reference Bank.

8.      Each Lender shall supply any information required by the Facility Agent
        for the purpose of calculating its Additional Cost Rate. In particular,
        but without limitation, each Lender shall supply the following
        information on or prior to the date on which it becomes a Lender:

        (a)    the jurisdiction of its Facility Office; and

                                     - 143 -


        (b)    any other information that the Facility Agent may reasonably
               require for such purpose.

        Each Lender shall promptly notify the Facility Agent of any change to
        the information provided by it pursuant to this paragraph.

9.      The percentages of each Lender for the purpose of A and C above and the
        rates of charge of each Reference Bank for the purpose of E above shall
        be determined by the Facility Agent based upon the information supplied
        to it pursuant to paragraphs 7 and 8 above and on the assumption that,
        unless a Lender notifies the Facility Agent to the contrary, each
        Lender's obligations in relation to cash ratio deposits and Special
        Deposits are the same as those of a typical bank from its jurisdiction
        of incorporation with a Facility Office in the same jurisdiction as its
        Facility Office.

10.     The Facility Agent shall have no liability to any person if such
        determination results in an Additional Cost Rate which over or under
        compensates any Lender and shall be entitled to assume that the
        information provided by any Lender or Reference Bank pursuant to
        paragraphs 3, 7 and 8 above is true and correct in all respects.

11.     The Facility Agent shall distribute the additional amounts received as a
        result of the Mandatory Cost to the Lenders on the basis of the
        Additional Cost Rate for each Lender based on the information provided
        by each Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8
        above.

12.     Any determination by the Facility Agent pursuant to this Schedule in
        relation to a formula, the Mandatory Cost, an Additional Cost Rate or
        any amount payable to a Lender shall, in the absence of manifest error,
        be conclusive and binding on all Parties.

13.     The Facility Agent may from time to time, after consultation with the
        Parent and the Lenders, determine and notify to all Parties any
        amendments which are required to be made to this Schedule in order to
        comply with any change in law, regulation or any requirements from time
        to time imposed by the Bank of England, the Financial Services Authority
        or the European Central Bank (or, in any case, any other authority which
        replaces all or any of its functions) and any such determination shall,
        in the absence of manifest error, be conclusive and binding on all
        Parties.

                                     - 144 -


                                   SCHEDULE 5

                          FORM OF TRANSFER CERTIFICATE

To:     [-] as Facility Agent

From:   [THE EXISTING LENDER] (the "EXISTING LENDER") and [THE NEW LENDER] (the
        "NEW LENDER")

Dated:

  IRON MOUNTAIN EUROPE LIMITED - L200,000,000 MULTICURRENCY TERM AND REVOLVING
       CREDIT FACILITIES AGREEMENT DATED [-] (THE "FACILITIES AGREEMENT")

1.      We refer to Clause 27.5 (PROCEDURE FOR TRANSFER):

        (a)    The Existing Lender and the New Lender agree to the Existing
               Lender and the New Lender transferring by novation all or part of
               the Existing Lender's Commitment, rights and obligations referred
               to in the Schedule in accordance with Clause 27.5 (PROCEDURE FOR
               TRANSFER).

        (b)    The proposed Transfer Date is [-].

        (c)    The Facility Office and address, fax number and attention details
               for notices of the New Lender for the purposes of Clause 36.2
               (ADDRESSES) are set out in the Schedule.

2.      The New Lender expressly acknowledges the limitations on the Existing
        Lender's obligations set out in paragraph (c) of Clause 27.4 (LIMITATION
        OF RESPONSIBILITY OF EXISTING LENDERS).

3.      This Transfer Certificate is governed by English law.

4.      Terms which are used in this Transfer Certificate which are not defined
        in this Transfer Certificate but are defined in the Facilities Agreement
        shall have the meaning given to those terms in the Facilities Agreement.

                                     - 145 -


                                  THE SCHEDULE

               COMMITMENT/RIGHTS AND OBLIGATIONS TO BE TRANSFERRED

                            [INSERT RELEVANT DETAILS]
   [FACILITY OFFICE ADDRESS, FAX NUMBER AND ATTENTION DETAILS FOR NOTICES AND
                         ACCOUNT DETAILS FOR PAYMENTS,]

[Existing Lender]                         [New Lender]

By:                                       By:

This Transfer Certificate is accepted by the Facility Agent and the Transfer
Date is confirmed as [-].

[Facility Agent]

By:

                                     - 146 -


                                   SCHEDULE 6

                            FORM OF ACCESSION LETTER

To:     [-] as Facility Agent

From:   [[SUBSIDIARY] and Iron Mountain Europe Limited] [Affiliate of Lender]

Dated:

Dear Sirs
  IRON MOUNTAIN EUROPE LIMITED - L200,000,000 MULTICURRENCY TERM AND REVOLVING
       CREDIT FACILITIES AGREEMENT DATED [-] (THE "FACILITIES AGREEMENT")

1.      [SUBSIDIARY] [Affiliate of Lender] agrees to become [an Additional
        [Borrower]/[Guarantor]] [a Hedging Bank] and to be bound by the terms of
        the Facilities Agreement, the Subordination Agreement and the other
        Finance Documents as [an Additional [Borrower]/[Guarantor]] [a Hedge
        Bank] pursuant to Clause [28.2 (ADDITIONAL BORROWERS)]/[Clause 28.3
        (ADDITIONAL GUARANTORS)] [Clause 27.8 (AFFILIATES OF LENDERS AS HEDGE
        BANKS)] of the Facility Agreement [and as an [Obligor] pursuant to
        Clause [-] of the Subordination Agreement. [SUBSIDIARY] is a company
        duly incorporated under the laws of [NAME OF RELEVANT JURISDICTION] and
        is a limited liability company and registered number [-]].

