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REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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<TABLE>
<CAPTION>
EXACT I.R.S. EMPLOYER
NAME OF JURISDICTIONS OF IDENTIFICATION
REGISTRANT INCORPORATION NUMBERS
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<S> <C> <C>
Pierce Leahy Command Company Nova Scotia N/A
Pierce Leahy Corp. Pennsylvania 23-2588479
Advanced Box, Inc. Delaware 52-2045727
Monarch Box, Inc. Delaware 52-2045728
Archivex Limited Nova Scotia N/A
</TABLE>
631 Park Avenue
King of Prussia, Pennsylvania 19406
(610) 992-8200
(Address, including zip code, and telephone number, including area code,
of the registrants' principal executive offices)
Douglas B. Huntley
631 Park Avenue
King of Prussia, Pennsylvania 19406
(610) 992-8200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Richard J. Busis, Esquire
Cozen and O'Connor
1900 Market Street
Philadelphia, Pennsylvania 19103
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Each Class of Offering Aggregate Amount of
Securities to be Registered Amount to be Registered Price Per Security(1) Offering Price(1) Registration Fee
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<S> <C> <C> <C> <C>
8-1/8% Senior Notes due 2008
of Pierce Leahy Command Company $135,000,000 100% $135,000,000 $39,825
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Senior Subordinated Guarantee of
Pierce Leahy Corp., Advanced Box,
Inc. and Monarch Box, Inc. -- -- -- None
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Senior Guarantee of Archivex Limited -- -- -- None
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(1) Estimated pursuant to Rule 457 solely for the purposes of calculating the
registration fee.
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+Information contained herein is subject to completion or amendment. A +
+registration statement relating to these securities has been filed with the +
+Securities and Exchange Commission. These securities may not be sold nor may +
+offers to buy be accepted prior to the time the registration statement becomes+
+effective. This prospectus shall not constitute an offer to sell or the +
+solicitation of an offer to buy nor shall there be any sale of these +
+securities in any State in which such offer, solicitation or sale would be +
+unlawful prior to registration or qualification under the securities laws of +
+any such State. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated July 6, 1998
[LOGO] PIERCE LEAHY COMMAND COMPANY
OFFER TO EXCHANGE ITS 8 /1/8% SENIOR NOTES DUE 2008,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR ANY AND ALL OF ITS
OUTSTANDING 8 1/8% SENIOR NOTES DUE 2008
GUARANTEED ON A SENIOR SUBORDINATED BASIS BY PIERCE LEAHY CORP.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON __________,
1998, UNLESS EXTENDED
_________________
Pierce Leahy Command Company, a Nova Scotia unlimited liability company (the
"Issuer"), hereby offers to exchange (the "Exchange Offer"), upon the terms and
subject to the conditions set forth in this Prospectus and the accompanying
Letter of Transmittal (the "Letter of Transmittal"), up to $135,000,000 in
aggregate principal amount of the Issuer's new 8 1/8% Senior Notes due
2008 (the "Exchange Notes"), for $135,000,000 in aggregate principal amount of
the Issuer's outstanding 8 1/8% Senior Notes due 2008 (the "Original
Notes"). The Original Notes and the Exchange Notes are sometimes referred to
herein collectively as the "Notes."
The terms of the Exchange Notes are substantially identical in all respects
(including principal amount, interest rate and maturity) to the terms of the
Original Notes for which they may be exchanged pursuant to this Exchange Offer,
except that (i) the Exchange Notes will be freely transferable by holders
thereof (other than as provided in the next paragraph) and issued free of any
covenant restricting transfer absent registration and (ii) holders of the
Exchange Notes will not be entitled to certain rights of holders of the Original
Notes under the Registration Agreement (as defined herein), which rights will
terminate upon the consummation of the Exchange Offer. The Exchange Notes will
evidence the same debt as the Original Notes (which they replace) and will be
entitled to the benefits of an Indenture dated as of April 7, 1998 governing the
Original Notes and the Exchange Notes (the "Indenture"). For a complete
description of the terms of the Exchange Notes, see "Description of the Notes."
There will be no cash proceeds to the Issuer from the Exchange Offer.
The Notes are redeemable at the option of the Issuer, in whole or in part, at
any time on or after May 15, 2003, at the redemption prices set forth herein,
plus accrued and unpaid interest to the date of redemption. In addition, the
Issuer, at its option, may redeem in the aggregate up to 35% of the original
principal amount of the Notes at any time and from time to time prior to May 15,
2001 at 108 1/8% of the aggregate principal amount so redeemed, plus
accrued and unpaid interest thereon to the redemption date, with the Net
Proceeds (as defined herein) of one or more Public Equity Offerings (as defined
herein), provided that at least 65% of the aggregate principal amount of the
Notes originally issued remain outstanding immediately after the occurrence of
each such redemption. See "Description of the Notes-Optional Redemption."
The Notes will be senior unsecured obligations of the Issuer ranking pari
passu in right of payment with all existing and future senior unsecured
indebtedness of the Issuer and senior in right of payment to all existing and
future subordinated indebtedness of the Issuer. The Notes will be effectively
subordinated to all secured indebtedness of the Issuer to extent of the value of
the assets securing such indebtedness. As of March 31, 1998, on a pro forma
basis after giving effect to the Offering (as defined herein), the application
of the net proceeds therefrom and the 1998 Acquisitions, (as defined herein),
there would have been approximately $2.4 million of secured indebtedness
outstanding of the Issuer to which holders of the Notes would be effectively
subordinated in right of payment. The Issuer is an indirect subsidiary of
Pierce Leahy Corp., a Pennsylvania corporation ("Pierce Leahy").
The Notes will be guaranteed (the "Domestic Guarantees") on an unsecured
senior subordinated basis by Pierce Leahy, its two U.S. subsidiaries (Advanced
Box, Inc. and Monarch Box, Inc.) and by each future U.S. Restricted Subsidiary
(as defined herein) of Pierce Leahy (each, a "Domestic Guarantor").
Accordingly, the Domestic Guarantees will be subordinated in right of payment to
all existing and future Senior Indebtedness (as defined herein) of the Domestic
Guarantors and will rank pari passu in right of payment to all existing and
future senior subordinated indebtedness of the Domestic Guarantors. As of March
31, 1998, on a pro forma basis, after giving effect to the Offering, the
application of the net proceeds therefrom and the 1998 Acquisitions, the
Domestic Guarantors would have had approximately $114.1 million of Senior
Indebtedness which would be senior in right of payment to the Domestic
Guarantees and $250 million of senior subordinated indebtedness which would rank
pari passu with the Domestic Guarantees.
In addition, the Notes will be guaranteed (the "Canadian Guarantees") on a
senior unsecured basis by Archivex Limited, a Nova Scotia company ("Archivex")
which is a wholly-owned subsidiary of Pierce Leahy and which borrowed from the
Company a portion of the proceeds of the Offering, and by any future material
Canadian subsidiaries of Pierce Leahy which are not prohibited by the laws of
Canada or any province thereof from acting as a guarantor of the Notes (each, a
"Canadian Guarantor"). As of March 31, 1998, on a pro forma basis, after giving
effect to the Offering, the application of the net proceeds therefrom and the
1998 Acquisitions, the only indebtedness outstanding of Archivex would be the
amounts borrowed from the Issuer.
Upon a Change of Control (as defined herein), each holder of the Notes will be
entitled to require the Issuer to purchase such holder's Notes at 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
purchase date. See "Description of the Notes-Change of Control Offer." If
certain changes affecting Canadian withholding taxes occur, the Notes may be
redeemed by the Issuer at a redemption price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the redemption
date. See "Description of the Notes-Redemption for Changes in Canadian
Withholding Taxes."
The Exchange Notes will bear interest from the most recent date to which
interest has been paid on the Original Notes, or if no interest has been paid on
the Original Notes, from April 7, 1998. Holders whose Original Notes are
accepted for exchange will not receive any payment in respect of interest on
such Original Notes otherwise payable on any interest payment date the record
date for which occurs on or after consummation of the Exchange Offer. See "The
Exchange Offer-Terms of the Exchange Offer."
_______________
SEE "RISK FACTORS" COMMENCING ON PAGE 16 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS OF THE NOTES.
_________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_________________
The date of this Prospectus is ______________, 1998
<PAGE>
The Original Notes were sold (the "Offering") on April 7, 1998, in a
transaction not registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption provided in the Securities Act.
Accordingly, the Original Notes may not be offered, resold or otherwise pledged,
hypothecated or transferred in the United States unless registered under the
Securities Act or unless an exemption from the registration requirements of the
Securities Act is available. The Exchange Notes are being offered to satisfy the
obligations of the Issuer under the Registration Agreement (as defined herein)
relating to the Original Notes. See "The Exchange Offer-Purposes and Effects of
the Exchange Offer." Each holder receiving Exchange Notes, other than a broker-
dealer, will represent that the holder is not engaging in or intending to engage
in a distribution of such Exchange Notes. Exchange Notes issued pursuant to the
Exchange Offer in exchange for the Original Notes may be offered for resale,
resold or otherwise transferred by the holders thereof (other than any holder
that is an affiliate of the Issuer within the meaning of Rule 405 under the
Securities Act), without compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such Exchange Notes
are acquired in the ordinary course of such holders' business and such holders
have no arrangement or understanding with any person to participate in the
distribution of such Exchange Notes. Each broker-dealer that receives Exchange
Notes for its own account pursuant to the Exchange Offer must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. The Letter of Transmittal states that by acknowledging and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "The Exchange Offer-
Purposes and Effects of the Exchange Offer" and "Plan of Distribution." Broker-
dealers may use this Prospectus, as amended or supplemented, in connection with
resales of the Exchange Notes received in exchange for the Original Notes where
such Original Notes were acquired by such broker-dealer as a result of market
making activities or other such trading.
The Exchange Offer is not conditioned on any minimum aggregate principal
amount of Original Notes being tendered for exchange. The Issuer will accept for
exchange any and all validly tendered Original Notes not withdrawn prior to 5:00
p.m., New York City time, on ________________, 1998 unless extended by the
Issuer, in its sole discretion (the "Expiration Date"). Tenders of Original
Notes may be withdrawn at any time prior to the Expiration Date. The Exchange
Offer is subject to certain customary conditions. See "The Exchange Offer-
Conditions." Original Notes may be tendered only in integral multiples of
$1,000. The Issuer will pay all expenses incident to the Exchange Offer.
The Notes constitute securities for which there is no established trading
market. Any Original Notes not tendered and accepted in the Exchange Offer will
remain outstanding. The Issuer does not currently intend to list the Exchange
Notes on any securities exchange. To the extent that any Original Notes are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Original Notes could be adversely affected. No assurances can be
given as to the liquidity of the trading market for either the Original Notes or
the Exchange Notes.
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AVAILABLE INFORMATION
Pierce Leahy Command Company (the "Issuer"), Pierce Leahy Corp. ("Pierce
Leahy"), Advanced Box, Inc. ("Advanced"), Monarch Box, Inc. ("Monarch") and
Archivex Limited ("Archivex", together with the Issuer, Pierce Leahy, Advanced
and Monarch, the "Registrants") have filed with the Commission a Registration
Statement on Form S-4 under the Securities Act with respect to the Exchange
Notes offered hereby (including all amendments and supplements thereto, the
"Registration Statement"). Statements contained in this Prospectus as to the
contents of any contract or other document are not necessarily complete, and in
each instance reference is made to the copy of such contract or document filed
as an exhibit to the Registration Statement, each such statement being qualified
by such reference.
Pierce Leahy is subject to the periodic reporting and other informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports and other information with
the Commission. As permitted by the rules and regulations of the Commission,
this Prospectus omits certain information, exhibits and undertakings contained
in the Registration Statement. For further information with respect to the
Registrants and the Exchange Notes offered hereby, reference is made to the
Registration Statement, including the exhibits thereto and the financial
statements, notes and schedules filed as part hereof. The Registration
Statement (and the exhibits and schedules thereto), as well as the periodic
reports and other information filed by Pierce Leahy with the Commission, may be
inspected and copied at the Public Reference Section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at 7 World Trade Center, Suite 1300,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials may be obtained from the Public
Reference Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Copies of such
material are available for inspection at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005. Such information can also
be reviewed through the Commission's Electronic Data Gathering, Analysis and
Retrieval System ("EDGAR") which is publicly available through the Commission's
Web Site on the Internet (http://www.sec.gov). Pierce Leahy has agreed that,
whether or not it is subject to filing requirements under Section 13 or 15(d) of
the Exchange Act, and so long as any Notes remain outstanding, it will file with
the Commission (but only if the Commission at such time is accepting such
voluntary filings) and will send the Trustee copies of the financial
information, documents and reports that would have been required to be filed
with the Commission pursuant to the Exchange Act.
The principal address of the Registrants is c/o Pierce Leahy Corp., 631 Park
Avenue, King of Prussia, Pennsylvania 19406, telephone number 610-992-8200.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by Pierce Leahy with the
Commission pursuant to the Exchange Act, are incorporated by reference in this
Prospectus:
1. Pierce Leahy's Annual Report on Form 10-K for the fiscal year ended
December 31,1997.
2. Pierce Leahy's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
3. Pierce Leahy's Current Report on Form 8-K dated July 2, 1998.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded, except as so modified or superseded,
shall be deemed to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. Such documents (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference) are
available to any person, including any beneficial owner of the Notes, to which
this Prospectus is delivered, on written or oral request, without change,
directed to the Secretary of Pierce Leahy Corp., 631 Park Avenue, King of
Prussia, Pennsylvania, 19406, telephone number 610-992-8200.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to, and should
be read in conjunction with, the more detailed information and financial
statements contained elsewhere in, or incorporated by reference in, this
Prospectus. Except as otherwise indicated by the context, references to the
"Company" include Pierce Leahy Corp. ("Pierce Leahy") and its consolidated
subsidiaries, including without limitation, the Issuer, Advanced Box, Inc.,
Monarch Box, Inc., Archivex Limited ("Archivex") and Kestrel Holdings, Inc.
("Kestrel"). Management is not aware of any definitive information about the
size or nature of the North American records management market (vended and
unvended, active and inactive). Estimates of such numbers and percentages
contained in this Prospectus have been developed by the Company from internal
sources and reflect the Company's current estimates; however, no assurance can
be given regarding the accuracy of such estimates. All dollar amounts herein
are expressed in U.S. dollars, except where otherwise indicated.
THE ISSUER AND THE COMPANY
Pierce Leahy Command Company, a Nova Scotia unlimited liability company
("Command" or the "Issuer"), is the issuer of the Notes and is an indirect
subsidiary of Pierce Leahy, which is a guarantor of the Notes on an unsecured
senior subordinated basis. The Issuer operates 24 records management facilities
in the eight largest markets in Canada.
The Company is the largest hard copy records management company in North
America, as measured by its 76 million cubic feet of records currently under
management. The Company operates a total of 225 records management facilities
of which 197 are in the United States, serving 67 markets, including 22 out of
25 of the largest U.S. markets. In addition, the Company operates 28 records
management facilities in Canada's eight largest markets, including 24 facilities
operated by the Issuer and four facilities operated by Archivex.
The Company is a full-service provider of records management and related
services, enabling customers to outsource their data and records management
functions. The Company offers storage for all major media, including paper
(which has typically accounted for approximately 95% of the Company's storage
revenues), computer tapes, optical discs, microfilm, video tapes and X-rays. In
addition, the Company provides next day or same day records retrieval and
delivery, allowing customers prompt access to all stored material. The Company
also offers other data management services, including customer records
management programs, imaging services and records management consulting
services.
The Company believes it is the most technologically advanced records
management company in the industry by virtue of its Pierce Leahy User
Solution/(R)/ (PLUS/(R)/) computer system. The PLUS/(R)/ system fully
integrates the Company's records management, data retrieval and billing
functions on a centralized basis through the use of proprietary, real-time
software. The PLUS/(R)/ system assists the Company in efficiently managing
records in multiple locations for national and local customers, rapidly
integrating acquisitions of records management companies and maintaining a low-
cost operating structure. The Company serves a diversified group of over 40,000
customer accounts in a variety of industries such as financial services,
manufacturing, transportation, healthcare and law. The Company's storage and
related services are typically provided pursuant to contracts that include
recurring monthly storage fees, which continue until such records are
permanently removed (for which the Company charges a fee), and additional
charges for services such as retrieval on a per unit basis.
From 1993 to 1997, the Company's revenues grew at a rate of 25.8%. The
Company attributes this growth to the expansion of its business with new and
existing customers, which has been primarily driven by the trend towards
outsourcing of records management functions by companies and the ongoing
consolidation of the fragmented records management industry. The Company
successfully acquired and integrated 39 companies from 1993 to 1997. In
addition, the Company has acquired 14 records management companies since the
beginning of 1998.
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The Company's growth strategy is to expand its business in new and existing
markets through (i) targeting new customers, (ii) growing with existing
customers and (iii) continuing its acquisition program. The Company has adopted
the following approaches to pursue its growth objectives:
. TARGETING NEW CUSTOMERS. The Company has a dual sales strategy focused on
both larger, typically multi-location accounts and smaller accounts, with a
dedicated sales force for each. The Company's sales and marketing force
has increased from approximately 70 persons at the end of 1996 to
approximately 143 persons currently. For large regional and national
accounts, the Company believes its national presence, sophisticated systems
and low-cost operating structure provide a competitive advantage. These
organizations are increasingly outsourcing such noncore activities, which
enables their management to focus on their core business and to reduce
space requirements and records management costs. For smaller accounts, the
Company combines the cost benefits of its centralized systems with quality
local service. From 1993 to 1997, the average annual growth rate of cubic
feet of storage from new customers was approximately 9%.
. GROWING WITH EXISTING CUSTOMERS. The Company services its existing
customers through both a centralized customer service organization and
local client service representatives. Existing customers typically
generate additional records annually which are stored with the Company.
From 1993 to 1997, the average annual growth rate of cubic feet of storage
from existing customers was approximately 6%.
. CONTINUING ACQUISITION PROGRAM. The Company believes that the records
management industry is highly fragmented and offers substantial opportunity
for consolidation. The Company targets potential acquisitions both in the
markets it already services and in new markets which it is not yet
servicing. From 1993 to 1997, the Company successfully completed and
integrated 39 acquisitions, totalling approximately 22.3 million cubic feet
of records at the time of acquisition. Since the beginning of 1998, the
Company has acquired 14 records management companies, adding an aggregate
of 12.3 million cubic feet of records (an increase of approximately 21%
from December 31, 1997) at the time of acquisition, including the
acquisition of Archivex Inc. (the "Archivex Acquisition") and the
acquisition of Kestrel Holdings, Inc. (the "Kestrel Acquisition"). As a
result of its centralized organizational structure and the PLUS/(R)/
system, the Company has been able to rapidly achieve significant economies
of scale in its acquisitions. From 1993 to 1997, the average annual growth
rate of cubic feet of storage from acquisitions was approximately 15%. See
"Business--Acquisition and Growth Strategy."
The Company's growth strategy is supported by an operating strategy which
emphasizes providing premium standardized services while maintaining a low-cost
operating structure. Both strategies apply to the entire North American market
(United States and Canada). The Company expects to continue its growth and
enhance its position by implementing its strategy based on the following
elements:
. USING SOPHISTICATED CENTRALIZED SYSTEMS TO PROVIDE HIGH QUALITY SERVICE.
In tandem with the Company's centralized customer service organization and
local field support personnel, the Company utilizes its PLUS/(R)/ system to
provide a high and consistent level of service (24 hours a day, seven days
a week) to its customers on a national and local basis, including providing
its customers with real-time access to the database. Although PLUS/(R)/ is
centralized, the system permits local management flexibility through a
variety of pre-programmed options to customize the system and enhance its
utility to different types of customers.
. MAINTAINING ITS POSITION AS A LOW-COST PROVIDER THROUGH ECONOMIES OF
SCALE. The Company strives to remain a low-cost operator through achieving
economies of scale in labor, real estate, transportation, computer systems
and administrative expenses. The PLUS/(R)/ system allows the Company to
enhance the efficiency of its facilities while reducing fixed and operating
costs. This system eliminates the need to designate permanent locations
for an individual customer's records within a facility by using
sophisticated
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bar-coding technology which enables records to be stored wherever space is
available and to be positioned within the Company's facilities based on
retrieval frequency, thereby reducing labor costs. PLUS/(R)/ is also
valuable in helping to achieve cost savings in acquisitions.
THE RECORDS MANAGEMENT INDUSTRY
According to a 1994 study by the Association of Commercial Record Centers (the
"ACRC"), an industry trade group with over 500 members, approximately 2,600
companies offer records storage and related services in North America. The
Company believes that only 25% of the potential market outsources its records
management functions and that approximately 75% is still "unvended," or
internally managed. The Company estimates that the North American vended
records management industry generates annual revenues in excess of $1.0 billion.
Management believes that the industry is highly fragmented, with most industry
participants operating on a regional or local basis.
Saved documents, or records, generally fall into two categories: active and
inactive. Active records refer to information that is frequently referenced and
usually stored on-site by the originator. Inactive records are not needed for
frequent access, but must be retained for future reference, legal requirements
or regulatory compliance. Inactive records, which the Company estimates
comprise approximately 80% of all records, are the principal focus of the
records management industry.
The Company believes that the records management industry is characterized by
the following trends:
. INDUSTRY CONSOLIDATION. The records management industry is undergoing a
period of consolidation as larger, better capitalized industry participants
acquire smaller regional or local participants. Management believes that
consolidation is primarily driven by the needs of large customers for fully
integrated coverage and the ability to realize economies of scale,
especially with respect to labor, real estate, transportation, computer
systems and administrative expenses. Industry consolidation also provides
private owners of smaller records management companies the ability to
obtain liquidity.
. MOVEMENT TOWARDS OUTSOURCING. Outsourcing of internal records management
functions represents the largest single source of new business for records
management companies. The Company believes that as more organizations
become aware of the advantages of professional records management, such as
net cost reductions and enhanced levels of service, the records management
industry will continue to gain a growing portion of the unvended segment.
The Company also believes that the establishment of national providers with
well-known brand names will help to accelerate this trend.
. INCREASING PRODUCTION OF PAPER. Increasingly widespread technologies such
as facsimiles, copiers, personal computers, laser printers and advanced
software packages have enabled organizations to create, copy and distribute
documents more easily and broadly. In spite of new "paperless"
technologies (including the Internet and "e-mail"), information remains
predominantly paper based. Additionally, the cost of storing records on
paper is currently less expensive than the cost of converting paper records
to, and storing on, other media (e.g., computer media, imaging, microfilm,
CD-Rom and optical disc).
. EXPANDED RECORD KEEPING NEEDS. While technology has augmented the growth
of paper generation, several external forces and concerns have played an
important role in organizations' decisions to store and retain access to
records. For example, the continued growth of regulatory requirements and
the proliferation of litigation has resulted in increased volumes and
lengthened holding periods of documents. Retained records are also
remaining in storage for extended periods of time because the process of
determining which records to destroy is time consuming and often more
costly in the short-term than continued storage.
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THE ARCHIVEX ACQUISITION
Concurrently with the Offering, the Company acquired substantially all of the
assets of Archivex Inc., a Canadian corporation, with a portion of the proceeds
of the Offering. Archivex Inc. had operations in six Canadian cities, including
three markets in which the Issuer previously operated (Calgary, Montreal and
Toronto) and three new markets in which Command did not previously have a
presence (Edmonton, Quebec City and Winnipeg). A newly formed wholly-owned
subsidiary of Pierce Leahy, Archivex, purchased and operates the assets of
Archivex Inc. in Montreal. The Issuer purchased the remaining assets of
Archivex Inc. The aggregate cash consideration for the Archivex Acquisition,
which represented a significant expansion in the Canadian market for the
Company, was approximately $63.0 million. Included in the Archivex Acquisition
are six owned records storage facilities with in excess of an aggregate of
600,000 square feet of space and five leased records storage facilities with
approximately 100,000 square feet of space. The Archivex Acquisition added
approximately 4.0 million cubic feet of records under management.
THE KESTREL ACQUISITION
On July 2, 1998, the Company purchased all of the capital stock of Kestrel
Holdings, Inc., a records storage company which, through its subsidiaries,
operates records storage facilities in Dallas and Houston. Included as part of
the acquisition are four owned records storage facilities with an aggregate of
approximately 264,000 square feet of space and four leased records storage
facilities with an aggregate of approximately 350,000 square feet of space. The
Kestrel Acquisition added approximately 2.5 million cubic feet of records under
management.
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THE EXCHANGE OFFER
Purpose of the Exchange Offer......... The Original Notes were sold in a
transaction exempt from the
registration requirements of the
Securities Act by the Issuer on April
7, 1998 to Salomon Brothers Inc, CIBC
Oppenheimer Corp. and PaineWebber
Incorporated (the "Initial
Purchasers"). In connection
therewith, the Issuer executed and
delivered, for the benefit of the
holders of the Original Notes, a
Registration Agreement dated April 2,
1998 (the "Registration Agreement"),
which is filed as an exhibit to the
Registration Statement of which this
Prospectus is a part, providing for,
among other things, the Exchange
Offer so that the Exchange Notes will
be freely transferable by the holders
thereof without registration or any
prospectus delivery requirements
under the Securities Act, except that
a "dealer" or any of its "affiliates"
as such terms are defined under the
Securities Act, who exchanges
Original Notes held for its own
account will be required to deliver
copies of this Prospectus in
connection with any resale of the
Exchange Notes issued in exchange for
such Original Notes. See "The
Exchange Offer-Purposes and Effects
of the Exchange Offer" and "Plan of
Distribution."
The Exchange Offer.................... The Issuer is offering to exchange
$1,000 principal amount of Exchange
Notes for each $1,000 principal
amount of Original Notes that are
properly tendered and accepted. The
Issuer will issue Exchange Notes on
or promptly after the Expiration
Date. There is $135,000,000
aggregate principal amount of
Original Notes outstanding. The
Original Notes and the Exchange Notes
are collectively referred to herein
as the "Notes." The terms of the
Exchange Notes are substantially
identical in all respects (including
principal amount, interest rate and
maturity) to the terms of the
Original Notes for which they may be
exchanged pursuant to the Exchange
Offer, except that (i) the Exchange
Notes are freely transferable by
holders thereof (other than as
provided herein), and are not subject
to any covenant restricting transfer
absent registration under the
Securities Act and (ii) holders of
the Exchange Notes will not be
entitled to certain rights of holders
of the Original Notes under the
Registration Agreement, which rights
will terminate upon the consummation
of the Exchange Offer. See "The
Exchange Offer."
Based on an interpretation by the
staff of the Securities and Exchange
Commission (the "Commission") set
forth in no-action letters issued to
third parties, the Issuer believes
that the Exchange Notes issued
pursuant to the Exchange Offer in
exchange for Original Notes may be
offered for resale, resold and
otherwise transferred by a holder
thereof (other than (i) a
broker-dealer who purchases such
Exchange Notes directly from the
Issuer to resell pursuant to Rule
144A under the Securities Act or any
other available exemption under the
Securities Act or (ii) a person that
is an affiliate (as defined in Rule
405 under the Securities Act) of the
Issuer), without compliance with the
registration and prospectus delivery
provisions of the Securities Act,
provided that the holder is acquiring
the Exchange Notes in the ordinary
course of its business and is not
participating, and had no
-6-
<PAGE>
arrangement or understanding with any
person to participate, in the
distribution of the Exchange Notes.
Each broker-dealer that receives
Exchange Notes for its own account in
exchange for Original Notes, where
such Notes were acquired by such
broker-dealer as a result of
market-making activities or other
trading activities, must acknowledge
that it will deliver a prospectus in
connection with any resale of such
Exchange Notes.
Registration Agreement................ The Original Notes were sold by the
Issuer on April 7, 1998 to the
Initial Purchasers pursuant to a
Purchase Agreement dated as of April
2, 1998 by and among the Issuer,
Pierce Leahy and the Initial
Purchasers (the "Purchase
Agreement"). Pursuant to the
Purchase Agreement, the Issuer,
Pierce Leahy and the Initial
Purchaser entered into the
Registration Agreement which grants
the holders of the Original Notes
certain exchange and registration
rights. See "The Exchange
Offer-Termination of Certain Rights."
The Exchange Offer is intended to
satisfy such rights, which terminate
upon the consummation of the Exchange
Offer. The holders of the Exchange
Notes are not entitled to any
exchange or registration rights with
respect to the Exchange Notes.
Expiration Date....................... The Exchange Offer will expire at
5:00 p.m., New York City time, on
______________, 1998, unless the
Exchange Offer is extended by the
Issuer in its reasonable discretion,
in which case the term "Expiration
Date" shall mean the latest date and
time to which the Exchange Offer is
extended.
Accrued Interest on the Exchange
Notes and Original Notes.............. Interest on the Exchange Notes will
accrue from (A) the later of (i) the
last interest payment date on which
interest was paid on the Notes
surrendered in exchange therefor or
(ii) if the Notes are surrendered for
exchange on a date in a period which
includes the record date for an
interest payment date to occur on or
after the date of such exchange and
as to which interest will be paid,
the date of such interest payment
date, or (B) if no interest has been
paid on the Notes, from April 7,
1998. Holders whose Original Notes
are accepted for exchange will be
deemed to have waived the right to
receive any interest accrued on the
Original Notes.
Conditions to the Exchange Offer...... The Exchange Offer is subject to
certain customary conditions, which
may be waived by the Issuer. See
"The Exchange Offer-Conditions." The
Exchange Offer is not conditioned
upon any minimum aggregate principal
amount of Original Notes being
tendered for exchange. The Issuer
reserves the right to terminate or
amend the Exchange Offer at any time
prior to the Expiration Date upon the
occurrence of any such conditions.
Procedures for Tendering
Original Notes........................ Each holder of Original Notes wishing
to accept the Exchange Offer must
complete, sign and date the Letter of
Transmittal, or a facsimile thereof,
in accordance with the instructions
contained herein and therein, and
mail or otherwise deliver such Letter
of Transmittal, or
-7-
<PAGE>
such facsimile, together with the
Original Notes and any other required
documentation to the exchange agent
(the "Exchange Agent") at the address
set forth herein. Original Notes may
be physically delivered, but physical
delivery is not required if a
confirmation of a book-entry transfer
of such Original Notes to the
Exchange Agent's account at The
Depository Trust Company ("DTC" or
the "Depository") is delivered in a
timely fashion. By executing the
Letter of Transmittal, each holder
will represent to the Issuer that,
among other things, the Exchange
Notes acquired pursuant to the
Exchange Offer are being obtained in
the ordinary course of business of
the person receiving such Exchange
Notes, whether or not such person is
the holder, that neither the holder
nor any such other person is engaged
in, or intends to engage in, or has
an arrangement or understanding with
any person to participate in, the
distribution of such Exchange Notes
and that neither the holder nor any
such other person is an "affiliate,"
as defined under Rule 405 of the
Securities Act, of the Issuer. Each
broker or dealer that receives
Exchange Notes for its own account in
exchange for Original Notes, where
such Original Notes were acquired by
such broker or dealer as a result of
market-making activities or other
trading activities, must acknowledge
that it will deliver a prospectus in
connection with any resale of such
Exchange Notes. See "The Exchange
Offer-Procedures for Tendering" and
"Plan of Distribution."
Special Procedures for
Beneficial Owners..................... Any beneficial owner whose Original
Notes are registered in the name of a
broker, dealer, commercial bank,
trust company or other nominee and
who wishes to tender should contact
such registered holder promptly and
instruct such registered holder to
tender on such beneficial owner's
behalf. If such beneficial owner
wishes to tender on such owner's own
behalf, such owner must, prior to
completing and executing the Letter
of Transmittal and delivering his
Original Notes, either make
appropriate arrangements to register
ownership of the Original Notes in
such owner's name or obtain a
properly completed bond power from
the registered holder. The transfer
of registered ownership may take
considerable time. See "The Exchange
Offer-Procedures for Tendering."
Guaranteed Delivery Procedures........ Holders of Original Notes who wish to
tender their Original Notes and whose
Original Notes are not immediately
available or who cannot deliver their
Original Notes, the Letter of
Transmittal or any other documents
required by the Letter of Transmittal
to the Exchange Agent prior to the
Expiration Date, must tender their
Original Notes according to the
guaranteed delivery procedures set
forth in the section titled "Exchange
Offer-Guaranteed Delivery Procedures."
Acceptance of the Original Notes
and Delivery of the Exchange
Notes................................. Subject to the satisfaction or waiver
of the conditions to the Exchange
Offer, the Issuer will accept for
exchange any and all Original Notes
which are properly tendered in the
Exchange Offer prior to the
Expiration Date. The Exchange Notes
issued pursuant to the
-8-
<PAGE>
Exchange Offer will be delivered on
the earliest practicable date
following the Expiration Date. See
"The Exchange Offer-Terms of the
Exchange Offer."
Withdrawal Rights..................... Tenders of Original Notes may be
withdrawn at any time prior to the
Expiration Date. See "The Exchange
Offer-Withdrawal of Tenders."
Certain Federal Income Tax
Considerations........................ For a discussion of certain federal
income tax considerations relating to
the exchange of the Exchange Notes
for the Original Notes, see "Certain
Federal Income Tax Considerations."
Exchange Agent........................ The Bank of New York is serving as
the Exchange Agent in connection with
the Exchange Offer. See "The
Exchange Offer-Exchange Agent."
Effect on Holders of the
Original Notes........................ As a result of the making of, and
upon acceptance for exchange of all
validly tendered Original Notes
pursuant to the terms of this
Exchange Offer, the Issuer will have
fulfilled one of the covenants
contained in the Registration
Agreement and, accordingly, there
will be no increase in the interest
rate on the Original Notes pursuant
to the applicable terms of the
Registration Agreement due to the
Exchange Offer. Holders of the
Original Notes who do not tender
their Original Notes will be entitled
to all the rights and limitations
applicable thereto under the
Indenture dated as of April 7, 1998,
among the Issuer and The Bank of New
York, as trustee (the "Trustee"),
relating to the Original Notes and
the Exchange Notes (the "Indenture"),
except for any rights under the
Indenture or the Registration
Agreement, which by their terms
terminate or cease to have further
effectiveness as a result of the
making of, and the acceptance for
exchange of all validly tendered
Original Notes pursuant to, the
Exchange Offer. All untendered
Original Notes will continue to be
subject to the restrictions on
transfer provided for in the Original
Notes and in the Indenture. To the
extent that Original Notes are
tendered and accepted in the Exchange
Offer, the trading market for
untendered Original Notes could be
adversely affected.
Use of Proceeds....................... There will be no cash proceeds to the
Issuer from the exchange pursuant to
the Exchange Offer.
-9-
<PAGE>
THE NOTES
The Exchange Notes.................... The Exchange Offer applies to
$135,000,000 aggregate principal
amount of the Original Notes. The
form and terms of the Exchange Notes
are the same as the form and terms of
the Original Notes except that (i)
the exchange will have been
registered under the Securities Act
and, therefore, the Exchange Notes
will not bear legends restricting
their transfer pursuant to the
Securities Act, and (ii) holders of
the Exchange Notes will not be
entitled to certain rights of holders
of the Original Notes under the
Registration Agreement, which rights
will terminate upon consummation of
the Exchange Offer. The Exchange
Notes will evidence the same debt as
the Notes (which they replace) and
will be issued under, and be entitled
to the benefits of, the Indenture.
See "Description of the Notes" for
further information and for
definitions of certain capitalized
terms used below.
Issuer................................ Pierce Leahy Command Company.
Maturity Date......................... May 15, 2008.
Interest Payment Dates................ May 15 and November 15, commencing
November 15, 1998.
Ranking............................... The Notes will be general senior
unsecured obligations of the Issuer,
ranking pari passu in right of
payment with all existing and future
senior indebtedness of the Issuer and
senior in right of payment to all
existing and future subordinated
indebtedness of the Issuer. The
Notes will be effectively
subordinated to all secured
indebtedness of the Issuer to the
extent of the value of the assets
securing such indebtedness. As of
March 31, 1998, on a pro forma basis
after giving effect to the Offering,
the application of the net proceeds
therefrom, and the 1998 Acquisitions
(which, as defined herein, include
the Archivex Acquisition and the
Kestrel Acquisition), the Issuer
would have approximately $0.6 million
of senior indebtedness ranking pari
passu which consists of trade
payables. In addition as of such
date, on a pro forma basis the Issuer
would have had approximately $2.4
million of secured indebtedness
outstanding to which holders of the
Notes would have been effectively
subordinated in right of payment.
The Indenture permits the Issuer to
incur additional indebtedness,
including secured senior
indebtedness, subject to certain
limitations, to which the Notes will
be effectively subordinated to the
extent of the value of the assets
securing such indebtedness.
Guarantees............................ The Notes will be guaranteed (the
"Domestic Guarantees"), on an
unsecured senior subordinated basis,
by Pierce Leahy and by each current
and future U.S. Restricted Subsidiary
of Pierce Leahy (together with Pierce
Leahy, the "Domestic Guarantors").
The Domestic Guarantees will be
subordinated in right of payment to
all existing and future Senior
Indebtedness (as defined herein) of
the respective Domestic Guarantors,
including without limitation,
indebtedness under the Credit
Facility (as hereinafter defined),
and
-10-
<PAGE>
will rank pari passu in right of
payment to all existing and future
senior subordinated indebtedness of
the Domestic Guarantors. As of March
31, 1998, on a pro forma basis, after
giving effect to the Offering, the
application of the net proceeds
therefrom, and the 1998 Acquisitions,
the Domestic Guarantors would have
had approximately $114.1 million of
Senior Indebtedness which would be
senior in right of payment to the
Domestic Guarantees and $250 million
of senior subordinated indebtedness
which would rank pari passu with the
Domestic Guarantees. The Notes will
also be guaranteed (the "Canadian
Guarantees"), on an unsecured senior
basis, by Archivex and by future
Canadian subsidiaries of Pierce Leahy
which are not prohibited by the laws
of Canada or of any province thereof
from acting as a guarantor of the
Notes and having either assets or
shareholders' equity in excess of
$5,000 (each, a "Canadian
Guarantor"). The Canadian Guarantees
will be effectively subordinated to
all secured obligations of the
respective Canadian Guarantor to the
extent of the assets securing such
obligations, including the Credit
Facility. As of March 31, 1998, on a
pro forma basis, after giving effect
to the Offering, the application of
the net proceeds therefrom and the
1998 Acquisitions, the only
outstanding indebtedness of Archivex,
the only current Canadian Guarantor,
would have been the amounts borrowed
by it from the Issuer. The Indenture
permits the Domestic Guarantors and
the Canadian Guarantors
(collectively, the "Guarantors") to
incur additional indebtedness,
including senior indebtedness,
subject to certain limitations, to
which the Domestic Guarantees will be
subordinated and, effectively
subordinated to the extent of the
value of assets securing any such
indebtedness in the case of the
Canadian Guarantees.
Sinking Fund.......................... None.
Optional Redemption................... The Notes will be redeemable at the
option of the Issuer, in whole or in
part, at any time on or after May 15,
2003, at the redemption prices set
forth herein, plus accrued and unpaid
interest to the date of redemption.
In addition, the Issuer, at its
option, may redeem in the aggregate
up to 35% of the original principal
amount of the Notes at any time and
from time to time prior to May 15,
2001 at a redemption price equal to
108-1/8% of the principal amount
thereof plus accrued interest to the
redemption date with the Net Proceeds
of one or more Public Equity
Offerings by Pierce Leahy, provided
that at least 65% of the original
aggregate principal amount of Notes
remain outstanding immediately after
the occurrence of each such
redemption. In the event of certain
changes affecting Canadian
withholding taxes, the Notes will be
subject to redemption as a whole, but
not in part, at the option of the
Issuer at any time, at 100% of the
principal amount thereof, plus
accrued and unpaid interest thereon
(if any) to but excluding the
redemption date. See "Description of
the Notes--Redemption for Changes in
Canadian Withholding Taxes."
Additional Amounts.................... All payments made by the Issuer with
respect to the Notes will be made
without withholding or deduction for
Canadian taxes unless required by law
or by the interpretation or
administration thereof by
-11-
<PAGE>
the relevant government authority or
agency, in which case the Issuer will
pay such additional amounts as may be
necessary so that the net amount
received by holders of the Notes
(other than certain excluded holders
of the Notes) after such withholding
or deduction will not be less than
the amount that would have been
received in the absence of such
withholding or deduction. See
"Description of the Notes--Additional
Amounts."
Change of Control..................... Upon the occurrence of a Change of
Control of Pierce Leahy, the Issuer
will be required to make an offer to
purchase all outstanding Notes at a
purchase price equal to 101% of the
principal amount thereof plus accrued
and unpaid interest, if any, to the
date of purchase. See "Description
of the Notes--Change of Control
Offer." There can be no assurance
that the Issuer will have sufficient
funds or will be contractually
permitted by outstanding Senior
Indebtedness of the Issuer or Pierce
Leahy to pay the required purchase
price for all Notes tendered by
holders upon a Change of Control.
Certain Covenants..................... The Indenture pursuant to which the
Notes will be issued will contain
certain covenants that, among other
things, restrict the ability of
Pierce Leahy and any of its
Restricted Subsidiaries (as defined
herein), including without
limitation, the Issuer, to: (i) incur
additional indebtedness; (ii) make
Restricted Payments (as hereinafter
defined); (iii) issue stock of
subsidiaries; (iv) make certain
investments; (v) repurchase stock;
(vi) create liens; (vii) enter into
transactions with affiliates; (viii)
enter into sale and leaseback
transactions; (ix) enter into mergers
or consolidations; and (x) transfer
and sell assets. These covenants are
subject to a number of important
exceptions and qualifications. See
"Description of the Notes--Certain
Covenants."
RISK FACTORS
Prospective purchasers of the Exchange Notes should consider carefully the
information set forth under the caption "Risk Factors," and all other
information set forth in this Prospectus, in evaluating the Notes, the Issuer
and the Company.
-12-
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA OF PIERCE LEAHY CORP.
The following summary historical and pro forma financial data, insofar as it
relates to each of the five years in the period ended December 31, 1997, has
been derived from the Company's audited consolidated financial statements,
including the consolidated balance sheets at December 31, 1996 and 1997 and the
related consolidated statements of operations for each of the three years in the
period ended December 31, 1997 and the notes thereto incorporated by reference
into this Prospectus. The summary historical and pro forma consolidated
statement of operations and balance sheet data as of and for the three months
ended March 31, 1998 and summary historical statement of operations data for the
three months ended March 31, 1997 have been derived from unaudited consolidated
financial statements incorporated by reference into this Prospectus which, in
the opinion of management, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results for the
unaudited interim periods. Results for the three months ended March 31, 1998 are
not necessarily indicative of results that may be expected for the entire year.
The following summary pro forma statement of operations and other data give
effect to, among other things, acquisitions completed in 1997, the 1998
Acquisitions (all such 1997 acquisitions and the 1998 Acquisitions, the "1997
and 1998 Acquisitions") and the impact of the Offering, as if each of these
items had occurred on January 1, 1997. The pro forma balance sheet gives effect
to the 1998 Acquisitions which closed after March 31, 1998 (the "Recent
Acquisitions") and the impact of the Offering, as if each of these items had
occurred on March 31, 1998. In 1997, the Company recorded a deferred income tax
provision of $6,600 in connection with the termination of the Company's status
as a Subchapter S corporation for the tax effect of differences in the basis of
assets and liabilities for financial reporting and income tax purposes. This
one-time deferred income tax provision has been eliminated in the Pro Forma
Condensed Consolidated Statement of Operations. Also not reflected in the Pro
Forma Condensed Consolidated Statement of Operations is the extraordinary charge
of $6,036 for the early extinguishment of a portion of the 1996 Notes that
occurred in August 1997.
The pro forma items and certain management assumptions and adjustments are
described in the accompanying notes hereto. This pro forma information is not
necessarily indicative of the results that would have occurred had the 1997 and
1998 Acquisitions and the Offering been completed on the dates indicated or of
the Company's actual or future results or financial position. The summary
historical and pro forma consolidated statements of operations, other data and
balance sheets should be read in conjunction with the information contained in
the Company's Consolidated Financial Statements and the notes thereto
incorporated by reference into this Prospectus and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Selected Historical
and Pro Forma Consolidated Statements of Operations, Other Data and Balance
Sheets" and "Pro Forma Financial Data of Pierce Leahy Corp." included elsewhere
in this Prospectus.
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA DATA OF PIERCE LEAHY CORP.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues
Storage............................................... $ 42,122 $ 47,123 $ 55,501 $ 75,900 $ 107,879
Service and storage material sales.................... 31,266 35,513 39,895 53,848 75,638
----------- ----------- ----------- ----------- -----------
Total revenues...................................... 73,388 82,636 95,396 129,748 183,517
Cost of sales, excluding depreciation and
amortization........................................ 45,391 49,402 55,616 73,870 101,940
Selling, general and administrative.................... 11,977 15,882 16,148 20,007 30,070
Depreciation and amortization.......................... 6,888 8,436 8,163 12,869 21,528
Special compensation charge (b)........................ - - - - 1,752
Foreign currency exchange.............................. - - - - 702
Consulting payments to related parties (c)............. - 500 500 - -
Non-recurring charges (d).............................. - - - 3,254 -
----------- ----------- ----------- ----------- -----------
Operating income...................................... 9,132 8,416 14,969 19,748 27,525
Interest expense....................................... 6,160 7,216 9,622 17,225 29,262
----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes and
extraordinary charge................................ 2,972 1,200 5,347 2,523 (1,737)
Income taxes (e)....................................... - - - - 7,424
Extraordinary charge (f)............................... 9,174 5,991 3,279 2,015 6,036
----------- ----------- ----------- ----------- -----------
Net income (loss)...................................... (6,202) (4,791) 2,068 508 (15,197)
Accretion (cancellation) of redeemable warrants........ (746) 16 889 1,561 -
----------- ----------- ----------- ----------- -----------
Net income (loss) applicable to Common shareholders.... $ (5,456) $ (4,807) $ 1,179 $ (1,053) $ (15,197)
=========== =========== =========== =========== ===========
Basic and diluted earnings per common share............
Income (loss) before extraordinary charge............. $ 0.34 $ 0.18 $ 0.19 $ 0.09 $ (0.69)
Extraordinary charge.................................. (0.85) (0.56) (0.30) (0.19) (0.45)
----------- ----------- ----------- ----------- -----------
Basic and diluted income (loss) per Common share: $ (0.51) $ (0.38) $ 0.11 $ (0.10) $ (1.14)
=========== =========== =========== =========== ===========
Shares used in computing basic net income (loss)
per Common share................................... 10,591,090 10,591,090 10,591,090 10,546,871 13,385,243
Shares used in computing diluted net income...........
(loss) per Common share............................ 10,782,025 10,888,441 10,890,188 10,630,922 13,385,243
Pro forma data (unaudited): ...........................
Historical net loss before income taxes and
extraordinary charge................................ $ (1,737)
Pro forma adjustment for income taxes (e)........... 1,452
Extraordinary charge, net of tax.................... 6,036
Historical net loss applicable to Common shareholders, -----------
as adjusted for pro forma income taxes.............. $ (9,225)
===========
Historical basic and diluted net loss per Common share
as adjusted for pro forma income taxes--
Loss before extraordinary charge ...................... $ (0.24)
Extraordinary charge................................... (0.45)
-----------
Pro forma basic and diluted net loss applicable to
Common shareholders per Common share............... $ (0.69)
===========
Shares used in computing per share amounts............. 13,385,243
Other Data:
Ratio of earnings to fixed charges (h)................. 1.30x 1.11x 1.37x 1.11x -
Cash flows provided by operations...................... $ 8,019 $ 11,000 $ 17,522 $ 26,438 $ 20,964
Cash flows used in investing activities................ (13,784) (13,933) (51,315) (108,842) (156,549)
Cash flows provided by financing activities............ 5,832 2,763 34,157 82,936 136,113
EBITDA (i)............................................. $ 16,020 $ 17,352 $ 23,632 $ 35,871 $ 51,507
EBITDA margin.......................................... 21.8% 21.0% 24.8% 27.6% 28.1%
EBITDA, as adjusted (j)................................ - - - - -
Capital expenditures (k) .............................. $ 5,827 $ 6,352 $ 16,288 $ 23,493 $ 35,397
Cubic feet of storage under management at end of period
(000s)............................................. 19,025 2,160 29,523 40,410 58,865
<CAPTION>
Three Months Ended March 31,
----------- ----------------------------------------------
Pro Forma Pro Forma
1997 (a) 1997 1998 1998 (a)
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Statement of Operations Data:
Revenues <C>
Storage............................................... $ 160,015 $ 23,322 $ 33,214 $ 40,986
Service and storage material sales.................... 113,296 16,910 23,076 28,075
----------- ----------- ----------- -----------
Total revenues...................................... 273,311 40,232 56,290 69,963
Cost of sales, excluding depreciation and
amortization........................................ 153,373 22,298 32,915 39,923
Selling, general and administrative.................... 53,231 6,762 8,774 12,150
Depreciation and amortization.......................... 33,962 4,214 7,219 9,466
Special compensation charge (b)........................ 1,752 - - -
Foreign currency exchange.............................. 702 182 (62) (62)
Consulting payments to related parties (c)............. - - - -
Non-recurring charges (d).............................. - - - -
----------- ----------- ----------- -----------
Operating income...................................... 30,291 6,776 7,444 8,486
Interest expense....................................... 46,480 6,712 8,300 11,620
----------- ----------- ----------- -----------
Income (loss) before income taxes and
extraordinary charge................................ (16,189) 64 (856) (3,134)
Income taxes (e)....................................... (3,255) - 181 (568)
Extraordinary charge (f)............................... - - - -
----------- ------------ ----------- -----------
Net income (loss)...................................... (12,934) 64 (1,037) (2,566)
Accretion (cancellation) of redeemable warrants........ - - - -
----------- ------------ ----------- -----------
Net income (loss) applicable to Common shareholders.... $ (12,934) $ 64 $ (1,037) $ (2,566)
=========== ============ =========== ===========
Basic and diluted earnings per Common share:
Income (loss) before extraordinary charge............. $ 0.01 $ (0.06)
Extraordinary charge.................................. - -
------------ -----------
Basic and diluted income (loss) per Common share...... $ 0 .01 $ (0.06)
============ ===========
Shares used in computing basic net income (loss)
per Common share................................... 10,944,603 16,477,728
Shares used in computing diluted net income
(loss) per Common share............................ 10,944,603 16,477,728
Pro forma data (unaudited): ...........................
Historical net loss before income taxes and
extraordinary charge................................ $ 64
Pro forma adjustment for income taxes (e)........... 291
Extraordinary charge, net of tax.................... -
------------
Historical net loss applicable to Common shareholders,
as adjusted for pro forma income taxes............. $ (227)
============
Historical basic and diluted net loss per Common share
as adjusted for pro forma income taxes--
Loss before extraordinary charge ...................... $ (0.02)
Extraordinary charge................................... -
------------
$ (0.02)
------------
Pro forma basic and diluted net loss applicable to
Common shareholders per Common share............... $ (.97)(g) (0.16)(g)
Shares used in computing per share amounts............. 13,385,243 10,385,090 16,477,728
Other Data:
Ratio of earnings to fixed charges (h)................. - 1.01(x) - -
Cash flows provided by (used in) operations............ - (5,549) 457 -
Cash flows used in investing activities................ - (31,906) (55,819) -
Cash flows provided by financing activities............ - 37,265 56,063 -
EBITDA (i)............................................. $ 66,707 11,172 $ 14,601 $ 17,890
EBITDA margin.......................................... 24.4% 27.8 25.9 25.6
EBITDA, as adjusted (j)................................ $ 81,675 - - $ 19,713
Capital expenditures (k) .............................. $ - $ 10,794 $ 12,622 $ -
Cubic feet of storage under management at end of period
(000s)(1).......................................... 71,365 43,354 65,125 74,113
</TABLE>
<TABLE>
<CAPTION>
As of December 31,
--------------------------------------------------------------
1993 1994 1995 1996 1997
--------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital deficit............................... $ (9,143) $ (5,202) $ (8,$39) $ (23,933) $ (12,906)
Total assets.......................................... 74,621 79,746 131,328 234,820 394,713
Total debt............................................ 69,736 77,683 120,071 29,023 279,197
Shareholders' equity (deficit)........................ (14,508) (19,341) (18,201) (25,438) 59,323
<CAPTION>
As of March 31, 1998
---------------------------------
Pro
Actual Forma (m)
Balance Sheet Data: ----------- -----------------
<S> <C> <C>
Working capital deficit................................ $ (7,771) $ (8,587)
Total assets........................................... 452,585 640,632
Total debt............................................. 336,928 501,535
Shareholders' equity (deficit)........................ 58,680 73,096
</TABLE>
<PAGE>
NOTES TO SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA OF PIERCE LEAHY CORP.
(a) Gives effect to (i) the 1997 and the 1998 Acquisitions and (ii) the impact
of the Offering, as if each of these items had occurred on January 1, 1997.
See "Pro Forma Financial Data of Pierce Leahy Corp." and Note 2 of the
Notes to Consolidated Financial Statements incorporated by reference
herein. In 1997, the Company recorded a deferred income tax provision of
$6,600 in connection with the termination of the Company's status as a
Subchapter S corporation for the tax effect of differences in the basis of
assets and liabilities for financial reporting and income tax purposes.
This one-time deferred income tax provision has been eliminated in the Pro
Forma Condensed Consolidated Statements of Operations. Also not reflected
in the Pro Forma Condensed Consolidated Statements of Operations is the
extraordinary charge of $6,036 for the early extinguishment of a portion of
the 1996 Notes that occurred in July 1997. See Note (f) below.
(b) Upon consummation of Pierce Leahy's 1997 initial public offering, options
granted during 1997 became fully vested and exercisable as provided for
under the stock option plan. The Company recorded a non-recurring, non-cash
compensation charge of $1,752 relating to those options, representing the
difference between the exercise price and the deemed value for accounting
purposes.
(c) Represents aggregate payments made to eight Pierce family members.
(d) Represents non-recurring charge in 1996 of $2,764 paid to a related party
partnership to assume the partnership's position in certain leases with
third parties and of $490 for the establishment of an annual pension for
Leo W. Pierce, Sr. and his spouse.
(e) Until July 1, 1997, the Company was taxed as a Subchapter S corporation.
Such status was terminated in connection with Pierce Leahy's 1997 initial
public offering. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 2 of Notes to Consolidated
Financial Statements incorporated by reference herein.
(f) Represents loss on early extinguishment of debt due to refinancings in
1993, 1994, 1995, 1996 and 1997. Amounts include write-off of unamortized
deferred financing costs and discount, along with prepayment penalties and
other costs. A charge for the early extinguishment of a portion of the 1996
Notes of $6,036 occurred in August 1997. Such charge has been eliminated in
the Pro Forma Condensed Consolidated Statement of Operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
(g) Excluding $14,968 and $1,823 of operating expenses included in the pro
forma statement of operations for 1997 and for the three months ended March
31, 1998, respectively, specifically identified by management that would
not have been incurred had the 1997 and 1998 Acquisitions occurred as of
January 1, 1997 and had such cost savings been fully implemented as of such
date, and excluding the special compensation charge incurred in 1997, pro
forma net loss and net loss per share would have been $9,233 and $0.69,
respectively, in 1997 and $1,582 and $0.10 for the three months ended March
31, 1998, respectively.
(h) The earnings for the year ended December 31, 1997 and for the three months
ended March 31, 1998 were inadequate to cover fixed charges by $1,737 and
$1,037, respectively.
(i) "EBITDA" is defined as net income (loss) before interest expense, taxes,
depreciation and amortization, consulting payments to related parties, non-
recurring charges, foreign currency exchange, special compensation charge
and extraordinary charge. EBITDA is not a measure of performance under
GAAP. While EBITDA should not be considered in isolation or as a substitute
for net income, cash flows from operating activities and other income or
cash flow statement data prepared in accordance GAAP, or as a measure of
profitability or liquidity, management understands that EBITDA is
customarily used as a criteria in evaluating records management companies.
Moreover, substantially all of the Company's financing agreements,
including the Notes and the 1996 Notes and the 1997 Notes (each as
hereinafter defined), contain covenants in which EBITDA is used as a
measure of financial performance. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations" for a discussion of other
measures of performance determined in accordance with GAAP and the
Company's sources and applications of cash flows.
(j) EBITDA, as adjusted is defined as EBITDA plus $14,968 and $1,823 of
operating expenses included in the pro forma statements of operations for
1997 and for the three months ended March 31, 1998, respectively,
specifically identified by management that would not have been incurred had
the 1997 and 1998 Acquisitions occurred as of January 1, 1997 and such cost
savings been fully implemented as of such date. See Note (b) of Notes to
Pro Forma Condensed Consolidated Statement of Operations. Management
expects to realize additional cost savings beyond the $14,968 and $1,823
specifically identified.
(k) Capital expenditures for 1997 are comprised of $14.9 million for new
shelving, $3.5 million for leasehold and building improvements, $10.6
million for new facility purchases and related improvements, $3.7 million
for data processing and $2.7 million for the purchase of transportation,
warehouse and office equipment.
(l) The pro forma cubic feet of storage as of March 31, 1998 includes cubic
feet of storage from the 1998 Acquisitions at the time of their respective
acquisitions.
(m) Gives effect to the Recent Acquisitions and the impact of the Offering as
if each of these items had occurred on March 31, 1998.
<PAGE>
RISK FACTORS
Prospective purchasers of the Exchange Notes should consider carefully the
following risk factors, in addition to the other information set forth in this
Prospectus, before making an investment in the Notes.
HIGH LEVEL OF INDEBTEDNESS AND LEVERAGE; ABILITY TO SERVICE DEBT
As of March 31, 1998, on a pro forma basis after giving effect to the
Offering, the application of the net proceeds therefrom and the 1998
Acquisitions, the Issuer's and the Company's indebtedness would have been
approximately $137.4 million (excluding trade payables) and $501.5 million
(excluding trade payables), respectively. In addition, on a pro forma basis
after giving effect to the Offering, the application of the net proceeds
therefrom, and the 1998 Acquisitions, the Issuer's 1997 EBITDA would have been
$7.4 million. The pro forma 1997 EBITDA of the Issuer, exclusive of any
Guarantors, would not have been sufficient to cover the interest payments on the
Notes. This level of indebtedness will have important consequences to holders
of the Notes, including: (i) the Issuer would have had to, and may in the future
have to, borrow under the Credit Facility or from another source, including
possibly from Pierce Leahy, in order to make interest payments on the Notes,
(ii) a substantial part of the Company's anticipated cash flow from operations
will be required for the payment of principal and interest; (iii) the Issuer's
and the Company's ability to obtain additional financing in the future may be
limited; (iv) the Issuer's and the Company's leveraged position and covenants
contained in the Notes, the 1996 Notes, the 1997 Notes (each as defined herein)
and the Credit Facility (or any replacement thereof) could limit its ability to
expand and make capital improvements and acquisitions; and (v) the Company's and
the Issuer's level of indebtedness could make it more vulnerable to economic
downturns, limit its ability to withstand competitive pressures, and limit its
flexibility in reacting to changes in its industry and economic conditions
generally. See "Description of Certain Indebtedness."
The Issuer's and the Company's ability to meet their respective debt service
obligations will be dependent upon their future operating performance (including
the performance of any acquired businesses), debt levels and financial results
which, in turn, will be subject to general economic conditions and to financial,
business and other factors affecting the operations of the Issuer and the
Company, many of which are beyond their control. Although management believes
that the Issuer's and the Company's cash flow from operations and available
borrowings under the Credit Facility will be sufficient to meet their
anticipated requirements for capital expenditures, working capital and future
debt service requirements, there can be no assurance that the Issuer or the
Company will generate cash flows at levels sufficient to meet these
requirements. To the extent that the Issuer's or the Company's existing
resources and future earnings are insufficient to fund their respective
activities or to repay indebtedness, the Company may need to raise additional
funds through public or private financings. There can be no assurance that such
additional financing would be available on acceptable terms or at all.
UNSECURED OBLIGATIONS; EFFECTIVE SUBORDINATION OF NOTES; GUARANTEES SUBORDINATED
The Notes will be senior unsecured obligations of the Issuer ranking pari
passu in right of payment with all existing and future senior unsecured
indebtedness of the Issuer and senior in right of payment to all existing and
future subordinated indebtedness of the Issuer. The Notes are not secured by
any of the assets of the Issuer. Accordingly, holders of any secured
indebtedness of the Issuer will have claims that are prior to the claims of
holders of the Notes with respect to the assets securing such secured
indebtedness. As of March 31, 1998, on a pro forma basis after giving effect to
the Offering, the application of the net proceeds therefrom and the 1998
Acquisitions, the Issuer would have had $3.0 million of indebtedness ranked pari
passu with the Notes, including trade payables of $0.6 million and $2.4 million
of secured indebtedness to which holders of the Notes would be effectively
subordinated in right of payment. The Credit Facility is secured by
substantially all of the assets of the Company. Accordingly, the Notes will be
effectively subordinated to any amounts borrowed by the Issuer under the Credit
Facility to the extent of the assets securing the Credit Facility.
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<PAGE>
The Notes will be guaranteed on an unsecured senior subordinated basis by each
Domestic Guarantor and on a senior unsecured basis by each Canadian Guarantor.
As of March 31, 1998, on a pro forma basis after giving effect to the Offering,
the application of the net proceeds therefrom and the 1998 Acquisitions, the
Domestic Guarantors would have had $114.1 million outstanding of senior
indebtedness which would be senior in right of payment to the Domestic
Guarantees and $250 million of senior subordinated indebtedness which would rank
pari passu with the Domestic Guarantees. As of March 31, 1998, Archivex,
currently the only Canadian Guarantor, would have no outstanding indebtedness
except for amounts borrowed from the Issuer. The Indenture permits the Issuer
and the Guarantors to incur additional indebtedness, including secured senior
indebtedness.
RISKS ASSOCIATED WITH ACQUISITIONS
One of the Company's strategies is to acquire records management businesses
that will complement its existing operations or provide it with an entree into
areas it does not presently serve. There can be no assurance that the Company
will be able to acquire or profitably manage additional acquisitions or
successfully integrate them into the Company. Furthermore, certain risks are
inherent in the Company's acquisition strategy, such as increasing leverage and
debt service requirements, diversion of management time and attention, and
combining disparate company cultures and facilities, which could adversely
affect the Company's operating results. The success of any acquisition will
depend in part on the Company's ability to integrate effectively the acquired
records management business into the Company. See "Business--Acquisition and
Growth Strategy."
In this regard, the Company's success will be dependent, in part, upon its
ability to effectively integrate the Archivex Acquisition and the Kestrel
Acquisition, which represent two of the Company's largest acquisitions to date,
with the Company's operations. The integration and consolidation of the
Archivex Acquisition and the Kestrel Acquisition entail certain risks and will
require substantial management time and other resources. While the Company
believes that it has sufficient management and other resources to accomplish the
integration of the Archivex Acquisition and the Kestrel Acquisition, there can
be no assurance in this regard or that the Company will not experience
difficulties with customers, suppliers, employees or others. In addition, there
can be no assurance that the Company will be able to achieve expected cost
savings from any such acquisitions.
The size, timing and integration of possible future acquisitions may cause
substantial fluctuations in operating results from quarter to quarter. As a
result, operating results for any quarter may not be indicative of results that
may be achieved for any subsequent quarter or for a full fiscal year. Further,
there can be no assurance that acquisitions will not have an adverse effect on
the Company's operating results, particularly in quarters immediately following
the consummation of such transactions, while the operations of the acquired
businesses are being integrated into the Company's operations. Once integrated,
acquisitions may not achieve levels of net sales or profitability comparable to
those achieved by the Company's existing operations, or otherwise perform as
expected. In addition, earnings may be adversely affected by transaction-
related expenses in the quarter in which an acquisition is consummated. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
RESTRICTIVE DEBT COVENANTS
The Credit Facility contains a number of covenants that, among other things,
limit the Company's ability to incur additional indebtedness, pay dividends,
prepay subordinated indebtedness, dispose of certain assets, create liens, make
capital expenditures, make certain investments or acquisitions and otherwise
restrict corporate activities. The Credit Facility also requires the Company to
comply with certain financial ratios and tests, under which the Company will be
required to achieve certain financial and operating results. The ability of the
Company to comply with such provisions may be affected by events beyond its
control. A breach of any of these covenants would result in a default under the
Credit Facility. In the event of any such default, depending on the actions
taken by the lenders under the Credit Facility, the Domestic Guarantors could be
prohibited from making any payments on the Domestic Guarantees. In addition,
such lenders could elect to declare all amounts borrowed under the Credit
Facility, together with accrued interest, to be due and payable. As a result of
the security
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<PAGE>
afforded the Credit Facility and its priority with respect to the Domestic
Guarantees, there can be no assurance that the Issuer or the Guarantors would
have sufficient assets to pay indebtedness then outstanding under the Credit
Facility, the Notes and other indebtedness ranking pari passu with the Notes or
the Domestic Guarantees. Any refinancing of the Credit Facility is likely to
contain similar restrictive covenants. See "Description of Certain
Indebtedness--The Credit Facility."
COMPETITION
The Company faces competition from numerous competitors in all geographic
areas in which it operates. The Company believes that competition for customers
is based on price, reputation for reliability, and quality and scope of service
and technology. As a result of this competition, the records management
industry has for the past several years experienced downward pricing pressures.
Should a further downward trend in pricing occur or continue for an extended
period of time, it could have a material adverse effect on the Company's results
of operations. The Company also competes for acquisition candidates. Some of
the Company's competitors possess greater financial and other resources than the
Company. If any such competitor were to devote additional resources to the
records storage business and/or such acquisition candidates or to focus its
strategy on the Company's areas of operation, the Company's results of
operations could be adversely affected.
The Company also faces competition from the internal document handling
capability of its current and potential customers. There can be no assurance
that these organizations will outsource more of their document management needs
or that they will not bring in-house some or all of the functions they currently
outsource. See "Business--The Records Management Industry" and "Business--
Competition."
ALTERNATIVE TECHNOLOGIES
The substantial majority of the Company's revenues have been derived from the
storage of paper documents and from related services. Such storage requires
significant physical space. Alternative technologies for generating, capturing,
managing, transmitting and storing information have been developed, many of
which require significantly less space than paper. Such technologies currently
include computer media, imaging, microfilming, audio/video tape, film, CD-Rom
and optical disc. None of these technologies has replaced paper as the
principal means for storing business type records. However, there can be no
assurance that one or more non-paper-based technologies (whether now existing or
developed in the future) may not in the future reduce or supplant the use of
paper as a preferred medium, which could in turn adversely affect the Company's
business.
RISKS RELATING TO INTERNATIONAL OPERATIONS
A portion of the Company's operations, and all of the Issuer's operations, are
conducted in Canada. As a result of their international operations, the Company
and the Issuer are subject to risks associated with operating in foreign
countries, including, among others, devaluations and fluctuations in currency
exchange rates, imposition of limitations on conversions of foreign currencies
into dollars or remittance of dividends and other payments by foreign
subsidiaries, and imposition or increase of withholding and other taxes on
remittances and other payments by foreign subsidiaries. There can be no
assurance that such risks will not have a material adverse effect on the
Company's or the Issuer's business and results of operations.
CHANGE OF CONTROL
In the event of a Change of Control of Pierce Leahy, the Issuer will be
required to offer to repurchase all of the outstanding Notes at 101% of the
principal amount thereof plus any accrued and unpaid interest thereon to the
date of the purchase. The 1996 Notes and the 1997 Notes (each as defined
herein) have a similar provision requiring Pierce Leahy to offer to repurchase
such Notes. A Change of Control under the Indenture will also result in a
default under the Credit Facility. The exercise by the holders of the Notes,
the 1996 Notes or the 1997 Notes of their right to require the Issuer or Pierce
Leahy to repurchase the Notes, the 1996 Notes or the 1997
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<PAGE>
Notes, as applicable, upon a Change of Control could also cause a default under
other indebtedness of the Company and the Issuer, even if the Change of Control
itself does not, because of the financial effect of such repurchase on the
Company or the Issuer. The Issuer's ability to pay cash to the holders of the
Notes upon a repurchase may be limited by the Issuer's and the Company's then
existing financial resources. There can be no assurance that in the event of a
Change of Control, the Issuer and the Company will have, or will have access to,
sufficient funds or will be contractually permitted under the terms of
outstanding indebtedness to pay the required purchase price for all the Notes,
the 1996 Notes and the 1997 Notes tendered by their respective holders upon a
Change of Control. See "Description of the Notes" and "Description of Certain
Indebtedness--The 1996 Notes and the 1997 Notes" and "--The Credit Facility."
DEPENDENCE ON KEY PERSONNEL
The Company's success depends, in part, upon the efforts, abilities and
expertise of its executive officers and other key employees, including in
particular J. Peter Pierce, Pierce Leahy's President and Chief Executive
Officer. The Company has no employment contracts with any of its executive
officers. There can be no assurance that the Company will be able to retain
such officers, the loss of any of whom could have a material adverse effect upon
the Company and the Issuer. See "Management."
U.S. FRAUDULENT CONVEYANCE AND PREFERENTIAL TRANSFER LAWS
Various fraudulent conveyance laws have been enacted for the protection of
creditors and may be utilized by a court to subordinate or avoid the Notes or
any Guarantee in favor of other existing or future creditors of the Issuer or a
Guarantor.
In the United States, if the court in a lawsuit brought by an unpaid creditor
or representative of creditors, such as a trustee in bankruptcy of the Issuer or
of a Domestic Guarantor, as the case may be, were to find under relevant U.S.
federal or state fraudulent conveyance statutes that the Issuer or such Domestic
Guarantor, as the case may be, (x) intended to hinder, delay or defraud any
existing or future creditor or contemplated insolvency with a design to prefer
one or more creditors to the exclusion in whole or in part of others or (y) did
not receive fair consideration or reasonably equivalent value for incurring the
indebtedness represented by the Notes or the Domestic Guarantees and that, at
the time of such incurrence, the Issuer or such Domestic Guarantor (i) was
insolvent, (ii) was rendered insolvent by reason of such incurrence, (iii) was
engaged or was about to engage in a business or transaction for which the assets
remaining with the Issuer or such Domestic Guarantor constituted unreasonably
small capital to carry on its business or (iv) intended to incur, or believed
that it would incur, debts beyond its ability to pay such debts as they matured,
such court, subject to applicable statutes of limitation, could avoid the
Issuer's obligations under the Notes or such Domestic Guarantor's obligations
under the Domestic Guarantee, subordinate the Notes or such Domestic Guarantee
to other indebtedness of the Issuer or such Domestic Guarantor or take other
action detrimental to the holders of the Notes.
To the extent that any Domestic Guarantees are voided as a fraudulent
conveyance or held unenforceable for any other reason, holders of the Notes
would cease to have any claim in respect of such Domestic Guarantor and would be
creditors solely of the Issuer and any Domestic Guarantor whose Domestic
Guarantee was not voided or held unenforceable. In such event, the claims of
the holders of the Notes against the issuer of an invalid Domestic Guarantee
would be subject to the prior payment of all liabilities and preferred equity
interests, if any, of such Domestic Guarantor. Particularly given the fact that
the Issuer's 1997 pro forma EBITDA is not adequate to cover interest payments on
the Notes, there can be no assurance that, after providing for all prior claims
and preferred equity interests, if any, there would be sufficient assets to
satisfy the claims of the holders of the Notes relating to any voided portions
of any of the Domestic Guarantees.
The measure of insolvency for these purposes will vary depending upon the law
of the jurisdiction being applied. Generally, however, a company will be
considered insolvent for these purposes if the sum of that company's debts is
greater than all that company's property at a fair valuation, or if the present
fair salable value
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<PAGE>
of that company's assets is less than the amount that would be required to pay
its probable liability on its existing debts as they become absolute and
matured. Moreover, regardless of solvency, a court could avoid an incurrence of
indebtedness, including the Notes or a Domestic Guarantee, if it determined that
such transaction was made with intent to hinder, delay or defraud creditors, or
a court could subordinate the indebtedness, including the Notes or a Domestic
Guarantee, to the claims of all existing and future creditors on similar
grounds.
Additionally, under U.S. federal bankruptcy or applicable state insolvency
law, if certain bankruptcy or insolvency proceedings were initiated by or
against the Issuer or a Domestic Guarantor within 90 days after any payment by
the Issuer with respect to the Notes or any payment by a Domestic Guarantor with
respect to the Domestic Guarantee or if the Issuer or a Domestic Guarantor
anticipated becoming insolvent at the time of such payment, all or a portion of
such payment could be avoided as a preferential transfer and the recipient of
such payment could be required to return such payment.
CANADIAN BANKRUPTCY AND RESTRUCTURING LAWS
In Canada, the rights of the Trustee to enforce remedies are likely to be
significantly impaired by the restructuring provisions of applicable Canadian
federal bankruptcy, insolvency and other restructuring legislation if the
benefit of such legislation is sought with respect to the Issuer or a Canadian
Guarantor. For example, both the Bankruptcy and Insolvency Act (Canada) and the
Companies' Creditors Arrangements Act (Canada) contain provisions enabling "an
insolvent person" to obtain a stay of proceedings against its creditors and
others and to prepare and file a proposal for consideration by all or some of
its creditors to be voted on by the various classes of its creditors. Such a
restructuring proposal, if accepted by the requisite majorities of creditors and
if approved by the court, would be binding on persons who might not otherwise be
willing to accept it. Moreover, such legislation permits, in certain
circumstances, the insolvent debtor to retain possession and administration of
its property, even though it may be in default under the applicable debt
instrument.
The powers of a court under the Bankruptcy and Insolvency Act (Canada) and
particularly under the Companies' Creditor Arrangement Act (Canada) have been
exercised broadly to protect a restructuring entity from actions taken by
creditors and other parties. Accordingly, it is impossible to predict if
payments under the Notes or any Canadian Guarantees would be made following
commencement of or during such a proceeding, whether or when the Trustee could
exercise its rights under the Indenture or whether and to what extent holders of
the Notes would be compensated for any delay in payments, if any, of principal
and interest.
Additionally, under federal Canadian bankruptcy law, if certain bankruptcy or
insolvency proceedings were initiated by or against a Canadian Guarantor within
90 days after any payment by such Canadian Guarantor with respect to its
Guarantee or if such Canadian Guarantor anticipated becoming insolvent at the
time of such payment, all or a portion of such payment could be avoided as a
fraudulent preference and the recipient of such payment could be required to
return such payment.
YEAR 2000 SOFTWARE ISSUE
The Company uses a number of computer software programs and operating systems
in its operations, including the PLUS/(R)/ system. To the extent that the
software applications used in such functions are unable to recognize the year
2000, the Company may incur expenses in connection with the need to remedy such
problem in the software and the associated risk and expense of any disruptions
that may be caused by the software's impaired functioning as the year 2000
approaches. The Company believes that the PLUS/(R)/ system will be year 2000
compliant by the end of 1998. The Company also believes that the manufacturers
of the software applications it uses most frequently, including its systems
software and its word processing and spreadsheet software, are in the process of
preparing or have already completed year 2000 remediations for their products.
In addition, the Company communicates electronically with a number of its
customers and vendors with respect to a variety of functions. Any failure of
the software of the Company's vendors or customers to address the year 2000
issue could impair the Company's ability to perform such functions. The Company
is analyzing the potential impact
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<PAGE>
of the year 2000 issue on the Company's software and on the Company's
interactions with its vendors and customers. Although the Company believes that
the expenses and capital expenditures associated with achieving year 2000
compliance will not have a material adverse effect on the Company's business and
financial condition or results of operations, there can be no assurance that the
remediation costs and potential disruptions to the Company's operations would
not have a material adverse affect on the Company's or the Issuer's business and
financial condition or results of operations. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
CASUALTY
The Company currently maintains and intends to continue to maintain, to the
extent such insurance is available on commercially reasonable terms,
comprehensive liability, fire, flood and earthquake (where appropriate) and
extended coverage insurance with respect to the properties that it now owns or
leases or that it may in the future own or lease, with customary limits and
deductibles. Certain types of loss, however, may not be fully insurable on a
cost-effective basis. In the future, should uninsured losses or damages occur,
the Company could lose both its investment in and anticipated profits from the
affected property and may continue to be obligated on any leasehold obligations,
mortgage indebtedness or other obligations related to such property. As a
result, any such material loss could materially adversely affect the Company and
the Issuer. See "Business--Insurance."
ENVIRONMENTAL MATTERS
The Company owns or leases approximately 16 million square feet of facilities.
Under various U.S. federal, state, local and foreign environmental laws,
regulations and ordinances ("environmental laws"), the Company's properties and
operations or former properties or locations may subject it to liability for the
costs of investigation, removal or remediation of soil and groundwater, on or
off-site, contaminated by hazardous substances and other contaminants or
hazardous materials such as petroleum products ("hazardous materials"), as well
as damages to natural resources. Certain such laws impose cleanup
responsibility and liability without regard to whether the owner or operator of
the real estate or business thereon knew of or was responsible for the
contamination, and whether or not operations at the property have been
discontinued or title to the property has been transferred. In addition, the
presence of such materials, or the failure to properly remediate such property,
may adversely affect the current property owner's or operator's ability to sell,
rent or use such property or to borrow using such property as collateral. The
owner or operator of contaminated property also may be subject to statutory and
common law claims by third parties based on any damages and costs resulting from
off-site migration of the contamination.
Certain environmental laws govern the removal, encapsulation or disturbance of
asbestos-containing materials ("ACMs") in buildings. Such laws may impose
liability for improper handling and release of ACMs and third parties may seek
to recover from owners or operators of real estate for personal injury
associated with exposure to such materials. Certain facilities operated by the
Company contain ACMs.
Certain of the properties formerly or currently owned or operated by the
Company were previously used for industrial or other purposes that involved the
use or storage of hazardous materials or the generation and disposal of
hazardous wastes, and the use of underground storage tanks ("USTs") for
hazardous materials. The Company has from time to time conducted certain
environmental investigations, and remedial activities have been performed, at
certain of its former and current properties, but an in-depth environmental
review of each of the properties and related operations has not been conducted
by or on behalf of the Company. In connection with its former and current
ownership or operation of certain properties and businesses, the Company may be
subject to environmental liability as discussed above and as more specifically
described under "Business--Environmental Matters."
The Company has not received any written notice from any governmental
authority or third party asserting, and is not otherwise aware of, any material
environmental non-compliance, liability or claim relating to hazardous
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<PAGE>
materials or otherwise under any environmental laws applicable to the Company in
connection with any of its present or former properties or operations other than
as described under "Business--Environmental Matters." However, no assurance can
be given that there are no environmental conditions for which the Company might
be liable in the future or that future regulatory action, or compliance with
future environmental laws, will not require the Company to incur costs with
respect to its properties or operations that could have a material adverse
effect on the Company's financial condition or results of operations.
CONTROL OF PIERCE LEAHY
Members of the Pierce family who collectively own approximately 51% of the
shares of the Common Stock of Pierce Leahy have entered into a ten-year voting
trust agreement (the "Voting Trust Agreement") pursuant to which all of the
shares subject to the Voting Trust Agreement or related proxies are voted at the
direction of Leo W. Pierce, Sr. and J. Peter Pierce (the "Voting Trustees").
Consequently, the Voting Trustees are able to elect the Company's directors, to
determine the outcome of corporate actions requiring shareholder approval and
otherwise to control the business affairs of the Company. See "Principal
Shareholders--Voting Trust Agreement."
ABSENCE OF PUBLIC MARKET
There is no existing trading market for the Notes, and the Company does not
intend to list any Notes on any securities exchange. Although the Company has
been advised that the Initial Purchaser currently intends to make a market in
the Notes, the Initial Purchaser is not obligated to do so and may discontinue
any such market making at any time without notice. In addition, any market
making activities in the Original Notes may be limited during the pendency of
the Exchange Offer. There can be no assurance that an active trading market for
the Notes will develop, or, if it develops, that it will continue. Future
trading prices for the Notes will depend on many factors, including, among other
things, the Company's operating results, the market for similar securities and
changes in prevailing interest rates.
PROCEDURES FOR TENDER OF ORIGINAL NOTES
The Exchange Notes will be issued in exchange for Original Notes only after
timely receipt by the Exchange Agent of such Original Notes, a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, holders of Original Notes desiring to tender such
Original Notes in exchange for Exchange Notes should allow sufficient time to
ensure timely delivery. Neither the Exchange Agent nor the Issuer is under any
duty to give notification of defects or irregularities with respect to tenders
of Original Notes for exchange. Any holder of Original Notes who tenders in the
Exchange Offer for the purpose of participating in a distribution of the
Exchange Notes will be required to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. Each broker-dealer that receives Exchange Notes for its own
account in exchange for Notes, where such Original Notes were acquired by such
broker-dealer as a result of market-making activities or any other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution."
CONSEQUENCES OF FAILURE TO EXCHANGE ORIGINAL NOTES
The Original Notes have not been registered under the Securities Act and are
subject to substantial restrictions on transfer. Original Notes that are not
tendered in exchange for Exchange Notes or are tendered but not accepted will,
following consummation of the Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof. The Issuer does not currently
anticipate that it will register the Original Notes under the Securities Act.
To the extent that Original Notes are tendered and accepted in the Exchange
Offer, the trading market for untendered and tendered but unaccepted Original
Notes could be adversely affected. See "The Exchange-Consequences of Failure to
Exchange."