2.      [SUBSIDIARY'S] administrative details are as follows:

        Address:

        Fax No.:

        Attention:

3.      [The Parent confirms that no Default is continuing or would occur as a
        result of a [Subsidiary] becoming an additional Borrower.]*

4.      This letter is governed by English law.

5.      Terms which are used in this Accession Letter which are not defined in
        this Accession Letter but are defined in the Facilities Agreement shall
        have the meaning given to those terms in the Facilities Agreement.

        [This Guarantor Accession Letter is entered into by deed.]**

        Iron Mountain Europe Limited                   [Subsidiary]

                                     - 147 -


NOTES:

*       Insert if Accession Letter is for an Additional Borrower.

**      If the Facilities are fully drawn there may be an issue in relation to
        past consideration for a proposed Additional Guarantor. This can be
        overcome by acceding by way of deed.

                                     - 148 -


                                   SCHEDULE 7

                         FORM OF COMPLIANCE CERTIFICATE

To:     [-] as Facility Agent

From:   Iron Mountain Europe Limited

Dated:

Dear Sirs

  IRON MOUNTAIN EUROPE LIMITED - L200,000,000 MULTICURRENCY TERM AND REVOLVING
       CREDIT FACILITIES AGREEMENT DATED [-] (THE "FACILITIES AGREEMENT")

1.      We refer to the Facilities Agreement.  This is a Compliance Certificate.

2.      We confirm that:

        (a)    in respect of the Relevant Period ending on [-] EBITDA for such
               Relevant Period was [-] and Consolidated Net Finance Charges for
               such Relevant Period were [-]. Therefore EBITDA for such Relevant
               Period was [-] times Consolidated Net Finance Charges for such
               Relevant Period and the covenant contained in paragraph (b) of
               Clause 24.2 (FINANCIAL CONDITION) [has/has not] been complied
               with;

        (b)    on the last day of the Relevant Period ending on [-] Consolidated
               Total Net Debt was [-] and EBITDA for such Relevant Period was
               [-]. Therefore Consolidated Total Net Debt at that time was
               [greater than or equal to [-] times EBITDA for such Relevant
               Period]/[less than [-] times EBITDA for such Relevant Period but
               greater than or equal to [-] times EBITDA for such Relevant
               Period]/[less than [-] times EBITDA for such Relevant Period].

3.      [We confirm that no Default is continuing.]*

4.      We confirm that the following companies constitute Material Companies
        for the purposes of the Facility Agreement: [-].

        We confirm that:

        (a)    the aggregate of the unconsolidated earnings before interest,
               tax, depreciation and amortisation (calculated on the same basis
               as EBITDA) of the Guarantors and the aggregate gross assets and
               aggregate turnover of the Guarantors (in each case calculated on
               an unconsolidated basis and excluding all intra-group items)
               represents not less than [-] per cent of EBITDA, and consolidated
               gross assets and consolidated turnover of the Group;

        (b)    the aggregate of the unconsolidated earnings before interest,
               tax, depreciation and amortisation (calculated on the same basis
               as EBITDA) of the Guarantors and the Pledged Companies and the
               aggregate gross assets and aggregate

                                     - 149 -


               turnover of the Guarantors and the Pledged Companies (in each
               case calculated on an unconsolidated basis and excluding all
               intra-group items) represents not less than [-] per cent of
               EBITDA, and consolidated gross assets and consolidated turnover
               of the Group.


Signed
               ---------------------              --------------------------

               Director                           Finance Director

               of                                 of
               Iron Mountain Europe Limited       Iron Mountain Europe Limited

[INSERT APPLICABLE CERTIFICATION LANGUAGE]

- -------------------------
for and on behalf of
[NAME OF AUDITORS OF THE PARENT]

NOTES:

*       If this statement cannot be made, the certificate should identify any
        Default that is continuing and the steps, if any, being taken to remedy
        it.

                                     - 150 -


                                   SCHEDULE 8

                                   TIMETABLES

                                     PART I



                                                                        LOANS IN            LOANS IN OTHER
                                                     LOANS IN EURO      STERLING            CURRENCIES
                                                                                   
Facility Agent notifies the Parent if a              -                  -                   U-4
currency is approved as an Optional Currency in
accordance with Clause 4.3 (CONDITIONS RELATING
TO OPTIONAL CURRENCIES)

Delivery of a duly completed Utilisation             U-3                U-1                 U-3
Request (Clause 5.1 (DELIVERY OF A UTILISATION
REQUEST) or a Selection Notice (Clause 13.1          9.30am             9.30am              9.30am
(SELECTION OF INTEREST PERIODS AND TERMS))

Facility Agent determines (in relation to a          U-3                U-1                 U-3
Utilisation) the Base Currency Amount of the
Loan, if required under Clause 5.4 (LENDERS'         noon               noon                noon
PARTICIPATION)

Facility Agent notifies the Lenders of the Loan      U-3                U-1                 U-3
in accordance with Clause 5.4 (LENDERS'
PARTICIPATION)                                       3.00pm             3.00pm              3.00pm

Facility Agent receives a notification from a        U-1                U-1                 U-1
Lender under Clause 8.2 (UNAVAILABILITY OF A
CURRENCY)                                            5.00pm             5.00pm              5.00pm

Facility Agent gives notice in accordance with       U- 2               U                   U-2
Clause 8.2 (UNAVAILABILITY OF A CURRENCY)
                                                     9.30am             9.30am              9.30am