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FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act, and is
subject to the safe-harbor created by such sections. Such forward-looking
statements concern the Company's operations, economic performance and financial
condition, including, without limitation, the Archivex Acquisition, the Kestrel
Acquisition and their integration into the Company's existing operations. Such
statements involve known and unknown risks, uncertainties and other factors,
including those identified under this "Risk Factors" section and elsewhere in
this Prospectus that may cause the actual results, performance or achievements
of the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such factors include, among others, the following: general
economic and business conditions; changes in customer preferences; competition;
changes in technology; the integration of any acquisitions; changes in business
strategy; the indebtedness of the Company and the Issuer; quality of management,
business abilities and judgment of the Company's and the Issuer's personnel; the
availability, terms and deployment of capital; and various other factors
referenced in this Prospectus. See "Prospectus Summary"; "Management's
Discussion and Analysis of Financial Condition and Results of Operations"; and
"Business." The forward-looking statements are made as of the date of this
Prospectus, and the Issuer and the Guarantors assume no obligation to update the
forward-looking statements or to update the reasons why actual results could
differ from those projected in the forward-looking statements.
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THE EXCHANGE OFFER
PURPOSES AND EFFECTS OF THE EXCHANGE OFFER
The Original Notes were sold by the Issuer on April 7, 1998 (the "Issue Date")
to the Initial Purchasers pursuant to a Purchase Agreement dated as of April 2,
1998 (the "Purchase Agreement"). As a condition to the sale of the Original
Notes, the Issuer, Pierce Leahy and the Initial Purchaser entered into the
Registration Agreement on the Issue Date. Pursuant to the Registration
Agreement, the Issuer agreed that, unless the Exchange Offer is not permitted by
applicable law or Commission policy, it would (i) file with the Commission a
Registration Statement under the Securities Act with respect to the Exchange
Notes within 90 days after the Issue Date, (ii) use its best efforts to cause
such Registration Statement to become effective under the Securities Act within
180 days after the Issue Date and (iii) upon effectiveness of the Registration
Statement, commence the Exchange Offer, keep the Exchange Offer open for at
least 30 days and not more than 45 days (or a longer period if required by law)
and deliver to the Exchange Agent Exchange Notes in the same aggregate principal
amount at maturity as the Original Notes that were tendered by holders thereof
pursuant to the Exchange Offer. Under existing Commission interpretations, the
Exchange Notes would in general be freely transferable after the Exchange Offer
without further registration under the Securities Act; provided, that in the
case of broker-dealers, a prospectus meeting the requirements of the Securities
Act will be delivered as required. The Issuer has agreed to make available a
prospectus meeting the requirements of the Securities Act to any broker-dealer
for use in connection with any resale of any such Exchange Notes acquired as
described below for such period of 180 days after the Expiration Date. A
broker-dealer that delivers such a prospectus to purchasers in connection with
such resales will be subject to certain of the civil liability provisions under
the Securities Act, and will be bound by the Registration Agreement (including
certain indemnification rights and obligations). A copy of the Registration
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part. The Registration Statement of which this Prospectus
is a part is intended to satisfy certain of the Issuer's obligations under the
Registration Agreement and the Purchase Agreement.
The Issuer is generally not required to file any registration statement to
register any outstanding Original Notes. Holders of Original Notes who do not
tender their Original Notes or whose Original Notes are tendered but not
accepted will have to rely on exemptions to registration requirements under the
securities laws, including the Securities Act, if they wish to sell their
Original Notes.
With respect to the Exchange Notes, based upon an interpretation by the staff
of the Commission set forth in certain no-action letters issued to third
parties, the Issuer believes that a holder (other than (i) a broker-dealer who
purchases such Exchange Notes directly from the Issuer to resell pursuant to
Rule 144A or any other available exemption under the Securities Act or (ii) any
such holder which is an "affiliate" of the Issuer within the meaning of Rule 405
under the Securities Act) who exchanges Original Notes for Exchange Notes in the
ordinary course of business and who is not participating, does not intend to
participate, and has no arrangement with any person to participate, in the
distribution of the Exchange Notes, will be allowed to resell the Exchange Notes
to the public without further registration under the Securities Act and without
delivering to the purchasers of the Exchange Notes a prospectus that satisfies
the requirements of Section 10 of the Securities Act. However, if any holder
acquires the Exchange Notes in the Exchange Offer for the purpose of
distributing or participating in the distribution of the Exchange Notes or is a
broker-dealer, such holder cannot rely on the position of the staff of the
Commission enumerated in certain no-action letters issued to third parties and
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, unless an exemption
from registration is otherwise available. Each broker-dealer that receives
Exchange Notes for its own account in exchange for Original Notes, where such
Original Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in
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exchange for Original Notes where such Original Notes were acquired by such
broker-dealer as a result of market-making or other trading activities.
Pursuant to the Registration Agreement, the Issuer has agreed to make this
Prospectus, as it may be amended or supplemented from time to time, available to
broker-dealers for use in connection with any resale for a period of 180 days
after the Expiration Date. See "Plan of Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus and
in the accompanying Letter of Transmittal, the Issuer will accept any and all
Original Notes validly tendered and not withdrawn prior to the Expiration Date.
The Issuer will issue $1,000 principal amount of Exchange Notes in exchange for
each $1,000 principal amount of outstanding Original Notes surrendered pursuant
to the Exchange Offer. Holders may tender some or all of their Original Notes
pursuant to the Exchange Offer; provided, however, that Original Notes may be
tendered only in integral multiples of $1,000. The Exchange Offer is not
conditioned upon any minimum aggregate principal amount of Original Notes being
tendered for exchange.
The form and terms of the Exchange Notes are the same as the form and terms of
the Original Notes except that (i) the Exchange Notes will be registered under
the Securities Act and, therefore, will not bear legends restricting their
transfer and (ii) holders of the Exchange Notes will not be entitled to the
certain rights of holders of Original Notes under the Registration Agreement,
which rights will terminate upon the consummation of the Exchange Offer. The
Exchange Notes will evidence the same debt as the Original Notes (which they
replace) and will be issued under, and be entitled to the benefits of, the
Indenture, which also authorized the issuance of the Original Notes, such that
all outstanding Notes will be treated as a single class of debt securities under
the Indenture.
Interest on the Exchange Notes will accrue from the most recent date to which
interest has been paid on the Original Notes or, if no interest has been paid,
from April 7, 1998. Accordingly, registered holders of Exchange Notes on the
relevant record date for the first interest payment date following the
consummation of the Exchange Offer will receive interest accruing from the most
recent date to which interest has been paid or, if no interest has been paid,
from April 7, 1998. Original Notes accepted for exchange will cease to accrue
interest from and after the date of the consummation of the Exchange Offer.
Holders whose Original Notes are accepted for exchange will not receive any
payment in respect of interest on such Original Notes otherwise payable on any
interest payment date, the record date for which occurs on or after consummation
of the Exchange Offer.
As of the date of this Prospectus, $135,000,000 aggregate principal amount of
the Original Notes are outstanding and registered in the name of Cede & Co., as
nominee for the Depository Trust Company (the "Depository" or "DTC"). Only a
registered holder of the Original Notes (or such holder's legal representative
or attorney-in-fact) as reflected on the records of the Trustee under the
Indenture may participate in the Exchange Offer. There will be no fixed record
date for determining registered holders of the Original Notes entitled to
participate in the Exchange Offer.
Holders of the Original Notes do not have any appraisal or dissenters' rights
under the Indenture in connection with the Exchange Offer. The Issuer intends
to conduct the Exchange Offer in accordance with the provisions of the
Registration Agreement and the applicable requirements of the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder.
The Issuer shall be deemed to have accepted validly tendered Original Notes
when, as and if the Issuer has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
of Original Notes for the purposes of receiving the Exchange Notes from the
Issuer.
If any tendered Original Notes are not accepted for exchange because of an
invalid tender, or due to the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Original Notes will be
returned without expense to the tendering holders thereof (or in the case of
Original Notes tendered
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by book-entry transfer, such Original Notes will be credited to the account of
such holder maintained at the Depository), as promptly as practicable after the
expiration or termination of the Exchange Offer.
Holders who tender Original Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Notes
pursuant to the Exchange Offer. The Issuer will pay all charges and expenses,
other than certain applicable taxes described below, in connection with the
Exchange Offer. See "The Exchange Offer-Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; TERMINATION
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
_______________, 1998 unless the Issuer, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer the Issuer will notify the Exchange
Agent of any extension by oral (promptly confirmed in writing) or written notice
and will make a public announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date of the Exchange Offer. Without limiting the manner in which the Issuer may
choose to make a public announcement of any delay, extension, amendment or
termination of the Exchange Offer, the Issuer shall have no obligation to
publish, advertise or otherwise communicate any such public announcement, other
than by making a timely release to an appropriate news agency.
The Issuer reserves the right, in its sole discretion, (i) to delay accepting
any Original Notes, (ii) to extend the Exchange Offer, (iii) if any conditions
set forth below under "-Certain Conditions to the Exchange Offer" shall not have
been satisfied, to terminate the Exchange Offer by giving oral or written notice
of such delay, extension or termination to the Exchange Agent or (iv) to amend
the terms of the Exchange Offer in any manner. Any such delay in acceptance,
extension, termination or amendment will be followed as promptly as practicable
by oral or written notice thereof to the registered holders. If the Exchange
Offer is amended in a manner determined by the Issuer to constitute a material
change, the Issuer will promptly disclose such amendment by means of a
prospectus supplement that will be distributed to the registered holders of
Original Notes, and the Issuer will extend the Exchange Offer for a period of
five to ten business days, depending upon the significance of the amendment and
the manner of disclosure to such registered holders, if the Exchange Offer would
otherwise expire during such five to ten business day period. The rights
reserved by the Issuer in this paragraph are in addition to the Issuer's rights
set forth below under the caption "-Certain Conditions of the Exchange Offer."
If the Issuer extends the period of time during which the Exchange Offer is
open, or if it is delayed in accepting for exchange of, or in issuing and
exchanging the Exchange Notes for, any Original Notes, or is unable to accept
for exchange, or issue Exchange Notes for, any Original Notes pursuant to the
Exchange Offer for any reason, then, without prejudice to the Issuer's rights
under the Exchange Offer, the Exchange Agent may, on behalf of the Issuer,
retain all Original Notes tendered, and such Original Notes may not be withdrawn
except as otherwise provided below in "-Withdrawal of Tenders." The adoption by
the Issuer of the right to delay acceptance for exchange of, or the issuance and
the exchange of the Exchange Notes, for any Original Notes is subject to
applicable law, including Rule 14e-1(c) under the Exchange Act, which requires
that the Issuer pay the consideration offered or return the Original Notes
deposited by or on behalf of the holders thereof promptly after the termination
or withdrawal of the Exchange Offer.
PROCEDURES FOR TENDERING
Only a registered holder of Original Notes may tender such Original Notes in
the Exchange Offer. To tender in the Exchange Offer, a holder must complete,
sign and date the Letter of Transmittal, or facsimile thereof, have the
signature thereon guaranteed if required by the Letter of Transmittal and mail
or otherwise deliver such Letter of Transmittal or such facsimile to the
Exchange Agent at the address set forth below under "The Exchange
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Offer-Exchange Agent" for receipt prior to the Expiration Date. In addition,
either (i) certificates for such Notes must be received by the Exchange Agent
along with the Letter of Transmittal, or (ii) a timely confirmation of a book-
entry transfer of such Notes, if such procedure is available, into the Exchange
Agent's account at DTC pursuant to the procedure for book-entry transfer
described below, must be received by the Exchange Agent prior to the Expiration
Date, or (iii) the holder must comply with the guaranteed delivery procedures
described below.
Any financial institution that is a participant in the Depository's Book-Entry
Transfer Facility system may make book-entry delivery of the Original Notes by
causing the Depository to transfer such Original Notes into the Exchange Agent's
account in accordance with the Depository's procedure for such transfer.
Although delivery of Original Notes may be effected through book-entry transfer
into the Exchange Agent's account at the Depository, the Letter of Transmittal
(or facsimile thereof), with any required signature guarantees and any other
required documents, must, in any case, be transmitted to and received or
confirmed by the Exchange Agent at its addresses set forth under "-Exchange
Agent" below prior to 5:00 p.m., New York City time, on the Expiration Date.
DELIVERY OF DOCUMENTS TO THE DEPOSITORY IN ACCORDANCE WITH ITS PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The tender by a holder which is not withdrawn prior to the Expiration Date
will constitute a binding agreement between such holder and the Issuer in
accordance with the terms and subject to the conditions set forth herein and in
the Letter of Transmittal.
THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE
EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR NOTES
SHOULD BE SENT TO THE ISSUER. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS,
DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE
TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner of the Original Notes whose Original Notes are registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact the registered holder promptly and
instruct such registered holder to tender on such beneficial owner's behalf. If
such beneficial owner wishes to tender on such owner's own behalf, such owner
must, prior to completing and executing the Letter of Transmittal and delivering
such owner's Original Notes, either make appropriate arrangements to register
ownership of the Notes in such owner's name (to the extent permitted by the
Indenture) or obtain a properly completed assignment from the registered holder.
The transfer of registered ownership may take considerable time.
If the Letter of Transmittal is signed by a person other than the registered
holder of any Original Notes (which term includes any participants in DTC whose
name appears on a security position listing as the owner of the Original Notes)
or if delivery of the Exchange Notes is to be made to a person other than the
registered holder, such Original Notes must be endorsed or accompanied by a
properly completed bond power, in either case signed by such registered holder
as such registered holder's name appears on such Original Notes with the
signature on the Original Notes or the bond power guaranteed by an Eligible
Institution (as defined below).
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "-Withdrawal of Tenders"), as the case may be, must be guaranteed by
an Eligible Institution unless the Original Notes tendered pursuant thereto are
tendered (i) by a registered holder who has not completed the box entitled
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. In the event that signatures on a Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed,
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such guarantee must be made by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States, or another "Eligible Guarantor Institution" within the meaning of Rule
17Ad-15 under the Exchange Act (any of the foregoing, an "Eligible
Institution").
If the Letter of Transmittal or any Original Notes or assignments are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Issuer,
evidence satisfactory to the Issuer of their authority to so act must be
submitted with the Letter of Transmittal.
The Exchange Agent and the Depository have confirmed that any financial
institution that is a participant in the Depository's system may utilize the
Depository's Automated Tender Offer Program to tender Original Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Original Notes will be
determined by the Issuer in its sole discretion, which determination will be
final and binding. The Issuer reserves the absolute right to reject any and all
Original Notes not properly tendered or any Original Notes, the Issuer's
acceptance of which would, in the opinion of counsel for the Issuer, be
unlawful. The Issuer also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Notes. The Issuer's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with
tenders of Original Notes must be cured within such time as the Issuer shall
determine. Although the Issuer intends to request the Exchange Agent to notify
holders of defects or irregularities with respect to tenders of Original Notes,
neither the Issuer, the Exchange Agent nor any other person shall incur any
liability for failure to give such notification. Tenders of Original Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived.
While the Issuer has no present plan to acquire any Original Notes which are
not tendered in the Exchange Offer or to file a registration statement to permit
resales of any Original Notes which are not tendered pursuant to the Exchange
Offer, the Issuer reserves the right in its sole discretion to purchase or make
offers for any Original Notes that remain outstanding subsequent to the
Expiration Date or, as set forth below under "-Certain Conditions to the
Exchange Offer," to terminate the Exchange Offer and, to the extent permitted by
applicable law, purchase Original Notes in the open market, in privately
negotiated transactions or otherwise. The terms of any such purchases or offers
could differ from the terms of the Exchange Offer.
By tendering, each holder will represent to the Issuer that, among other
things, (i) the Exchange Notes to be acquired by the holder of the Original
Notes in connection with the Exchange Offer are being acquired by the holder in
the ordinary course of business of the holder, (ii) the holder has no
arrangement or understanding with any person to participate in the distribution
of Exchange Notes, (iii) the holder acknowledges and agrees that any person who
is a broker-dealer registered under the Exchange Act or is participating in the
Exchange Offer for the purpose of distributing the Exchange Notes must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction of the Exchange Notes acquired
by such person and cannot rely on the position of the staff of the Commission
set forth in certain no-action letters, (iv) the holder understands that a
secondary resale transaction described in clause (iii) above and any resales of
Exchange Notes obtained by such holder in exchange for Original Notes acquired
by such holder directly from the Issuer should be covered by an effective
registration statement containing the selling securityholder information
required by Item 507 or Item 508, as applicable, of Regulation S-K of the
Commission, and (v) the holder is not an "affiliate," as defined in Rule 405 of
the Securities Act, of the Issuer. If the holder is a broker-dealer that will
receive Exchange Notes for its own account in exchange for Original Notes that
were acquired as a result of market-making activities or other trading
activities, the holder is required to acknowledge in the Letter of Transmittal
that it will deliver a prospectus in connection with any resale of such Exchange
Notes; however, by so acknowledging and by delivering a prospectus, the holder
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
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RETURN OF NOTES
If any tendered Original Notes are not accepted for any reason set forth in
the terms and conditions of the Exchange Offer or if Original Notes are
withdrawn or are submitted for a greater principal amount than the holders
desire to exchange, such unaccepted, withdrawn or non-exchanged Original Notes
will be returned without expense to the tendering holder thereof (or, in the
case of Original Notes tendered by book-entry transfer into the Exchange Agent's
account at the Depository pursuant to the book-entry transfer procedures
described below, such Original Notes will be credited to an account maintained
with the Depository) as promptly as practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect to
the Original Notes at the Depository for purposes of the Exchange Offer within
two business days after the date of this Prospectus, and any financial
institution that is a participant in the Depository's system may make book-entry
delivery of Original Notes by causing the Depository to transfer such Original
Notes into the Exchange Agent's account at the Depository in accordance with the
Depository's procedures for transfer. However, although delivery of Original
Notes may be effected through book-entry transfer at the Depository, the Letter
of Transmittal or facsimile thereof, with any required signature guarantees and
any other required documents, must, in any case, be transmitted to and received
by the Exchange Agent at the address set forth below under "-Exchange Agent" on
or prior to the Expiration Date or pursuant to the guaranteed delivery
procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Original Notes and (i) whose Original Notes
are not immediately available or (ii) who cannot deliver their Original Notes
(or complete the procedures for book-entry transfer), the Letter of Transmittal
or any other required documents to the Exchange Agent prior to the Expiration
Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Issuer (by
facsimile transmission, mail or hand delivery) setting forth the name and
address of the holder, the certificate number(s) of such Original Notes (if
available) and the principal amount of Original Notes tendered, stating that
the tender is being made thereby and guaranteeing that, within five New York
Stock Exchange trading days after the Expiration Date, the Letter of
Transmittal (or a facsimile thereof) together with the certificate(s)
representing the Original Notes in proper form for transfer (or a confirmation
of a book-entry transfer into the Exchange Agent's account at the Depository
of Original Notes delivered electronically), and any other documents required
by the Letter of Transmittal will be deposited by the Eligible Institution
with the Exchange Agent; and
(c) such properly executed Letter of Transmittal (or facsimile thereof), as
well as the certificate(s) representing all tendered Original Notes in proper
form for transfer (or a confirmation of a book-entry transfer into the
Exchange Agent's account at the Depository of Original Notes delivered
electronically), and all other documents required by the Letter of Transmittal
are received by the Exchange Agent within five New York Stock Exchange trading
days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Original Notes according to the
guaranteed delivery procedures set forth above.
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WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Original Notes may be
withdrawn at any time prior to the Expiration Date.
To withdraw a tender of Original Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having deposited
the Original Notes to be withdrawn, (ii) identify the Original Notes to be
withdrawn (including the certificate number or numbers (if applicable) and
principal amount of such Original Notes), and (iii) be signed by the holder in
the same manner as the original signature on the Letter of Transmittal by which
such Original Notes were tendered (including any required signature guarantees).
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by the Issuer in its sole
discretion, whose determination shall be final and binding on all parties. Any
Original Notes so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer and no Exchange Notes will be issued with respect
thereto unless the Original Notes so withdrawn are validly retendered. Properly
withdrawn Notes may be retendered by following one of the procedures described
above under "-Procedures for Tendering" at any time prior to the Expiration
Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Issuer shall not be
required to accept for exchange, or exchange the Exchange Notes for, any
Original Notes not theretofore accepted for exchange, and may terminate or amend
the Exchange Offer as provided herein before the acceptance of such Original
Notes, if any of the following conditions exist:
(a) any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the Exchange Offer which, in
the reasonable judgment of the Issuer, might impair the ability of the Issuer
to proceed with the Exchange Offer or have a material adverse effect on the
contemplated benefits of the Exchange Offer to the Issuer or there shall have
occurred any material adverse development in any existing action or proceeding
with respect to the Issuer or any of its subsidiaries; or
(b) there shall have been any material change, or development involving a
prospective change, in the business or financial affairs of the Issuer or any
of its subsidiaries which, in the reasonable judgment of the Issuer, could
reasonably be expected to materially impair the ability of the Issuer to
proceed with the Exchange Offer or materially impair the contemplated benefits
of the Exchange Offer to the Issuer; or
(c) there shall have been proposed, adopted or enacted any law, statute,
rule or regulation which, in the judgment of the Issuer, could reasonably be
expected to materially impair the ability of the Issuer to proceed with the
Exchange Offer or materially impair the contemplated benefits of the Exchange
Offer to the Issuer; or
(d) any governmental approval which the Issuer shall, in its reasonable
discretion, deem necessary for the consummation of the Exchange Offer as
contemplated hereby shall have not been obtained.
If the Issuer determines in its reasonable discretion that any of these
conditions are not satisfied, the Issuer may (i) refuse to accept any Original
Notes and return all tendered Original Notes to the tendering holders, (ii)
extend the Exchange Offer and retain all Original Notes tendered prior to the
expiration of the Exchange Offer, subject, however, to the rights of holders to
withdraw such Original Notes (see "The Exchange Offer-Withdrawal of Tenders") or
(iii) waive such unsatisfied conditions with respect to the Exchange Offer and
accept all properly tendered Original Notes which have not been withdrawn. If
such waiver constitutes a material change to the Exchange Offer, the Issuer will
promptly disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Original Notes, and the Issuer will
extend the Exchange Offer for a
-30-
<PAGE>
period of five to ten business days, depending upon the significance of the
waiver and the manner of disclosure to the registered holders, if the Exchange
Offer would otherwise expire during such five to ten business day period.
Holders may have certain rights and remedies against the Issuer under the
Registration Agreement should the Issuer fail to consummate the Exchange Offer,
notwithstanding a failure of the conditions stated above. Such conditions are
not intended to modify those rights or remedies in any respect.
The foregoing conditions are for the sole benefit of the Issuer and may be
asserted by the Issuer regardless of the circumstances giving rise to such
condition or may be waived by the Issuer in whole or in part at any time and
from time to time in the Issuer's reasonable discretion. The failure by the
Issuer at any time to exercise the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
TERMINATION OF CERTAIN RIGHTS
All rights under Registration Agreement (including registration rights) of
holders of the Original Notes eligible to participate in this Exchange Offer
will terminate upon consummation of the Exchange Offer except with respect to
the Issuer's continuing obligations (i) to indemnify the holders (including any
broker-dealers) and certain parties related to the holders against certain
liabilities (including liabilities under the Securities Act), (ii) to provide,
upon the request of any holder of a transfer-restricted Original Note, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Original Notes pursuant to Rule 144A, (iii) to use its
best efforts to keep the Registration Statement effective to the extent
necessary to ensure that it is available for resales of transfer-restricted
Notes by broker-dealers for a period of 180 days from the Expiration Date and
(iv) to provide copies of the latest version of the Prospectus to broker-dealers
upon their request for a period of 180 days from the Expiration Date. Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted pursuant to the foregoing provisions, the Issuer has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
-31-
<PAGE>
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. All questions and requests for assistance as well as all correspondence
in connection with the Exchange Offer and the Letter of Transmittal should be
addressed to the Exchange Agent, as follows:
By Facsimile: By Overnight Courier:
The Bank of New York The Bank of New York
(212) 815-5915 101 Barclay Street - 21W
(For Eligible Institutions Only) New York, NY 10286
Attention: Corporate Trust
Administration
Confirm by Telephone:
The Bank of New York
(212) ___-____
By Hand: By Mail:
(insured or registered recommended)
The Bank of New York
101 Barclay Street - 21W The Bank of New York
New York, NY 10286 101 Barclay Street - 21W
Attention: Corporate Trust Administration New York, NY 10286
Attention: Corporate Trust
Administration
Requests for additional copies of this Prospectus, the Letter of Transmittal
or the Notice of Guaranteed Delivery should be directed to the Exchange Agent.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Issuer. The principal
solicitation is being made by mail; however, additional solicitation may be made
by telegraph, telephone or in person by officers and regular employees of the
Issuer and its affiliates.
The Issuer has not retained any dealer-manager or other soliciting agent in
connection with the Exchange Offer and will not make any payments to brokers,
dealers or others soliciting acceptance of the Exchange Offer. The Issuer will,
however, pay the Exchange Agent reasonable and customary fees for its services
and will reimburse it for its reasonable out-of-pocket expenses in connection
therewith.
The cash expenses to be incurred in connection with the Exchange Offer will be
paid by the Issuer and are estimated in the aggregate to be approximately
$_________________. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
The Issuer will pay all transfer taxes, if any, applicable to the exchange of
Original Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes, or Original Notes for principal amounts not
tendered or acceptable for exchange, are to be delivered to, or are to be issued
in the name of, any person other than the registered holders of the Original
Notes tendered, or if tendered Original Notes are registered in the name of any
person other than the person signing the Letter of Transmittal, or if a transfer
tax is imposed for any reason other than the exchange of Original Notes pursuant
to the Exchange Offer, then the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
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<PAGE>
tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder of
Original Notes.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the Original
Notes as reflected in the Issuer's accounting records on the date of the
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized. The expenses of the Exchange Offer will be amortized over the term
of the Exchange Notes.
CONSEQUENCE OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the Original
Notes are urged to consult their financial and tax advisors in making their own
decisions on what action to take.
The Original Notes which are not exchanged for the Exchange Notes pursuant to
the Exchange Offer will remain restricted securities. Accordingly, such
Original Notes may be resold only (i) to a person whom the seller reasonably
believes is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, (ii) in
a transaction meeting the requirements of Rule 144 under the Securities Act,
(iii) outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act, (iv) in accordance with
another exemption from the registration requirements of the Securities Act (and
based upon an opinion of counsel if the Issuer so requests), (v) to the Issuer
or (vi) pursuant to an effective registration statement and, in each case, in
accordance with any applicable securities laws of any state of the United States
or any other applicable jurisdiction.
THE COMPANY
Pierce Leahy is a Pennsylvania corporation. It was originally incorporated in
New York in 1990 and, pursuant to a merger, was redomesticated into Pennsylvania
in 1997 in connection with Pierce Leahy's initial public offering of shares of
its Common Stock.
Pierce Leahy's operations date to 1957 when its predecessor company, L.W.
Pierce Co., Inc., was founded to provide filing systems and related equipment to
companies in the Philadelphia area. L. W. Pierce Co., Inc. expanded primarily
through internal growth until 1990 when it acquired Britannia Security Group,
Inc. (doing business as Leahy Business Archives), which approximately doubled
the size of the Company. Pierce Leahy was formed at that time from the
consolidation of the predecessor company with Leahy Business Archives.
The principal executive offices of Pierce Leahy are located at 631 Park
Avenue, King of Prussia, Pennsylvania 19406, and its telephone number is (610)
992-8200.
THE ISSUER
Pierce Leahy entered the Canadian records storage market through the purchase
of Command Records Services Limited in 1995. Pierce Leahy formed the Issuer,
Pierce Leahy Command Company, a Nova Scotia unlimited liability company, in 1995
to acquire such business. As a result of Pierce Leahy's status as a Subchapter
S corporation for federal income tax purposes at the time of the formation of
the Issuer, all of the capital stock of the Issuer is owned by two Pennsylvania
limited partnerships. Two separate corporations owned by J. Peter Pierce, the
Company's President and Chief Executive Officer, are the general partner of each
partnership, respectively, and Pierce Leahy has a 99% limited partnership
interest in each partnership. Accordingly, Pierce Leahy has an indirect 99%
equity interest in the Issuer.
-33-
<PAGE>
Prior to the Archivex Acquisition, the Issuer operated a total of 17 records
management facilities in five of the six largest markets in Canada (Calgary,
Montreal, Ottawa, Toronto and Vancouver). Concurrently with the Offering, the
Company acquired substantially all of the assets of Archivex Inc., a Canadian
corporation, with a portion of the proceeds of the Offering. Archivex Inc. has
operations in six Canadian cities, including three markets in which the Issuer
previously operated (Calgary, Montreal and Toronto) and three markets in which
the Issuer did not previously have a presence (Edmonton, Quebec City and
Winnipeg). A newly formed wholly-owned subsidiary of Pierce Leahy, Archivex
Limited, purchased and operates the assets of Archivex Inc. in Montreal,
including four records management facilities. Command purchased the remaining
assets of Archivex Inc. Since the consummation of the Archivex Acquisition, the
Issuer operates 24 records management facilities in the eight largest markets in
Canada. The aggregate cash consideration for the Archivex Acquisition, which
represented a significant expansion in the Canadian market for the Company, was
approximately $63.0 million. Included in the Archivex Acquisition were six
owned records storage facilities with in excess of an aggregate of 600,000
square feet of space and five leased records storage facilities with
approximately 100,000 square feet of space. The Archivex Acquisition added
approximately 4.0 million cubic feet of records under management.
The principal executive offices of Command are located at 1303 Greene Avenue,
Suite 303, Montreal, Quebec H3Z 2A4, Canada, and its telephone number is (514)
934-0273.
USE OF PROCEEDS
The Issuer will not receive any cash proceeds from the issuance of the
Exchange Notes offered hereby. In consideration for issuing the Exchange Notes
as contemplated in this Prospectus, the Issuer will receive in exchange Original
Notes in like principal amount, the terms of which are substantially identical
to the Exchange Notes. The Original Notes surrendered in exchange for Exchange
Notes will be retired and cancelled and cannot be reissued. Accordingly,
issuance of the Exchange Notes will not result in any increase in the
indebtedness of the Issuer or the Company.
The net proceeds to the Issuer from the sale of the Original Notes were
estimated to be approximately $131.8 million, after deducting underwriting fees
and estimated offering expenses. The Issuer has used or expects to use the net
proceeds of the Offering as follows: (i) approximately $66 million to fund the
Archivex Acquisition (including approximately $20 million of such total amount
loaned to Archivex to fund its portion of the Archivex Acquisition), which
amount includes approximately $3 million of related integration costs; (ii)
approximately $25 million to repay the Issuer's outstanding borrowings under the
Credit Facility; (iii) approximately $11 million to repay outstanding loans from
Pierce Leahy; (iv) approximately $4 million to return capital invested by Pierce
Leahy in the Issuer; and (v) the balance of the net proceeds was lent to Pierce
Leahy, which amount Pierce Leahy used to repay a portion of its borrowings under
the Credit Facility. As of April 1, 1998, the effective interest rate on the
Canadian dollar portion of the Credit Facility was approximately 6.38% and the
effective interest rate on the U.S. dollar portion of the Credit Facility was
approximately 7.57%. The borrowings by the Issuer under the Credit Facility
which were repaid by a portion of the net proceeds of the Offering were
primarily used to fund certain of the Company's acquisitions and for working
capital. The borrowings by Pierce Leahy under the Credit Facility which it
repaid with a portion of the proceeds of the Offering were primarily used to
fund acquisitions.
-34-
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of March
31, 1998 (i) on an actual basis, (ii) on a pro forma basis to give effect to the
Recent Acquisitions as if they had occurred as of March 31, 1998 and (iii) as
further adjusted to give effect to the sale of the Offering and the application
of the net proceeds therefrom as described under "Use of Proceeds." This table
should be read in conjunction with the Company's Pro Forma Financial Data and
Consolidated Financial Statements and notes thereto and the other information
included elsewhere in this Prospectus (amounts in thousands):
<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
-------------------------------------
PRO FORMA
FOR THE RECENT
ACTUAL ACQUISITIONS PRO FORMA
---------- -------------- ----------
<S> <C> <C> <C>
Cash................................................................................... $ 2,483 $ 2,858 $ 2,858
======== ======== ========
Credit Facility (a).................................................................... $ 75,156 $236,763 $104,763
11/1//8% Senior subordinated notes due 2006............................................ 130,000 130,000 130,000
9/1//8% Senior subordinated notes due 2007............................................. 120,000 120,000 120,000
8/1//8% Senior subordinated notes due 2008 of Pierce Leahy Command Company............. -- -- 135,000
Seller notes........................................................................... 967 967 967
Other indebtedness..................................................................... 10,805 10,805 10,805
Less--Current portion.................................................................. (2,127) (2,127) (2,127)
-------- -------- --------
Total long-term debt (b)................................................... 334,801 496,408 499,408
-------- -------- --------
Preferred stock........................................................................ -- -- --
Common stock........................................................................... 165 171 171
Additional paid-in capital............................................................. 67,976 82,386 82,386
Accumulated deficit.................................................................... (9,461) (9,461) (9,461)
-------- -------- --------
Total shareholders' equity................................................. 58,680 73,096 73,096
-------- -------- --------
Total capitalization..................................................... $393,481 $577,804 $580,804
======== ======== ========
</TABLE>
(a) See Note 6 of the Notes to Consolidated Financial Statements incorporated by
reference herein for information concerning the Company's debt obligations.
<PAGE>
PRO FORMA FINANCIAL DATA OF PIERCE LEAHY CORP.
The unaudited pro forma condensed consolidated balance sheet as of March 31,
1998 gives effect to, among other things, the Recent Acquisitions and the
Offering as if they occurred on March 31, 1998. The unaudited pro forma
condensed consolidated statement of operations for the year ended December 31,
1997 and for the three months ended March 31, 1998 give effect to, among other
things, the 1997 and 1998 Acquisitions for periods prior to their acquisition by
the Company and the Offering, as if they occurred on January 1, 1997. The
Company recorded a deferred income tax provision of $6,600 in 1997 in connection
with the termination of the Company's status as a Subchapter S corporation for
the tax effect of differences in the basis of assets and liabilities for
financial reporting and income tax purposes. This one-time deferred income tax
provision has been eliminated in the Pro Forma Condensed Consolidated Statement
of Operations.
The 1997 and 1998 Acquisitions, the Offering and certain management
assumptions and adjustments are described in the accompanying notes hereto. This
pro forma information is not necessarily indicative of the results that would
have occurred had the 1997 and 1998 Acquisitions and the Offering been completed
on the dates indicated or of the Company's actual or future results or financial
position. The unaudited pro forma condensed consolidated balance sheet and
statements of operations should be read in conjunction with the Company's
Consolidated Financial Statements and notes thereto as of December 31, 1997 and
for each of the three years in the period ended December 31, 1997, incorporated
by reference into this Prospectus.
<PAGE>
PIERCE LEAHY CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Pro Forma for the
ASSETS Acquisition of Archivex (b)
------ ----------------------------
Recent Acquisitions
Except Archivex Archivex Pro Forma
Actual and Kestrel (a) Actual Adjustments
-------- ------------------- ------------- ---------------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash.............................................. $ 2,483 $ 126 $ -- $ --
Accounts receivable............................... 31,325 3,750 3,681 (3,681) (d)
Inventories....................................... 872 -- 123 (123) (d)
Prepaid expenses and other........................ 1,112 400 249 (249) (d)
Deferred income taxes............................. 2,589 -- -- --
-------- ------- ------- --------
Total current assets.......................... 38,381 4,276 4,053 (4,053)
PROPERTY AND EQUIPMENT, net........................ 173,399 3,320 6,505 8,188 (e)
OTHER ASSETS, primarily Goodwill................... 240,805 57,005 4,674 45,433 (f)
-------- ------- ------- --------
$452,585 $64,601 $15,232 $49,568
======== ======= ======= ========
LIABILITIES AND STOCKHOLDERS EQUITY
- -----------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt and noncompete
obligations...................................... $ 2,127 $ -- $ 2,818 $ (2,818) (d)
Accounts payable.................................. 6,873 2,400 2,438 (2,438) (d)
Accrued expenses.................................. 24,716 -- 781 (781) (d)
1,398 (b)
Deferred revenues................................. 12,436 -- 1,580 --
-------- ------- ------- --------
Total current liabilities..................... 46,152 2,400 7,617 (4,639)
LONG-TERM DEBT AND NONCOMPETE OBLIGATIONS.......... 334,801 47,785 810 (810) (d)
61,822 (g)
DEFERRED RENT...................................... 4,358 -- -- --
DEFERRED INCOME TAXES.............................. 8,594 -- 1,195 (1,195) (d)
SHAREHOLDERS' EQUITY............................... 58,680 14,416 5,610 (5,610) (h)
-------- ------- ------- --------
$452,585 $64,601 $15,232 $49,568
======== ======= ======= ========
<CAPTION>
Pro Forma for the
Acquisition of Kestrel (c)
-------------------------
Pro Forma for
ASSETS Recent Acquisitions
------ Kestrel Pro Forma Including Archivex Adjustments from
Actual Adjustments and Kestrel the Offering Pro Forma
-------- --------------- -------------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:....................................
Cash............................................... $ 249 $ -- $ 2,858 $ -- $ 2,858
Accounts receivable................................ 1,633 -- 36,708 -- 36,708
Inventories........................................ -- -- 872 -- 872
Prepaid expenses and other......................... 526 -- 2,038 -- 2,038
Deferred income taxes.............................. -- -- 2,589 -- 2,589
------- -------------- -------- -------- --------
Total current assets........................... 2,408 -- 45,065 -- 45,065
PROPERTY AND EQUIPMENT, net......................... 15,623 -- 207,035 -- 207,035
OTHER ASSETS, primarily Goodwill.................... 1,762 35,853 (i) 385,532 3,000 (l) 388,532
------- -------------- -------- -------- --------
$19,793 $35,853 $637,632 $3,000 $640,632
======= ============== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt and noncompete
obligations....................................... $ 1,706 $(1,706) (j) $ 2,127 $ -- $ 2,127
Accounts payable................................... 675 -- 9,948 -- 9,948
Accrued expenses................................... 573 -- 26,687 -- 26,687
Deferred revenues.................................. 874 -- 14,890 -- 14,890
------- -------------- -------- -------- --------
Total current liabilities...................... 3,828 (1,706) 53,652 -- 53,652
LONG-TERM DEBT AND NONCOMPETE OBLIGATIONS........... 8,300 43,700 (j) 496,408 3,000 (l) 499,408
DEFERRED RENT....................................... 624 (624)(k) 4,358 -- 4,358
DEFERRED INCOME TAXES............................... 1,524 -- 10,118 -- 10,118
SHAREHOLDERS' EQUITY................................ 5,517 (5,517) (h) 73,096 -- 73,096
------- -------------- -------- -------- --------
$19,793 $35,853 $637,632 $ 3,000 $640,632
======= ============== ======== ======== ========
</TABLE>
<PAGE>
PIERCE LEAHY CORP.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)
(a) Represents the balance sheets for the Recent Acquisitions other than the
Archivex Acquisition and Kestrel Acquisition (see "Business-The 1998
Acquisitions") after the application of the purchase method of accounting.
The purchase price of the 1998 Acquisitions (excluding the Archivex
Acquisition and Kestrel Acquisition) was $62,201, including $14,416 of
common stock issued at fair market value.
(b) The Company completed the Archivex Acquisition after March 31, 1998 (see
"Business--The 1998 Acquisitions"), for approximately $63,402, including
transaction costs and assumed liabilities of $1,580. In addition to the
purchase price, the Company has accrued $1,398 for estimated severance costs
for planned employee terminations. The pro forma adjustments reflect the
application of the purchase method of accounting to the actual balance sheet
of Archivex.
(c) The Company completed the Kestrel Acquisition after March 31, 1998 (see
"Business--The 1998 Acquisitions") for approximately $52,000, including
transaction costs. The pro forma adjustments reflect the application of the
purchase method of accounting to the actual balance sheet of Kestrel.
(d) Reflects the adjustments for the assets and liabilities not acquired or
assumed as part of the Archivex Acquisition.
(e) Reflects the purchase of real estate owned by affiliates of Archivex, Inc.
which is not included in the financial statements of Archivex.
(f) Intangible assets include goodwill $(42,967) and a noncompete agreement
$(7,140) which resulted from the preliminary allocation of the purchase
price. These intangibles are subject to adjustment based on the final
allocation of the purchase price to the net assets acquired. Management
believes that the final allocation of the purchase price will not differ
materially from the preliminary estimated amounts.
(g) Reflects the Company's assumed borrowing of $61,822 under the Credit
Facility to fund the Archivex Acquisition.
(h) Reflects the adjustment to eliminate historical equity accounts.
(i) Intangible assets include goodwill ($30,853) and a noncompete agreement
($5,000) which resulted from the preliminary allocation of the purchase
price. These intangibles are subject to adjustment based on the final
allocation of the purchase price to the net assets acquired. Management
believes that the final allocation of the purchase price will not differ
materially from the preliminary estimated amounts.
(j) Reflects the Company's assumed additional borrowing of $43,700 under the
Credit Facility to fund the Archivex Acquisition and the repayment of
existing indebtedness of $1,706.
(k) Reflects the adjustment of deferred rent, not acquired as part of the
Kestrel Acquisition.