Facility Agent determines amount of the Loan in      U-3                U                   U-3
Optional Currency in accordance with Clause
33.9 (CHANGE OF CURRENCY)                            11.00am            11.00am             11.00am


                                     - 151 -




                                                                        LOANS IN            LOANS IN OTHER
                                                     LOANS IN EURO      STERLING            CURRENCIES
                                                                                   
LIBOR is fixed                                       Quotation Day      Quotation Day as    Quotation Day as
                                                     as of 11:00        of 11:00 a.m.       of 11:00 a.m.
                                                     a.m. London
                                                     time in respect
                                                     of LIBOR


"U"        =   date of utilisation

"U - X"    =   X Business Days prior to date of utilisation

                                     - 152 -


                                     PART II

                                LETTERS OF CREDIT



                                                                         LETTERS OF CREDIT
                                                                           
Delivery of a duly completed Utilisation Request                                U3
(Clause 5.1 (DELIVERY OF A UTILISATION REQUEST FOR                            9.30am
LETTERS OF CREDIT)

Agent determines (in relation to a Utilisation) the                             U-3
Base Currency Amount of the Letter of Credit if                               3.00pm
required under paragraph (e) of Clause 6.5 (ISSUE OF
LETTERS OF CREDIT) and notifies the Issuing Bank and
Lenders of the Letter of Credit in accordance with
paragraph (e) of Clause 6.5 (ISSUE OF LETTERS OF
CREDIT).


Delivery of duly completed Renewal Request

"U"     =     date of utilisation

"U-X"   =     Business Days prior to date of utilisation

                                     - 153 -


                                   SCHEDULE 9

                               MATERIAL COMPANIES

Iron Mountain Europe Limited

Iron Mountain (UK) Limited

Iron Mountain Nederland B.V.

                                     - 154 -


                                   SCHEDULE 10

                         LMA CONFIDENTIALITY UNDERTAKING

                  [LETTERHEAD OF SELLER/SELLER'S AGENT/BROKER]

To:

                                                  [INSERT NAME OF POTENTIAL
                                                  PURCHASER/PURCHASER'S
                                                  AGENT/BROKER]


Re:     THE AGREEMENT

Borrower:

Date:

Amount:

Agent:


Dear Sirs

We understand that you are considering [acquiring](a)/[arranging the acquisition
of](b) an interest in the Agreement (the "ACQUISITION"). In consideration of us
agreeing to make available to you certain information, by your signature of a
copy of this letter you agree as follows:

1.      CONFIDENTIALITY UNDERTAKING

        You undertake (a) to keep the Confidential Information confidential and
        not to disclose it to anyone except as provided for by paragraph 2 below
        and to ensure that the Confidential Information is protected with
        security measures and a degree of care that would apply to your own
        confidential information, (b) to use the Confidential Information only
        for the Permitted Purpose, (c) to use all reasonable endeavours to
        ensure that any person to whom you pass any Confidential Information
        (unless disclosed under paragraph 2[(c)/(d)](c) below) acknowledges and
        complies with the provisions of this letter as if that person were also
        a party to it, and (d) not to make enquiries of any member of the Group
        or any of their officers, directors, employees or professional advisers
        relating directly or indirectly to the Acquisition.


(a) delete if addressee is acting as broker or agent.

(b) delete if addressee is acting as principal.

(c) delete as applicable.
                                     - 155 -


2.      PERMITTED DISCLOSURE

        We agree that you may disclose Confidential Information:

        (a)         to members of the Purchaser Group and their officers,
                    directors, employees and professional advisers to the extent
                    necessary for the Permitted Purpose and to any auditors of
                    members of the Purchaser Group;(2)

        (b)         [subject to the requirements of the Agreement, in accordance
                    with the Permitted Purpose so long as any prospective
                    purchaser has delivered a letter to you in equivalent form
                    to this letter;]

        [(b/c)](3)  subject to the requirements of the Agreement, to any person
                    to (or through) whom you assign or transfer (or may
                    potentially assign or transfer) all or any of the rights,
                    benefits and obligations which you may acquire under the
                    Agreement or with (or through) whom you enter into (or may
                    potentially enter into) any sub-participation in relation
                    to, or any other transaction under which payments are to be
                    made by reference to, the Agreement or the Borrower or any
                    member of the Group in each case so long as that person has
                    delivered a letter to you in equivalent form to this letter;
                    and

        [(c/d)](3)  (i) where requested or required by any court of competent
                    jurisdiction or any competent judicial, governmental,
                    supervisory or regulatory body, (ii) where required by the
                    rules of any stock exchange on which the shares or other
                    securities of any member of the Purchaser Group are listed
                    or (iii) where required by the laws or regulations of any
                    country with jurisdiction over the affairs of any member of
                    the Purchaser Group.

3.      NOTIFICATION OF REQUIRED OR UNAUTHORISED DISCLOSURE

        You agree (to the extent permitted by law) to inform us of the full
        circumstances of any disclosure under paragraph 2[(c)/(d)](3) or upon
        becoming aware that Confidential Information has been disclosed in
        breach of this letter.

4.      RETURN OF COPIES

        If we so request in writing, you shall return all Confidential
        Information supplied to you by us and destroy or permanently erase all
        copies of Confidential Information made by you and use all reasonable
        endeavours to ensure that anyone to whom you have supplied any
        Confidential Information destroys or permanently erases such
        Confidential Information and any copies made by them, in each case save
        to the extent that you or the recipients are required to retain any such
        Confidential Information by any applicable law, rule or regulation or by
        any competent judicial, governmental, supervisory or regulatory body or
        in accordance with internal policy, or where the Confidential
        Information has been disclosed under paragraph 2[(c)/(d)](3) above.

                                     - 156 -


5.      CONTINUING OBLIGATIONS

        The obligations in this letter are continuing and, in particular, shall
        survive the termination of any discussions or negotiations between you
        and us. Notwithstanding the previous sentence, the obligations in this
        letter shall cease (a) if you become a party to or otherwise acquire (by
        assignment or sub-participation) an interest, direct or indirect, in the
        Agreement or (b) twelve months after you have returned all Confidential
        Information supplied to you by us and destroyed or permanently erased
        all copies of Confidential Information made by you (other than any such
        Confidential Information or copies which have been disclosed under
        paragraph 2 above (other than sub-paragraph 2(a)) or which, pursuant to
        paragraph 4 above, are not required to be returned or destroyed).

6.      NO REPRESENTATION; CONSEQUENCES OF BREACH, ETC

        You acknowledge and agree that:

        (a)    neither we, [nor our principal](d) nor any member of the Group
               nor any of our or their respective officers, employees or
               advisers (each a "RELEVANT PERSON") (i) make any representation
               or warranty, express or implied, as to, or assume any
               responsibility for, the accuracy, reliability or completeness of
               any of the Confidential Information or any other information
               supplied by us or the assumptions on which it is based or (ii)
               shall be under any obligation to update or correct any inaccuracy
               in the Confidential Information or any other information supplied
               by us or be otherwise liable to you or any other person in
               respect to the Confidential Information or any such information;
               and

        (b)    we [or our principal](4) or members of the Group may be
               irreparably harmed by the breach of the terms hereof and damages
               may not be an adequate remedy; each Relevant Person may be
               granted an injunction or specific performance for any threatened
               or actual breach of the provisions of this letter by you.

7.      NO WAIVER; AMENDMENTS, ETC

        This letter sets out the full extent of your obligations of
        confidentiality owed to us in relation to the information the subject of
        this letter. No failure or delay in exercising any right, power or
        privilege hereunder will operate as a waiver thereof nor will any single
        or partial exercise of any right, power or privilege preclude any
        further exercise thereof or the exercise of any other right, power or
        privileges hereunder. The terms of this letter and your obligations
        hereunder may only be amended or modified by written agreement between
        us.

8.      INSIDE INFORMATION

        You acknowledge that some or all of the Confidential Information is or
        may be price-sensitive information and that the use of such information
        may be regulated or

(d) delete if letter is sent out by the Seller rather than the Seller's broker
    or agent.

                                     - 157 -


        prohibited by applicable legislation relating to insider dealing and
        you undertake not to use any Confidential Information for any unlawful
        purpose.

9.      NATURE OF UNDERTAKINGS

        The undertakings given by you under this letter are given to us and
        (without implying any fiduciary obligations on our part) are also given
        for the benefit of [our principal,](4) the Borrower and each other
        member of the Group.

10.     THIRD PARTY RIGHTS

        (a)    Subject to this paragraph 10 and to paragraphs 6 and 9, a person
               who is not a party to this letter has no right under the
               Contracts (Rights of Third Parties) Act 1999 (the "THIRD PARTIES
               ACT") to enforce or to enjoy the benefit of any term of this
               letter.

        (b)    The Relevant Persons may enjoy the benefit of the terms of
               paragraphs 6 and 9 subject to and in accordance with this
               paragraph 10 and the provisions of the Third Parties Act.

        (c)    The parties to this letter do not require the consent of the
               Relevant Persons to rescind or vary this letter at any time.

11.     GOVERNING LAW AND JURISDICTION

        (a)    This letter (including the agreement constituted by your
               acknowledgement of its terms) is governed by English law.

        (b)    The parties submit to the non-exclusive jurisdiction of the
               English courts.

12.     DEFINITIONS

        In this letter (including the acknowledgement set out below) terms
        defined in the Agreement shall, unless the context otherwise requires,
        have the same meaning and:

        "CONFIDENTIAL INFORMATION" means any information relating to the
        Borrower, the Group, the Agreement and/or the Acquisition provided to
        you by us or any of our affiliates or advisers, in whatever form, and
        includes information given orally and any document, electronic file or
        any other way of representing or recording information which contains or
        is derived or copied from such information but excludes information that
        (a) is or becomes public knowledge other than as a direct or indirect
        result of any breach of this letter or (b) is known by you before the
        date the information is disclosed to you by us or any of our affiliates
        or advisers or is lawfully obtained by you thereafter, other than from a
        source which is connected with the Group and which, in either case, as
        far as you are aware, has not been obtained in violation of, and is not
        otherwise subject to, any obligation of confidentiality;

                                     - 158 -


        "GROUP" means the Borrower and each of its holding companies and
        subsidiaries and each subsidiary of each of its holding companies (as
        each such term is defined in the Companies Act 1985);

        "PERMITTED PURPOSE" means [subject to the terms of this letter, passing
        on information to a prospective purchaser for the purpose of](2)
        considering and evaluating whether to enter into the Acquisition; and

        "PURCHASER GROUP" means you, each of your holding companies and
        subsidiaries and each subsidiary of each of your holding companies (as
        each such term is defined in the Companies Act 1985).

Please acknowledge your agreement to the above by signing and returning the
enclosed copy.