(l) Reflects the net proceeds of $131,815 from the Offering (after deducting
underwriting discounts and commissions and estimated offering expenses of
$3,000, which amount has been recorded as deferred financing costs) and the
application of the net proceeds therefrom. The proceeds from the Offering
were used to repay certain Senior Indebtedness and to finance the Archivex
Acquisition and other 1998 Acquisitions.
<PAGE>
PIERCE LEAHY CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1997 and 1998 Acquisitions
Excluding Archivex Archivex Kestrel
Actual and Kestrel (a) Actual Actual
--------- -------------------------- ---------- --------
<S> <C> <C> <C> <C>
REVENUES $ 183,517 $ 62,399 $ 14,522 $ 12,873
--------- -------- -------- --------
OPERATING EXPENSES:
Cost of sales, excluding depreciation and amortization........ 101,940 40,101 7,600 5,330
Selling, general and administrative........................... 30,070 15,785 3,031 4,727
Depreciation and amortization................................. 21,528 2,352 1,627 883
Special compensation charge................................... 1,752 -- -- --
Foreign currency exchange..................................... 702 -- -- --
--------- -------- -------- --------
Total operating expenses...................................... 155,992 58,238 12,258 10,940
--------- -------- -------- --------
Operating income.............................................. 27,525 4,161 2,264 1,933
INTEREST EXPENSE............................................... 29,262 604 542 841
--------- -------- -------- --------
Income (loss) before income taxes, extraordinary charge and
discontinued operations...................................... (1,737) 3,557 1,722 1,092
INCOME TAXES................................................... 7,424 16 868 359
--------- -------- -------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY CHARGE AND DISCONTINUED
OPERATIONS.................................................... $ (9,161) $ 3,541 $ 854 $ 733
========= ======== ======== ========
<CAPTION>
Pro Forma Pro Forma For Adjustment for
Adjustments (b) Acquisitions Offering Pro Forma
--------------- ------------- -------------- -----------
<S> <C> <C> <C> <C>
REVENUES $ -- $ 273,311 $ -- $ 273,311
--------- --------- --------- ----------
OPERATING EXPENSES:
Cost of sales, excluding depreciation and amortization........ (1,598) (c) 153,373 -- 153,373
Selling, general and administrative........................... (382) (d) 53,231 -- 53,231
Depreciation and amortization................................. 7,572 (e) 33,962 -- 33,962
Special compensation charge................................... -- 1,752 -- 1,752
Foreign currency exchange..................................... -- 702 -- 702
--------- --------- --------- ----------
Total operating expenses...................................... 5,592 243,020 -- 243,020
--------- --------- --------- ----------
Operating income.............................................. (5,592) 30,291 -- 30,291
INTEREST EXPENSE............................................... 14,436 (f) 45,685 795 46,480(g)
--------- --------- --------- ----------
Income (loss) before income taxes, extraordinary charge and
discontinued operations...................................... (20,028) (15,394) (795) (16,189)
INCOME TAXES................................................... (9,945) (h) (1,278) (1,977) (3,255)(i)
--------- --------- --------- ----------
INCOME (LOSS) BEFORE EXTRAORDINARY CHARGE AND DISCONTINUED
OPERATIONS.................................................... $ (10,083) $ (14,116) $ 1,182 $ (12,934)
========= ========= ========= ==========
</TABLE>
PIERCE LEAHY CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1997 and 1998 Acquisitions
Excluding Archivex Archivex Kestrel
Actual and Kestrel (a) Actual Actual
--------- -------------------------- --------- --------
<S> <C> <C> <C> <C>
REVENUES $ 56,290 $ 6,919 $ 3,816 $ 2,938
--------- -------- ------- --------
OPERATING EXPENSES:
Cost of sales, excluding depreciation and amortization... 32,915 3,765 2,150 1,487
Selling, general and administrative...................... 8,774 1,748 936 786
Depreciation and amortization............................ 7,219 256 242 255
Foreign currency exchange................................ (62) -- -- --
--------- -------- ------- --------
Total operating expenses................................. 48,846 5,769 3,328 2,528
--------- -------- ------- --------
Operating income......................................... 7,444 1,150 488 410
INTEREST EXPENSE.......................................... 8,300 49 111 178
--------- -------- ------- --------
Income (loss) before income taxes........................ (856) 1,101 377 232
INCOME TAXES.............................................. 181 20 113 72
--------- -------- ------- --------
NET INCOME (LOSS)......................................... $ (1,037) $ 1,081 $ 265 $ 160
========= ======== ======= ========
<CAPTION>
Pro Forma Pro Forma For Adjustment for
Adjustments (b) Acquisitions Offering Pro Forma
--------------- -------------- -------------- ----------
<S> <C> <C> <C> <C>
REVENUES $ -- $ 69,963 $ -- $ 69,963
-------- --------- -------- --------
OPERATING EXPENSES:
Cost of sales, excluding depreciation and amortization... (394) (c) 39,923 -- 39,923
Selling, general and administrative...................... (94) (d) 12,150 -- 12,150
Depreciation and amortization............................ 1,494 (e) 9,466 -- 9,466
Foreign currency exchange................................ -- (62) -- (62)
-------- --------- -------- --------
Total operating expenses................................. 1,006 61,477 -- 61,477
-------- --------- -------- --------
Operating income......................................... (1,006) 8,486 -- 8,486
INTEREST EXPENSE.......................................... 2,564 (f) 11,202 418 11,620 (g)
-------- --------- -------- --------
Income (loss) before income taxes........................ (3,570) (2,716) (418) (3,134)
INCOME TAXES.............................................. (665) (279) (289) (568) (i)
-------- --------- -------- --------
NET INCOME (LOSS)......................................... $ (2,905) $ (2,437) $ (129) $ (2,566)
======== ========= ======== ========
</TABLE>
<PAGE>
PIERCE LEAHY CORP.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
(a) Represents the historical results of operations of the 1997 and 1998
Acquisitions for the periods from January 1, 1997 to the earlier of their
dates of acquisition by the Company or March 31, 1998. See "Business--
Acquisition and Growth Strategy" and "Business--The 1998 Acquisitions."
(b) Management expects to achieve cost savings from the 1997 and 1998
Acquisitions as a result of the factors described below. The Pro Forma
Condensed Consolidated Statement of Operations for the year ended December
31, 1997 and the three months ended March 31, 1998 reflect only the cost
savings actually achieved in 1997 and in the three months ended March 31,
1998 from the acquisitions completed in 1997 and in the three months ended
March 31, 1998 and none of the additional expected savings from the 1997 and
1998 Acquisitions. There is typically a lag after an acquisition is
completed to fully realize such savings and the Company expects to achieve
additional savings from the 1997 and 1998 Acquisitions.
The integration of an acquired company entails, among other things,
converting the database of stored records to the PLUS/(R)/ system,
reorganizing archive operating activities and eliminating certain back
office activities which can be handled through the PLUS/(R)/ system or the
Company's centralized corporate organization. Cost savings start to be
realized a short time after an acquisition. Management has specifically
identified approximately $14,968 and $1,823 of estimated operating expenses
included in the pro forma statement of operations for the year ended
December 31, 1997 and for the three months ended March 31, 1998 that would
not have been incurred had the 1997 and 1998 Acquisitions occurred as of
January 1, 1997 and had such cost savings been fully implemented as of such
date. These savings relate to (i) the termination of certain employees due
to the efficiency of the PLUS/(R)/ system and integration and consolidation
of facilities, (ii) a reduction in warehouse rent expense related to
facilities the Company has vacated or will vacate or has negotiated changes
in lease terms and (iii) a reduction of other operating costs due to the
Company's economies of scale. Management expects to realize additional cost
savings beyond the $14,968 and $1,823 specifically identified.
(c) Represents the elimination of rent expense on facilities leased to Archivex,
Inc. from its affiliates. These facilities were purchased as part of the
Archivex Acquisition.
(d) Represents the elimination of management fees paid to an affiliate of
Archivex, Inc. which fees were discontinued upon completion of the Archivex
Acquisition.
(e) A pro forma adjustment has been made to reflect additional depreciation and
amortization expense based on the estimated fair value of the assets
acquired, as if the 1997 and 1998 Acquisitions had occurred as of January 1,
1997. Such depreciation and amortization has been recorded in accordance
with the Company's accounting policies as stated in Notes 3 and 4 of Notes
to Consolidated Financial Statements incorporated by reference herein. The
purchase price allocation may change upon the final appraisal of the fair
market value of the net assets acquired. However, management believes that
any change in value will not materially impact the amount of depreciation
and amortization recorded.
(f) Represents interest expense for the year ended December 31, 1997 and for the
three months ended March 31, 1998, respectively, on debt incurred to finance
the 1997 and 1998 Acquisitions, using an annual interest rate of 8%.
(g) Reflects interest expense on $200,000 of 1996 notes at 11 1/8% from January
1, 1997 to the 1997 initial public offering of Pierce Leahy and $130,000 of
1996 notes at 11 1/8% for the remainder of 1997 and 1998, $120,000 of 1997
Notes at 9 1/8%, $135,000 of the Notes at 8 1/8%, and with respect to the
year ended December 31, 1997 and the three months ended March 31, 1998,
interest expense of $3,919 and $980 on existing and assumed senior
indebtedness, interest expense of $394 and $99 on other pro forma
indebtedness, commitment fees on existing Senior Indebtedness of $433 and
$108 and amortization of deferred financing costs of $1,426 and $357,
respectively.
(h) The Company recorded a deferred income tax provision of $6,600 in 1997 in
connection with the termination of the Company's status as a Subchapter S
corporation. This one-time deferred income tax provision has been eliminated
along with recording an income tax benefit of $3,874 resulting from the pro
forma adjustments for acquisitions.
(i) The Company operated as a Subchapter S corporation for income tax purposes
until July 1, 1997. The pro forma income taxes represent taxes on the pro
forma loss before income taxes and extraordinary charge after addback of all
pro forma non-deductible expenses.
<PAGE>
SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED STATEMENTS OF
OPERATIONS, OTHER DATA AND BALANCE SHEETS OF PIERCE LEAHY CORP.
The following selected consolidated statement of operations and balance sheets,
insofar as it relates to each of the five years in the period ended December 31,
1997, have been derived from the Consolidated Financial Statements of the
Company which have been audited by Arthur Andersen LLP, independent public
accounts. The report of Arthur Andersen LLP with respect to the Company's
Consolidated Financial Statements for the years ended December 31, 1997, 1996
and 1995 was incorporated by reference into this Prospectus. The selected
consolidated statement of operations, balance sheet and other data as of March
31, 1998 and for the three months ended March 31, 1998 and 1997, is derived from
the unaudited Consolidated Financial Statements of the Company incorporated by
reference into this Prospectus which, in management's opinion, includes all
material adjustments (consisting only of normal recurring adjustments) necessary
for the fair presentation of the information set forth therein. The results of
operations for the three months ended March 31, 1998 are not necessary
indicative of the results that may be expected for a full year.
The following selected pro forma statement of operations and other data give
effect to, among other things, the 1997 and 1998 Acquisitions and the impact of
the Offering, as if each of these items had occurred on January 1, 1997. The
pro forma balance sheet gives effect to the Recent Acquisitions and the impact
of the Offering, as if each of these items had occurred on March 31, 1998. In
1997, the Company recorded a deferred income tax provision of $6,600 in
connection with the termination of the Company's status as a Subchapter S
corporation for the tax effect of differences in the basis of assets and
liabilities for financial reporting and income tax purposes. This one-time
deferred income tax provision has been eliminated in the Pro Forma Condensed
Consolidated Statement of Operations. Also not reflected in the Pro Forma
Condensed Consolidated Statement of Operations is the extraordinary charge of
$6,036 for the early extinguishment of a portion of the 1996 Notes that occurred
in August 1997.
The pro forma items are described in the accompanying notes hereto. The pro
forma information should be read in conjunction with the Company's Consolidated
Financial Statements and notes thereto as of December 31, 1997 and for each of
the three years in the period then ended, incorporated by reference into this
Prospectus. This pro forma information is not necessarily indicative of the
results that would have occurred had the 1997 and 1998 Acquisitions and the
Offering been completed on the dates indicated or the Company's actual or future
results or financial position.
The information set forth below should be read in conjunction with the Pro Forma
Condensed Consolidated Financial Statements, the Company's Consolidated
Financial Statements and the related notes thereto, and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" appearing
elsewhere in this Prospectus.
<PAGE>
SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS, OTHER
DATA AND BALANCE SHEETSOF PIERCE LEAHY CORP.
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------
1993 1994 1995 1996 1997
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(dollars in thousands, except per share data)
Statement of Operations Data:
Revenues
Storage...................................... $ 42,122 $ 47,123 $ 55,501 $ 75,900 $ 107,879
Service and storage material sales........... 31,266 35,513 39,895 53,848 75,638
----------- ----------- ----------- ----------- -----------
Total revenues.............................. 73,388 82,636 95,396 129,748 183,517
Cost of sales, excluding depreciation and
amortization................................. 45,391 49,402 55,616 73,870 101,940
Selling, general and administrative........... 11,977 15,882 16,148 20,007 30,070
Depreciation and amortization................. 6,888 8,436 8,163 12,869 21,528
Special compensation charge (b)............... -- -- -- -- 1,752
Foreign currency exchange..................... -- -- -- -- 702
Consulting payments to related parties (c).... -- 500 500 -- --
Non-recurring charges (d)..................... -- -- -- 3,254 --
----------- ----------- ----------- ----------- -----------
Operating income............................. 9,132 8,416 14,969 19,748 27,525
Interest expense.............................. 6,160 7,216 9,622 17,225 29,262
----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes and
extraordinary charge........................ 2,972 1,200 5,347 2,523 (1,737)
Income taxes (e).............................. -- -- -- -- 7,424
Extraordinary charge (f)...................... 9,174 5,991 3,279 2,015 6,036
----------- ----------- ----------- ----------- -----------
Net income (loss)............................. (6,202) (4,791) 2,068 508 (15,197)
Accretion (cancellation) of redeemable
warrants..................................... (746) 16 889 1,561 --
----------- ----------- ----------- ----------- -----------
Net income (loss) applicable to Common
shareholders................................. $ (5,456) $ (4,807) $ 1,179 $ (1,053) $ (15,197)
=========== =========== =========== =========== ===========
Basic and diluted earnings per Common share
Income (loss) before extraordinary charge.... $0.34 $0.18 $0.19 $0.09 $ (0.69)
Extraordinary charge......................... (0.85) (0.56) (0.30) (0.19) (0.45)
----------- ----------- ----------- ----------- -----------
Basic and diluted income (loss) per Common
share....................................... $ (0.51) $ (0.38) $ 0.11 $ (0.10) $ (1.14)
=========== =========== =========== =========== ===========
Shares used in computing basic net income
(loss) per Common share.................... 10,591,090 10,591,090 10,591,090 10,546,871 13,385,243
Shares used in computing diluted net income
(loss) per Common share.................... 10,782,025 10,888,441 10,890,188 10,630,922 13,385,243
Pro forma data (unaudited):
Historical net loss before income taxes and
extraordinary charge........................ $ (1,737)
Pro forma adjustment for income taxes (e)... 1,452
Extraordinary charge, net of tax............ 6,036
-----------
Historical net loss applicable to Common
shareholders, as adjusted for pro forma
income taxes................................ $ (9,225)
===========
Historical basic and diluted net loss per
Common share, as adjusted for pro forma
income taxes--
Loss before extraordinary charge.............. $ (0.24)
Extraordinary charge.......................... (0.45)
-----------
$ (0.69)
===========
Pro forma basic and diluted net loss
applicable to Common shareholders per Common
share........................................
Shares used in computing per share amounts.... 13,385,243
OTHER DATA:
Ratio of earnings to fixed charges (h)........ 1.30x 1.11x 1.37x 1.11x --
Cash flows provided by operations............. $ 8,019 $ 11,000 $ 17,522 $ 26,438 $ 20,964
Cash flows used in investing activities....... (13,784) (13,933) (51,315) (108,842) (156,549)
Cash flows provided by financing activities... 5,832 2,763 34,157 82,936 136,113
EBITDA (i).................................... $ 16,020 $ 17,352 $ 23,632 $ 35,871 $ 51,507
EBITDA margin ............................... 21.8% 21.0% 24.8% 27.6% 28.1%
EBITDA, as adjusted (j)....................... -- -- -- -- --
Capital expenditures (k) ................... $ 5,827 $ 6,352 $ 16,288 $ 23,493 $ 35,397
Cubic feet of storage under management at
end of period (000s)......................... 19,025 22,160 29,523 40,410 58,865
<CAPTION>
Three Months Ended March 31,
------------ -----------------------------------------------------
Pro Forma Pro Forma
1997 (a) 1997 1998 1998 (a)
------------ ------------------- --------------- ---------------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Statement of Operations Data:
Revenues
Storage......................................... $ 160,015 $ 23,322 $ 33,214 $ 40,988
Service and storage material sales.............. 113,296 16,910 23,076 28,975
----------- ----------- ----------- -----------
Total revenues................................. 273,311 40,232 56,290 69,963
Cost of sales, excluding depreciation and
amortization.................................... 153,373 22,298 32,915 39,923
Selling, general and administrative.............. 53,231 6,762 8,774 12,150
Depreciation and amortization.................... 33,962 4,214 7,219 9,466
Special compensation charge (b).................. 1,752 -- -- --
Foreign currency exchange........................ 702 182 (62) (62)
Consulting payments to related parties (c)....... -- -- -- --
Non-recurring charges (d)........................ -- -- -- --
----------- ----------- ----------- -----------
Operating income................................ 30,291 6,776 7,444 8,486
Interest expense................................. 46,480 6,712 8,300 11,620
----------- ----------- ----------- -----------
Income (loss) before income taxes and
extraordinary charge........................... (16,189) 64 (856) (3,134)
Income taxes (e)................................. (3,255) -- 181 (568)
Extraordinary charge (f)......................... -- -- -- --
----------- ----------- ----------- -----------
Net income (loss)................................ (12,934) 64 (1,037) (2,566)
Accretion (cancellation) of redeemable -- -- -- --
warrants........................................ ----------- ----------- ----------- -----------
Net income (loss) applicable to Common
shareholders.................................... $ (12,934) $ 64 $ (1,037) $ (2,566)
=========== =========== =========== ===========
Basic and diluted earnings per Common share:
Income (loss) before extraordinary charge....... $ 0.01 $ (0.06)
Extraordinary charge............................ -- --
----------- -----------
Basic and diluted income (loss) per Common
share.......................................... $ 0.01 $ (0.06)
=========== ===========
Shares used in computing basic net income
(loss) per Common share........................ 10,944,603 16,477,728
Shares used in computing diluted net income
(loss) per Common share....................... 10,944,603 16,477,728
Pro forma data (unaudited):......................
Historical net loss before income taxes and
extraordinary charge........................... $ 64
Pro forma adjustment for income taxes (e)...... 291
Extraordinary charge, net of tax............... --
-----------
Historical net loss applicable to Common
shareholders, as adjusted for pro forma
income taxes................................... $ (227)
===========
Historical basic and diluted net loss per
Common share, as adjusted for pro forma
income taxes--
Loss before extraordinary charge................. $ (0.02)
Extraordinary charge............................. --
-----------
$ (0.02)
===========
Pro forma basic and diluted net loss
applicable to Common shareholders per Common
share........................................... $ (.97) (g) (0.16) (g)
Shares used in computing per share amounts....... 13,385,243 10,485,090 16,477,728
OTHER DATA
Ratio of earnings to fixed charges (h)........... -- 1.01 (x) -- --
Cash flows provided by (used in) operations...... -- $ (5,549) 457 --
Cash flows used in investing activities.......... -- (31,906) (55,819) --
Cash flows provided by financing activities...... -- 37,265 56,063 --
EBITDA (i)....................................... $ 66,707 $ 11,172 $ 14,601 $ 17,890
EBITDA margin .................................. 24.4% 27.8 25.9 25.6
EBITDA, as adjusted (j).......................... $ 81,675 -- -- $ 19,713
Capital expenditures (k)......................... $ -- $ 10,794 $ 12,622 $ --
Cubic feet of storage under management at end
of period (000s) (l)............................ 71,365 43,354 65,125 74,113
</TABLE>
<TABLE>
<CAPTION>
As of December 31,
-------------------------------------------------------------------
1993 1994 1995 1996 1997
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital deficit....................... $ (9,143) $ (5,202) $ (8,139) $ (23,933) $ (12,906)
Total assets.................................. 74,621 79,746 131,328 234,820 394,713
Total debt.................................... 69,736 77,683 120,071 29,023 279,197
Shareholders' equity (deficit)................ (14,508) (19,341) (18,201) (25,438) 59,323
<CAPTION>
As of March 31, 1998
--------------------------------
Pro
Actual Forma (m)
-------------- ---------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital deficit....................... $ (7,771) $ (8,587)
Total assets.................................. 452,585 640,632
Total debt.................................... 336,928 501,535
Shareholders' equity (deficit)................ 58,680 73,096
</TABLE>
<PAGE>
NOTES TO SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA
(a) Gives effect to (i) the 1997 and the 1998 Acquisitions and (ii) the impact
of the Offering, as if each of these items had occurred on January 1, 1997.
See "Pro Forma Financial Data or Pierce Leahy Corp." and Note 2 of the
Notes to Consolidated Financial Statements incorporated by reference
herein. In 1997, the Company recorded a deferred income tax provision of
$6,600 in connection with the termination of the Company's status as a
Subchapter S corporation for the tax effect of differences in the basis of
assets and liabilities for financial reporting and income tax purposes.
This one-time deferred income tax provision has been eliminated in the Pro
Forma Condensed Consolidated Statements of Operations. Also not reflected
in the Pro Forma Condensed Consolidated Statements of Operations is the
extraordinary charge of $6,036 for the early extinguishment of a portion of
the 1996 Notes that occurred in July 1997. See Note (f) below.
(b) Upon consummation of Pierce Leahy's 1997 initial public offering, options
granted during 1997 became fully vested and exercisable as provided for
under the stock option plan. The Company recorded a non-recurring, non-cash
compensation charge of $1,752 relating to those options, representing the
difference between the exercise price and the deemed value for accounting
purposes.
(c) Represents aggregate payments made to eight Pierce family members.
(d) Represents non-recurring charges in 1996 of $2,764 paid to a related party
partnership to assume the partnership's position in certain leases with
third parties and of $490 for the establishment of an annual pension for
Leo W. Pierce, Sr. and his spouse.
(e) Until July 1, 1997, the Company was taxed as a Subchapter S corporation.
Such status was terminated in connection with Pierce Leahy's 1997 initial
public offering. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 2 of Notes to Consolidated
Financial Statements incorporated by reference herein.
(f) Represents loss on early extinguishment of debt due to refinancings in
1993, 1994, 1995, 1996 and 1997. Amounts include write-off of unamortized
deferred financing costs and discount, along with prepayment penalties and
other costs. A charge for the early extinguishment of a portion of the 1996
Notes of $6,036 occurred in August 1997. Such charge has been eliminated in
the Pro Forma Condensed Consolidated Statement of Operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
(g) Excluding $14,968 and $1,823 of operating expenses included in the pro
forma statement of operations for 1997 and for the three months ended March
31, 1998, respectively, specifically identified by management that would
not have been incurred had the 1997 and 1998 Acquisitions occurred as of
January 1, 1997 and had such cost savings been fully implemented as of such
date, and excluding the special compensation charge incurred in 1997, pro
forma net loss and net loss per share would have been $9,233 and $0.69,
respectively, in 1997 and $1,582 and $0.10 for the three months ended March
31, 1998, respectively.
(h) The earnings for the year ended December 31, 1997 and for the three months
ended March 31, 1998 were inadequate to cover fixed charges by $1,737 and
$1,037, respectively.
(i) "EBITDA" is defined as net income (loss) before interest expense, taxes,
depreciation and amortization, consulting payments to related parties, non-
recurring charges, foreign currency exchange, special compensation charge
and extraordinary charge. EBITDA is not a measure of performance under
GAAP. While EBITDA should not be considered in isolation or as a substitute
for net income, cash flows from operating activities and other income or
cash flow statement data prepared in accordance GAAP, or as a measure of
profitability or liquidity, management understands that EBITDA is
customarily used as a criteria in evaluating records management companies.
Moreover, substantially all of the Company's financing agreements,
including the Notes and the 1996 Notes and the 1997 Notes (each as
hereinafter defined), contain covenants in which EBITDA is used as a
measure of financial performance. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations" for a discussion of other
measures of performance determined in accordance with GAAP and the
Company's sources and applications of cash flows.
(j) EBITDA, as adjusted is defined as EBITDA plus $14,968 and $1,823 of
operating expenses included in the pro forma statements of operations for
1997 and for the three months ended March 31, 1998, respectively,
specifically identified by management that would not have been incurred had
the 1997 and 1998 Acquisitions occurred as of January 1, 1997 and such cost
savings been fully implemented as of such date. See Note (b) of Notes to
Pro Forma Condensed Consolidated Statement of Operations. Management
expects to realize additional cost savings beyond the $14,968 and $1,823
specifically identified.
(k) Capital expenditures for 1997 are comprised of $14.9 million for new
shelving, $3.5 million for leasehold and building improvements, $10.6
million for new facility purchases and related improvements, $3.7 million
for data processing and $2.7 million for the purchase of transportation,
warehouse and office equipment.
(l) The pro forma cubic feet of storage as of March 31, 1998 includes cubic
feet of storage from the 1998 Acquisitions at the time of their respective
acquisitions.
(m) Gives effect to the Recent Acquisitions and the impact of the Offering as
if each of these items had occurred on March 31, 1998.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The Company is the largest hard copy records management company in North
America, as measured by its 76 million cubic feet of records currently under
management. The Company's operations date to 1957 when its predecessor company,
L.W. Pierce Co., Inc., was founded to provide filing systems and related
equipment to companies in the Philadelphia area. The Company expanded primarily
through internal growth until 1990, when it acquired Leahy Business Archives,
which effectively doubled its size. Since 1992, the Company has pursued an
expansion strategy combining growth from new and existing customers with the
completion and successful integration of 43 acquisitions through 1997 and the
completion of 14 acquisitions to date in 1998.
The Company's net income (loss) was $(15.2) million, $0.5 million, $2.1
million, $(1.0) million and $0.1 million in 1997, 1996, and 1995 and the three
months ended March 31, 1998 and 1997, respectively. Although the Company's
operating income has increased over the three years, net income (loss) has
fluctuated as a result of increases in interest expense, income taxes related to
the termination of the Company's status as a Subchapter S corporation, and
extraordinary charges related to the early extinguishment of debt due to
refinancings in 1997, 1996 and 1995.
Another tool for measuring the performance of records management companies is
"EBITDA" (net income (loss) before interest expense, taxes, depreciation and
amortization, consulting payments to related parties, non-recurring charges,
foreign currency exchange, special compensation charge and extraordinary
charge). Substantially all of the Company's financing agreements, including the
Notes, the 1997 Notes and the 1996 Notes contain covenants in which EBITDA is
used as a measure of financial performance. However, EBITDA should not be
considered an alternative to operating or net income (as determined in
accordance with generally accepted accounting principles ("GAAP") as an
indicator of the Company's performance or to cash flow from operations (as
determined in accordance with GAAP) as a measure of liquidity.
-44-
<PAGE>
The following table illustrates the growth in stored cubic feet from new and
existing customers and acquisitions from 1997 through 1993 and for the three
months ended March 31, 1998:
NET ADDITIONS OF CUBIC FEET OF STORAGE BY CATEGORY
(CUBIC FEET IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
----------------- --------------------------------------
1998 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Additions of Cubic Feet
New and Existing Customer
Accounts(a)................ 1,999 8,170 3,956 2,740 2,695 2,660
Acquisitions............... 4,243 10,285 6,931 4,623 440 117
------ ------ ------ ------ ------
Total.................... 6,242 18,455 10,887 7,363 3,135 2,777
% Increase From:
New and Existing Customer
Accounts(a)................ * 20% 13% 12% 14% 16%
Acquisitions............... * 26% 24% 21% 21% 1%
------ ------ ------ ------ ------
Total.................... * 46% 37% 33% 16% 17%
Cubic Feet Under Management
Beginning of Period........
End of Period.............. 58,865 40,410 29,523 22,160 19,025 16,248
65,127 58,865 40,410 29,523 22,160 19,025
</TABLE>
- --------------------------
* Not applicable.
(a) Net of permanent removals. Includes effect of records destruction program
of 475 and 372 cubic feet of records in 1996 and 1995, respectively, for a
major customer, as recommended by the Company pursuant to a consulting
agreement with the Company.
-45-
<PAGE>
Revenues
The Company's revenues consist of storage revenues (58.8% of total revenues in
1997), and related service and storage material sales revenues (41.2% of total
revenues in 1997). The Company provides records storage and related services
under annual or multi-year contracts that typically provide for recurring
monthly storage fees which continue until such records are permanently removed
(for which the Company charges a service fee) and service based on activity with
respect to such records.
While the Company's total revenues have increased from 1995 to 1997, total
revenue per annual average cubic foot during such period has declined. The
decline is principally attributable to (i) increases in sales to large volume
accounts under long-term contracts with discounted rates, which generate lower
revenue per cubic foot, but typically generate increased operating income, (ii)
renegotiation of contracts with existing customers to provide for longer term
contracts at lower rates, and (iii) competition.
Operating Expenses and Productivity
Operating expenses consist primarily of cost of sales, selling, general and
administrative expenses, and depreciation and amortization. Cost of sales are
comprised mainly of wages and benefits, facility occupancy costs, equipment
costs and supplies. The major components of selling, general and administrative
expenses are management, administrative, marketing and data processing wages and
benefits and also include travel, communication and data processing expenses,
professional fees and office expenses.
The Company's depreciation and amortization charges result primarily from the
capital-intensive nature of its business and completed acquisitions. The
principal components of depreciation relate to shelving, facilities and
leasehold improvements, equipment for new facilities and computer systems.
Amortization primarily relates to the amortization of intangible assets
associated with acquisitions, including goodwill, and the amortization of client
acquisition costs. The Company has accounted for all of its acquisitions under
the purchase method except for two small acquisitions, which were accounted for
under the pooling of interests method. Since the purchase price for records
management companies is usually substantially in excess of the fair market value
of their assets, these purchases have given rise to significant goodwill and,
accordingly, significant levels of amortization. Although amortization is a
non-cash charge, it does impact reported net income (loss).
Capital Expenditures and Client Acquisition Costs
The majority of the Company's capital expenditures are related to expansion.
The largest single component is the purchase of shelving, which is directly
related to the addition of new records. Shelving has a relatively long life and
rarely needs to be replaced. Most of the Company's storage facilities (both in
number and square feet) are leased, but the Company will purchase facilities on
an opportunistic basis. The Company's data processing capital expenditures are
also largely related to growth.
The Company often incurs client acquisition costs, primarily sales commissions
and move-in costs. Client acquisition costs are capitalized and amortized over
six years, which is the average initial contract term of new customer accounts.
In 1997, the Company incurred $10.6 million of client acquisition costs or
approximately $2.04 per cubic foot of client records moved in from new clients.
Amortization of client acquisition costs amounted to $3.2 million in 1997.
-46-
<PAGE>
Extraordinary Charge
To provide capital to fund its growth oriented business strategy, the Company
has incurred substantial indebtedness. The Company has completed several
refinancings and expansions of its credit facilities, primarily utilizing bank
debt and note issuances, which have resulted in one-time charges, including the
repurchase of warrants and the write-off of deferred financing costs, of $6.0
million, $2.0 million and $3.3 million in 1997, 1996 and 1995, respectively.
Year 2000 Compliance
The Company has developed a plan designed to make its systems compliant with
the requirements to process transactions in the year 2000. Review of the
Company's core PLUS/(R)/ system databases and programs has been completed and
code modifications and testing are scheduled to be completed by December 31,
1998. The present version of the Company's internal financial accounting system
is not year 2000 compliant and is scheduled to be upgraded by December 31, 1998.
The Company is also working with its other internal information systems and
network providers to ensure all systems are year 2000 compliant. The Company
estimates that the expenses and capital expenditures associated with achieving
year 2000 compliance will not have a material effect on its financial results in
1998 or 1999.
Results of Operations
The following table sets forth, for the periods indicated, information derived
from the Company's consolidated statements of operations, expressed as a
percentage of revenue. There can be no assurance that the trends in revenue
growth or operating results shown below will continue in the future.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31,
---------------------------- -----------------------------
1998 1997 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
REVENUES:
Storage
59.0 58.0%% 58.8% 58.5% 58.2%
Service and storage material
sales 41.0 42.0 41.2 41.5 41.8
----- ----- ----- ----- -----
Total revenues
100.0 100.0 100.0 100.0 100.0
OPERATING EXPENSES:
Costs of sales, excluding
depreciation and amortization
58.5 55.4 55.5 57.0 58.3
Selling, general and
administrative
15.6 16.8 16.4 15.4 16.9
Depreciation and amortization
12.8 10.5 11.7 9.9 8.6
Special compensation charge
0.0 0.0 1.0 0.0 0.0
Foreign currency exchange
<0.1> 0.5 0.4 0.0 0.0
Non-recurring charge
0.0 0.0 0.0 2.5 0.0
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31,
---------------------------- -----------------------------
1998 1997 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Consulting payments to related
parties 0.0 0.0 0.0 0.0 0.5
----- ----- ----- ----- -----
Total operating expenses 86.8 83.2 85.0 84.8 84.3
----- ----- ----- ----- -----
Operating income 13.2 16.8 15.0 15.2 15.7
INTEREST EXPENSE 14.7 16.7 15.9 13.3 10.1
----- ----- ----- ----- -----
Income (loss) before income
taxes and extraordinary item <1.5> 0.1 (0.9) 1.9 5.6
INCOME TAXES 0.3 0.0 4.1 0.0 0.0
----- ----- ----- ----- -----
Income (loss) before
extraordinary charge <1.8> 0.1 (5.0) 1.9 5.6
EXTRAORDINARY ITEM - loss
on early extinguishment of
debt, net of $4,014 tax
benefit in 1997 and none in
1996 and 1995 0.0 0.0 3.3 1.5 3.4
----- ----- ----- ----- -----
NET INCOME (LOSS) (1.8%) 0.1 (8.3%) 0.4% 2.2%
===== ===== ===== ===== =====
EBITDA 25.9% 27.8% 28.1% 27.6% 24.8%
</TABLE>
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997
Total revenues increased from $40.2 million for the three months ended March 31,
1997 to $56.3 million for the three months ended March 31, 1998, an increase of
$16.1 million, or 39.9%. Eighteen acquisitions were completed from April 1997 to
March 1998, which accounted for $10.9 million, or 67.7%, of such increase in
total revenues. The balance of the revenue growth resulted from sales to new
customers and from net increases in cubic feet stored from existing customers.
Storage revenues increased from $23.3 million for the three months ended March
31, 1997 to $33.2 million for the three months ended March 31, 1998, an increase
of $9.9 million, or 42.4%. Service and storage material sales revenues
increased from $16.9 million for the three months ended March 31, 1997 to $23.1
million for the three months ended March 31, 1998, an increase of $6.2 million,
or 36.5%.
Cost of sales (excluding depreciation and amortization) increased from $22.3
million in the three months ended March 31, 1997 to $32.9 million in the three
months ended March 31, 1998, an increase of $10.6 million, or 47.6%, and
increased as a percentage of total revenues from 55.4% in the 1997 period to
58.5% in the 1998 period. The increase as a percentage of total revenues
resulted primarily from an increase in wages and benefits resulting from an
increased number of employees and an increase in facility occupancy costs
resulting from an increase in cubic feet stored from growth and acquisitions.
Selling, general and administrative expenses increased from $6.8 million for the
three months ended March 31, 1997 to $8.8 million for the three months ended
March 31, 1998, an increase of $2.0 million, or 29.8%, but decreased as a
percentage of total revenues from 16.8% in the 1997 period to 15.6% in the 1998
period. The dollar increase was primarily attributable to increases in staffing,
including increases in sales force and administrative staff. The decrease as a
percentage of total revenues was attributable to economies realized from
administrative efficiencies operating in a centralized manner including the use
of the Company's proprietary PLUS/(R)/ software system.
Depreciation and amortization expense increased from $4.2 million for the three
months ended March 31, 1997 to $7.2 million for the three months ended March 31,
1998, an increase of $3.0 million, or 71.3%, and increased as a percentage of
revenues from 10.5% for the three months ended March 31, 1997 to 12.8% for the
three months ended March 31, 1998. The increase was primarily attributable to
the additional depreciation and amortization expense related to the 18
acquisitions completed from
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<PAGE>
April 1997 to March 1998 and to capital expenditures for buildings, shelving,
improvements to records management facilities and information systems, and
client acquisition costs.
The Company had a foreign currency exchange loss for the three months ended
March 31, 1997 of $0.2 million (or 0.5% of revenues) and a gain of $0.1 million
(or 0.1% of revenues) for the three months ended March 31, 1998. The change in
the foreign currency adjustment is primarily due to an increase in the value of
the Canadian dollar compared to the U.S. dollar.
Interest expense increased from $6.7 million for the three months ended March
31, 1997 to $8.3 million for the three months ended March 31, 1998, an increase
of $1.6 million, or 23.7%. The increase was primarily attributable to increased
indebtedness incurred to finance acquisitions and capital expenditures.
As a result of the foregoing factors, the Company had income before income
taxes of $0.1 million (0.2% of revenues) for the three months ended March 31,
1997 compared to a loss before income taxes of $0.9 million (-1.5% of revenues)
for the three months ended March 31, 1998.
The Company recorded a provision for income taxes of $0.2 million (or 0.3% of
revenues) for the three months ended March 31, 1998. There were no income taxes
in the three months ended March 31, 1997 since the Company operated as a
Subchapter S corporation during such period.
As a result of the foregoing items, net income for the three months ended
March 31, 1997 was $0.1 million (0.2% of revenues) and net loss was $1.0 million
(-1.8% of revenues) for the three months ended March 31, 1998.
EBITDA increased from $11.2 million for the three months ended March 31, 1997
to $14.6 million for the three months ended March 31, 1998, an increase of $3.4
million, or 30.7%. As a percentage of revenues, EBITDA was 27.8% for the three
months ended March 31, 1997 and 25.9% for the three months ended March 31, 1998.
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996
Total revenues increased from $129.7 million in 1996 to $183.5 million in
1997, an increase of $53.8 million or 41.4%. Revenues from acquisitions
represented $34.9 million of this increase. Approximately $18.9 million of the
total revenue growth resulted from sales to new customers and increases in cubic
feet stored from existing customers, a base business revenue growth of
approximately 16% year over year.
Storage revenues increased from $75.9 million in 1996 to $107.9 million in
1997, an increase of $32.0 million or 42.1%. Service and storage material sales
revenues increased from $53.8 million in 1996 to $75.6 million in 1997, an
increase of $21.8 million or 40.5%.
Cost of sales (excluding depreciation and amortization) increased from $73.9
million in 1996 to $101.9 million in 1997, an increase of $28.1 million or
38.0%, but decreased slightly as a percentage of total revenues from 57.0% in
1996 to 55.5% in 1997. The $28.1 million increase was due primarily to
increases in wages and benefits resulting from an increased number of employees
and to increases in facility occupancy costs resulting from an increase in cubic
feet associated with the growth in business and entry into 14 new markets during
1997. Capacity utilization is generally lower in new markets than in existing
markets. The decrease as a percentage of total revenue was due primarily to
increased labor operating efficiencies.
Selling, general and administrative expenses increased from $20.0 million in
1996 to $30.1 million in 1997, an increase of $10.1 million or 50.3%, and
increased as a percentage of total revenues from 15.4% in 1996 to 16.4% in 1997.
The increase as a percentage of total revenues was due to increases in sales
personnel and training costs associated with the increased staff, enhancements
to the PLUS/(R)/ system, and temporarily carrying duplicate administrative costs
from recent acquisitions.
A special compensation charge of $1.8 million was incurred during 1997. This
charge relates to the write-off of the unamortized compensation expense due to
the acceleration of the vesting of the stock options granted on January 1, 1997
in conjunction with the Company's initial public offering of Common Stock.
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<PAGE>
Depreciation and amortization expenses increased from $12.9 million in 1996 to
$21.5 million in 1997, an increase of $8.7 million or 67.3%, and increased as a
percentage of total revenues from 9.9% in 1996 to 11.7% in 1997. This increase
was the result of increased capital expenditures for shelving, building, and
improvements to records management facilities and information systems and the
amortization of goodwill from the Company's acquisitions and client acquisition
costs.
The Company incurred a foreign currency exchange adjustment in 1997 of $0.7
million during which time the Company had an intercompany loan with the Issuer.
This exchange adjustment was directly related to the decrease in the Canadian
dollar to U.S. dollar exchange rate during the last quarter of 1997.
The Company incurred non-recurring charges of $3.3 million, or 2.5% of total
revenues, in 1996 in connection with the assumption of leasehold interests in
certain facilities from affiliated parties completed in connection with the sale
of the 1996 Notes and with the establishment of a pension for Leo W. Pierce, Sr.