Yours faithfully


- -------------------------------
For and on behalf of

[Seller/Seller's agent/broker]

To:     [Seller]

[Seller's agent/broker]

The Borrower and each other member of the Group


We acknowledge and agree to the above:


- -------------------------------
For and on behalf of

[POTENTIAL PURCHASER/PURCHASER'S AGENT/BROKER]

                                     - 159 -


                                   SCHEDULE 11

                                     PART I

                          EXISTING RETAINED FACILITIES



                                                                                  TOTAL COMMITMENT
                                                             PARTICULARS OF       AS AT THE DATE OF
COMPANY NAME                 EXISTING FACILITY               INDEBTEDNESS         THIS AGREEMENT
                                                                         
Societe Civile Immobiliere   Credit Industriel et               [EURO]83,863          [EURO]83,863
du Chemin Cornillon          Commercial -
                             construction loan secured on
                             Paris building

Societe Civile Immobiliere   Banque du Credit Mutuel           [EURO]125,696         [EURO]125,696
du Chemin Cornillon          - construction loan secured
                             on Paris building

Societe Civile Immobiliere   Banque Nationale de Paris -       [EURO]207,154         [EURO]207,154
du Chemin Cornillon          construction loan secured on
                             Paris building

Iron Mountain Espana S.A.    Banco Santander - 10 year       [EURO]1,361,064       [EURO]1,500,000
                             mortgage loan secured on
                             Daganzo building

Iron Mountain Espana S.A.    Banco Sabadell - overdraft            In credit         [EURO]300,000
                             facility

Iron Mountain Espana S.A.    La Caixa - overdraft facility         In credit         [EURO]300,000

Iron Mountain Iberica S.L.   Banco Pastor - loan                 [EURO]1,725           [EURO]1,725

Iron Mountain Ireland        Bank of Scotland (formerly         [EURO]75,848          [EURO]75,848
Limited                      ICC Bank plc)- Racking loan

Iron Mountain Ireland        ACC Bank Asset Finance -            [EURO]8,308           [EURO]8,308
Limited                      Finance Lease (Lansing fork
                             lift)
Iron Mountain Nederland      ABN Onroerend Goed Lease B.V.  [EURO]247,877.50      [EURO]247,877.50
B.V.                         - Finance Lease

Iron Mountain Nederland      ABN Amro                          [EURO]104,056         [EURO]104,056
B.V.

Iron Mountain Nederland      Fortis Bank                        [EURO]75,203          [EURO]75,203
B.V.



                                     - 160 -


                                     - 161 -


                                     PART II

                           EXISTING RETAINED SECURITY



                                                                      MAXIMUM
                      DATE OF       TYPE OF                            AMOUNT          SHORT
  COMPANY NAME       CREATION       SECURITY          CHARGEE         SECURED       PARTICULARS
- -------------------------------------------------------------------------------------------------
                                                                   
Societe Civile      08/02/96     Guarantee/       Banque due         [EURO]125,696     Building
Immobiliere du                   Charge           Credit Mutuel
Chemin Cornillon

                    08/02/96     Guarantee/       BNP Paribas        [EURO]207,154     Building
                                 Charge

                    08/02/96     Guarantee/       CIS Bank            [EURO]83,863     Building
                                 Charge

Iron Mountain       26/12/02     Mortgage         Banco Santander  [EURO]1,500,000     Building
Espana S.A.

Iron Mountain       23/08/1996   Chattel
Ireland Limited                  Mortgage         Bank of
                                                  Scotland
                    26/06/1998   Chattel          (formerly ICC       [EURO]75,848     Racking
                                 Mortgage         Bank plc)
                    23/08/1996   Debenture

                    15/03/2001   Guarantee/       ACC Bank Asset       [EURO]8,308     Lansing FLT
                                 Charge           Finance


                                     - 162 -


                                                                     
Iron Mountain                                                                       Land lease Schepenbergweg 1 in
Nederland B.V.                                                                      Amsterdam, recorded in the Land
                    1/11/1988    Deed of                                            Register as municipality of
                                 Mortgage         ABN                               Weesperkarspel, section M, number 254
                                                  Onroerend    [EURO]1,043,694.49
                    2/5/1989     Second Deed      Goed Lease
                                 of Mortgage      B.V.

Iron Mountain       25/11/1996   Pledges of       ABN Amro     [EURO]104,056        Bank Accounts:
Nederland B.V.      29/12/1997   bank accounts                                      (i)51.49.09.289
                    2/10/2000                                                       (ii)51.64.24.556


Iron Mountain                    Pledges of       Fortis Bank  [EURO]75,203         Bank Accounts:
Nederland B.V.                   bank accounts                                      (i)24.46.24.070
                                                                                    (ii)63.18.86.184
                                                                                    (iii)63.18.86.230




                                     - 163 -


                                   SCHEDULE 12

                            FORM OF LETTER OF CREDIT

To:     [BENEFICIARY](the "BENEFICIARY")

                                                                Date

                  IRREVOCABLE STANDBY LETTER OF CREDIT NO. [-]

At the request of [-], [ISSUING BANK] (the "ISSUING BANK") issues this
irrevocable standby Letter of Credit ("Letter of Credit") in your favour on the
following terms and conditions:

1.      DEFINITIONS

        In this Letter of Credit:

        "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
        banks are open for general business in [London].*

        "DEMAND" means a demand for a payment under this Letter of Credit in the
        form of the schedule to this Letter of Credit.

        "EXPIRY DATE" means [-].

        "TOTAL L/C AMOUNT" means [-].

2.      ISSUING BANK'S AGREEMENT

        (a)    The Beneficiary may request a drawing or drawings under this
               Letter of Credit by giving to the Issuing Bank a duly completed
               Demand. A Demand must be received by the Issuing Bank by [-] p.m.
               ([London] time) on the Expiry Date.

        (b)    Subject to the terms of this Letter of Credit, the Issuing Bank
               unconditionally and irrevocably undertakes to the Beneficiary
               that, within [ten] Business Days of receipt by it of a Demand, it
               must pay to the Beneficiary the amount demanded in that Demand.

        (c)    The Issuing Bank will not be obliged to make a payment under this
               Letter of Credit if as a result the aggregate of all payments
               made by it under this Letter of Credit would exceed the Total L/C
               Amount.

3.      EXPIRY

        (a)    The Issuing Bank will be released from its obligations under this
               Letter of Credit on the date (if any) notified by the Beneficiary
               to the Issuing Bank as the date upon which the obligations of the
               Issuing Bank under this Letter of Credit are released.

                                     - 164 -


        (b)    Unless previously released under paragraph (a) above, on [-]
               p.m.([London] time) on the Expiry Date the obligations of the
               Issuing Bank under this Letter of Credit will cease with no
               further liability on the part of the Issuing Bank except for any
               Demand validly presented under the Letter of Credit that remains
               unpaid.

        (c)    When the Issuing Bank is no longer under any further obligations
               under this Letter of Credit, the Beneficiary must return the
               original of this Letter of Credit to the Issuing Bank.

4.      PAYMENTS

        All payments under this Letter of Credit shall be made in [o ] and for
        value on the due date to the account of the Beneficiary specified in the
        Demand.

5.      DELIVERY OF DEMAND

        Each Demand shall be in writing, and, unless otherwise stated, may be
        made by letter, fax or telex and must be received in legible form by the
        Issuing Bank at its address and by the particular department or office
        (if any) as follows:

        [



                                 ]

6.      ASSIGNMENT

        The Beneficiary's rights under this Letter of Credit may not be assigned
        or transferred.

7.      ISP

        Except to the extent it is inconsistent with the express terms of this
        Letter of Credit, this Letter of Credit is subject to the International
        Standby Practices (ISP 98), International Chamber of Commerce
        Publication No. 590.

8.      GOVERNING LAW

        This Letter of Credit is governed by English law.

9.      JURISDICTION

        The courts of England have exclusive jurisdiction to settle any dispute
        arising out of or in connection with this Letter of Credit.

                                     - 165 -


Yours faithfully


[ISSUING BANK]

By:


NOTES:

*       This may need to be amended depending on the currency of payment under
        the Letter of Credit.

                                     - 166 -


                                   SIGNATURES

THE PARENT

IRON MOUNTAIN EUROPE LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

Attention:              Finance Director


THE ORIGINAL BORROWERS

IRON MOUNTAIN EUROPE LIMITED

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

IRON MOUNTAIN (UK) LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

DOCUMENT AND INFORMATION MANAGEMENT SERVICES LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

                                     - 167 -


THE ORIGINAL GUARANTORS

IRON MOUNTAIN EUROPE LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

IRON MOUNTAIN (UK) LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

DOCUMENT AND INFORMATION MANAGEMENT SERVICES LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

THE DOCUMENT STORAGE COMPANY LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

                                     - 168 -


IRON MOUNTAIN HOLDINGS (EUROPE) LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

MILLER DATA MANAGEMENT LIMITED

By:  /s/

Address:                Third Floor
                        Cottons Centre
                        Tooley Street
                        London SE1 2TT

Fax:                    020 7 939 1507

IRON MOUNTAIN IRELAND (HOLDINGS) LIMITED

By:  /s/

Address:                Unit 17
                        Crag Terrace
                        Clondalkin Industrial Estate
                        Dublin 22

Fax:                    + 353 (0) 1 457 1023


IRON MOUNTAIN IRELAND LIMITED

By:  /s/

Address:                Unit 17
                        Crag Terrace
                        Clondalkin Industrial Estate
                        Dublin 22

Fax:                    + 353 (0) 1 457 1023

                                     - 169 -


IRON MOUNTAIN NEDERLAND HOLDINGS B.V.

By:  /s/

Address:                Cairostraat 1
                        3047 BB Rotterdam
                        Nederland

Fax:                    + 31 (0) 10462 4120


IRON MOUNTAIN NEDERLAND B.V.

By:  /s/

Address:                Cairostraat 1
                        3047 BB Rotterdam
                        Nederland

Fax:                    + 31 (0) 10462 4120


THE ARRANGERS

BARCLAYS CAPITAL (THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC)

By:  /s/

Address:                5 The North Colonnade
                        Canary Wharf
                        London E14 4BB

Fax:                    020 7 773 1572

Attention:              John Loomes


THE GOVERNOR & COMPANY OF THE BANK OF SCOTLAND

By:  /s/

Address:                3rd Floor
                        New Uberior House
                        11 Earl Grey Street
                        Edinburgh

Fax:                    0131 659 0674

Attention:              Fiona Ross

                                     - 170 -


THE FACILITY AGENT

THE GOVERNOR & COMPANY OF THE BANK OF SCOTLAND

By:  /s/

Address:                Corporate Banking
                        123 St Vincent Street
                        Glasgow
                        G2 5EA

Fax:                    0141 207 1205

Attention:              Alison Campbell


THE SECURITY TRUSTEE

THE GOVERNOR & COMPANY OF THE BANK OF SCOTLAND

By:  /s/

Address:                Corporate Banking
                        123 St Vincent Street
                        Glasgow
                        G2 5EA

Fax:                    0141 207 1205

Attention:              Alison Campbell


THE LENDERS

ALLIED IRISH BANKS, P.L.C.