Interest expense increased from $17.2 million in 1996 to $29.3 million in
1997, an increase of $12.0 million or 69.9%. The increase was primarily
attributable to increased indebtedness related to financing acquisitions and
capital expenditures, as well as the higher interest rate on the 1997 Notes
issued in July 1997 and a full year of interest expense on the 1996 Notes
compared to the bank debt repaid upon the issuance of the 1997 Notes and 1996
Notes. Interest expense was also affected by the proceeds of the Company's
initial public stock offering.
As a result of the foregoing factors, the Company had a loss before income
taxes and extraordinary charge of $1.7 million (0.9% of revenues) for 1997
compared to income of $2.5 million (1.9% of revenues) in 1996.
The Company recorded a provision for income taxes of $7.4 million (or 4.1% of
revenues) for 1997. These taxes were comprised of the tax effect from the
termination of the Company's Subchapter S status ($6.6 million) and the
provision for the results of operations after the termination of its status as
an S Corporation on July 1, 1997 ($0.8 million). There was no provision for
income taxes in the year ended 1996 since the Company operated as a Subchapter S
corporation during the period.
The Company recorded extraordinary charges of $6.0 million in 1997 and $2.0
million in 1996 related to the early extinguishment of debt as a result of
refinancing and expanding its existing credit agreement in 1997 and 1996.
As a result of the foregoing items, the Company had a net loss of $15.2
million and net income of $0.5 million for 1997 and 1996, respectively.
EBITDA increased from $35.9 million in 1996 to $51.5 million in 1997, an
increase of $15.6 million or 43.6%, and increased as a percentage of total
revenues from 27.6% in 1996 to 28.1% in 1997. The increase as a percentage of
the total revenues reflected growth in the Company's business, economies of
scale and increased operating efficiencies.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995
Total revenues increased from $95.4 million in 1995 to $129.7 million in 1996,
an increase of $34.4 million or 36.0%. Revenues from acquisitions represented
$25.7 million or 74.9% of this increase, including $16.3 million from a full
year of operations of five acquisitions made in 1995 and $9.4 million from a
partial year of operations of twelve acquisitions made in 1996. Approximately
$8.6 million or 25.1% of the total revenue growth resulted from sales to new
customers and increases in cubic feet stored from existing customers.
Storage revenues increased from $55.5 million in 1995 to $75.9 million in
1996, an increase of $20.4 million or 36.8%. Service and storage material sales
revenues increased from $39.9 million in 1995 to $53.8 million in 1996, an
increase of $14.0 million or 35.0%.
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<PAGE>
Cost of sales (excluding depreciation and amortization) increased from $55.6
million in 1995 to $73.9 million in 1996, an increase of $18.3 million or 32.8%,
but decreased as a percentage of total revenues from 58.3% in 1995 to 57.0% in
1996. The $18.3 million increase was due primarily to increases in wages and
benefits resulting from an increased number of employees and increases in
facility occupancy costs associated with the growth in business. The decrease
as a percentage of total revenue was due primarily to increased operating and
storage efficiencies.
Selling, general and administrative expenses increased from $16.1 million in
1995 to $20.0 million in 1996, an increase of $3.9 million or 23.9%, and
decreased as a percentage of total revenues from 16.9% in 1995 to 15.4% in 1996.
The decrease as a percentage of total revenues was due to operating efficiencies
and the implementation of programs to control and reduce certain administrative
expenses. The purchase of certain real estate interests from affiliates in
August 1996 contributed $0.9 million to the reduction in cost of sales or 0.7%
as a percentage of revenues.
Depreciation and amortization expenses increased from $8.2 million in 1995 to
$12.9 million in 1996, an increase of $4.7 million or 57.7%, and increased as a
percentage of total revenues from 8.6% in 1995 to 9.9% in 1996. This increase
was the result of increased capital expenditures for shelving and improvements
to record management facilities and information systems and the amortization of
goodwill from the Company's acquisitions.
The Company incurred non-recurring charges of $3.3 million in 1996 in
connection with the assumption of leasehold interests in certain facilities from
affiliated parties and with the establishment of a pension for Leo W. Pierce,
Sr.
As a result of the foregoing factors, excluding the non-recurring charges in
1996, operating income increased from $15.0 million in 1995 to $23.0 million in
1996, an increase of 53.7% and increased as a percentage of total revenues from
15.7% in 1995 to 17.7% in 1996. The increase reflected the growth in the
Company's business, economies of scale and increased operating efficiencies.
Interest expense increased from $9.6 million in 1995 to $17.2 million in 1996,
an increase of $7.6 million or 79.0%, due primarily to higher levels of
indebtedness. The Company recorded extraordinary charges of $2.0 million in
1996 and $3.3 million in 1995 related to the early extinguishment of debt as a
result of refinancing and expanding its existing credit agreement in 1996 and
1995.
As a result of the foregoing factors, net income was $0.5 million in 1996
compared to net income of $2.1 million in 1995.
EBITDA increased from $23.6 million in 1995 to $35.9 million in 1996, an
increase of $12.2 million or 51.8%, and increased as a percentage of total
revenues from 24.8% in 1995 to 27.7% in 1996. The increase as a percentage of
the total revenues reflected growth in the Company's business, economies of
scale and increased operating efficiencies.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of capital have been cash flows from operations
and borrowings under various revolving credit facilities and other senior
indebtedness. Historically, the Company's primary uses of capital have been for
acquisitions, capital expenditures and client acquisition costs.
Capital Investments
For 1997, 1996 and 1995, and the three months ended March 31, 1998, capital
expenditures were $35.4 million, $23.5 million, $16.3 million and $12.6 million,
respectively, and client acquisition costs were $10.6 million, $6.5 million,
$2.2 million and $2.1 million, respectively. In 1998, the Company expects its
aggregate capital
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<PAGE>
expenditures will approximate $35.0 million. Over 85% of 1998 capital
expenditures are anticipated to be growth related, primarily shelving for new
client records.
Acquisitions
In order to take advantage of the operating efficiencies of the PLUS/(R)/
system and the opportunities presented by the consolidation undergoing in the
record management industry, the Company has actively pursued acquisitions since
the beginning of 1994, which has significantly impacted liquidity and capital
resources. In 1997, the Company completed 17 acquisitions for an aggregate
purchase price of $109.1 million, consisting of $102.1 million in cash, 328,621
shares of Common Stock with a deemed value of $4.5 million and $1.7 million in
Sellers notes. Since the beginning of 1998, the Company has completed 14
acquisitions, for an aggregate cash purchase price of approximately $205.9
million and 548,262 shares of Common Stock with a deemed value of approximately
$14.4 million. The Company has historically financed its acquisitions with
borrowings under its credit agreements and notes and with cash flows from
existing operating activities.
To the extent that future acquisitions are financed by additional borrowings
under the Company's credit facility or other types of indebtedness, the
resulting increase in debt and interest expense could have a negative effect on
such measures of liquidity as debt to equity.
Sources of Funds
Net cash flows provided by operating activities were $21.0 million, $26.4
million, $17.5 and $0.5 million for 1997, 1996, 1995 and the three months ended
March 31, 1998, respectively. The $5.5 million decrease from 1996 to 1997 was
primarily comprised of a reduction in net income of $15.7 million and a $14.1
million increase in working capital, offset by a $9.2 million increase in
depreciation and amortization, an increase in deferred income taxes of $7.4
million, a $4.0 million increase in extraordinary charge and a special
compensation charge of $1.8 million in 1997.
Net cash flows used in investing activities were $156.5 million, $108.8
million, $51.3 million and $55.8 million for 1997, 1996, 1995 and the three
months ended March 31, 1998, respectively. The uses of such cash flows were
primarily for acquisitions, capital expenditures and client acquisition
expenditures detailed above.
Net cash flows provided by financing activities were $136.1 million, $82.9
million, $34.2 million and $56.1 million for 1997, 1996, 1995 and the three
months ended March 31, 1998, respectively. In 1997, the $136.1 million in
financing activities consisted primarily of $120 million of gross proceeds from
the issuance of the 1997 Notes, $93.6 million in net proceeds from Pierce
Leahy's initial public offering of Common Stock, and $17.2 million of borrowings
on the revolving line of credit, offset by the repayment of long-term debt of
$82.5 million, the $7.0 million prepayment premium on the redemption of a
portion of the 1996 Notes and the payment of $5.2 million of financing costs
related to the issuance of the 1997 Notes and the Company's credit facility. In
August 1997, the Company entered into its current Credit Facility, which, as
amended, provides $150 million in U.S. dollar borrowings, and Cdn. $40 million
in Canadian dollar borrowings. In July 1996, the Company issued $200 million of
the 1996 Notes and used the net proceeds to retire all of the debt outstanding
under the Company's previous credit facility, to purchase certain properties
from affiliates of the Company, to redeem stock from a shareholder of the
Company, to fund an acquisition and for general corporate purposes.
In April 1998, the Company issued $135 million principal amount of Original
Notes pursuant to the Purchase Agreement. Pursuant to the Exchange Offer, the
Exchange Notes will be substituted for those Original Notes which are validly
tendered and not withdrawn as provided herein.
The Credit Facility contains a number of financial and other covenants
restricting the Company's ability to incur additional indebtedness and make
certain types of expenditures. Covenants in the indentures governing the Notes,
the 1997 Notes and the 1996 Notes, also restrict borrowings under the Credit
Facility. As of March 31, 1998,
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<PAGE>
$50.5 and Cdn. $35 million was outstanding under the Credit Facility and the
Company could have borrowed an additional $29.2 million under the Credit
Facility in accordance with the debt incurrence limitations. The effective
interest rate on the Credit Facility, as of March 31, 1998, was approximately
6.38%. As of March 31, 1998, on a pro forma basis, after giving effect to the
Offering, the application of the net proceeds thereof and the 1998 Acquisitions,
the Company could have borrowed an additional $31.3 million in accordance with
debt incurrence limitations. Additionally, to the extent the Company makes
acquisitions, it would have additional availability under the Credit Facility
based upon the pro forma EBITDA of such acquisitions.
Future Capital Needs
Management believes that cash flow from operations in conjunction with
borrowings under the Credit Facility and possible other sources of financing
will be sufficient for the foreseeable future to meet working capital
requirements, debt service requirements and to make possible future acquisitions
and capital expenditures. Depending on the pace and size of future possible
acquisitions, the Company may elect to seek additional debt or equity financing.
There can be no assurance that the Company will be able to obtain any future
financing, if required, or that the terms for any such future financing would be
favorable to the Company.
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<PAGE>
BUSINESS
GENERAL
Pierce Leahy Command Company is the issuer of the Notes and is an indirect
subsidiary of Pierce Leahy, which is a guarantor of the Notes on an unsecured
senior subordinated basis. After consummation of the Archivex Acquisition, the
Issuer operates 24 records management facilities in the eight largest markets in
Canada.
The Company is the largest hard copy records management company in North
America, as measured by its 76 million cubic feet of records currently under
management. The Company operates a total of 225 records management facilities
of which 197 are in the United States, serving 67 markets, including 22 out of
25 of the largest U.S. markets. In addition, the Company operates 28 records
management facilities in Canada's eight largest markets, including 24 facilities
operated by the Issuer and four facilities operated by Archivex.
The Company's strategies and operations are intended to be standardized
throughout North America (United States and Canada). Accordingly, unless
otherwise noted or the context otherwise suggests, the description of the
Company's strategies and operations are intended to cover all of its operations
in the United States and Canada.
The Company is a full-service provider of records management and related
services, enabling customers to outsource their data and records management
functions. The Company offers storage for all major media, including paper
(which has typically accounted for approximately 94% of the Company's storage
revenues), computer tapes, optical discs, microfilm, video tapes and X-rays. In
addition, the Company provides next day or same day records retrieval and
delivery, allowing customers prompt access to all stored material. The Company
also offers other data management services, including customer records
management programs, imaging services and records management consulting
services.
The Company believes it is the most technologically advanced records
management company in the industry by virtue of its Pierce Leahy User
Solution(R) (PLUS/(R)/) computer system. The PLUS/(R)/ system fully integrates
the Company's records management, data retrieval and billing functions on a
centralized basis through the use of proprietary, real time software. The
PLUS/(R)/ system assists the Company in efficiently managing records in multiple
locations for national and local customers, rapidly integrating acquisitions of
records management companies and maintaining a low-cost operating structure. The
Company serves a diversified group of over 40,000 customer accounts in a variety
of industries such as financial services, manufacturing, transportation,
healthcare and law. The Company's storage and related services are typically
provided pursuant to contracts that include recurring monthly storage fees,
which continue until such records are permanently removed (for which the Company
charges a fee), and additional charges for services such as retrieval on a per
unit basis.
The Company's growth strategy is to expand its business in new and existing
markets through (i) targeting new customers, (ii) growing with existing
customers and (iii) continuing its acquisition program. The Company has adopted
the following approaches to pursue its growth objectives:
TARGETING NEW CUSTOMERS. The Company has a dual sales strategy focused on
both larger, typically multi-location accounts and smaller accounts, with a
dedicated sales force for each. The Company's sales and marketing force has
increased from approximately 70 persons at the end of 1996 to approximately 120
persons currently.
GROWING WITH EXISTING CUSTOMERS. The Company services its existing customers
through both a centralized customer service organization and local client
service representatives. Existing customers typically generate additional
records annually which are stored with the Company.
CONTINUING ACQUISITION PROGRAM. The Company believes that the records
management industry is highly fragmented and offers substantial opportunity for
consolidation. The Company targets potential acquisitions both in the markets
it already services and in new markets which it is not yet servicing. From 1993
to 1997, the
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<PAGE>
Company completed and integrated 39 acquisitions, totalling approximately 22.3
million cubic feet of records at the time of acquisition. Since the beginning
of 1998, the Company has completed 14 acquisitions totaling approximately 12.9
million cubic feet of records at the time of acquisition.
The Company's growth strategy is supported by an operating strategy which
emphasizes providing premium standardized services while maintaining a low-cost
operating structure. Both strategies apply to the entire North American market
(United States and Canada). The Company expects to continue its growth and
enhance its position by implementing its strategy based on the following
elements:
a. USING SOPHISTICATED CENTRALIZED SYSTEMS TO PROVIDE HIGH QUALITY SERVICE.
In tandem with the Company's centralized customer service organization and
local field support personnel, the Company utilizes its PLUS/(R)/ system
to provide a high and consistent level of service (24 hours a day, seven
days a week) to its customers on a national and local basis, including
providing its customers with real-time access to the database. Although
PLUS/(R)/ is centralized, the system permits local management flexibility
through a variety of pre-programmed options to customize the system and
enhance its utility to different types of customers.
b. MAINTAINING ITS POSITION AS A LOW-COST PROVIDER THROUGH ECONOMIES OF
SCALE. The Company strives to remain a low-cost operator through
achieving economies of scale in labor, real estate, transportation,
computer systems and administrative expenses. The PLUS/(R)/ system allows
the Company to enhance the efficiency of its facilities while reducing
fixed and operating costs. This system eliminates the need to designate
permanent locations for an individual customer's records within a facility
by using sophisticated bar-coding technology which enables records to be
stored wherever space is available and to be positioned within the
Company's facilities based on retrieval frequency, thereby reducing labor
costs. PLUS/(R)/ is also valuable in helping to achieve cost savings in
acquisitions.
THE RECORDS MANAGEMENT INDUSTRY
According to a 1994 study by the Association of Commercial Record Centers (the
"ACRC"), an industry trade group with over 500 members, approximately 2,600
companies offer records storage and related services in North America. The
Company believes that only 25% of the potential market outsources its records
management functions and that approximately 75% is still "unvended," or
internally managed. The Company estimates that the North American vended
records management industry generates annual revenues in excess of $1.0 billion.
Management believes that the industry is highly fragmented, with most industry
participants operating on a regional or local basis.
Saved documents, or records, generally fall into two categories: active and
inactive. Active records refer to information that is frequently referenced and
usually stored on-site by the originator. Inactive records are not needed for
frequent access, but must be retained for future reference, legal requirements
or regulatory compliance.
Inactive records, which the Company estimates comprise approximately 80% of
all records, are the principal focus of the records management industry.
The Company believes that the records management industry is characterized by
the following trends:
INDUSTRY CONSOLIDATION. The records management industry is undergoing a
period of consolidation as larger, better capitalized industry participants
acquire smaller regional or local participants. Management believes that
consolidation is primarily driven by the needs of large customers for fully
integrated coverage and the ability to realize economies of scale, especially
with respect to labor, real estate, transportation and computer systems and
administrative expenses. Industry consolidation also provides private owners of
smaller records management companies the ability to obtain liquidity.
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MOVEMENT TOWARDS OUTSOURCING. Outsourcing of internal records management
functions represents the largest single source of new business for records
management companies. The Company believes that as more organizations become
aware of the advantages of professional records management, such as net cost
reductions and enhanced levels of service, the records management industry will
continue to gain a growing portion of the unvended segment. The Company also
believes that the establishment of national providers with well-known brand
names will help to accelerate this trend.
INCREASING PRODUCTION OF PAPER. Increasingly widespread technologies such as
facsimiles, copiers, personal computers, laser printers and advanced software
packages have enabled organizations to create, copy and distribute documents
more easily and broadly. In spite of new "paperless" technologies (including
the Internet and "e-mail"), information remains predominantly paper based.
Additionally, the cost of storing records on paper is currently less expensive
than the cost of converting paper records to, and storing on, other media (e.g.,
computer media, imaging, microfilm, CD-Rom and optical disc).
EXPANDED RECORD KEEPING NEEDS. While technology has augmented the growth of
paper generation, several external forces and concerns have played an important
role in organizations' decisions to store and retain access to records. For
example, the continued growth of regulatory requirements and the proliferation
of litigation has resulted in increased volumes and lengthened holding periods
of documents. Retained records are also remaining in storage for extended
periods of time because the process of determining which records to destroy is
time consuming and often more costly in the short-term than continued storage.
ACQUISITION HISTORY AND GROWTH STRATEGY
The Company believes that the consolidation trend occurring in the North
American records management industry will continue and that acquisitions will
remain an important part of the Company's growth strategy. Acquisitions provide
the Company with the ability to expand and achieve additional economies of
scale. From 1993 to 1997, the Company successfully completed and integrated 39
acquisitions, totaling approximately 22.3 million cubic feet of records at the
time of acquisition. Since January 1, 1998, the Company has completed 14
acquisitions, including the Archivex Acquisition and the Kestrel Acquisition
(the "1998 Acquisitions"), totalling approximately 12.9 million cubic feet of
records at the time of acquisition. As a result of its substantial acquisition
experience, the Company has developed a standardized program through which it
integrates acquired companies into its existing infrastructure. In each of
these acquisitions, staffing levels were initially reduced with further
reductions typically taking place in the following months as general and
administrative functions were integrated into the Company's centralized
operating system.
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<PAGE>
The following table summarizes certain information for each acquisition
completed since 1993:
<TABLE>
<CAPTION>
EXISTING/-
ACQUISITIONS LOCATION NEW LOCATION
- ------------ -------- ------------
<S> <C> <C>
1993 Acquisition
Data Management of Tennessee Nashville New
1994 Acquisitions
Command Records Chicago Existing
Fidelity Archives Philadelphia Existing
ProFilers Jacksonville New
Fileminders Jacksonville New
1995 Acquisitions
Vital Archives New York Existing
Bestway Archival Services Miami Existing
Curtis Archives Seattle New
Command Records Service Canada* New
AMK Documents Phoenix New
1996 Acquisitions
Brambles (Ottawa Division) Ottawa Existing
The File Cabinet Atlanta Existing
File Box Austin New
Security Archives Dallas Existing
Archives America of San Diego San Diego New
Security Archives of Denver Denver New
Data Protection Services Birmingham New
Info-Stor Calgary Existing
Archives Denver Existing
InTrust Denver, Albuquerque,
Colorado Springs,
Ft. Wayne Existing/New
Security Archives of Las Vegas Las Vegas New
Records Management Birmingham Existing
1997 Acquisitions
Security Archives & Storage Company Wilmington Existing
The Records Center Tampa Existing
Data Archives Trenton Existing
Professional Records Storage
& Delivery West Palm Beach Existing
Advanced File Storage Systems Jacksonville Existing
Records Management Services Multiple** Existing/New
Austin File Room Austin Existing
Corporate Storage Chicago Existing
Smithfield Archives El Paso New
FilExpress Pittsburgh New
National Records Management Louisville New
Records Management
& Projection New Orleans New
Davidson Archives Kansas City Existing
Datafilms, Inc. Denver Existing
dataLOK Partners San Fernando Existing
Binyon O'Keefe Ft. Worth Existing
Records Depository Buffalo New
1998 Acquisitions
Records Archives Corp. Houston Existing
Automated Records Centre Toronto Existing
DataStor St. Louis Existing
Offsite Records Management Dallas Existing
Deliverex of Denver Denver Existing
Archivex Inc. Canada*** Existing/New
Amodio Archives New Britain, CT Existing
All Safe Records Boston Existing
The Record Centre Detroit Existing
Comac Services San Francisco Existing
Data Protection Services Birmingham Existing
Bender Records Management Reno New
Keystone Records Management Harrisburg New
Kestrel Records Management Dallas, Houston Existing
</TABLE>
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- ---------------------------
* Toronto, Montreal, Vancouver, Ottawa and Calgary.
** Chicago, Indianapolis, Cincinnati, Los Angeles, Phoenix, Houston, New York
and St. Louis.
*** Montreal, Quebec City, Toronto, Winnipeg, Edmonton and Calgary.
The Company's centralized organizational structure and management information
systems are essential elements for both the successful integration of acquired
records management operations and the ability of the Company to achieve
economies of scale. The rapid conversion of an acquired company's records into
the PLUS/(R)/ system and the integration of all corporate functions (order
processing, accounting, payroll, etc.) into the Company's corporate organization
in an efficient, standardized process allows the Company to realize cost savings
as a result of reduced labor and overhead costs and improved facility
utilization. The Company also believes that its centralized approach permits
better quality measurement and control procedures than a decentralized approach
to integrating acquisitions. See "Risk Factors-Risks Associated with
Acquisitions."
The Company targets potential acquisitions both in locations it already
services (existing markets) and in new areas which it is not yet servicing.
Existing market acquisitions typically provide the highest degree of operating
leverage as a result of eliminating redundant overhead, such as overlapping
delivery runs, and when economically feasible, consolidating with an existing
Company facility in the same market. New market acquisitions allow the Company
to both expand its business generally and enhance its ability to serve multi-
location customer accounts. These acquisitions are typically either the result
of following an existing customer into a new location or are on a more
opportunistic basis when an attractive acquisition comes to the attention of the
Company. Once in the new area, the Company seeks to obtain records from its
existing multi-location customers which may have operations in that area.
Additionally, operating in the new locations assists the Company's sales force
in more effectively targeting new customers in that area.
THE 1998 ACQUISITIONS
Since January 1998, the Company has completed 14 acquisitions (the "1998
Acquisitions"), including the Archivex Acquisition and the Kestrel Acquisition.
The aggregate consideration for the 1998 Acquisitions was approximately $205.9
million in cash and shares of Common Stock with a deemed value of approximately
$14.4 million. The locations of the facilities acquired in the 1998
Acquisitions are set forth above under the section "Acquisition History and
Growth Strategy." One of such 1998 Acquisitions, Comac, was of a marketing
literature storage and fulfillment company.
THE ARCHIVEX ACQUISITION
In April 1998, the Company purchased substantially all of the assets of
Archivex Inc., a Canadian records storage company with operations in six
Canadian cities, including three markets in which the Issuer previously had
operations (Montreal, Toronto and Calgary) and three markets in which the Issuer
did not have a presence (Quebec City, Winnipeg and Edmonton). The aggregate
cash consideration for the Archivex Acquisition, which represented a significant
expansion in the Canadian market, was approximately $63.0 million. Included in
the Archivex Acquisition were six owned records storage facilities with in
excess of an aggregate of 600,000 square feet of space and five leased records
storage facilities with approximately 100,000 square feet of space. The
Archivex Acquisition added 4.0 million cubic feet of records under management.
The Issuer loaned approximately $20 million to Archivex, which purchased the
assets of Archivex Inc. located in Montreal. The Issuer purchased the remaining
assets of Archivex Inc. As a result of the Archivex Acquisition, the Issuer
operates 24 records management facilities in eight markets and Archivex operates
four records management facilities in Montreal.
THE KESTREL ACQUISITION
On July 2, 1998, the Company purchased all of the capital stock of Kestrel
Holdings, Inc., a records storage company which, through its subsidiaries,
operates records storage facilities in Dallas and Houston. Included as part of
the acquisition are four owned records storage facilities with an aggregate of
approximately 264,000 square feet of space and four leased records storage
facilities with an aggregate of approximately 350,000 square feet of space. The
Kestrel Acquisition added approximately 2.5 million cubic feet of records under
management.
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<PAGE>
DESCRIPTION OF SERVICES
The Company's records management services are focused on storage, retrieval
and data management of hard copy documents.
Storage
Storage revenues have averaged 58% of total revenues during the Company's last
five fiscal years. Nearly all of the Company's storage fees are derived from
hard copy storage. During 1997, the Company generated 94% of its storage
revenues from hard copy storage and 6% from vault storage for special items such
as computer tapes, X-rays, films or other valuable items. Storage charges
typically are billed monthly on a per cubic foot basis.
The Company tracks all of its records stored in cartons, from initial pick-up
through permanent removal, with the use of its PLUS/(R)/ system. Bar-coded boxes
are packed by the customer and transported by the Company's transportation
department to the appropriate facility where they are scanned and placed into
storage at the locations designated by PLUS/(R)/. At such time, the Company's
data input personnel enter the data twice (i.e., double key verifying) to
enhance the integrity of the information entered into the system.
The Company offers secure, climate-controlled facilities for the storage of
non-paper forms of media such as computer tapes, optical discs, microfilm, video
tapes and X-rays. These types of media often require special facilities due to
the nature of the records. The Company's storage fees for non-paper media are
higher than for typical paper storage. The Company also provides ancillary
services for non-paper records in the same manner as it provides for its hard
copy storage operations.
Service and Product Sales
The Company's principal services include adding records to storage, temporary
removal of records from storage to support a customer's need to review the
files, replacing temporarily removed records and permanent withdrawals from
storage or destruction of records. Pick-up and delivery of customer records can
be tailored to a customer's specific needs and range from standard service
(typically requests received by 10:30 a.m. are delivered or picked up that
afternoon and requests received by 3:30 p.m. are delivered or picked up the next
day) to emergency service (typically within three hours or less). Pick-up and
delivery operations are supported by the Company's fleet of over 500 owned or
leased vehicles. The Company charges for pick-up and delivery services on a
per-unit basis depending on the immediacy of delivery requested.
A small percentage of the Company's customers manage their records on a file
by file basis, allowing the customer direct access and traceability of a
specific file (rather than on a box by box basis). The Company provides data
entry services to such customers to input the file by file listings into the
PLUS/(R)/ system.
The Company also offers a records destruction service, which provides
customers with a secure, controlled program to periodically review and remove
records which no longer need to be retained. Although boxes destroyed no longer
generate monthly storage fees, the Company charges for the destruction of
records and increases its available shelving space as a result. The Company
believes its ability to manage destruction programs for customers efficiently
through the PLUS/(R)/ system also enhances its ability to attract large
accounts.
In addition to providing traditional storage, customers may contract with the
Company to manage their on-site records or file services center. Such
management services generally include providing Company personnel to manage the
customer's active files (including records storage and tracking) at the
customer's facilities, supplemented by off-site storage at the Company's
facilities. As part of this service, the Company can use its own internally
developed file management software, or maintain the customer's existing system.
The Company also provides consulting and other services on an individualized
basis, including advisory work for customers setting up in-house
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<PAGE>
records management systems. In addition, the Company sells cardboard boxes and
other storage containers to its customers.
CUSTOMER SERVICE
Customer calls are routed into one of the Company's two centralized customer
service departments located in the Company's U.S. and Canadian corporate
headquarters. Both customer service departments are staffed and can receive
customer calls 24 hours a day, seven days a week. The Company currently employs
approximately 75 customer service representatives. Routine pick-up and delivery
requests are dispatched directly by customer service representatives to local
facilities as directed by PLUS/(R)/.
PLUS/(R)/, in tandem with a centralized order processing organization and
local field support personnel, enables the Company to provide a high and
consistent level of service (24 hours a day, seven days a week) to its customers
in a cost-effective manner. The centralized order entry system allows (i)
efficient workload balancing as the daily "peak" call-in periods can be spread
over three time zones, (ii) centralized quality control monitoring to increase
delivery of consistent and high-quality service, and (iii) the employment of
Spanish-speaking customer service representatives whose language skills can
serve any of the Company's U.S. customers, primarily for its operations in
Florida, Texas and California.
As a complement to its centralized customer service departments, the Company
provides client service representatives to work with existing customers at the
local level. In addition to maintaining personal contacts with customers, the
local client service representatives help meet the Company's customers' changing
records management needs through advice in efficient recordkeeping procedures,
and, when appropriate, by offering the sale of additional services.
MANAGEMENT INFORMATION SYSTEMS
The Company believes that PLUS/(R)/, its core management information system,
is the most sophisticated records management system in the industry, and
provides the Company with a significant customer service and cost advantage in
attracting and retaining major accounts with records storage needs in multiple
locations and acquiring other records management companies. The Company's
centralized customer service and billing functions eliminate the need for
redundant functions at individual facilities. In addition, the PLUS/(R)/ system
enables the Company to offer its customers full life cycle records management,
from file creation to destruction, and coordinates inventory control, order
entry, billing, material sales, service activity, accounts receivable and
management reporting on a centralized basis. PLUS/(R)/ utilizes database
technology, proprietary software and extensive bar coding in a flexible,
enterprise-wide, client/server environment.
Implementation of the PLUS/(R)/ system has improved the Company's operating
efficiency by streamlining a number of its daily work processes:
. PLUS/(R)/ allows the Company real time access to locate each unit of a
customer's records, regardless of geographic location, through an enterprise-
wide, shared database and to centrally receive and dispatch pick-up and
delivery orders to the appropriate location for processing. Management
believes that no other records management system in the industry offers such
real time access for multiple locations.
. The PLUS/(R)/ system reduces the number of employees required to handle the
inbound/outbound movement of boxes through the use of sophisticated
algorithms which allow archive employees to process multiple customer
requests in an efficient manner.
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<PAGE>
. PLUS/(R)/ facilitates the integration of acquired records management
companies in an efficient, standardized process. By converting the acquired
company's records into the PLUS/(R)/ system, the Company is able to reduce
the labor and overhead costs associated with the acquisition, resulting in
cost savings.
. The PLUS/(R)/ system assists the Company in efficiently utilizing its storage
space by eliminating the need for permanent locations for individual records.
At any one time, approximately 2% of total cubic feet of records managed by
the Company are temporarily returned to customers, freeing up storage space
which PLUS/(R)/ enables the Company to use productively. When a box is
temporarily returned to a customer, a new box may be placed in the original
box's location. Upon return of the original box to the Company, PLUS/(R)/
automatically assigns the box a new location within a facility in the market
in which the Company determines to store the box.
PLUS/(R)/ offers several additional features which enhance the Company's
customer support functions. The PLUS/(R)/ system is continuously updated when
any account activity is undertaken, providing customers with real time access to
information regarding box location and retrievals. The PLUS/(R)/ system is
flexible and allows the Company to design and implement customized records
management solutions for various industries utilizing a set of standardized
options. The PLUS/(R)/ system's on-line customer support network allows certain
customers to place orders for both records storage and retrieval directly from
their own in-house terminals resulting in a more efficient system of records
management. PLUS/(R)/ can also perform sophisticated searches to locate
inventory items even when the customers do not have the specific number of the
box they are seeking. In addition, the Company has recently initiated a trial
program, PLUS/(R)/ Link, which is designed to transfer information directly
between the Company's centralized database and a customer's local file room.
SALES AND MARKETING
During the past five years, the Company has invested significant effort in
developing its sales and marketing department, which is comprised of
approximately 120 employees in the United States and Canada. Sales
representatives are trained to sell a "total systems approach," in which a
customer's records management requirements are surveyed and evaluated in order
to determine the file management system which best meets the customer's needs
and offer recommendations on how to implement such a system. From 1993 to 1997,
the Company's sales representatives secured over 4,000 new customer accounts
comprising over 12.8 million cubic feet of records from new accounts.
The Company's sales and marketing department is divided into five regions:
Northeast; South; Midwest; West; and Canada. The Company's Vice President,
Sales and Marketing directs five regional sales managers who are each
responsible for one of the regions. In addition, the Company's sales force is
divided between sales representatives who focus on large accounts which are
frequently multi-location and a recently expanded group of sales representatives
who focus on smaller, single-location customers. The sales force is primarily
compensated on a commission basis with incentives tied to the Company's sales
goals. The Company also uses telemarketing, direct response and print
advertising to assist in its marketing programs.
CUSTOMERS
The Company serves a diversified group of over 40,000 customer accounts in a
variety of industries, including financial services, manufacturing,
transportation, healthcare and law. The Company tracks customer accounts, which
are based on invoices. Accordingly, depending on how invoices have been
arranged at the request of a customer, one customer may have multiple customer
accounts. None of the Company's customers accounted for more than 3% of the
Company's total revenues during any of the last three years. The Company
services all types of customers from small to medium size companies (such as
professional groups and law firms that often have one location) to Fortune 500
companies that have operations in multiple locations. The Company provides
records management services to approximately one-half of the Fortune 500
companies and has over 50 customers with over 100,000 cubic feet of records
under management with the Company. Larger companies with multiple locations
that
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have performed their own records management services to date are a principal
focus for new customers by the Company. The Company believes that its presence
in multiple locations in conjunction with the PLUS/(R)/ system enable it to
provide the sophisticated file management services frequently required by such
customers.
The Company's contracts with larger, typically multi-location customers
usually provide for an initial term of five or more years, and contracts with
other customers typically provide for initial terms of one or two years. Both
types of contracts generally provide for annual renewals thereafter (with either
party having the right to terminate the contract). Customers are generally
charged monthly storage fees until their records are destroyed or permanently
removed, for which fees are charged. In addition, services such as file
retrieval are separately charged. During 1997, approximately 3% of cubic feet
of records under management by the Company were permanently removed (other than
as part of an organized records destruction program). The Company believes this
relatively low attrition rate is due to a number of factors, including
satisfaction with the Company's services as well as the effort and expense of
transferring records to another service provider or back in-house.
FACILITIES
The Company operates a total of 225 records management facilities of which 197
are in the United States, serving 66 markets, including 22 out of 25 of the
largest U.S. markets, and 28 facilities in Canada serving Canada's eight largest
markets. Of the 16.0 million square feet of floor space (representing
approximately 108.3 million cubic feet of storage capacity) in the Company's
records storage facilities, approximately 36% and 64% (40% and 60% on a cubic
footage basis) are in owned and leased facilities, respectively. The Company's
facilities are located as follows:
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<TABLE>
<CAPTION>
RECORDS MANAGEMENT CUBIC FEET
FACILITIES OF CAPACITY
REGION ---------- -----------
- ------
United States
<S> <C> <C>
Southern Region................................ 28 10.5 million
(includes Alabama, Florida,
Georgia, North Carolina and
Tennessee)
Northern Region................................ 58 45.2 million
(includes Connecticut, Delaware,
Maryland, Massachusetts, New Jersey,
New York, Ohio, Pennsylvania and
Virginia)
Midwest Region................................. 84 29.0 million
(includes Colorado, Illinois,
Indiana, Michigan, Missouri,
New Mexico and Texas)
Western Region................................. 27 8.3 million
(includes Arizona, California,
Nevada, Utah and Washington)
Total U.S...................................
--- -------------
197 93.0 million
Canada
(includes Calgary, Edmonton, Montreal,
Ottawa, Quebec City, Toronto, Vancouver and
Winnipeg) 28 15.3 million
--- -------------
Total....................................... 225 108.3 million
=== =============
</TABLE>
In response to certain opportunities that arose, the Company has made
significant new facility investments, substantially increasing the Company's
available storage capacity in its Northeast region. During 1995, the Company
purchased a storage facility in New Jersey with 12 million cubic feet of storage
capacity and leased (with an option to purchase) a storage facility in
Massachusetts with five million cubic feet of storage capacity. The Company is
in the process of consolidating certain individual warehouses into these
facilities and will consolidate other warehouses over the next two or three
years as existing leases expire. The addition of these facilities provides the
Company with substantial excess storage capacity in such region and is expected
to satisfy the Company's facility expansion requirements in its Northeast region
for several years. The Company intends to consolidate facilities in other
locations when appropriate. Primarily as a result of the new facilities in New
Jersey and Massachusetts, warehouse utilization has declined to approximately
70% from historical levels to 80%.
COMPETITION
The Company competes with numerous records management companies in all
geographic areas in which it operates. The Company believes that competition
for customers is based on price, reputation for reliability, quality of service
and scope and scale of technology, and believes that it generally competes
effectively based on these factors. Management believes that, except for Iron
Mountain Incorporated, all of these competitors have records management revenues
significantly lower than those of the Company. The Company believes that the
trend towards
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consolidation in the industry will continue, and the Company also faces
competition in identifying attractive acquisition candidates. In addition, the
Company faces competition from the internal document handling capability of its
current and potential customers.
The substantial majority of the Company's revenues are derived from the
storage of paper records and from related services. Alternative technologies
for generating, capturing, managing, transmitting and storing information have
been developed, many of which require significantly less space than paper. Such
technologies include computer media, microforms, audio/video tape, film, CD-Rom
and optical disc. Management believes that conversion of paper documents into
these smaller storage media is currently not cost-effective for inactive
records, primarily due to the high labor cost of preparing and converting the
documents for imaging.
EMPLOYEES
As of June 25, 1998, the Company had 3,175 employees, including 525 employees
in Canada. Approximately 50 of the employees of Archivex in Canada are covered
by a collective bargaining agreement. Management considers its employee
relations to be good.
INSURANCE
The Company carries comprehensive property insurance covering replacement
costs of real and personal property. Subject to certain limitations and
deductibles, such policies also cover extraordinary expenses associated with
business interruption and damage or loss from fire, flood or earthquakes (in
certain geographic areas), and losses at the Company's facilities up to
approximately $450 million.
ENVIRONMENTAL MATTERS
The Company's properties and operations, past or present, may be subject to
liability under various environmental laws, regardless of fault, for the
investigation, removal or remediation of soil or groundwater, on or off-site,
resulting from the release or threatened release of hazardous materials, as well
as damages to natural resources. The past or present owner or operator of
contaminated property may also be subject to claims for damages and remediation
costs from third parties based upon the migration of any hazardous materials to
other properties.
At certain of the properties owned or leased by the Company, petroleum
products or other hazardous materials are or were stored in USTs. Some formerly
used USTs have been removed; others were abandoned in place. The Company
believes all of the USTs are registered, where required under applicable law.
Some of the properties acquired in the Archivex Acquisition may contain USTs
which are required to be removed. It is expected that removal costs to the
Issuer will not be material. The Company also is aware of the presence in some
of its facilities of ACMs, but believes that no action is presently required to
be taken as a result of such material.
At the Company's New Jersey facility, certain contamination has been
discovered resulting from operations of the prior owner thereof. The prior
owner, which has agreed to be responsible for the cost of such remediation, is
completing remediation of the property under a consent order with the New Jersey
Department of Environmental Protection ("NJDEP"). The prior owner has posted a
$1.1 million letter of credit with the NJDEP. The Company has purchased an
environmental liability insurance policy covering the cleanup costs to the
Company, if any, resulting from any on- or off-site environmental condition
existing at the time of the Company's acquisition of this property, with a
$250,000 deductible and policy limits of $4 million per occurrence/$8 million in
the aggregate, provided the claim first arises during the term of the policy,
which is August 10, 1995 through August 11, 1998.
The Company has not received any written notice from any governmental
authority or third party asserting, and is not otherwise aware of, any material
noncompliance, liability or claim under environmental laws applicable to the
Company other than as described above. No assurance can be given that there are
no environmental conditions for which the Company may be liable in the future or
that future regulatory action, or compliance with future
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environmental laws, will not require the Company to incur costs that could have
a material adverse effect on the Company's financial condition or results of
operations.
LEGAL PROCEEDINGS
The Company is involved in litigation from time to time in the ordinary course
of its business. In the opinion of management, no material legal proceedings
are pending to which the Company, or any of its property, is subject.
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MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS OF PIERCE LEAHY
Set forth below is certain information regarding Pierce Leahy's directors,
executive officers and other significant management personnel:
<TABLE>
<CAPTION>
NAME AGE/(1)/ POSITION
---- -------- --------
<S> <C> <C>
Leo W. Pierce, Sr........ 79 Chairman of the Board
J. Peter Pierce.......... 52 President, Chief Executive Officer and Director
Douglas B. Huntley....... 37 Vice President, Chief Financial Officer and Director
Joseph A. Nezi........... 51 Vice President, Sales and Marketing
David Marsh.............. 50 Vice President, Chief Information Officer
Ross M. Engelman......... 34 Vice President, Operations-South
J. Michael Gold.......... 39 Vice President, Operations-Northeast
Christopher J. Williams.. 39 Vice President, Operations-West
Raul A. Fernandez........ 48 Vice President, Information Services
Joseph P. Linaugh........ 48 Vice President, Treasurer and Secretary
Thomas Grogan............ 43 Vice President and Controller
Ronald P. Muhlenhaupt.... 43 Vice President, Assistant to the President
Lisa G. Goldschmidt...... 30 General Counsel
Alan B. Campell.......... 47 Director
Delbert S. Conner........ 68 Director
Thomas A. Decker......... 52 Director
J. Anthony Hayden........ 54 Director
</TABLE>
____________________
/(1)/ Age as of June 1, 1998.
Leo W. Pierce, Sr. has served as Chairman of the Board of the Company since
its formation in 1957. Mr. Pierce served as the Chief Executive Officer of the
Company from formation to January 1995 and as its President from formation to
January 1984. Prior to forming the Company, Mr. Pierce was a sales
representative for Lefebure Corporation and an accountant for Price Waterhouse.
Mr. Pierce holds a B.A. degree from St. John's University.
J. Peter Pierce has served as President and Chief Executive Officer of the
Company since January 1995 and has been a director since the early 1970s. Mr.
Pierce served as President and Chief Operating Officer of the Company from
January 1984 to January 1995, prior to which time he served in various other
capacities with the Company, including as Vice President of Operations, General
Manager of Connecticut, New York and New Jersey and Sales Executive. Mr. Pierce
attended the University of Pennsylvania and served in the United States Marine
Corps. Leo W. Pierce, Sr. is the father of J. Peter Pierce.
Douglas B. Huntley has served as Chief Financial Officer since January 1994
and as a director of the Company since September 1994. From May 1993 until
December 1993, Mr. Huntley served as Assistant to the President of the Company.
From August 1989 to March 1993, he was an Executive Advisor and a Project
Manager of Rockwell International in connection with a multi-billion dollar NASA
contract. Prior thereto, Mr. Huntley was an accountant for Deloitte Haskin &
Sells. Mr. Huntley holds a B.S. degree from Bucknell University and an M.B.A.
from the University of Pennsylvania, Wharton School of Business and is a
Certified Public Accountant.
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Joseph A. Nezi has served as Vice President, Sales and Marketing of the
Company since September 1991. From July 1990 to September 1991, Mr. Nezi was
the Vice President, Sales and Marketing of Delaware Valley Wholesale Florist
where he was responsible for the sales and marketing of a firm with $30 million
of sales. Prior thereto, Mr. Nezi was the President and General Manager of
Pomerantz and Company following 17 years in various sales positions of
increasing responsibility with Xerox. Mr. Nezi holds a B.A. degree from
Villanova University.
David Marsh has served as Vice President and Chief Information Officer of the
Company since January 1995 and was Assistant to the President of the Company
from November 1994 to December 1994. From August 1986 to May 1994, Mr. Marsh
was Manager-Corporate Relations for the Massachusetts Institute of Technology
where he was responsible for the management and development of MIT's
relationships with United States and European information technology,
communications and service companies. Prior to August 1986, Mr. Marsh held
positions as President of MEA Management Systems, Director of Corporate
Strategic Planning with Public Service Company of New Hampshire, Senior
Consultant with Booz, Allen & Hamilton and Second Vice President with the Chase
Manhattan Bank. Mr. Marsh holds a B.S. degree from University of Salford, U.K.
and S.M. degrees in Management and Nuclear Engineering from MIT.
Ross M. Engelman has served as Vice President, Operations-South since October
1994. From June 1993 to October 1994, Mr. Engelman was Vice President,
Information Systems and from September 1991 to June 1993, he was Assistant to
the President of the Company. From August 1985 to September 1991, Mr. Engelman
was a management consultant with Andersen Consulting. Mr. Engelman holds a
B.S.E. degree from the University of Pennsylvania, Wharton School of Business.
J. Michael Gold has served as Vice President, Operations-Northeast of the
Company since June 1993. Prior thereto, Mr. Gold was Vice President, Operations
from February 1992 to June 1993, Vice President, New York Metropolitan Region
from January 1990 to February 1992 and General Manager of the New Jersey Archive
from April 1985 to February 1989. Prior to joining the Company, Mr. Gold was
the Budget Administration Manager for SmithKline Beecham. Mr. Gold holds a B.A.
degree from Villanova University.
Christopher J. Williams has served as Vice President, Operations-West since
June 1993. From February 1992 to June 1993, Mr. Williams was the Company's Vice
President, Information Services. Prior thereto, Mr. Williams held a number of
additional positions with the Company since he joined it in 1980, including most
recently as General Manager of the New York Archive and Regional Vice President-
New England. Mr. Williams holds a B.S. degree from Western New England College.
Raul A. Fernandez has served as Vice President, Information Systems of the
Company since February 1990. From March 1988 to February 1990, Mr. Fernandez
was Director of Information Systems. Prior to joining the Company, Mr.
Fernandez was employed by RCA Pictures Division and Sperry-Unisys as District
Manager. Mr. Fernandez holds a B.A. degree from Kings College.
Joseph P. Linaugh has served as Vice President and Treasurer of the Company
since January 1994 and Secretary of the Company since December 1997. From
January 1990 to December 1993, Mr. Linaugh served as Vice President, Chief
Financial Officer and a director of the Company. Prior to joining the Company,
Mr. Linaugh worked in various financial positions with private and publicly held
companies and for Laventhol & Horwath in public accounting. Mr. Linaugh holds a
B.S. degree from LaSalle University and is a Certified Public Accountant.
Thomas Grogan has served as Vice President and Controller of the Company since
January 1994. From April 1985 to December 1993, Mr. Grogan was the Company's
Vice President of Finance and Administration. Prior to joining the Company, Mr.
Grogan worked for Dunn, Dunn and Associates in public accounting from May 1979
to March 1985 and in private industry from June 1977 to April 1979. Mr. Grogan
holds a B.S. degree from Widener College and is a Certified Public Accountant.
Ronald P. "Rip" Muhlenhaupt has served as Vice President, Assistant to the
President since October 1994, with responsibility for the Customer Response
Group and corporate communications, as well as company-wide training
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and education initiatives for both customers and staff. From April 1992 to
October 1994, Mr. Muhlenhaupt was Vice President, Corporate Development. Mr.
Muhlenhaupt provided service as Creative Consultant from November 1989 to April
1992 when he joined the Company upon the acquisition, by Pierce Leahy, of the
records management division of his family-owned business, The Muhlenhaupt
Corporation, where he was President. Mr. Muhlenhaupt holds a B.S. degree from
Fairfield University.
Lisa G. Goldschmidt has served as General Counsel of the Company since October
1995. From September 1992 to October 1995, Ms. Goldschmidt was an attorney at
Reed Smith Shaw & McClay. Ms. Goldschmidt holds a B.A. and a J.D. degree from
the University of Pennsylvania.
Alan B. Campell has served as a director of the Company since September 1994.
Since 1997, Mr. Campell has been a consultant. From 1986 until 1997, Mr.
Campell was a Managing Director of Campell Vanderslice Furman, an investment
banking firm. Prior thereto, Mr. Campell was a Vice President at Chase
Manhattan Bank, N.A. Mr. Campell holds a B.A. degree from Brown University and
an M.A. from the University of Southern California.
Delbert S. Conner has served as a director of the Company since September
1990. Since May 1995, Mr. Conner has served as the Vice Chairman of USCO
Distribution Services, Inc. on a semi-retired basis. From January 1994 through
April 1995, he was the Vice Chairman of USCO on a full-time basis and its
President and Chief Executive Officer from February 1983 to December 1993. Mr.
Conner holds a B.S. degree from Bryant College.
Thomas A. Decker has served as a director of the Company since 1997. Since
January 1997, Mr. Decker has served as Senior Vice President, General Counsel
and Secretary, of Unisource Worldwide, Inc. From 1994 until January 1997, Mr.
Decker was Executive Vice President, Chief Operating Officer and General Counsel
of Saint-Gobain Corporation, and from 1994 until 1996, Mr. Decker was Executive
Vice President and General Counsel of Saint-Gobain Corporation. During the
period 1994 through 1997, he was responsible for all corporate staff activities
including Law, Human Resources, Finance and Information Systems at Saint-Gobain
Corporation and its three principal subsidiaries. Mr. Decker was Vice
President, General Counsel and Secretary of Saint-Gobain Corporation from 1991
through 1994. From 1974 to 1991, Mr. Decker was Vice President, General Counsel
and Secretary of Certainteed Corporation. Mr. Decker holds a B.A. degree from
the University of Pennsylvania and a J.D. degree from the University of Virginia
School of Law.
J. Anthony Hayden has served as director of the Company since 1997. Since
March 1996, Mr. Hayden has served as President and Chief Executive Officer of
Hayden Real Estate, Inc. From 1975 until March 1996, Mr. Hayden served in
various capacities with Cushman and Wakefield Commercial Real Estate Company,
including Executive Vice President of the Mid-Atlantic/Mid-West Region. Mr.
Hayden holds B.S. degree from LaSalle University. Mr. Hayden also serves as a
director of Liberty Property Trust.
PIERCE LEAHY BOARD OF DIRECTORS
Pierce Leahy's Board of Directors (the "Board of Directors") is classified
into three classes with staggered three-year terms, each class to contain as
nearly as possible one-third of the number of members of the Board. The term of
the Class II Directors (Delbert S. Conner and Douglas B. Huntley) expires at the
1999 annual shareholders meeting; the term of the Class III Directors (Leo W.
Pierce. Sr. and J. Anthony Hayden) expires at the annual shareholders meeting in
2000; and the term of the Class I Directors (J. Peter Pierce, Alan B. Campell
and Theodore A. Decker) expires at the 2001 annual shareholder meeting of Pierce
Leahy.
Pierce Leahy's Board of Directors has an Executive Committee, a Compensation
Committee and an Audit Committee. The Executive Committee, comprised of Messrs.
Leo W. Pierce, Sr., J. Peter Pierce, Campell and Huntley, is empowered to
approve acquisitions and other transactions up to a specified amount. The
Compensation Committee, comprised of Messrs. Conner and Decker, recommends to
the Board both salary levels and bonuses for the executive officers of the
Company. The Compensation Committee also administers Pierce Leahy's stock
option plans. The Audit Committee, comprised of Messrs. Campell, Conner and
Hayden, recommends the
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appointment of the Company's independent public accountants and reviews the
scope and results of audits and internal accounting controls.
All directors receive reimbursement of reasonable out-of-pocket expenses
incurred in connection with meetings of the Board of Directors. All nonemployee
directors receive $3,500 for each meeting of the Board of Directors attended.
In addition, each nonemployee director was granted in January 1998 an option to
purchase 2,500 shares of Common Stock at the fair market value on the date of
grant. The options vest in five equal annual installments beginning on the
first anniversary of the date of grant.
MANAGEMENT OF THE ISSUER
Richard S. Ingram has been Chief Executive Officer of the Issuer since the
consummation of the Archivex Acquisition. Mr. Ingram worked in various
capacities for Archivex Inc. from 1973 until the Archivex Acquisition, most
recently as Chairman of the Board and Chief Executive Officer of Archivex Inc.
from 1989 until the Archivex Acquisition. Mr. Ingram holds a B.A. degree from
the University of Toronto and an M.B.A. from Harvard University.
John Richardson has been the President of the Issuer since the consummation of
the Archivex Acquisition. Mr. Richardson worked in various capacities for
Archivex Inc. from 1984 until the Archivex Acquisition, most recently as
President from 1989 until the Archivex Acquisition. Prior to joining Archivex
Inc., Mr. Richardson served in various positions at Bell Rinfret Ltee. Mr.
Richardson attended H.E.C. in Montreal, Canada and College Mount St. Louis in
Canada.
EXECUTIVE COMPENSATION OF PIERCE LEAHY
The following table sets forth the cash compensation paid by the Company as
well as certain other compensation paid or accrued during fiscal 1995, 1996 and
1997 to the Company's Chief Executive Officer and the Company's five other
highest paid executive officers (together with the Chief Executive Officer, the
"Named Executives") for services to the Company in 1995, 1996 and 1997:
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<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------------
LONG TERM
OTHER ANNUAL COMPENSATION
------------ ALL OTHER
NAME AND PRINCIPAL COMPENSATION AWARDS COMPENSATION
FISCAL -------------
POSITION YEAR SALARY ($) BONUS ($) ($) OPTIONS (#) ($)
- -------------------------- ------ ---------- ----------- ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. Peter Pierce, 1997 250,000 87,760 __ __ 7,122(1)
President and Chief 1996 251,485 93,400 __ __ 6,967(1)
Executive Officer 1995 186,800 93,400 __ __ 6,681(1)
Ross M. Engelman, 1997 130,000 45,635 __ 31,773 5,403(2)
Vice President, 1996 130,000 65,000 __ 54,014 5,216(2)
Operations - South 1995 130,422 65,000 __ 90,024 4,813(2)
J. Michael Gold, 1997 130,000 45,635 __ 31,773 4,092(3)
Vice President, 1996 130,000 65,000 __ 54,014 3,739(3)
Operations - Northeast 1995 129,905 65,000 __ 90,024 3,417(3)
Douglas B. Huntley, 1997 130,000 45,635 __ 31,773 5,442(4)
Vice President, Chief 1996 130,000 65,000 __ 54,014 5,231(4)
Financial Officer 1995 129,520 65,000 __ 90,024 4,802(4)
Joseph A. Nezi, 1997 130,000 97,635(5) __ __ 6,335(6)
Vice President, Sales 1996 130,000 92,370(5) __ 37,068 6,256(6)
and Marketing 1995 133,020 97,841(5) __ 90,024 5,748(6)
Christopher J. Williams, 1997 130,000 45,635 __ 31,773 5,442(7)
Vice President, 1996 130,000 65,000 __ 54,014 5,339(7)
Operations - West 1995 129,905 65,000 __ 90,024 5,089(7)
</TABLE>
(1) Included in such amounts for 1997, 1996 and 1995, respectively, are $2,250,
$2,268 and $2,310 representing an employer match under the Company's 401(k)
Plan, $1,872, $1,699 and $1,371 in net premiums for a guaranteed term life
insurance policy on behalf of Mr. Pierce and $3,000, $3,000 and $3,000
representing contributions made by the Company under its Profit Sharing
Plan.
(2) Included in such amounts for 1997, 1996 and 1995, respectively, are $2,245,
$2,249 and $2,107 representing an employer match under the 401(k) Plan,
$158, $158 and $98 in net premiums for a guaranteed term life insurance
policy on behalf of Mr. Engelman and $3,000, $2,809 and $2,608 representing
contributions made by the Company under the Profit Sharing Plan.
(3) Included in such amounts for 1997, 1996 and 1995, respectively, are $900,
$750 and $700 representing an employer match under the 401(k) Plan, $192,
$191 and $119 in net premiums for a guaranteed term life insurance policy on
behalf of Mr. Gold and $3,000, $2,798 and $2,598 representing contributions
made by the Company under the Profit Sharing Plan.
(4) Included in such amounts for 1997, 1996 and 1995, respectively, are $2,250,
$2,250 and $2,093 representing an employer match under the 401(k) Plan,
$192, $191 and $119 in net premiums for a guaranteed term life insurance
policy on behalf of Mr. Huntley and $3,000, $2,790 and $2,590 representing
contributions made by the Company under the Profit Sharing Plan.
(5) Includes $52,000, $27,370 and $32,842 paid as commissions in 1997, 1996 and
1995, respectively.
(6) Included in such amounts for 1997, 1996 and 1995, respectively, are $2,250,
$2,260 and $2,310 representing an employer match under the 401(k) Plan,
$1,135, $996 and $438 in net premiums for a guaranteed term life insurance
policy on behalf of Mr. Nezi and $3,000, $3,000 and $3,000 representing
contributions made by the Company under the Profit Sharing Plan.
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(7) Included in such amounts for 1997, 1996 and 1995, respectively, are $2,250,
$2,250 and $2,066 representing an employer match under the 401(k) Plan,
$192, $191 and $125 in net premiums for a guaranteed term life insurance
policy on behalf of Mr. Williams and $3,000, $2,898 and $2,898 representing
contributions made by the Company under the Profit Sharing Plan.
STOCK OPTION GRANTS OF PIERCE LEAHY
The following table contains information concerning grants of stock options
to the Chief Executive Officer and to each of the other Named Executives during
1997:
OPTION GRANTS IN 1997
---------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------
POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE PRICE APPRECIATION FOR
OPTIONS EMPLOYEES IN PRICE EXPIRATION OPTION TERM (2)
----------------------
NAME GRANTED(#)(1) 1997 ($/SH) DATE 5% 10%
- ---- ----------- ------------ -------- ---------- --- ---
<S> <C> <C> <C> <C> <C> <C>
J. Peter Pierce.......... -- -- -- -- -- --
Ross M. Engelman......... 31,773 20.7 5.09 * 101,708 257,748
J. Michael Gold.......... 31,773 20.7 5.09 * 101,708 257,748
Douglas B. Huntley....... 31,773 20.7 5.09 * 101,708 257,748
Joseph A. Nezi........... -- -- -- -- -- --
Christopher J. Williams.. 31,773 20.7 5.09 * 101,708 257,748
</TABLE>
- ---------------------------
* The options have no specified expiration date.
(1) All options were granted under Pierce Leahy's Nonqualified Stock Option Plan
(the "Plan"). The options were originally scheduled to vest in five equal
annual installments commencing on the first anniversary of the date of
grant. However, upon the completion of the initial public offering of
Pierce Leahy's Common Stock on July 1, 1997, these options became fully
vested and exercisable. Pierce Leahy may make loans with respect to vested
options.
(2) Illustrates the value that might be received upon exercise of options
immediately prior to the assumed expiration of their term at the specified
compounded rates of appreciation based on the market price for Pierce
Leahy's Common Stock when the options were granted. There was no
established trading market for Pierce Leahy's Common Stock at the time the
options were issued, so the market price is based upon the formula set forth
in the Plan based upon a multiple of EBITDA, as well as the amount of cash,
cash equivalents, outstanding indebtedness and other obligations of Pierce
Leahy. Since the options granted to the Named Executives do not have a
specified expiration date, for purposes of calculating the assumed
appreciation, the options have been deemed to expire ten years from the date
of grant. Assumed rates of appreciation are not necessarily indicative of
future stock performance.
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STOCK OPTION EXERCISES AND HOLDINGS OF PIERCE LEAHY
The following table sets forth the value of options held by each of the Named
Executives at December 31, 1997. None of the Named Executives exercised any
options during 1997.
AGGREGATED OPTION EXERCISES IN 1997 AND OPTION VALUES AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
------ VALUE AT DECEMBER 31, 1997 (#) DECEMBER 31, 1997 ($)(1)
ACQUIRED ON REALIZED ----------------------------- ---------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Peter Pierce............ __ __ __ __ __ __
Ross M. Engelman........... __ __ 107,393 68,418 1,637,750 1,029,007
J. Michael Gold............ __ __ 107,393 68,418 1,637,750 1,029,007
Douglas B. Huntley......... __ __ 107,393 68,418 1,637,750 1,029,007
Joseph A. Nezi............. __ __ 68,841 58,251 1,048,892 880,153
Christopher J. Williams.... __ __ 107,393 68,418 1,637,750 1,029,007
</TABLE>
- --------------------------
(1) The value of unexercised in-the-money options is based on the difference
between the last sale price of a share of Common Stock as reported by the
New York Stock Exchange on December 31, 1997 ($20.50) and the exercise price
of the options, multiplied by the number of options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to Pierce Leahy's initial public offering of Common Stock in July 1997,
the Compensation Committee of its Board of Directors was comprised of Leo W.
Pierce, Sr., J. Peter Pierce and Alan B. Campell. Leo W. Pierce, Sr. is the
former Chief Executive Officer and President of the Company and J. Peter Pierce
is the Company's Chief Executive Officer and President.
The Company leases from four separate limited partnerships its corporate
headquarters in King of Prussia, Pennsylvania and its facilities in Suffield,
Connecticut, Orlando, Florida and Charlotte, North Carolina. J. Peter Pierce,
the Company's President and Chief Executive Officer, is the general partner of
three of the limited partnerships and members of the Pierce family and certain
other officers and directors of the Company and their affiliates own substantial
limited partnership interests in each of the four limited partnerships. The
lease on the Company's corporate headquarters expires on April 30, 2003, without
any renewal options. The leases for the Suffield, Orlando and Charlotte
facilities terminate on December 31, 2005, October 31, 2004 and August 31, 2001,
respectively. Each of such leases contains two five-year renewal options. The
aggregate rental payments by the Company for such properties during 1995, 1996
and 1997 were $773,000, $894,000 and $961,000, respectively.
In August 1996, the Company purchased for $14.9 million all of the interests
of the two partnerships owned by members of the Pierce family in six facilities
previously leased to the Company and 16 facilities previously subleased, as well
as minority interests in five other properties currently leased by the Company.
The purchase price was based on third party appraisals or the recent acquisition
price for the six facilities and management's estimates of the value of the
leasehold and minority ownership interests based on the net present value of the
cash flows generated by such interests. The leases and subleases were entered
into during the period from March 1980 to April 1995. The aggregate rental
payments for the leases and subleases were $8,201,000 and $4,624,000 in 1995 and
the portion of 1996 prior to the purchase, respectively.
The Company believes that the terms of its leases with the related parties are
as favorable to the Company as those generally available from unaffiliated third
parties. There are no plans by the Company to lease additional facilities from
officers, directors or other affiliated parties.
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<PAGE>
In December 1993, the Company's Chairman, Leo W. Pierce, Sr., advanced $80,000
to the Company. The Company repaid the loan, together with interest at 7%, in
three equal installments in December 1994, December 1995 and May 1996. In July,
1996, the Company redeemed 100 shares of voting Class A Common Stock (equivalent
to 105,910 shares of Common Stock after a stock recapitalization) from Mr.
Pierce for an aggregate price of $1.45 million, which price was based on the
Company's EBITDA. The Company had previously undertaken to pay $60,000 per year
for a five-year period to Mr. Pierce's spouse upon his death. The Company
replaced this arrangement by providing an annual pension in the amount of
$96,000 to Mr. Pierce and then to his spouse, if she survives him.
The Company entered into a tax indemnification agreement with the shareholders
of the Company prior to its initial public offering of Common Stock which
provides for: (i) the distribution to such shareholders of cash equal to the
product of the Company's taxable income for the period from January 1, 1997
until the date the Company's initial public offering was completed and the sum
of the highest effective federal and state income tax rate applicable to any
current shareholder (or in the case of shareholders that are trusts, any
beneficiaries), less any prior distributions to such shareholders to pay taxes
for such period, and (ii) an indemnification of such shareholders for any losses
or liabilities with respect to any additional taxes (including interest,
penalties and legal fees) resulting from the Company's operations during the
period in which it was a Subchapter S corporation.
Alan B. Campell was a managing director of Campell Vanderslice Furman ("CVF"),
an investment banking firm that provided investment banking services to the
Company from 1992 until its termination in 1997. During 1995, 1996 and 1997,
the Company paid CVF $0.7 million, $0.8 million and $0.1 million, respectively,
with respect to investment banking services. In 1997, CVF received a fee of
approximately $1.8 million in connection with the Company's initial public
offering of Common Stock and its concurrent offering of the 1997 Notes. CVF is
expected to receive a fee of approximately $0.3 million in connection with the
Offering.
CERTAIN TRANSACTIONS
In December 1994, the Company loaned $60,000 to J. Michael Gold, its Vice
President, Operations-Northeast. During 1996 and 1997 additional amounts were
loaned to Mr. Gold. As of December 31, 1997, an aggregate of $210,266 was
outstanding. Interest accrues on the loan at an annual rate of 8.875%
In 1997, the Company paid $88,000 to Hayden Real Estate, Inc., a company owned
by J. Anthony Hayden, a Pierce Leahy director, for commissions on various real
estate transactions.
See also "Management-Compensation Committee Interlocks and Insider
Participation."
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PRINCIPAL SHAREHOLDERS OF PIERCE LEAHY
The following table sets forth certain information with respect to the
beneficial ownership as of June 1, 1998 of (i) each person who was known to the
Company to be the beneficial owner of more than 5% of the Common Stock, (ii)
each director and each Named Executive and (iii) all the directors and executive
officers as a group. Each of the shareholders named below has sole voting and
investment power with respect to such shares, unless otherwise indicated.
<TABLE>
<CAPTION>
Common Stock
-----------------------------------------------------------
Name of Number of Shares(1) Percent
-------- ----------------------------- ----------------------------
Beneficial Owner
----------------
<S> <C> <C>
Leo W. Pierce, Sr....................................... 8,792,295(2)(3) 51.6%
J. Peter Pierce......................................... 8,734,795(2)(4) 51.3%
Leo W. Pierce, Jr....................................... 1,371,251(2)(5) 8.1%
Michael J. Pierce....................................... 1,211,708(2)(6) 7.1%
Mary E. Pierce.......................................... 1,391,953(2)(7) 8.2%
Barbara P. Quinn........................................ 1,311,741(2)(8) 7.7%
Constance P. Buckley.................................... 1,121,167(2)(9) 6.6%
Thomas W. Smith......................................... 1,134,900(10) 6.7%
Thomas N. Tryforos...................................... 1,034,900(10) 6.1%
Douglas B. Huntley...................................... 107,993(11) *
Alan B. Campell......................................... 20,000 *
Delbert S. Conner....................................... 1,000 *
J. Anthony Hayden....................................... 72,000(12) *
Thomas A. Decker........................................ 500 *
Ross M. Engelman........................................ 107,743(11) *
J. Michael Gold......................................... 107,393(13) *
Joseph A. Nezi.......................................... 68,841(14) *
Christopher J. Williams................................. 113,393(11) *
All executive officers and directors as a group (13..... 9,444,995(15) 55.5
person)
</TABLE>
- --------------------------
* Less than 1 percent.
(1) With respect to each shareholder, includes any shares issuable upon exercise
of any options held by such shareholder that are or will become exercisable
within sixty days of the record date.
(2) A total of 8,734,795 shares of Common Stock are either held in a Voting
Trust pursuant to a Voting Trust Agreement dated June 24, 1997 (as amended
or restated from time to time, the "Voting Trust") or are subject to proxies
(the "Proxies"). Leo W. Pierce, Sr. and J. Peter Pierce are the Trustees of
the Voting Trust and the persons granted voting rights under the Proxies
and, as such, each has shared power to vote the shares held in the Voting
Trust or subject to the Proxies. In the event that Messrs. Leo W. Pierce,
Sr. and J. Peter Pierce disagree as to how to vote the shares held subject
to the Voting Trust or the Proxies, one-half of the shares subject to the
Voting Trust or the Proxies will be voted at the direction of each Trustee.
With the exception of 57,500 shares beneficially owned by Leo W. Pierce, Sr.
which are discussed in Note (3) below, all of the shares beneficially owned
by Leo W. Pierce, Sr., J. Peter Pierce, Leo W. Pierce, Jr., Michael J.
Pierce, Mary E. Pierce, Barbara P. Quinn, and Constance P. Buckley are held
in the Voting Trust or are subject to Proxies. The beneficial owners of
interests in the Voting Trust or the shares subject to the Proxies have the
right to dispose of the shares to which they have beneficial interests. The
address of each of the foregoing shareholders is c/o Pierce Leahy Corp., 631
Park Avenue, King of Prussia, PA 19406.
(3) Mr. Pierce has a direct beneficial interest in the 383,813 shares of Common
Stock held in the Voting Trust and, as such, has sole dispositive power with
respect to such shares. Mr. Pierce is also a co-trustee of the Pierce Family
Foundation (the "Foundation"), which owns 57,500 shares of Common Stock. In
such capacity, Mr. Pierce has shared voting and dispositive power with
respect to such shares. Mr. Pierce disclaims beneficial ownership of the
shares held by the Foundation.
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<PAGE>
(4) Mr. Pierce has a direct beneficial interest in the 746,668 shares of Common
Stock and, as such, has sole dispositive power with respect to such shares.
He also has a beneficial interest in 180,047 shares of Common Stock as
custodian for the benefit of his child. In addition, Mr. Pierce
beneficially owns 435,290 shares of Common Stock as co-trustee of a trust.
All of such shares are subject to Proxies. Mr. Pierce disclaims beneficial
ownership of the shares held by the trust.
(5) Mr. Pierce has a direct beneficial interest in 783,460 shares of Common
Stock. He also has a beneficial interest in an aggregate of 200,169 shares
as custodian for the benefit of his children and an aggregate of 30,186
shares in which his wife is custodian for the benefit of his children. In
addition, Mr. Pierce beneficially owns 357,436 shares as trustee of a
trust. All of such shares are held in the Voting Trust. Mr. Pierce
disclaims beneficial ownership of the shares held by the trust.
(6) Mr. Pierce has a direct beneficial interest in 1,105,798 shares of Common
Stock. He also has a beneficial interest in an aggregate of 105,910 shares
as custodian for the benefit of his child. All of such shares are held in
the Voting Trust or are subject to Proxies.
(7) Ms. Pierce has a direct beneficial interest in 1,391,953 shares of Common
Stock held in the Voting Trust.
(8) Ms. Quinn has a direct beneficial interest in 442,138 shares of Common
Stock. She also has a beneficial interest in an aggregate of 564,500 shares
as custodian for the benefit of her children and an aggregate of 21,183
shares in which her husband is custodian for the benefit of her children.
In addition, Ms. Quinn beneficially owns 148,356 shares as trustee of a
trust and an aggregate of 135,564 shares as co-trustee of three separate
trusts. All of such shares are held in the Voting Trust or are subject to
Proxies. Ms. Quinn disclaims beneficial ownership of all shares held by the
trusts.
(9) Ms. Buckley has a direct beneficial interest in 615,145 shares of Common
Stock. She also has a beneficial interest in an aggregate of 152,512 shares
as custodian for the benefit of her children and an aggregate of 8,472
shares in which her husband is custodian for the benefit of her children.
In addition, Ms. Buckley beneficially owns 222,535 shares as trustee of a
trust and an aggregate of 122,503 shares as co-trustee of four separate
trusts. All of such shares are held in the Voting Trust or are subject to
Proxies. Ms. Buckley disclaims beneficial ownership of all shares held by
the trusts. (10) The information is based on a Schedule 13D, dated March
16, 1998, of Thomas W. Smith and Thomas N. Tryforos filed with the
Securities and Exchange Commission. Based on their Schedule 13D, Messrs.
Smith and Tryforos beneficially own an aggregate of 1,034,900 shares of
Common Stock in their capacity as investment managers for certain managed
accounts. Mr. Smith beneficially owns an additional 100,000 shares. The
address of Messrs. Smith and Tryforos is 323 Railroad Avenue, Greenwich, CT
06830.
(11) Includes options to purchase 107,393 shares of Common Stock.
(12) Includes 55,000 shares of Common Stock beneficially owned through an IRA.
(13) Consists of options to purchase 107,393 shares of Common Stock.
(14) Consists of options to purchase 68,841 shares of Common Stock.
(15) Includes options to purchase an aggregate of 604,747 shares of Common
Stock.
VOTING TRUST AGREEMENT
In connection with Pierce Leahy's initial public offering in 1997, certain
members of the Pierce family, who own approximately 51% of the outstanding
shares of Common Stock, entered into a ten-year voting trust agreement (the
"Voting Trust Agreement") which appoints Leo W. Pierce, Sr. and J. Peter Pierce
as the Voting Trustees (the "Voting Trustees"). All shares subject to the
Voting Trust Agreement are voted at the direction of the Voting Trustees. In
the event the Voting Trustees cannot agree on how to vote with respect to a
certain matter, one-half of the shares subject to the Voting Trust Agreement
will be voted according to the direction of each Voting Trustee. In the event
that a Voting Trustee becomes unable or unwilling to continue serving as a
Voting Trustee, the remaining Voting Trustee will act as sole Voting Trustee.
The Voting Trust Agreement will terminate in the event both Trustees become
unable or unwilling to continue serving as Voting Trustees. The Voting Trust
Agreement does not place any restriction on the transfer of shares held subject
to the Voting Trust Agreement; such shares will be released from the Voting
Trust Agreement upon their transfer to a person not subject to the Voting Trust
Agreement. Some of the shares of Common Stock held by members of the Pierce
family that would otherwise be subject to the Voting Trust, are held by such
individuals subject to a proxy granting Leo W. Pierce, Sr. and J. Peter
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Pierce the power to vote such shares (the "Proxies"). The Proxies, which are
intended to be the functional equivalent of the Voting Trust, are voted in the
same manner as shares held in the Voting Trust.
DESCRIPTION OF CERTAIN INDEBTEDNESS
THE 1996 NOTES
In July 1996, Pierce Leahy issued $200,000,000 principal amount of 11 1/8%
Senior Subordinated Notes due 2006 (the "1996 Original Notes") pursuant to an
indenture dated as of July 16, 1996 between Pierce Leahy and United States Trust
Company of New York, as Trustee (the "1996 Indenture"). In November 1996,
Pierce Leahy exchanged the 1996 Original Notes for $200,000,000 principal amount
of 11 1/8% Senior Subordinated Notes due 2006 (the "1996 Notes"), which are
substantially identical to the 1996 Original Notes except that the 1996 Notes
are registered under the Securities Act. The 1996 Notes mature on July 15, 2006
and bear interest at 11 1/8% per annum, payable semi-annually in arrears on
January 15 and July 15. Pierce Leahy was entitled to redeem up to an aggregate
of $70,000,000 principal amount of the 1996 Notes at any time prior to July 15,
1999 with the net proceeds of the one or more Public Equity Offerings (as
defined in the 1996 Indenture) at a redemption price equal to 110% of the
aggregate principal amount so redeemed plus accrued interest to the redemption
date. Pierce Leahy utilized a portion of the net proceeds of its initial public
offering of Common Stock to redeem $70,000,000 principal amount of the 1996
Notes. Accordingly, $130,000,000 principal amount of the 1996 Notes currently
remains outstanding.
The 1996 Notes are general unsecured obligations of Pierce Leahy, subordinated
in right of payment to Senior Indebtedness (as defined in the 1996 Indenture) of
Pierce Leahy and senior in right of payment to any current or future
subordinated indebtedness of Pierce Leahy, except as otherwise provided in the
1996 Indenture. The Domestic Guarantors (other than Pierce Leahy) have
unconditionally guaranteed, on an unsecured senior subordinated basis, the
payment of principal, premium, if any, and interest, on the 1996 Notes jointly
and severally. Accordingly, the obligations of Pierce Leahy on the 1996 Notes
and the guarantees of the other Domestic Guarantors of the 1996 Notes rank pari
passu with their respective Domestic Guarantees. The 1996 Notes are secured by
a pledge of 65% of the capital stock of the Issuer. The pledge is on a second
priority basis, junior to the pledge of such shares in favor of the lenders and
the administrative agent under the Credit Facility and senior to the pledge in
favor of the holders of the 1997 Notes. The 1996 Notes will be guaranteed, pari
passu with the Notes, on an unsecured senior subordinated basis, by any future
Domestic Guarantors.
The 1996 Indenture contains, among other things, covenants restricting the
ability of Pierce Leahy and its subsidiaries to dispose of assets, pay stock and
indebtedness, create liens, make capital expenditures, make certain investments
or acquisitions, enter into transactions with affiliates and otherwise restrict
corporate activities.
THE 1997 NOTES
In June 1997, Pierce Leahy issued $120,000,000 principal amount of 9 1/8%
Senior Subordinated Notes due 2007 (the "1997 Notes") pursuant to an indenture
dated as of July 7, 1997 ("1997 Indenture") between Pierce Leahy and The Bank of
New York, as Trustee. The 1997 Notes mature on July 15, 2007 and bear interest
at 91/8% per annum, payable semi-annually in arrears on January 15 and July 15.
The 1997 Notes are general unsecured obligations of Pierce Leahy, subordinated
in right of payment to Senior Indebtedness (as defined in the 1997 Indenture) of
Pierce Leahy and senior in right of payment to any current or future
subordinated indebtedness of Pierce Leahy, except as otherwise provided in the
1997 Indenture. The Domestic Guarantors (other than Pierce Leahy) have
unconditionally guaranteed, on an unsecured senior subordinated basis, the
payment of principal, premium, if any, and interest, on the 1997 Notes jointly
and severally. Accordingly, the obligations of Pierce Leahy on the 1997 Notes
and the guarantees of the other Domestic Guarantors of the 1997 Notes rank pari
passu with the respective Domestic Guarantees.
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The 1997 Notes are secured by a pledge of 65% of the capital stock of the
Issuer. The pledge is on a third priority basis, junior to the pledge of such
shares in favor of the lenders and the administrative agent under the Credit
Facility and to the pledge in favor of the holders of the 1996 Notes.
The 1997 Indenture contains, among other things, covenants restricting the
ability of the Company and its subsidiaries to dispose of assets, pay dividends,
repurchase or redeem capital stock and indebtedness, create liens, make capital
expenditures, make certain investments or acquisitions, enter into transactions
with affiliates and otherwise restrict corporate activities.
DESCRIPTION OF CREDIT FACILITY
In August 1997, Pierce Leahy and the Issuer entered into the Credit Facility
with Canadian Imperial Bank of Commerce ("CIBC" or "Agent") as the Agent, and
certain other lenders, providing for a senior secured revolving line of credit
in an aggregate principal amount of $140 million in U.S. dollar borrowings by
Pierce Leahy and Cdn. $35 million in Canadian dollar borrowings by the Issuer.
The amount of U.S. dollar borrowings and Canadian dollar borrowings provided for
under the Credit Facility were subsequently increased to U.S. $150 million and
to Cdn. $40 million.
The Credit Facility will mature on June 30, 2004, unless previously
terminated, and the aggregate available commitments under the Credit Facility
will be reduced incrementally on a quarterly basis, beginning March 31, 2001.
Borrowings under the U.S. dollar portion of the Credit Facility bear interest
at a rate equal to, at the option of Pierce Leahy, either (i) the base rate
(which is based on the Federal Funds rate or the prime rate most recently
announced by the Agent) or (ii) LIBOR, in each case plus an applicable margin
determined by reference to the ratio of Total Net Debt to EBITDA of the Company
(as defined in the Credit Facility). Borrowings under the Canadian dollar
portion of the Credit Facility also bear interest based on various methods plus
an applicable margin.
The obligations of Pierce Leahy under the Credit Facility are unconditionally
guaranteed, jointly and severally, by all U.S. subsidiaries of the Company. The
obligations of the Company and such guarantors under the Credit Facility are
secured primarily by a first priority pledge of the stock of all material U.S.
subsidiaries of Pierce Leahy, a first priority pledge of 65% of the capital
stock of the Issuer and a first priority lien on all of the assets of Pierce
Leahy, the Issuer and such guarantors. Obligations under the Canadian facility
are guaranteed by Pierce Leahy.
The Credit Facility contains, among other things, covenants restricting the
ability of the Company and its subsidiaries to dispose of assets, pay dividends,
repurchase or redeem capital stock and indebtedness, create liens, make capital
expenditures, make certain investments or acquisitions, enter into transactions
with affiliates and otherwise restrict corporate activities. The Credit
Facility also contains a number of financial covenants.
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DESCRIPTION OF THE NOTES
The Original Notes were, and the Exchange Notes will be, issued under an
Indenture dated as of April 7, 1998 (the "Indenture") by and among the Issuer,
Pierce Leahy and The Bank of New York, as trustee (the "Trustee"). The terms of
the Notes include those stated in the Indenture and those made a part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Notes are subject to all such terms, and holders of
the Notes are referred to the Indenture and the Trust Indenture Act for a
statement of such terms.
The following is a summary of the material terms and provisions of the Notes.
This summary does not purport to be a complete description of the Notes and is
subject to the detailed provisions of, and qualified by reference to, the Notes
and the Indenture (including the definitions contained therein). Definitions
relating to certain capitalized terms are set forth under "Certain Definitions"
and throughout this description. Capitalized terms that are used but not
otherwise defined herein have the meanings assigned to them in the Indenture,
and such definitions are incorporated herein by reference. The Indenture has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part. The form of the Exchange Notes and the Original Notes are identical
in all material respects except that the Exchange Notes will have been
registered under the Securities Act and, therefore, will not bear legends
restricting their transfer. The Exchange Notes will not represent new
indebtedness of the Issuer, will be entitled to the benefits of the same
Indenture which governs the Original Notes and will rank pari passu with the
Original Notes. Any provisions of the Indenture which require actions by or
approval of a specified percentage of Original Notes shall require the approval
of the holders of such percentage of principal amount of Original Notes and
Exchange Notes, in the aggregate.
GENERAL
The Notes are limited in aggregate principal amount to $135,000,000. The
Notes are general unsecured senior obligations of the Issuer, ranking pari passu
in right of payment to all existing and future senior indebtedness of the Issuer
and senior in right of payment to any current or future subordinated
indebtedness of the Issuer, except as otherwise provided herein. The Notes will
not be secured by any assets and are effectively subordinated to any existing
and future secured indebtedness of the Issuer, including the Credit Facility.