By:  /s/

Address:                Corporate Operations
                        AIB Bankcentre
                        Ballsbridge
                        Dublin 4
                        Ireland

Fax:                    020 7 726 8735

Attention:              Antoinette Dunleavy

                                     - 171 -


BARCLAYS BANK PLC

By:  /s/

Address:                Barclays Capital Global Services Unit
                        7th Floor
                        10 The South Colonnade
                        Canary Wharf
                        London E14 4BB

Fax:                    020 7 773 6807

Attention:              Graham Smart


BEAR STEARNS CORPORATE LENDING INC.

By:  /s/

Address:                One Canada Square
                        Canary Wharf
                        London E14 5AD

Fax:                    020 7 516 5966

Attention:              Neils Ribeiro


HSBC BANK PLC

By:  /s/

Address:                Specialised Financing
                        8 Stephenson Place
                        New Street
                        Birmingham B2 4NH

Fax:                    0121 252 2652

Attention:              Sharon Hill

                                     - 172 -


LLOYDS TSB BANK PLC

By:  /s/

Address:                Corporate Banking
                        PO Box 908
                        125 Colmore Row
                        Birmingham B3 2DS

Fax:                    0121 212 0861

Attention:


THE GOVERNOR & COMPANY OF THE BANK OF SCOTLAND

By:  /s/

Address:                Corporate Banking
                        123 St Vincent Street
                        Glasgow G2 5EA

Fax:                    0141 207 1205

Attention:              Alison Campbell


THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND

By:  /s/

Address:                Corporate Relationship Banking
                        Eastcheap Court
                        11 Philpot Lane
                        London
                        EC3M 8BA

Fax:                    020 7 626 2405

Attention:              Brendan Gilmore/Will Haywood

                                     - 173 -

EX-12

                                                                   Exhibit 12


                           IRON MOUNTAIN INCORPORATED

       STATEMENT OF THE CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

                             (Dollars in thousands)



                                                              Year Ended December 31,

                                               1999          2000          2001           2002         2003
                                               ----          ----          ----           ----         ----
                                                                                      
Earnings:
  Income (Loss) from Continuing
  Operations before Provision for Income
  Taxes and Minority Interest                 $ 9,841      $(23,291)     $(28,111)      $114,519     $156,989
    Add: Fixed Charges                         73,957       154,975       177,032        178,587      195,258
                                              -------      --------      --------       --------     --------
                                              $83,798      $131,684      $148,921       $293,106     $352,247
                                              =======      ========      ========       ========     ========

Fixed Charges:
  Interest Expense, Net                       $54,425      $117,975      $134,742       $136,632     $150,468
  Interest Portion of Rent Expense             19,532        37,000        42,290         41,955       44,790
                                              -------      --------      --------       --------     --------
                                              $73,957      $154,975      $177,032       $178,587     $195,258
                                              =======      ========      ========       ========     ========
Ratio of Earnings to Fixed Charges                1.1x          0.8x          0.8x           1.6x         1.8x
                                                                (1)           (1)


(1)  We reported a loss from continuing operations before provision for income
     taxes and minority interest for the years ended December 31, 2000 and
     December 31, 2001 and we would have needed to generate additional income
     from operations before provision for income taxes and minority interest of
     $23,291 and $28,111, respectively to cover our fixed charges of $154,975
     and $177,032, respectively.

EX-21

                                                                      EXHIBIT 21

                            SCHEDULE OF SUBSIDIARIES

                               AS OF MARCH 9, 2004



                                                             JURISDICTION OF
                                                             INCORPORATION OR          NAMES UNDER WHICH THE ENTITY
                    ENTITY NAME                                ORGANIZATION                    DOES BUSINESS
- -------------------------------------------------------------------------------------------------------------------
                                                                                 
Archivage Actif Groupe Iron Mountain SAS                    France
Archive Services Limited                                    United Kingdom
Archivex Box Company Limited                                Alberta
Archivex Limited                                            Nova Scotia
Arcus Data Security Limited                                 United Kingdom
Britannia Data Management Limited                           United Kingdom
COMAC, Inc.                                                 Delaware
Custodia De Documentos LTDA                                 Chile
Datavault Holdings Limited                                  United Kingdom
Datavault Limited                                           Scotland
Datavault Northwest Limited                                 United Kingdom
Datavault Southwest Limited                                 United Kingdom
Document and Information Management Services, Ltd.          United Kingdom
DSI Technology Escrow Services, Inc.                        Delaware
FIME S.A.                                                   France
H. Investments Ltd.                                         Cayman Islands
Honanross Ltd.                                              Ireland
IMSA Peru SRL                                               Peru
Iron Mountain Argentina                                     Argentina
Iron Mountain Assurance Corporation                         Vermont
Iron Mountain Belgium NV                                    Belgium
Iron Mountain Box Company                                   Nova Scotia
Iron Mountain Canada Corporation                            Nova Scotia
Iron Mountain Cayman Ltd.                                   Cayman Islands
Iron Mountain Chile S.A.                                    Chile
Iron Mountain Deutschland GmbH                              Germany


                                                                          Page 1




                                                             JURISDICTION OF
                                                             INCORPORATION OR          NAMES UNDER WHICH THE ENTITY
                    ENTITY NAME                                ORGANIZATION                    DOES BUSINESS
- -------------------------------------------------------------------------------------------------------------------
                                                                                 