The Notes will be unconditionally guaranteed (the "Domestic Guarantees"), on a
senior subordinated basis, as to payment of principal, premium, if any, and
interest, jointly and severally, by Pierce Leahy, its two U.S. Subsidiaries,
Advanced Box, Inc. and Monarch Box, Inc., and by each future Restricted
Subsidiary of Pierce Leahy organized under the laws of the United States, any
state thereof or the District of Columbia (together with Pierce Leahy, the
"Domestic Guarantors").
The Notes will be unconditionally guaranteed (the "Canadian Guarantees"), on a
senior basis, as to payment of principal, premium, if any, and interest, jointly
and severally, by Archivex and by each future Subsidiary of Pierce Leahy
organized under the laws of Canada or any province thereof, which is not
prohibited by the laws of Canada or of any province thereof from acting as a
guarantor of the Notes and which has either assets or shareholders' equity in
excess of $5,000 (each, a "Canadian Guarantor," and together with the Domestic
Guarantors, the "Guarantors"). The Canadian Guarantees will be effectively
subordinated to any existing and future secured indebtedness of the Canadian
Subsidiaries, including the Credit Facility.
MATURITY, INTEREST AND PRINCIPAL
The Notes will mature on May 15, 2008. The Notes will bear interest at a rate
of 8 1/8% per annum from the date of original issuance until maturity. Interest
is payable semi-annually in arrears on May 15 and November 15 of each year,
commencing November 15, 1998, to holders of record of the Notes at the close of
business on the immediately preceding May 1 and November 1, respectively. The
interest rate on the Notes is subject to increase, and such Special Interest
will be payable on the payment dates set forth above, in certain circumstances,
if the Notes
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(or other securities substantially similar to the Notes) are not registered with
the Commission within the prescribed time periods.
The interest rate on the Notes is subject to increase, and such Additional
Interest will be payable on the payment dates set forth above, in certain
circumstances, if the Notes (or other securities substantially similar to the
Notes) are not registered with the Commission within the prescribed time
periods. Upon consummation of the Exchange Offer, such registration
requirements will have been met and no Additional Interest will be payable with
respect the Notes, except as set forth below. In the event that the Company
does not exchange Exchange Notes for all Original Notes validly tendered in
accordance with the terms of the Exchange Offer on or prior to 60 days after the
date of this Prospectus or the Registration Statement of which this Prospectus
forms a part ceases to be effective at any time prior to the consummation of the
Exchange Offer (either such event, a "Registration Default"), the sole remedy
available to holders of the Notes will be the immediate assessment of additional
interest ("Additional Interest") as follows: the per annum interest rate on the
Notes will increase by 50 basis points; and the per annum interest rate will
increase by an additional 25 basis points for each subsequent 90-day period
during which the Registration Default remains uncured, up to a maximum
additional interest rate of 200 basis points per annum in excess of the interest
rate on the cover of this Prospectus. All Additional Interest will be payable
to holders of the Notes in cash on the same original issue payment dates as the
Notes, commencing with the first such date occurring after any such Additional
Interest commences to accrue, until such Registration Default is cured. After
the date on which such Registration Default is cured, the interest rate on the
Notes will revert to the interest rate originally borne by the Notes (as shown
on the cover of this Prospectus).
The summary herein of certain provisions of the Registration Rights Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Registration Rights
Agreement, which has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part, a copy of which will be available upon
request to the Company.
OPTIONAL REDEMPTION
The Notes will be redeemable at the option of the Issuer, in whole or in part,
at any time on or after May 15, 2003 at the following redemption prices
(expressed as a percentage of principal amount), together, in each case, with
accrued and unpaid interest to the redemption date, if redeemed during the
twelve-month period beginning on May 15, of each year listed below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003.................................................. 104.063%
2004.................................................. 102.708%
2005.................................................. 101.354%
2006 and thereafter................................... 100.000%
</TABLE>
Notwithstanding the foregoing, the Issuer may redeem in the aggregate up to
35% of the original principal amount of Notes at any time and from time to time
prior to May 15, 2001 at a redemption price equal to 108 1/8% of the aggregate
principal amount so redeemed, plus accrued interest to the redemption date out
of the Net Proceeds of one or more Public Equity Offerings; provided, that at
least 65% of the aggregate principal amount of Notes originally issued remains
outstanding immediately after the occurrence of any such redemption and that any
such redemption occurs within 90 days following the closing of any such Public
Equity Offering.
In the event of redemption of fewer than all of the Notes, the Trustee shall
select either on a pro rata basis or by lot or in such other manner as it shall
deem fair and appropriate the Notes to be redeemed. The Notes will be
redeemable in whole or in part upon not less than 30 nor more than 60 days'
prior written notice, mailed by first class mail to a holder's last address as
it shall appear on the register maintained by the Registrar of the Notes. If
any Note is to be redeemed in part only, the notice of redemption that relates
to such Note shall state the portion
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of the principal amount thereof to be redeemed. A new Note, in a principal
amount equal to the unredeemed portion thereof, will be issued in the name of
the holder thereof upon cancellation of the original Note. On and after any
redemption date, interest will cease to accrue on the Notes or portions thereof
called for redemption unless the Issuer shall fail to redeem any such Note.
REDEMPTION FOR CHANGES IN CANADIAN WITHHOLDING TAXES
The Notes will be subject to redemption as a whole, but not in part, at the
option of the Issuer at any time, on not less than 30 nor more than 60 days'
prior written notice, at 100% of the principal amount thereof, plus accrued and
unpaid interest thereon (if any) to but excluding the redemption date, in the
event the Issuer has become, or would become, obligated to pay, on the next date
on which any amount would be payable with respect to the Notes, any Additional
Amounts (as defined in "Additional Amounts") as a result of a change in the laws
(including any regulations thereunder) of Canada (or any political subdivision
or taxing authority thereof or therein), or any change in any official position
regarding the application or interpretation of such laws or regulations, which
change is announced or becomes effective on or after the Issue Date.
ADDITIONAL AMOUNTS
All payments made by the Issuer under or with respect to the Notes will be
made free and clear of, and without withholding or deduction for or on account
of, any present or future tax, duty, levy, impost, assessment or other
governmental charge imposed or levied by or on behalf of the government of
Canada or of any province or territory thereof or by any authority or agency
therein or thereof having power to tax ("Taxes"), unless the Issuer is required
to withhold or deduct Taxes by law or by the interpretation or administration
thereof by the relevant governmental authority or agency. If the Issuer is so
required to withhold or deduct any amount for or on account of Taxes from any
payment made under or with respect to the Notes, the Issuer will pay such
additional amounts ("Additional Amounts") as may be necessary so that the net
amount received by each holder (including Additional Amounts) after such
withholding or deduction will not be less than the amount the holder would have
received if such Taxes had not been withheld or deducted; provided, that no
Additional Amounts will be payable with respect to a payment made to a holder
(an "Excluded Holder") (i) with which the Issuer does not deal at arm's length
(within the meaning of the Income Tax Act (Canada)) at the time of making such
payment, or (ii) which is subject to such Taxes by reason of its being connected
with Canada or any province or territory thereof otherwise than by the mere
acquisition, holding or disposition of Notes or the receipt of payments
thereunder. The Issuer will also (i) make such withholding or deduction and
(ii) remit the full amount deducted or withheld to the relevant governmental
authority in accordance with applicable law, the Issuer will furnish to the
holders (other than an Excluded Holder), within 30 days after the date the
payment of any Taxes is due pursuant to applicable law, certified copies of tax
receipts evidencing such payment by the Issuer. The Issuer will indemnify and
hold harmless each holder (other than an Excluded Holder) and upon written
request reimburse each such holder for the amount of (i) any Taxes so levied or
imposed and paid by such holder as a result of payments made under or with
respect to the Notes, (ii) any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, and (iii) any Taxes imposed
with respect to any reimbursement under (i) or (ii), but excluding any such
Taxes on such holder's net income.
At least 30 days prior to each date on which any payment under or with respect
to the Notes is due and payable, if the Issuer will be obligated to pay
Additional Amounts with respect to such payment, the Issuer will deliver to the
Trustee an Officers' Certificate stating the fact that such Additional Amounts
will be payable, the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional Amounts to
holders (other than an Excluded Holder) on the payment date. Whenever in the
Indenture there is mentioned in any context the payment of principal (and
premium, if any), redemption price, interest or any other amount payable under
or with respect to any Note, such mention shall be deemed to include mention of
the payment of Additional Amounts to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof.
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For a discussion of the exemption from Canadian withholding taxes applicable
to payments under or with respect to the Notes, see "Canadian Federal Income Tax
Considerations."
SUBORDINATION OF DOMESTIC GUARANTEES
Each Domestic Guarantee is, to the extent and in the manner provided in the
Indenture, subordinated in right of payment to the prior indefeasible payment
and satisfaction in full in cash of all existing and future Senior Indebtedness
of such Domestic Guarantor. As of May 31, 1998, there was approximately $58.8
million of Senior Indebtedness outstanding which would be senior in right of
payment to the Domestic Guarantees and $250 million of senior subordinated
indebtedness which would rank pari passu with the Domestic Guarantees.
In the event of any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to a Domestic Guarantor or to its creditors, as
such, or to its assets, whether voluntary or involuntary, or any liquidation,
dissolution or other winding-up of a Domestic Guarantor, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or any
general assignment for the benefit of creditors or any other marshalling of
assets or liabilities of a Domestic Guarantor (except in connection with the
merger or consolidation of a Domestic Guarantor or its liquidation or
dissolution following the transfer of substantially all of its assets, upon the
terms and conditions permitted under the circumstances described under "Mergers,
Consolidations or Sale of Assets") (all of the foregoing referred to herein
individually as a "Bankruptcy Proceeding" and collectively as "Bankruptcy
Proceedings"), the holders of Senior Indebtedness of the Domestic Guarantors
will be entitled to receive payment and satisfaction in full in cash of all
amounts due on or in respect of all Senior Indebtedness of the Domestic
Guarantors before the holders of the Notes are entitled to receive or retain any
payment or distribution of any kind on account of the Notes pursuant to the
Domestic Guarantees. In the event that, notwithstanding the foregoing, the
Trustee or any holder of Notes receives any payment or distribution of assets of
the Domestic Guarantors of any kind, whether in cash, property or securities,
including, without limitation, by way of set-off or otherwise, in respect of the
Notes pursuant to the Domestic Guarantees before all Senior Indebtedness of the
Domestic Guarantors is paid and satisfied in full in cash, then such payment or
distribution will be held by the recipient in trust for the benefit of holders
of such Senior Indebtedness and will be immediately paid over or delivered to
the holders of such Senior Indebtedness or their representative or
representatives to the extent necessary to make payment in full in cash of all
such Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution, or provision therefor, to or for the holders of such
Senior Indebtedness. By reason of such subordination, in the event of
liquidation or insolvency, creditors of the Domestic Guarantors who are holders
of Senior Indebtedness of the Domestic Guarantors may recover more, ratably,
than other creditors of the Domestic Guarantors, and creditors of the Domestic
Guarantors who are not holders of Senior Indebtedness or of the Notes may
recover more, ratably, than the holders of the Notes.
No payment or distribution of any assets or securities of the Domestic
Guarantors of any kind or character (including, without limitation, cash,
property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other Indebtedness of the Domestic Guarantors being
subordinated to the payment of the Notes by the Domestic Guarantors) may be made
by or on behalf of the Domestic Guarantors, including, without limitation, by
way of set-off or otherwise, for or on account of the Notes pursuant to the
Domestic Guarantees, or for or on account of the purchase, redemption,
defeasance or other acquisition of the Notes pursuant to the Domestic
Guarantees, and neither the Trustee nor any holder or owner of any Notes shall
take or receive from any Domestic Guarantor, directly or indirectly in any
manner, payment in respect of all or any portion of Notes pursuant to the
Domestic Guarantees following the delivery by the representative of the holders
of Designated Senior Indebtedness ("Representative") to the Trustee of written
notice of (i) the occurrence of a Payment Default or (ii) the occurrence of a
Non-Payment Event of Default on Designated Senior Indebtedness and the
acceleration of the maturity of such Designated Senior Indebtedness in
accordance with its terms, and, in any such event, such prohibition shall
continue until such Payment Default is cured, waived in writing or ceases to
exist or such acceleration has been rescinded or otherwise cured. At such time
as the prohibition set forth in the preceding sentence shall no longer be in
effect, subject to the provisions of the following paragraph, the Domestic
Guarantors
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shall, if applicable, resume making any and all required payments on account of
the Notes pursuant to the Domestic Guarantees, including any missed payments.
Upon the occurrence of a Non-Payment Event of Default on Designated Senior
Indebtedness, no payment or distribution of any assets or securities of the
Domestic Guarantors of any kind or character (including, without limitation,
cash, property and any payment or distribution which may be payable or
deliverable by reason of the payment of any other Indebtedness of the Domestic
Guarantors being subordinated to the payment of the Domestic Guarantees by the
Domestic Guarantors) may be made by the Domestic Guarantors, including, without
limitation, by way of set-off or otherwise, on account of the Notes pursuant to
the Domestic Guarantees, or for or on account of the purchase, redemption,
defeasance or other acquisition of Notes pursuant to the Domestic Guarantees,
and neither the Trustee nor any holder or owner of any Notes shall take or
receive from any Domestic Guarantors (or any U.S. Restricted Subsidiary or U.S.
Subsidiary of such Domestic Guarantor), directly or indirectly in any manner,
payment in respect of all or any portion of the Notes pursuant to the Domestic
Guarantees, for a period (a "Payment Blockage Period") commencing on the date of
receipt by the Trustee of written notice from the Representative of such Non-
Payment Event of Default unless and until (subject to any blockage of payments
that may then be in effect under the preceding paragraph) the earliest of (x)
more than 179 days shall have elapsed since receipt of such written notice by
the Trustee, (y) such Non-Payment Event of Default shall have been cured or
waived in writing or shall have ceased to exist or such Designated Senior
Indebtedness shall have been paid in full or (z) such Payment Blockage Period
shall have been terminated by written notice to the Domestic Guarantors or the
Trustee from such Representative, after which, in the case of clause (x), (y) or
(z), the Domestic Guarantors shall resume making any and all required payments
in respect of the Domestic Guarantees, including, if applicable, any missed
payments. Notwithstanding any other provision of the Indenture, in no event
shall a Payment Blockage Period commenced in accordance with the provisions of
the Indenture described in this paragraph extend beyond 179 days from the date
of the receipt by the Trustee of the notice referred to above (the "Initial
Blockage Period"). Any number of additional Payment Blockage Periods may be
commenced during the Initial Blockage Period; provided, however, that no such
additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no Payment
Blockage Period may be commenced until at least 180 consecutive days have
elapsed from the last day of the Initial Blockage Period. Notwithstanding any
other provision of the Indenture, no event of default with respect to Designated
Senior Indebtedness (other than a Payment Default) which existed or was
continuing on the date of the commencement of any Payment Blockage Period
initiated by the Representative shall be, or be made, the basis for the
commencement of a second Payment Blockage Period initiated by the
Representative, whether or not within the Initial Blockage Period, unless such
event of default shall have been cured or waived for a period of not less than
90 consecutive days.
If any Domestic Guarantor fails to make any payment on any Domestic Guarantee,
when due or within any applicable grace period, whether or not on account of
payment blockage provisions, such failure constitutes an Event of Default under
the Indenture and would, subject to the above provision, enable the holders of
the Notes to accelerate the maturity thereof. See "Events of Default."
A holder of Notes by his acceptance of Notes agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purpose.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Additional Indebtedness
Pierce Leahy will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, incur (as defined) any Indebtedness (including Acquired
Indebtedness) unless (a) after giving effect to the incurrence of such
Indebtedness and the receipt and application of the proceeds thereof, the ratio
of total Indebtedness of Pierce Leahy
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and its Restricted Subsidiaries to the Adjusted EBITDA of Pierce Leahy is less
than 6.5 to 1; provided, however, that the Indebtedness which is the subject of
a determination under this provision is Acquired Indebtedness, or Indebtedness
incurred in connection with the simultaneous acquisition of any Person,
business, property or assets, then such ratio shall be determined by giving
effect (on a pro forma basis, as if the transaction had occurred at the
beginning of the four quarter period ending at the end of the last fiscal
quarter of such Person or business for which financial statements are available)
to the incurrence or assumption of such Acquired Indebtedness or such other
Indebtedness by Pierce Leahy or a Restricted Subsidiary; and (b) no Default or
Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness.
Notwithstanding the foregoing, Pierce Leahy and its Restricted Subsidiaries
may incur Permitted Indebtedness; provided, that no Domestic Guarantor may incur
any Permitted Indebtedness, without meeting the Indebtedness incurrence
provisions of the preceding paragraph, that ranks pari passu or junior in right
of payment to the Domestic Guarantees and that has a maturity or mandatory
sinking fund payment prior to the maturity of the Notes.
Limitation on Restricted Payments
Pierce Leahy will not make, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless:
(a) no Default or Event of Default shall have occurred and be continuing at
the time of or immediately after giving effect to such Restricted Payment;
(b) immediately after giving pro forma effect to such Restricted Payment,
Pierce Leahy or a Restricted Subsidiary could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under the covenant set forth
under "Limitation on Additional Indebtedness"; and
(c) immediately after giving effect to such Restricted Payment, the aggregate
of all Restricted Payments declared (except to the extent not made on the
payment date) or made after the Issue Date does not exceed the sum of (1) 50%
of the cumulative Consolidated Net Income of Pierce Leahy subsequent to the
Issue Date (or minus 100% of any cumulative deficit in Consolidated Net Income
during such period) and (2) 100% of the aggregate Net Proceeds and the fair
market value of securities or other property received by Pierce Leahy or the
Issuer from the issue or sale, after the Issue Date, of Capital Stock (other
than Disqualified Capital Stock or Capital Stock of Pierce Leahy or the Issuer
issued to any Subsidiary of Pierce Leahy) of Pierce Leahy or the Issuer or any
Indebtedness or other securities of Pierce Leahy or the Issuer convertible into
or exercisable or exchangeable for Capital Stock (other than Disqualified
Capital Stock) of Pierce Leahy or the Issuer which has been so converted or
exercised or exchanged, as the case may be, and (3) $3,000,000. For purposes
of determining under this clause (c) the amount expended for Restricted
Payments, cash distributed shall be valued at the face amount thereof and
property other than cash shall be valued at its fair market value.
Notwithstanding the foregoing, the provisions of this covenant shall not
prohibit (i) the payment of any distribution within 60 days after the date of
declaration thereof, if at such date of declaration such payment would comply
with the provisions of the Indenture, (ii) the retirement of any shares of
Capital Stock of Pierce Leahy or the Issuer or subordinated Indebtedness by
conversion into, or by or in exchange for, shares of Capital Stock (other than
Disqualified Capital Stock), or out of, the Net Proceeds of the substantially
concurrent sale (other than to a Subsidiary of Pierce Leahy) of other shares of
Capital Stock of Pierce Leahy (other than Disqualified Capital Stock), (iii) the
redemption or retirement of Indebtedness of the Issuer subordinated to the Notes
in the case of the Issuer or of a Guarantor subordinated to its respective
Guarantee in exchange for, by conversion into, or out of the Net Proceeds of, a
substantially concurrent sale or incurrence of Indebtedness (other than any
Indebtedness owed to a Subsidiary) of the Issuer or a Guarantor that is
contractually subordinated in right of payment to the Notes in the case of
Issuer or such Guarantor's Guarantee, as the case may be, to at least the same
extent as the subordinated Indebtedness being redeemed or retired, (iv) the
retirement of any shares of Disqualified Capital Stock by conversion into, or by
exchange for, shares of Disqualified Capital Stock, or out of the Net Proceeds
of the substantially
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concurrent sale (other than to a Subsidiary of Pierce Leahy) of other shares of
Disqualified Capital Stock, (v) Permitted Tax Distributions, (vi) payments to
employees of Pierce Leahy for repurchases of stock or repurchases pursuant to
the Pierce Leahy Nonqualified Stock Option Plan; provided, however, that the
aggregate amount of all such payments under this clause (vi) does not exceed
$2,000,000 in the aggregate, exclusive of amounts funded by insurance proceeds
and, provided, further, that with respect to clause (vi) (other than with
respect to payments funded by insurance proceeds) no Default or Event of Default
shall have occurred and be continuing at the time of any such distribution or
payment or will occur immediately after giving effect to any such distribution
or payment; and, provided, further, that, in determining the aggregate amount of
all Restricted Payments made subsequent to the Issue Date, all distributions or
payments made pursuant to clause (vi) (exclusive of insurance proceeds) shall be
included.
Not later than the date of making any Restricted Payment, Pierce Leahy and the
Issuer shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this covenant were computed, which calculations may be
based upon Pierce Leahy's latest available financial statements, and that no
Default or Event of Default exists and is continuing and no Default or Event of
Default will occur immediately after giving effect to such Restricted Payment.
Limitation on Senior Subordinated Debt
Pierce Leahy will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, incur, contingently or otherwise, any Indebtedness
(other than the Notes and the Guarantees, as the case may be) that is both (i)
subordinate in right of payment to any Senior Indebtedness of Pierce Leahy or
its Restricted Subsidiaries, as the case may be, and (ii) senior in right of
payment to the Notes, with respect to the Issuer, or a Guarantor's Guarantee,
with respect to such Guarantor, as the case may be. For purposes of this
covenant, Indebtedness is deemed to be senior in right of payment to a Domestic
Guarantee if it is not explicitly subordinate in right of payment to Senior
Indebtedness at least to the same extent as the Domestic Guarantees are
subordinate to Senior Indebtedness.
Limitations on Investments
Pierce Leahy will not, and will not permit any of its Restricted Subsidiaries
to, make any Investment other than (i) a Permitted Investment or (ii) an
Investment that is made as a Restricted Payment in compliance with the
"Limitation on Restricted Payments" covenant, after the Issue Date.
Limitations on Liens
Pierce Leahy will not, and will not permit any of its Restricted Subsidiaries
to, create, incur or otherwise cause or suffer to exist or become effective any
Liens of any kind (other than Permitted Liens) upon any property or asset of
Pierce Leahy or any Restricted Subsidiary or any shares of stock or debt of any
Restricted Subsidiary which owns property or assets, now owned or hereafter
acquired, in any case which secures Indebtedness pari passu with or subordinated
to the Notes with respect to the Issuer or a Guarantor's Guarantee with respect
to the respective Guarantor unless (i) if such Lien secures Indebtedness which
is pari passu with the Notes in the case of the Issuer or a Guarantee with
respect to the respective Guarantor, then the Notes or such Guarantee, as
applicable, are secured on an equal and ratable or senior basis with the
obligations so secured until such time as such obligation is no longer secured
by a Lien or (ii) if such Lien secures Indebtedness which is subordinated to the
Notes in the case of the Issuer or a Guarantor's Guarantee in the case of a
Guarantor, any such Lien shall be subordinated to the Lien granted to the
holders of the Notes in the same collateral to the same extent as such
subordinated Indebtedness is subordinated to the Notes or such Guarantee, as
applicable.
Limitation on Transactions with Affiliates
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Pierce Leahy will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, enter into any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with any Affiliate (including entities in
which Pierce Leahy or any of its Restricted Subsidiaries own a minority
interest) or holder of 10% or more of Pierce Leahy's Common Stock (an "Affiliate
Transaction") or extend, renew, waive or otherwise modify the terms of any
Affiliate Transaction entered into prior to the Issue Date unless (i) such
Affiliate Transaction is between or among Pierce Leahy and its Wholly-Owned
Subsidiaries; (ii) such Affiliate Transaction is solely between or among Wholly-
Owned Subsidiaries of Pierce Leahy; or (iii) the terms of such Affiliate
Transaction are fair and reasonable to Pierce Leahy or such Restricted
Subsidiary, as the case may be, and the terms of such Affiliate Transaction are
at least as favorable as the terms which could be obtained by Pierce Leahy or
such Restricted Subsidiary, as the case may be, in a comparable transaction made
on an arm's-length basis between unaffiliated parties; provided, however, that
Pierce Leahy and its Restricted Subsidiaries may renew any then existing
Affiliate Transaction through either a renewal option or upon expiration of an
arrangement on substantially similar terms to those in effect immediately
preceding such expiration. In any Affiliate Transaction involving an amount or
having a value in excess of $1 million which is not permitted under clause (i)
or (ii) above, Pierce Leahy must obtain a resolution of the Board of Directors
certifying that such Affiliate Transaction complies with clause (iii) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors. In transactions with a value
in excess of $3 million which are not permitted under clause (i) or (ii) above,
Pierce Leahy must obtain a written opinion as to the fairness from a financial
point of view of such a transaction from an independent investment banking firm
of national standing or real estate firm of national standing (as the case may
be).
The foregoing provisions will not apply to (i) any Restricted Payment that is
not prohibited by the provisions described under "Limitations on Restricted
Payments" contained herein, (ii) any transaction, approved by the Board of
Directors of Pierce Leahy in good faith, with an officer, director, employee or
consultant of Pierce Leahy or of any Subsidiary in his or her capacity as an
officer, director, employee or consultant entered into in the ordinary course of
business, including compensation, indemnity and employee benefit arrangements
with any officer, director, employee or consultant of Pierce Leahy or of any
Subsidiary, or (iii) customary investment banking, underwriting, placement agent
or financial advisor fees paid in connection with services rendered to Pierce
Leahy or any Subsidiary.
Limitation on Creation of Subsidiaries
Pierce Leahy will not create or acquire, nor permit any of its Restricted
Subsidiaries to create or acquire, any Subsidiary other than (i) a Restricted
Subsidiary existing as of the date of the Indenture, (ii) a Restricted
Subsidiary that is acquired or created after the date of the Indenture, or (iii)
an Unrestricted Subsidiary; provided, however, that (a) each Restricted
Subsidiary organized under the laws of the United States or any state thereof or
the District of Columbia acquired or created pursuant to clause (ii) at the time
it has either assets or shareholder's equity in excess of $5,000 and (b) each
Restricted Subsidiary organized under the laws of Canada or any province thereof
acquired or created pursuant to clause (ii) which is not prohibited by the laws
of Canada or any province thereof from acting as a guarantor of the Notes, at
the time it has either assets or shareholders' equity in excess of $5,000, shall
execute a subordinated guarantee in the case of a Domestic Guarantor and a
senior guarantee in the case of a Canadian Guarantor, each in the form attached
to the Indenture and reasonably satisfactory in form and substance to the
Trustee (and with such documentation relating thereto as the Trustee shall
require, including, without limitation a supplement or amendment to the
Indenture and opinions of counsel as to the enforceability of such guarantee).
See "Future Guarantees."
Limitation on Certain Asset Sales
Pierce Leahy will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless (i) Pierce Leahy or its Restricted
Subsidiaries, as the case may be, receives consideration at the time of such
sale or other disposition at least equal to the fair market value thereof (as
determined for Asset Sales other than eminent domain, condemnation or similar
government proceedings in good faith by Pierce Leahy's Board of Directors, and
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evidenced by a board resolution); (ii) not less than 85% of the consideration
received by Pierce Leahy or its Subsidiaries, as the case may be, is in the form
of cash or Temporary Cash Investments; and (iii) the Asset Sale Proceeds
received by Pierce Leahy or such Restricted Subsidiary are applied (a) first, to
the extent Pierce Leahy or such Restricted Subsidiary elects, or is required, to
prepay, repay or purchase debt under any then existing Senior Indebtedness of
Pierce Leahy or any Restricted Subsidiary within 180 days following the receipt
of the Asset Sale Proceeds from any Asset Sale; (b) second, to the extent of the
balance of Asset Sale Proceeds after application as described above, to the
extent Pierce Leahy or such Restricted Subsidiary elects, to an investment in
assets (including Capital Stock or other securities purchased in connection with
the acquisition of Capital Stock or property of another Person) used or useful
in businesses similar or ancillary to the business of Pierce Leahy or a
Restricted Subsidiary as conducted at the time of such Asset Sale, provided that
such investment occurs or Pierce Leahy or a Restricted Subsidiary enters into
contractual commitments to make such investment, subject only to customary
conditions (other than the obtaining of financing), on or prior to the 181st day
following receipt of such Asset Sale Proceeds (the "Reinvestment Date") and
Asset Sale Proceeds contractually committed are so applied within 270 days
following the receipt of such Asset Sale Proceeds; and (c) third, if on the
Reinvestment Date with respect to any Asset Sale, the Available Asset Sale
Proceeds exceed $10 million, Pierce Leahy or such Restricted Subsidiary, as
applicable, shall apply an amount equal to such Available Asset Sale Proceeds to
an offer to repurchase the Notes, or any Indebtedness ranking pari passu with
the Notes with respect to Indebtedness of the Issuer or the relevant Guarantee
with respect to Indebtedness of a Guarantor, which Indebtedness contains similar
provisions requiring Pierce Leahy or a Restricted Subsidiary to repurchase such
Indebtedness, at a purchase price in cash equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of repurchase (an
"Excess Proceeds Offer"); provided, however, that prior to making any such
Excess Proceeds Offer, Pierce Leahy or such Restricted Subsidiary may, to the
extent required pursuant to the terms of Indebtedness outstanding as of the
Issue Date, such as the 1996 Notes and the 1997 Notes, offer to use such
Available Asset Sale Proceeds to repurchase and use all or a portion of such
Available Asset Sale Proceeds to repurchase such Indebtedness. If an Excess
Proceeds Offer is not fully subscribed, Pierce Leahy or such Restricted
Subsidiary may retain the portion of the Available Asset Sale Proceeds not
required to repurchase Notes for general corporate purposes. If the aggregate
principal amount of Notes tendered pursuant to such Excess Proceeds Offer is
more than the amount of the Available Asset Sale Proceeds, the Notes tendered
will be repurchased on a pro rata basis or by such other method as the Trustee
shall deem fair and appropriate.
If the Issuer is required to make an Excess Proceeds Offer, the Issuer shall
mail, within 30 days following the Reinvestment Date (or within 120 days
following the Reinvestment Date if Pierce Leahy or a Restricted Subsidiary is
required to make an offer to repurchase Indebtedness (other than the Notes)
outstanding as of the Issue Date), a notice to the holders stating, among other
things: (1) that such holders have the right to require Pierce Leahy to apply,
or to cause a Restricted Subsidiary to apply, the Available Asset Sale Proceeds
to repurchase such Notes at a purchase price in cash equal to 100% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase; (2) the purchase date, which shall be no earlier than 30 days and
not later than 60 days from the date such notice is mailed; (3) the
instructions, determined by the Issuer, that each holder must follow in order to
have such Notes repurchased; and (4) the calculations used in determining the
amount of Available Asset Sale Proceeds to be applied to the repurchase of such
Notes.
Limitation on Preferred Stock of Restricted Subsidiaries
Pierce Leahy will not permit any Restricted Subsidiary to issue any Preferred
Stock (except Preferred Stock to Pierce Leahy or a Restricted Subsidiary) or
permit any Person (other than Pierce Leahy or a Subsidiary) to hold any such
Preferred Stock unless Pierce Leahy or such Restricted Subsidiary would be
entitled to incur or assume Indebtedness under the covenant described under
"Limitation on Additional Indebtedness" in the aggregate principal amount equal
to the aggregate liquidation value of the Preferred Stock to be issued;
provided, however, that the Issuer and any Restricted Subsidiary that guarantees
the Notes shall be permitted to issue Preferred Stock that is not Disqualified
Capital Stock.
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Limitation on Capital Stock of Restricted Subsidiaries
Pierce Leahy will not (i) sell, pledge, hypothecate or otherwise convey or
dispose of any Capital Stock of a Restricted Subsidiary (other than under the
terms of the Credit Facility or under the terms of any Designated Senior
Indebtedness or as permitted under "Limitations on Liens") or (ii) permit any of
its Restricted Subsidiaries to issue any Capital Stock, other than to Pierce
Leahy or a Wholly-Owned Subsidiary of Pierce Leahy. The foregoing restrictions
shall not apply to an Asset Sale made in compliance with "Limitation on Certain
Asset Sales" or the issuance of Preferred Stock in compliance with the covenants
described under "Limitation on Preferred Stock of Restricted Subsidiaries."
Limitation on Sale and Lease-Back Transactions
Pierce Leahy will not, and will not permit any Restricted Subsidiary to, enter
into any Sale and Lease-Back Transaction unless (i) the consideration received
in such Sale and Lease-Back Transaction is at least equal to the fair market
value of the property sold, as determined by a board resolution of Pierce Leahy,
and (ii) Pierce Leahy or a Restricted Subsidiary could incur the Attributable
Indebtedness in respect of such Sale and Lease-Back Transaction in compliance
with the covenant described under "Limitation on Additional Indebtedness."
Payments for Consent
Neither Pierce Leahy nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of the
Indenture or the Notes unless such consideration is offered to be paid or agreed
to be paid to all holders of the Notes which so consent, waive or agree to amend
in the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
CHANGE OF CONTROL OFFER
Within 30 days of the occurrence of a Change of Control of Pierce Leahy, the
Issuer shall notify the Trustee in writing of such occurrence and shall make an
offer to purchase (the "Change of Control Offer") the outstanding Notes at a
purchase price equal to 101% of the principal amount thereof plus any accrued
and unpaid interest thereon to the Change of Control Payment Date (as
hereinafter defined) (such applicable purchase price being hereinafter referred
to as the "Change of Control Purchase Price") in accordance with the procedures
set forth in this covenant. See "Certain Definitions-Change of Control" herein.
Within 30 days of the occurrence of a Change of Control, the Issuer also shall
(i) cause a notice of the Change of Control Offer to be sent at least once to
the Dow Jones News Service or similar business news service in the United States
and (ii) send by first-class mail, postage prepaid, to the Trustee and to each
holder of the Notes, at the address appearing in the register maintained by the
Registrar of the Notes, a notice stating:
(1) that the Change of Control Offer is being made pursuant to this covenant
and that all Notes tendered will be accepted for payment, and otherwise subject
to the terms and conditions set forth herein;
(2) the Change of Control Purchase Price and the purchase date (which shall
be a Business Day no earlier than 20 business days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"));
(3) that any Note not tendered will not be purchased and will continue to
accrue interest;
(4) that, unless the Issuer defaults in the payment of the Change of Control
Purchase Price, any Notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Payment Date;
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(5) that holders accepting the offer to have their Notes purchased pursuant
to a Change of Control Offer will be required to surrender the Notes to the
paying agent at the address specified in the notice prior to the close of
business on the Business Day preceding the Change of Control Payment Date;
(6) that holders will be entitled to withdraw their acceptance if the Paying
Agent receives, not later than the close of business on the third Business Day
preceding the Change of Control Payment Date, a facsimile transmission or
letter setting forth the name of the holder, the principal amount of the Notes
delivered for purchase, and a statement that such holder is withdrawing his
election to have such Notes purchased;
(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, provided that each Note purchased and each such new Note issued
shall be in an original principal amount in denominations of $1,000 and
integral multiples thereof;
(8) any other procedures that a holder must follow to accept a Change of
Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the paying agent.
On the Change of Control Payment Date, the Issuer shall, to the extent lawful,
(i) accept for payment Notes or portions thereof or beneficial interests under a
Global Note properly tendered pursuant to the Change of Control Offer, (ii)
deposit with the paying agent money sufficient to pay the Change of Control
Purchase Price of all Notes or portions thereof or beneficial interests so
tendered and (iii) deliver or cause to be delivered to the Trustee Notes so
accepted together with an Officers' Certificate stating the Notes or portions
thereof tendered to the Issuer. The paying agent shall promptly (1) mail to
each holder of Notes so accepted and (2) cause to be credited to the respective
accounts of the holders under a Global Note of beneficial interest so accepted
payment in an amount equal to the Change of Control Purchase Price for such
Notes, and the Issuer shall execute and issue, and the Trustee shall promptly
authenticate and mail to each such holder, a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered and shall issue a Global
Note equal in principal amount to any unpurchased portion of beneficial interest
so surrendered; provided that each such new Note shall be issued in an original
principal amount in denominations of $1,000 and integral multiples thereof.
The Indenture requires that if the Credit Facility is in effect, or any
amounts are owing thereunder or in respect thereof, at the time of the
occurrence of a Change of Control, prior to the mailing of the notice to holders
described in the preceding paragraph, but in any event within 30 days following
any Change of Control, Pierce Leahy and the Issuer will covenant to (i) repay in
full all obligations under or in respect of the Credit Facility or offer to
repay in full all obligations under or in respect of the Credit Facility and
repay the obligations under or in respect of the Credit Facility of each lender
who has accepted such offer or (ii) obtain the requisite consent mit the
repurchase of the Notes as described above Pierce Leahy and the Issuer must
first comply with the covenant described in the preceding sentence before it
shall be required to purchase Notes in the event of a Change of Control;
provided that Pierce Leahy's or the Issuer's failure to comply with the covenant
described in the preceding sentence constitutes an Event of Default described in
clause (iii) under "Events of Default" below if not cured within 60 days after
the notice required by such clause. As a result of the foregoing, a holder of
the Notes may not be able to compel the Issuer to purchase the Notes unless the
Issuer or Pierce Leahy is able at the time to refinance all of the obligations
under or in respect of the Credit Facility or obtain requisite consents under
the Credit Facility.
The Indenture provides that, (i) if Pierce Leahy or any Subsidiary thereof has
issued any outstanding (a) Indebtedness that is subordinated in right of payment
to the Notes in the case of the Issuer or a Guarantee in the case of a Guarantor
making such Guarantee or (b) Preferred Stock, and Pierce Leahy or such
Subsidiary is required to make a change of control offer or to make a
distribution with respect to such subordinated Indebtedness or Preferred Stock
in the event of a change of control, Pierce Leahy or such Subsidiary, as the
case may be, shall not consummate any such offer or distribution with respect to
such subordinated Indebtedness or Preferred Stock until
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such time as the Issuer shall have paid the Change of Control Purchase Price in
full to the holders of Notes that have accepted the Change of Control Offer and
shall otherwise have consummated the Change of Control Offer made to holders of
the Notes and (ii) the Issuer and the Guarantors will not issue Indebtedness
that is subordinated in right of payment to the Notes in the case of the Issuer
or a Guarantee in the case of a Guarantor making such Guarantee or Preferred
Stock with change of control provisions requiring the payment of such
indebtedness or Preferred Stock prior to the payment of the Notes or such
Guarantee, as the case may be, in the event of a Change of Control under the
Indenture.
In the event that a Change of Control occurs and the holders of Notes exercise
their right to require the Issuer to purchase Notes, if such purchase
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at that time, the Issuer will comply with the requirements of Rule 14e-1 as then
in effect with respect to such repurchase.
The Issuer's ability to purchase the Notes will be limited by Issuer's and
Pierce Leahy's then available financial resources and, if such financial
resources are insufficient, the Issuer's or Pierce Leahy's ability to arrange
financing to effect such purchases. There can be no assurance that the Issuer
or Pierce Leahy will have sufficient funds to repurchase the Notes upon a Change
of Control or that the Issuer or Pierce Leahy will be able to arrange financing
for such purpose. In addition, Pierce Leahy has a similar obligation with
respect to the 1996 Notes and the 1997 Notes upon a Change of Control. Such
obligations of Pierce Leahy rank pari passu with the obligation to make a Change
of Control Offer under the Notes pursuant to its Guarantee.
MERGER, CONSOLIDATION OR SALE OF ASSETS
Pierce Leahy and the Issuer will not and will not permit any Guarantor to
consolidate with, merge with or into, or transfer all or substantially all of
its assets (as an entirety or substantially as an entirety in one transaction or
a series of related transactions), to any Person unless: (i) Pierce Leahy, the
Issuer or the Guarantor, as the case may be, shall be the continuing Person, or
the Person (if other than Pierce Leahy, the Issuer or a Guarantor) formed by
such consolidation or into which Pierce Leahy, the Issuer or the Guarantor, as
the case may be, is merged or to which the properties and assets of Pierce
Leahy, the Issuer or the Guarantor, as the case may be, are transferred shall be
a corporation organized and existing under the laws of the United States or any
state thereof or the District of Columbia (and in the case of the Issuer or a
Canadian Guarantor, a corporation organized and existing under the laws of
Canada or any province thereof) and shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all of the obligations of Pierce Leahy, the Issuer or the Guarantor, as
the case may be, under the Notes and the Indenture, and the obligations under
the Indenture shall remain in full force and effect; (ii) immediately before and
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing; and (iii) immediately after
giving effect to such transaction on a pro forma basis Pierce Leahy, a
Restricted Subsidiary or such Person could incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under the covenant set forth
under "Limitation on Additional Indebtedness"; provided, however, that (a) a
Guarantor other than Pierce Leahy may merge into the Issuer, Pierce Leahy or
another Guarantor, (b) the Issuer may merge into a Canadian Guarantor or another
corporation or limited liability company organized and existing under the laws
of Canada or any province thereof for the purpose of converting into a limited
liability company or to change the Issuer's jurisdiction of incorporation, and
(c) the Issuer or a Canadian Guarantor can transfer a portion of its assets to
the Issuer or another Canadian Guarantor, in the case of (a), (b) or (c),
without complying with this clause (iii).