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 Secure Shredding
Iron Mountain Ireland                                       Ireland
Iron Mountain Ireland (Holdings)                            Ireland
Iron Mountain Mexico, S.A. de R.L. de C.V.                  Mexico
Iron Mountain Nederland Holdings BV                         Netherlands
Iron Mountain (Nederland) B.V.                              Netherlands
Iron Mountain Norge AS                                      Norway
Iron Mountain Norsk Grodata Senter                          Nowary
Iron Mountain Norge AS                                      Norway
Iron Mountain Peru S.A.                                     Peru
Iron Mountain Records Management (Puerto Rico), Inc.        Puerto Rico                Iron Mountain Records Mnagement
Iron Mountain Scotland (Holdings) Limited                   United Kingdom
Iron Mountain Scotland Limited                              United Kingdom
Iron Mountain South America Ltd.                            Cayman Islands
Iron Mountain Tape Technology Norge AS                      Norway
Iron Mountain (UK) Limited                                  United Kingdom             Iron Mountain
JAD 93 Limited                                              United Kingdom


                                                                          Page 2




                                                             JURISDICTION OF
                                                             INCORPORATION OR          NAMES UNDER WHICH THE ENTITY
                    ENTITY NAME                                ORGANIZATION                    DOES BUSINESS
- -------------------------------------------------------------------------------------------------------------------
                                                                                 
Jones & Crossland Limited                                   United Kingdom
Kestrel Data Services Limited                               United Kingdom
Kestrel Data UK Limited                                     United Kingdom
Kestrel Reprographics Limited                               United Kingdom
Memogarde, S.A.                                             France
Miller Data Management Limited                              United Kingdom
Mountain Real Estate Assets, Inc.                           Delaware
Mountain Reserve II, Inc.                                   Delaware
Mountain West Palm Real Estate, Inc.                        Delaware Peru
Movers & Files, S.A.                                        Peru
Pierce Leahy Europe, Limited                                United Kingdom
Record Data Limited                                         Ireland
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 Imobiliere du Chemin Cornillon               France
The Document Storage Company Limited                        United Kingdom
397499 British Columbia Ltd.                                British Columbia
TM 1177 Ltd.                                                United Kingdom
Treeline Services Corporation                               Delaware
Upper Providence Venture I, L.P.                            Pennsylvania


                                                                          Page 3

EX-23.1

                                                                    EXHIBIT 23.1

                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statements on
Forms S-3 (File No. 333-105494), S-4 (File No. 333-91577) and S-8 (File Nos.
333-43787, 333-89008, 333-95901, and 333-105938) of Iron Mountain
Incorporated of our report dated March 8, 2004, relating to the consolidated
financial statements of Iron Mountain Incorporated as of and for the years
ended December 31, 2003 and 2002 (which report expresses an unqualified
opinion and includes an explanatory paragraph relating to the application of
procedures relating to certain disclosures of financial statement amounts
related to the 2001 financial statements that were audited by other auditors
who have ceased operations and the adoption of Statement of Financial
Accounting Standard No. 142) appearing in this Annual Report on Form 10-K of
Iron Mountain Incorporated for the year ended December 31, 2003.

/s/ DELOITTE & TOUCHE LLP


Boston, Massachusetts
March 8, 2004

EX-23.2

                                                                    EXHIBIT 23.2

                          INDEPENDENT AUDITORS' CONSENT

We hereby consent to the incorporation by reference of our report dated March
8, 2004 (which expresses an unqualified opinion), included in this Form
10-K, into Iron Mountain Incorporated's previously filed Registration Statements
on Forms S-3 (File No. 333-105494), S-4 (File No. 333-91577) and S-8 (File Nos.
333-43787, 333-89008, 333-95901 and 333-105938).


/s/ RSM Robson Rhodes LLP

Chartered Accountants
Birmingham, England

March 8, 2004

EX-31.1

                                                                    EXHIBIT 31.1

                           SECTION 302 CERTIFICATIONS


I, C. Richard Reese, certify that:

1.   I have reviewed this annual report on Form 10-K of Iron Mountain
     Incorporated;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a.   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

     b.   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c.   Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):


     a.   All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b.   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.

Date: March 11, 2004

                                                  /s/ C. Richard Reese
                                                  ---------------------------
                                                  C. Richard Reese
                                                  Chief Executive Officer

EX-31.2

                                                                    EXHIBIT 31.2

                           SECTION 302 CERTIFICATIONS


I, John F. Kenny, Jr., certify that:

1.   I have reviewed this annual report on Form 10-K of Iron Mountain
     Incorporated;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a.   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

     b.   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c.   Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):


     a.   All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b.   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.



Date: March 11, 2004

                                                 /s/ John F. Kenny, Jr.
                                                 --------------------------
                                                 John F. Kenny, Jr.
                                                 Chief Financial Officer

EX-32.1

                                                                    EXHIBIT 32.1


                            CERTIFICATION PURSUANT TO
                 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

     In connection with the filing of the Annual Report on Form 10-K for the
year ended December 31, 2003 (the "Report") by Iron Mountain Incorporated (the
"Company"), the undersigned, as the Chief Executive Officer of the Company,
hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

     1. the Report fully complies with the requirements of Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934; and

     2. the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.


Date: March 11, 2004

                                                  /s/ C. Richard Reese
                                                  --------------------------
                                                  C. Richard Reese
                                                  Chief Executive Officer

EX-32.2

                                                                    EXHIBIT 32.2


                            CERTIFICATION PURSUANT TO
                 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

     In connection with the filing of the Annual Report on Form 10-K for the
year ended December 31, 2003 (the "Report") by Iron Mountain Incorporated (the
"Company"), the undersigned, as the Chief Financial Officer of the Company,
hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

     1. the Report fully complies with the requirements of Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934; and

     2. the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.


Date: March 11, 2004

                                                  /s/ John F. Kenny, Jr.
                                                  ----------------------------
                                                  John F. Kenny, Jr.
                                                  Chief Financial Officer