In connection with any consolidation, merger or transfer of assets
contemplated by this provision, Pierce Leahy and the Issuer shall deliver, or
cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an opinion of counsel,
each stating that such consolidation, merger or transfer and the supplemental
indenture in respect thereto comply with this provision and that all conditions
precedent herein provided for relating to such transaction or transactions have
been complied with.
GUARANTEES
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The Notes will be guaranteed on an unsecured senior subordinated basis by the
Domestic Guarantors. The obligations of each Domestic Guarantor will be limited
to the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Domestic Guarantor (including, without limitation, any
guarantees of Senior Indebtedness) and after giving effect to any collections
from or payments made by or on behalf of any other Domestic Guarantor in respect
of the obligations of such other Domestic Guarantor under its Domestic Guarantee
or pursuant to its contribution obligations under the Indenture, result in the
obligations of such Domestic Guarantor under the Domestic Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. Each Domestic Guarantor that makes a payment or distribution under a
Domestic Guarantee will be entitled to a contribution from each other Domestic
Guarantor in a pro rata amount based on the Adjusted Net Assets of each Domestic
Guarantor.
The Notes will be guaranteed on an unsecured senior basis by the Canadian
Guarantors, to the extent permitted by law, including financial assistance
restrictions imposed by corporate legislation. All payments pursuant to the
Canadian Guarantees by the Canadian Guarantors will be effectively subordinated
to all secured indebtedness of such Canadian Guarantors to the extent of the
assets securing such indebtedness.
A Guarantor other than Pierce Leahy will be released from all of its
obligations under its Guarantee if all or substantially all of its assets are
sold or all of its Capital Stock is sold, in each case in a transaction in
compliance with the covenants described under "Limitation on Certain Asset
Sales" and "Merger, Consolidation or Sale of Assets," or the Guarantor other
than Pierce Leahy merges with or into or consolidates with, or transfers all or
substantially all of its assets to, Pierce Leahy or another Guarantor in a
transaction in compliance with "Merger, Consolidation or Sale of Assets," and
such Guarantor has delivered to the Trustee an Officers' Certificate and an
opinion of counsel, each stating that all conditions precedent herein provided
for relating to such transaction have been complied with.
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default":
(i) default in payment of any principal of, or premium, if any, on the
Notes;
(ii) default for 30 days in payment of any interest on the Notes after such
interest becomes due and payable;
(iii) default by the Issuer, Pierce Leahy or any other Guarantor in the
observance or performance of any other covenant in the Notes or the Indenture
for 60 days after written notice from the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then outstanding;
(iv) default in the payment at final maturity of principal in an aggregate
amount of $3,000,000 or more with respect to any Indebtedness of Pierce Leahy
or any Restricted Subsidiary thereof which default shall not be cured, waived
or postponed pursuant to an agreement with the holders of such Indebtedness
within 60 days after written notice as provided in the Indenture, or the
acceleration of any such Indebtedness aggregating $3,000,000 or more which
acceleration shall not be rescinded or annulled within 20 days after written
notice as provided in the Indenture;
(v) any final judgment or judgments which can no longer be appealed for the
payment of money in excess of $3,000,000 (which are not paid or covered by
third party insurance by financially sound insurers that have not disclaimed
coverage) shall be rendered against Pierce Leahy or any Restricted Subsidiary
thereof, and shall not be discharged for any period of 60 consecutive days
during which a stay of enforcement shall not be in effect; and
(vi) certain events involving bankruptcy, insolvency or reorganization of
the Issuer, Pierce Leahy or any other Restricted Subsidiary.
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The Indenture provides that the Trustee may withhold notice to the holders of
the Notes of any default (except in payment of principal or premium, if any, or
interest on the Notes) if the Trustee in good faith determines it to be in the
best interest of the holders of the Notes to do so.
The Indenture provides that if an Event of Default (other than an Event of
Default resulting from certain events of bankruptcy, insolvency or
reorganization of Pierce Leahy or the Issuer) shall have occurred and be
continuing, then the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding may declare to be immediately due
and payable the entire principal amount of all the Notes then outstanding plus
premium, if any, and accrued interest to the date of acceleration and (i) such
amounts shall become immediately due and payable or (ii) if there are any
amounts outstanding under or in respect of the Credit Facility such amounts
shall become due and payable upon the first to occur of an acceleration of
amounts outstanding under or in respect of the Credit Facility or five business
days after receipt by Pierce Leahy or the Issuer and the representative of the
holders of Senior Indebtedness under or in respect of the Credit Facility, of
notice of the acceleration of the Notes; provided, however, that after such
acceleration but before a judgment or decree based on acceleration is obtained
by the Trustee, the holders of a majority in aggregate principal amount of
outstanding Notes may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than nonpayment of accelerated
principal, premium, if any, or interest, have been cured or waived as provided
in the Indenture. In case an Event of Default resulting from certain events of
bankruptcy, insolvency or reorganization with respect to Pierce Leahy or the
Issuer shall occur, the principal, premium and interest with respect to all of
the Notes shall be due and payable immediately without any declaration or other
act on the part of the Trustee or the holders of the Notes.
The holders of a majority in principal amount of the Notes then outstanding
shall have the right to waive any existing default or Event of Default or
compliance with any provision of the Indenture or the Notes and to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, subject to certain limitations specified in the Indenture.
No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the holders of at least 25% in aggregate principal
amount of the outstanding Notes shall have made written request and offered
reasonable indemnity to the Trustee to institute such proceeding as a trustee,
and unless the Trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding Notes a direction inconsistent
with such request and the Trustee shall have failed to institute such proceeding
within 60 days. However, such limitations do not apply to a suit instituted for
payment of principal, premium, if any, or interest on a Note on or after the
respective due dates expressed in such Note.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that the Issuer may elect either (a) to defease and be
discharged from any and all obligations with respect to the Notes (except for
the obligations to register the transfer or exchange of such Notes, to replace
temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office
or agency in respect of the Notes and to hold monies for payment in trust)
("defeasance") or (b) to be released from its obligations with respect to the
Notes under certain covenants contained in the Indenture and described above
under "Certain Covenants" ("covenant defeasance"), upon the deposit with the
Trustee (or other qualifying trustee), in trust for such purpose, of money
and/or U.S. Government Obligations which through the payment of principal and
interest in accordance with their terms will provide money, in an amount
sufficient to pay the principal of, premium, if any, and interest on the Notes,
on the scheduled due dates therefor or on a selected date of redemption in
accordance with the terms of the Indenture things, the Issuer has delivered to
the Trustee an opinion of counsel (as specified in the Indenture) (i) to the
effect that neither the trust nor the Trustee will be required to register as an
investment company under the Investment Company Act of 1940, as amended, and
(ii) to the effect that holders of the Notes or persons in their positions will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit, defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same times, as would
have been the case if such deposit, defeasance and discharge had not occurred,
which,
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in the case of defeasance only, must be based upon a private letter ruling
concerning the Notes, a published ruling of the Internal Revenue Service or a
change in applicable federal income tax law.
MODIFICATION OF INDENTURE
From time to time, the Issuer, Pierce Leahy and the Trustee may, without the
consent of holders of the Notes, modify, amend, waive, restate or supplement the
provisions of the Indenture or the Notes for certain specified purposes,
including providing for uncertificated Notes in addition to certificated Notes,
and curing any ambiguity, defect or inconsistency, or making any other change
that does not materially and adversely affect the rights of any holder. The
Indenture contains provisions permitting the Issuer, Pierce Leahy and the
Trustee, with the consent of holders of at least a majority in principal amount
of the outstanding Notes, to modify, amend, waive or supplement the Indenture or
the Notes, except that no such modification shall, without the consent of each
holder affected thereby, (i) reduce the amount of Notes whose holders must
consent to an amendment, supplement, or waiver to the Indenture or the Notes,
(ii) reduce the rate of or change the time for payment of interest on any Note,
(iii) reduce the principal of or premium on or change the stated maturity of any
Note, (iv) make any Note payable in money other than that stated in the Note or
change the place of payment from New York, New York, (v) change the amount or
time of any payment required by the Notes or reduce the premium payable upon any
redemption of Notes, or change the time before which no such redemption may be
made, (vi) waive a default on the payment of the principal of, interest on, or
redemption payment with respect to any Note, or (vii) take any other action
otherwise prohibited by the Indenture to be taken without the consent of each
holder affected thereby.
The consent of the holders is not necessary to approve the particular form of
a proposed amendment. It is sufficient if such consent approves the substance of
the proposed amendment.
REPORTS TO HOLDERS
So long as Pierce Leahy is subject to the periodic reporting requirements of
the Exchange Act, it will continue to furnish the information required thereby
to the Commission and to the holders of the Notes. The Indenture provides that
even if Pierce Leahy is entitled under the Exchange Act not to furnish such
information to the Commission or to the holders of the Notes, it will
nonetheless continue to furnish such information to the Commission and holders
of the Notes.
COMPLIANCE CERTIFICATE
Pierce Leahy and the Issuer will deliver to the Trustee on or before 100 days
after the end of Pierce Leahy's fiscal year and on or before 50 days after the
end of each of the first, second and third fiscal quarters in each year an
Officers' Certificate stating whether or not the signers know of any Default or
Event of Default that has occurred. If they do, the certificate will describe
the Default or Event of Default and its status.
THE TRUSTEE
The Trustee under the Indenture is the registrar and paying agent with regard
to the Notes. The Indenture provides that, except during the continuance of an
Event of Default which is continuing, the Trustee will perform only such duties
as are specifically set forth in the Indenture. During the existence of an Event
of Default which is continuing, the Trustee will exercise such rights and powers
vested in it under the Indenture and use the same degree of care and skill in
its exercise as a prudent person would exercise under the circumstances in the
conduct of such person's own affairs.
The Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee, should it
become a creditor of Pierce Leahy or the Issuer, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or
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otherwise. The Trustee is permitted to engage in other transactions; provided,
however, that if it acquires any conflicting interest, it must eliminate such
conflict or resign.
TRANSFER AND EXCHANGE
Holders of the Notes may transfer or exchange Notes in accordance with the
Indenture. The Registrar under such Indenture may require a holder, among other
things, to furnish appropriate endorsements and transfer documents, and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
is not required to transfer or exchange any Note selected for redemption. Also,
the Registrar is not required to transfer or exchange any Note for a period of
15 days before the day of mailing of the notice of redemption of the Notes to be
redeemed.
The Original Notes were issued in a transaction exempt from registration under
the Act and will be subject to the restrictions on transfer.
The registered holder of a Note may be treated as the owner of it for all
purposes.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants contained in the Indenture. Reference is made to the Indenture for the
full definition of all such terms as well as any other capitalized terms used
herein for which no definition is provided.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or assumed in connection with the acquisition of assets from a
Person.
"ACQUISITION EBITDA" means, without duplication, (i) EBITDA for the last four
fiscal quarters for which financial statements are available at the date of
determination (the "Acquisition EBITDA Period") with respect to a business or
Person which has been acquired by Pierce Leahy or one of its Restricted
Subsidiaries or which is the subject of a binding acquisition agreement
requiring the calculation of EBITDA for purposes of the covenant restricting the
incurrence of Indebtedness and, in each case, with respect to which financial
results on a consolidated basis with Pierce Leahy or one of its Restricted
Subsidiaries have not been made available for an entire fiscal quarter; plus
(ii) in connection with any such acquisition, projected quantifiable
improvements in operating results due to cost reductions calculated in good
faith, by Pierce Leahy or one of its Restricted Subsidiaries through a Board
Resolution certified by an Officers' Certificate filed with the Trustee
(calculated on a pro forma basis for the Acquisition EBITDA Period as if the
program had been implemented at the beginning of the Acquisition EBITDA Period),
without giving effect to any operating losses of the acquired Person. Each such
Officers' Certificate shall be signed by the Chief Financial Officer and another
officer of Pierce Leahy. Acquisition EBITDA of a business shall be a fixed
number determined as of the date the calculation of EBITDA for purposes of the
covenant restricting the incurrence of Indebtedness is first required with
respect to the acquisition of such business (the "Determination Date") and shall
be utilized from the Determination Date through the date financial results are
available for the first full fiscal quarter following the acquisition (following
which the actual EBITDA of such business or Person shall be included in the
EBITDA of Pierce Leahy). For purposes of determining Acquisition EBITDA with
respect to the acquisition of a particular business or Person, Acquisition
EBITDA shall include not only the Acquisition EBITDA of such business or Person,
but also the Acquisition EBITDA of any business previously acquired by Pierce
Leahy or a Restricted Subsidiary or the subject of a pending acquisition
agreement to the extent that, as of the Determination Date, the financial
results for such business or Person on a consolidated basis with Pierce Leahy
for a full fiscal quarter subsequent to its acquisition by Pierce Leahy or a
Restricted Subsidiary are not yet available.
"ADJUSTED EBITDA" means, without duplication, for any Person, the sum of (a)
EBITDA of such Person and its Restricted Subsidiaries for the most recent fiscal
quarter for which internal financial statements are available, multiplied by
four and (b) Acquisition EBITDA.
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"ADJUSTED NET ASSETS" of a Guarantor at any date shall mean the lesser of the
amount by which (x) the fair value of the property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
(including, without limitation, any guarantees of Senior Indebtedness)), but
excluding liabilities under the Guarantee of such Guarantor at such date and (y)
the present fair salable value of the assets of such Guarantor at such date
exceeds the amount that will be required to pay the probable liability of such
Guarantor on its debts (after giving effect to all other fixed and contingent
liabilities (including, without limitation, any guarantees of Senior
Indebtedness) and after giving effect to any collection from any Subsidiary of
such Guarantor in respect of the obligations of such Subsidiary under the
Guarantee), excluding Indebtedness in respect of the Guarantee as they become
absolute and matured.
"AFFILIATE" of any specified Person means any other Person which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such specified Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by," and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
"ASSET SALE" means the sale, transfer or other disposition (other than to
Pierce Leahy or any of its Restricted Subsidiaries) in any single transaction or
series of related transactions involving assets with a fair market value in
excess of $500,000 of (a) any Capital Stock of or other equity interest in any
Restricted Subsidiary of Pierce Leahy, (b) all or substantially all of the
assets of Pierce Leahy or of any Restricted Subsidiary thereof, (c) real
property of Pierce Leahy or a Restricted Subsidiary or (d) all or substantially
all of the assets of any business property, or part thereof, owned by Pierce
Leahy or any Restricted Subsidiary thereof, or a division, line of business or
comparable business segment of Pierce Leahy or any Restricted Subsidiary
thereof; provided that Asset Sales shall not include (i) sales, leases,
conveyances, transfers or other dispositions to Pierce Leahy or to a Restricted
Subsidiary or to any other Person if after giving effect to such sale, lease,
conveyance, transfer or other disposition such other Person becomes a Restricted
Subsidiary, (ii) transactions complying with "Merger, Consolidation or Sale of
Assets" above and (iii) transfers or other distributions of assets which
constitute (1) Permitted Investments or (2) Restricted Payments made in
compliance with the covenant described under "Certain Covenants-Limitation on
Restricted Payments."
"ASSET SALE PROCEEDS" means, with respect to any Asset Sale, (i) cash received
by Pierce Leahy or any Restricted Subsidiary from such Asset Sale (including
cash received as consideration for the assumption of liabilities incurred in
connection with or in anticipation of such Asset Sale), after (a) provision for
all income or other taxes measured by or resulting from such Asset Sale, (b)
payment of all brokerage commissions, underwriting and other fees and expenses
related to such Asset Sale, (c) provision for minority interest holders in any
Restricted Subsidiary as a result of such Asset Sale, (d) payments made to
retire Indebtedness secured by the assets subject to such Asset Sale and (e)
deduction of appropriate amounts to be provided by Pierce Leahy or a Restricted
Subsidiary as a reserve, in accordance with GAAP, against any liabilities
associated with the assets sold or disposed of in such Asset Sale and retained
by Pierce Leahy or a Restricted Subsidiary after such Asset Sale, including,
without limitation, pension and other post employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with the assets sold or disposed of in such Asset Sale,
and (ii) promissory notes and other non-cash consideration received by Pierce
Leahy or any Restricted Subsidiary from such Asset Sale or other disposition
upon the liquidation or conversion of such notes or non-cash consideration into
cash.
"ATTRIBUTABLE INDEBTEDNESS" under the Indenture in respect of a Sale and
Lease-Back Transaction means, as of the time of determination, the greater of
(i) the fair value of the property subject to such arrangement (as determined by
the Board of Directors) and (ii) 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 term of the lease included in such Sale
and Lease-Back Transaction (including any period for which such lease has been
extended).
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"AVAILABLE ASSET SALE PROCEEDS" means, with respect to any Asset Sale, the
aggregate Asset Sale Proceeds from such Asset Sales that have not been applied
in accordance with clauses (iii)(a) or (iii)(b) of "Certain Covenants-Limitation
on Certain Asset Sales," and which has not yet been the basis for an Excess
Proceeds Offer in accordance with clause (iii)(c), of the first paragraph of
"Certain Covenants-Limitation on Certain Asset Sales."
"CAPITAL STOCK" means, with respect to any Person, any and all shares or other
equivalents (however designated) of capital stock, partnership interests or any
other participation, right or other interest in the nature of an equity interest
in such Person or any option, warrant or other security convertible into any of
the foregoing.
"CAPITALIZED LEASE OBLIGATIONS" means Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP, and the amount of such Indebtedness shall be
the capitalized amount of such obligations determined in accordance with GAAP.
A "CHANGE OF CONTROL" will be deemed to have occurred at such time as (i) any
Person (including a Person's Affiliates and associates), other than a Permitted
Holder, becomes the beneficial owner (as defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of more than
50% of the total voting power of the Common Stock of Pierce Leahy, (ii) there
shall be consummated any consolidation or merger of Pierce Leahy in which Pierce
Leahy is not the continuing or surviving corporation or pursuant to which the
Common Stock of Pierce Leahy would be converted into cash, securities or other
property, other than a merger or consolidation of Pierce Leahy in which the
holders of the Common Stock of Pierce Leahy outstanding immediately prior to the
consolidation or merger hold, directly or indirectly, at least a majority of the
Common Stock of the surviving corporation immediately after such consolidation
or merger, or (iii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of Pierce
Leahy (together with any new directors whose election by such Board of Directors
or whose nomination for election by the shareholders of Pierce Leahy has been
approved by a majority of the directors then still in office who either were
directors at the beginning of such period or whose election or recommendation
for election was previously so approved) cease to constitute a majority of the
Board of Directors of Pierce Leahy.
"COMMON STOCK" of any Person means all Capital Stock of such Person that is
generally entitled to (i) vote in the election of directors of such Person or
(ii) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management and policies of such Person.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person, for any
period, the aggregate amount of interest which, in conformity with GAAP, would
be set forth opposite the caption "interest expense" or any like caption on an
income statement for such Person and its Subsidiaries on a consolidated basis
for such period (including, but not limited to, Redeemable Dividends, whether
paid or accrued, on Preferred Stock of a Subsidiary, imputed interest included
in Capitalized Lease Obligations, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, the net costs associated with hedging obligations, the interest
portion of any deferred payment obligation, amortization of discount or premium,
if any, and all other non-cash interest expense (other than interest amortized
to cost of sales)) plus, without duplication, all net capitalized interest for
such period and all interest paid under any guarantee of Indebtedness (including
a guarantee of principal, interest or any combination thereof) of any Person,
plus the amount of all dividends or distributions paid on Disqualified Capital
Stock (other than dividends paid or payable in shares of Capital Stock of Pierce
Leahy).
"CONSOLIDATED NET INCOME" means, with respect to any Person, for any period,
the aggregate of the Net Income of such Person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; provided,
however, that (a) the Net Income of any Person (the "other Person") in which the
Person in question or any of its Subsidiaries has less than a 99% interest
(which interest does not cause the net income of such other Person to be
consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or the Subsidiary, (b)
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the Net Income of any Subsidiary of the Person in question, which Subsidiary is
subject to any restriction or limitation on the payment of dividends or the
making of other distributions (other than pursuant to the 1996 Indenture, the
1997 Indenture or the Indenture), shall be excluded to the extent of such
restriction or limitation (provided that if any such restriction or limitation
by its terms takes effect upon the occurrence of a default or event of default,
such exclusion shall become effective only upon the occurrence of such default
or event of default which is continuing), (c)(i) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition and (ii) any net gain (but not loss) resulting from an Asset
Sale by the Person in question or any of its Subsidiaries other than in the
ordinary course of business shall be excluded, and (d) extraordinary, unusual
and nonrecurring gains and losses shall be excluded.
"CREDIT FACILITY" means the credit agreement or credit agreements, in
existence on the date of the Indenture, by and among Pierce Leahy, any or all
Restricted Subsidiaries and any one or more lenders from time to time parties
thereto, as the same may be amended, extended, increased, renewed, restated,
supplemented or otherwise modified (in whole or in part, and without limitation
as to amount, terms, conditions, covenants and other provisions) from time to
time, and any agreement or agreements governing Indebtedness incurred to
refinance, replace, restructure or refund in whole or in part the borrowings and
then maximum commitments under the Credit Facility or such agreement (whether
with the original administrative agent and lenders or other agents and lenders
or otherwise, and whether provided under the original Credit Facility or other
credit agreements or otherwise). Pierce Leahy shall promptly notify the Trustee
of any such refunding, replacement, restructuring or refinancing of the Credit
Facility.
"DESIGNATED SENIOR INDEBTEDNESS," as to the Issuer, Pierce Leahy or any other
Guarantor, as the case may be, means any Senior Indebtedness (a) under the
Credit Facility, or (b) which at the time of determination exceeds $15,000,000
in aggregate principal amount (or accredited value in the case of Indebtedness
issued at a discount) outstanding or available under a committed facility, and
(i) unless such designation is prohibited by the Credit Facility, which is
specifically designated in the instrument evidencing such Senior Indebtedness as
"Designated Senior Indebtedness" by such Person and (ii) as to which the Trustee
has been given written notice of such designation.
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock of Pierce Leahy or a
Restricted Subsidiary thereof which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Notes, for cash or securities constituting
Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock
shall be deemed to include (i) any Preferred Stock of a Restricted Subsidiary of
Pierce Leahy and (ii) any Preferred Stock of Pierce Leahy, with respect to
either of which, under the terms of such Preferred Stock, by agreement or
otherwise, such Restricted Subsidiary or Pierce Leahy is obligated to pay
current dividends or distributions in cash during the period prior to the
maturity date of the Notes; provided, however, that Preferred Stock of Pierce
Leahy or any Restricted Subsidiary thereof that is issued with the benefit of
provisions requiring a change of control offer to be made for such Preferred
Stock in the event of a change of control of Pierce Leahy or a Restricted
Subsidiary, which provisions have substantially the same effect as the
provisions of the Indenture described under "Change of Control," shall not be
deemed to be Disqualified Capital Stock solely by virtue of such provisions, and
provided, further, that Capital Stock owned by Pierce Leahy or a Wholly-Owned
Subsidiary shall not constitute Disqualified Capital Stock.
"EBITDA" means, for any Person, for any period, an amount equal to (a) the sum
of (i) Consolidated Net Income for such period, plus (ii) the provision for
taxes for such period based on income or profits to the extent such income or
profits were included in computing Consolidated Net Income and any provision for
taxes utilized in computing net loss under clause (i) hereof, plus (iii)
Consolidated Interest Expense for such period (but only including Redeemable
Dividends in the calculation of such Consolidated Interest Expense to the extent
that such Redeemable Dividends have not been excluded in the calculation of
Consolidated Net Income), plus (iv) depreciation for such period on a
consolidated basis, plus (v) amortization of intangibles and other deferred
financing fees for such period on a consolidated basis, plus (vi) any other non-
cash items reducing Consolidated Net Income for such
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period, plus (vii) Permitted Tax Distributions, except that with respect to
Pierce Leahy each of the foregoing items shall be determined on a consolidated
basis with respect to Pierce Leahy and its Restricted Subsidiaries only.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles consistently applied as
in effect in the United States from time to time.
"INCUR" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Indebtedness or other
obligation or the recording (other than previously recorded), as required
pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on
the balance sheet of such Person (and "incurrence," "incurred," "incurrable,"
and "incurring" shall have meanings correlative to the foregoing); provided that
a change in GAAP that results in an obligation of such Person that exists at
such time becoming Indebtedness shall not be deemed an incurrence of such
Indebtedness.
"INDEBTEDNESS" means, without duplication, with respect to any Person, any
indebtedness at any time outstanding, secured or unsecured, contingent or
otherwise, which is for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
representing the balance deferred and unpaid of the purchase price of any
property (excluding, without limitation, any balances that constitute accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a lie included (i) any Capitalized Lease Obligations, (ii) obligations
secured by a Lien to which the property or assets owned or held by such Person
is subject, whether or not the obligation or obligations secured thereby shall
have been assumed (provided, however, that if such obligation or obligations
shall not have been assumed, the amount of such Indebtedness shall be deemed to
be the lesser of the principal amount of the obligation or the fair market value
of the pledged property or assets), (iii) guarantees of items of other Persons
which would be included within this definition for such other Persons (whether
or not such items would appear upon the balance sheet of the guarantor), (iv)
all obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction (provided that, in the case of
any such letters of credit, the items for which such letters of credit provide
credit support are those of other Persons which would be included within this
definition for such other Persons), (v) in the case of Pierce Leahy,
Disqualified Capital Stock of Pierce Leahy or any Restricted Subsidiary thereof,
and (vi) obligations of any such Person under any Interest Rate Agreement
applicable to any of the foregoing (if and to the extent such Interest Rate
Agreement obligations would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP). The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the contingency giving
rise to the obligation, provided (i) that the amount outstanding at any time of
any Indebtedness issued with original issue discount is the principal amount of
such Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with GAAP
and (ii) that Indebtedness shall not include any liability for federal, state,
local or other taxes. Notwithstanding any other provision of the foregoing
definition, any trade payable arising from the purchase of goods or materials or
for services obtained in the ordinary course of business or contingent
obligations arising out of customary indemnification agreements with respect to
the sale of assets or securities shall not be deemed to be "Indebtedness" of
Pierce Leahy or any Restricted Subsidiaries for purposes of this definition.
Furthermore, guarantees of (or obligations with respect to letters of credit
supporting) Indebtedness and Liens securing Indebtedness otherwise included in
the determination of such amount shall not also be included.
"INTEREST RATE AGREEMENT" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
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"INVESTMENTS" means, directly or indirectly, any advance, account receivable
(other than an account receivable arising in the ordinary course of business or
acquired as a part of the assets acquired by Pierce Leahy or a Restricted
Subsidiary in connection with an acquisition of assets which is otherwise
permitted by the terms of the Indenture), loan or capital contribution to (by
means of transfers of property to others, payments for property or services for
the account or use of others or otherwise), the purchase of any stock, bonds,
notes, debentures, partnership or joint venture interests or other securities
of, the acquisition, by purchase or otherwise, of all or substantially all of
the business or assets or stock or other evidence of beneficial ownership of,
any Person or the making of any investment in any Person. Investments shall
exclude (i) extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices and (ii) the repurchase or redemption of
securities of any Person by such Person.
"ISSUE DATE" means the date the Notes are first issued by the Issuer and
authenticated by the Trustee under the Indenture.
"LIEN" means with respect to any property or assets of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including
without limitation, any Capitalized Lease Obligation, conditional sales, or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"NET INCOME" means, with respect to any Person for any period, the net income
(loss) of such Person determined in accordance with GAAP minus Permitted Tax
Distributions with respect to such period, and excluding any foreign currency
translation gains or losses added or deducted, as applicable, in the computation
of Net Income.
"NET PROCEEDS" means (i) in the case of any sale of Capital Stock by Pierce
Leahy or a Restricted Subsidiary, the aggregate net proceeds received by Pierce
Leahy or a Restricted Subsidiary, after payment of expenses, commissions and the
like incurred in connection therewith, whether such proceeds are in cash or in
property (valued at the fair market value thereof, as determined in good faith
by the Board of Directors, at the time of receipt), (ii) in the case of any
exchange, exercise, conversion or surrender of outstanding securities of any
kind for or into shares of Capital Stock of Pierce Leahy or a Restricted
Subsidiary which is not Disqualified Capital Stock, the net book value of such
outstanding securities on the date of such exchange, exercise, conversion or
surrender (plus any additional amount required to be paid by the holder to
Pierce Leahy or any Restricted Subsidiary upon such exchange, exercise,
conversion or surrender, less any and all payments made to the holders e.g., on
account of fractional shares and less all expenses incurred by Pierce Leahy or a
Restricted Subsidiary in connection therewith) and (iii) in the case of any
issuance of any Indebtedness by Pierce Leahy or a Restricted Subsidiary, the
aggregate net cash proceeds received by such Person after payment of expenses,
commissions, underwriting discounts and the like incurred in connection
therewith.
"NON-PAYMENT EVENT OF DEFAULT" means any event (other than a Payment Default)
the occurrence of which entitles one or more Persons to accelerate the maturity
of any Designated Senior Indebtedness.
"NOTES" means the securities that are issued under the Indenture, as amended,
restated or supplemented from time to time pursuant to the Indenture.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed by the Chief Executive Officer, the Controller, the President or any Vice
President and the Chief Financial Officer or any Treasurer of such Person that
shall comply with applicable provisions of the Indenture.
"PAYMENT DEFAULT" means any default, whether or not any requirement for the
giving of notice, the lapse of time or both, or any other condition to such
default becoming an event of default has occurred, in the payment of
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principal of (or premium, if any) or interest on or any other amount payable in
connection with Designated Senior Indebtedness.
"PERMITTED HOLDERS" means, collectively, Leo W. Pierce, Sr., his children or
other lineal descendants (whether adoptive or biological), the spouses of any of
the foregoing and any probate estate of any such individual and any trust, so
long as one or more of the foregoing individuals is the principal beneficiary of
such trust, and any other partnership, corporation or other entity all of the
partners, shareholders, members or owners of which are any one or more of the
foregoing.
"PERMITTED INDEBTEDNESS" means:
(i) Indebtedness of Pierce Leahy or any Restricted Subsidiary arising
under or in connection with the Credit Facility in an aggregate amount at any
one time outstanding not to exceed $100,000,000;
(ii) Indebtedness of the Issuer (and related guarantees) or a Canadian
Guarantor arising under or in connection with the Credit Facility in an
aggregate amount at any one time outstanding not to exceed Cdn. $40,000,000;
(iii) Indebtedness under the 1997 Notes and the guarantees thereof;
(iv) Indebtedness under the 1996 Notes and the guarantees thereof;
(v) Indebtedness under the Notes and the Guarantees;
(vi) Indebtedness not covered by any other clause of this definition which
is outstanding on the date of the Indenture;
(vii) Indebtedness of Pierce Leahy to any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary to Pierce Leahy or another Restricted
Subsidiary;
(viii) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire property in the ordinary course of business which
Indebtedness and Capitalized Lease Obligations do not in the aggregate exceed
5% of the consolidated total assets of Pierce Leahy and its Subsidiaries;
(ix) Interest Rate Agreements;
(x) additional Indebtedness of Pierce Leahy or a Restricted Subsidiary not
to exceed an aggregate of $3,000,000 in principal amount outstanding at any
time; and
(xi) Refinancing Indebtedness.
"PERMITTED INVESTMENTS" means, for any Person, Investments made on or after
the date of the Indenture consisting of
(i) Investments by Pierce Leahy, or by a Restricted Subsidiary, in Pierce
Leahy or a Restricted Subsidiary; and
(ii) Temporary Cash Investments; and
(iii) Investments by Pierce Leahy, or a Restricted Subsidiary, in a Person
(or in all or substantially all of the business or assets of a business or a
Person), if as a result of such Investment (a) such Person becomes a Restricted
Subsidiary of Pierce Leahy, (b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, Pierce Leahy or a Restricted Subsidiary
thereof or (c) such business or assets are owned by Pierce Leahy or a
Restricted Subsidiary; and
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(iv) reasonable and customary loans made to employees not to exceed $500,000
in the aggregate at any one time outstanding, plus any loans which may be
required to be made under the Pierce Leahy Nonqualified Stock Option Plan in an
amount not to exceed $2,000,000; and
(v) an Investment that is made by Pierce Leahy or a Restricted Subsidiary
in the form of any stock, bonds, notes, debentures, partnership or joint
venture interests or other securities that are issued by a third party to
Pierce Leahy or Restricted Subsidiary solely as partial consideration for the
consummation of an Asset Sale that is otherwise permitted under the covenant
described under "Certain Covenants-Limitation on Certain Asset Sales"; and
(vi) accounts receivable of Pierce Leahy and its Restricted Subsidiaries
generated in the ordinary course of business; and
(vii) Investments existing on the Issue Date; and
(viii) Investments for any purpose not to exceed $2,000,000.
"PERMITTED LIENS" means (i) Liens on property or assets of, or any shares of
stock of or secured debt of, any Person or business existing at the time such
Person becomes a Restricted Subsidiary of Pierce Leahy or at the time such
Person is merged into or consolidated with Pierce Leahy or any of its Restricted
Subsidiaries or at the time such business is acquired by Pierce Leahy or a
Restricted Subsidiary, provided that such Liens are not incurred in anticipation
of such Person becoming a Restricted Subsidiary of Pierce Leahy or merging into
or consolidating with Pierce Leahy or any of its Restricted Subsidiaries or such
business being acquired by Pierce Leahy or a Restricted Subsidiary, (ii) Liens
securing Refinancing Indebtedness, provided that any such Lien does not extend
to or cover any Property, shares or debt other than the Property, shares or debt
securing the Indebtedness so refunded, refinanced or extended, (iii) Liens in
favor of Pierce Leahy or any of its Restricted Subsidiaries, (iv) Liens securing
industrial revenue bonds or mortgages on real property, (v) Liens to secure
Purchase Money Indebtedness that is otherwise permitted under the Indenture,
provided that (a) any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the cost
(including sales and excise taxes, installation and delivery charges and other
direct costs of, and other direct expenses paid or charged in connection with,
such purchase or construction) of such Property, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such costs, and (c)
such Lien does not extend to or cover any Property other than such item of
Property and any improvements on such item, (vi) statutory liens or landlords',
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 in appropriate
proceedings, (vii) other Liens securing obligations incurred in the ordinary
course of business which obligations do not exceed $1,000,000 in the aggregate
at any one time outstanding, (viii) Liens for taxes, assessments or governmental
charges that are being contested in good faith by appropriate proceedings, (ix)
Liens securing Capitalized Lease Obligations or mortgage loans related to real
property permitted to be incurred under clause (viii) of the definition of
"Permitted Indebtedness," provided that such Lien does not extend to any
property other than that subject to the underlying lease, (x) Liens securing
Designated Senior Indebtedness, (xi) easements or minor defects or
irregularities in title and other similar charges or encumbrances on Property
not interfering in any material respect with Pierce Leahy's or any Restricted
Subsidiary's use of such Property, (xii) Liens existing on the date of the
Indenture and (xiii) pledges or deposits made in the ordinary course of business
(a) in connection with (1) leases, performance bonds and similar bonds or (2)
workers' compensation, unemployment insurance and other social security
legislation or (b) securing the performance of surety bonds and appeal bonds
required (1) in the ordinary course of business or in connection with the
enforcement of rights or claims of Pierce Leahy or a Subsidiary thereof or (2)
in connection with judgments that do not give rise to an Event of Default and
which do not exceed $3,000,000 in the aggregate, (xiv) Liens securing Interest
Rate Agreements entered into with any lender under the Credit Facility or any
Affiliate thereof and any guarantees thereof and (xv) any extensions,
substitutions, replacements or renewals of the foregoing.
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"PERMITTED TAX DISTRIBUTIONS" means, with respect to any periods for which
Pierce Leahy was taxed as an S corporation or other pass-through entity for
federal income tax purposes, distributions to the holders of Capital Stock of
Pierce Leahy based on estimates of the highest amount of federal, state and
local income tax per share of Capital Stock that any holder of Capital Stock of
Pierce Leahy would be required to pay as a result of Pierce Leahy's being
treated as a pass-through entity for income tax purposes.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).
"PREFERRED STOCK" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"PROPERTY" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.
"PUBLIC EQUITY OFFERING" means a public offering by Pierce Leahy of shares of
its Capital Stock and any and all rights, warrants or options to acquire such
Capital Stock.
"PURCHASE MONEY INDEBTEDNESS" means any Indebtedness incurred in the ordinary
course of business by a Person to finance the cost (including the cost of
construction) of an item of Property, the principal amount of which Indebtedness
does not exceed the sum of (i) 100% of such cost and (ii) reasonable fees and
expenses of such Person incurred in connection therewith.
"REDEEMABLE DIVIDEND" means, for any dividend or distribution with regard to
Disqualified Capital Stock, the quotient of the dividend or distribution divided
by the difference between one and the maximum statutory federal income tax rate
(expressed as a decimal number between 1 and 0) then applicable to the issuer of
such Disqualified Capital Stock.
"REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances,
renews, replaces or extends any Indebtedness of Pierce Leahy or a Restricted
Subsidiary outstanding on the Issue Date or other Indebtedness permitted to be
incurred by Pierce Leahy or its Restricted Subsidiaries pursuant to the terms of
the Indenture, whether involving the same or any other lender or creditor or
group of lenders or creditors, but only to the extent that (i) the Refinancing
Indebtedness is subordinated to the Notes with respect to Indebtedness of the
Issuer and the relevant Guarantee with respect to the Indebtedness of a
Guarantor to at least the same extent as the Indebtedness being refunded,
refinanced or extended, if at all, (ii) the Refinancing Indebtedness is
scheduled to mature either (a) no earlier than the Indebtedness being refunded,
refinanced or extended, or (b) after the maturity date of the Notes, (iii) the
portion, if any, of the Refinancing Indebtedness that is scheduled to mature on
or prior to the maturity date of the Notes has a weighted average life to
maturity at the time such Refinancing Indebtedness is incurred that is equal to
or greater than the weighted average life to maturity of the portion of the
Indebtedness being refunded, refinanced or extended that is scheduled to mature
on or prior to the maturity date of the Notes, (iv) such Refinancing
Indebtedness is in an aggregate principal amount that is equal to or less than
the sum of (a) the aggregate principal amount then outstanding under the
Indebtedness being refunded, refinanced or extended, (b) the amount of accrued
and unpaid interest, if any, and premiums owed, if any, not in excess of
preexisting prepayment provisions on such Indebtedness being refunded,
refinanced or extended and (c) the amount of customary fees, expenses and costs
related to the incurrence of such Refinancing Indebtedness, and (v) such
Refinancing Indebtedness is incurred by the same Person that initially incurred
the Indebtedness being refunded, refinanced or extended, except that the Issuer
or any Guarantor may incur Refinancing Indebtedness to refund, refinance or
extend Indebtedness of the Issuer or any Guarantor.
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"RESTRICTED PAYMENT" means any of the following: (i) the declaration or
payment of any dividend or any other distribution or payment on Capital Stock of
Pierce Leahy or any Restricted Subsidiary or any payment made to the direct or
indirect holders (in their capacities as such) of Capital Stock of Pierce Leahy
or any Restricted Subsidiary (other than (x) dividends or distributions payable
solely in Capital Stock (other than Disqualified Capital Stock) or in options,
warrants or other rights to purchase Capital Stock (other than Disqualified
Capital Stock), and (y) in the case of Restricted Subsidiaries, dividends or
distributions payable to Pierce Leahy or to a Wholly-Owned Subsidiary of Pierce
Leahy); (ii) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of Pierce Leahy or any of its Restricted Subsidiaries
(other than Capital Stock owned by Pierce Leahy or a Wholly-Owned Subsidiary of
Pierce Leahy, excluding Disqualified Capital Stock); (iii) the purchase,
defeasance, repurchase, redemption or other acquisition or retirement for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment of, or the making of any principal payment on, any Indebtedness which is
subordinated in right of payment to (x) the Notes with respect to such an action
by the Issuer or (y) to the respective Guarantee with respect to such an action
by a Guarantor, in each case, (other than subordinated Indebtedness acquired in
anticipation of satisfying a scheduled sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
acquisition); (iv) the making of any Investment or guarantee of any Investment
in any Person other than a Permitted Investment; (v) any designation of a
Restricted Subsidiary as an Unrestricted Subsidiary on the basis of the
Investment by Pierce Leahy; and (vi) forgiveness of any Indebtedness of an
Affiliate of Pierce Leahy (other than a Restricted Subsidiary) to Pierce Leahy
or a Restricted Subsidiary. For purposes of determining the amount expended for
Restricted Payments, cash distributed or invested shall be valued at the face
amount thereof and property other than cash shall be valued at its fair market
value in the good faith determination of the Board of Directors. It is agreed
that any payments made to Leo W. Pierce, Sr. or his spouse pursuant to a pension
obligation of Pierce Leahy in the annual amount of $96,000 shall not constitute
a Restricted Payment.
"RESTRICTED SUBSIDIARY" means a Subsidiary of Pierce Leahy having either
assets or shareholders' equity in excess of $5,000 other than an Unrestricted
Subsidiary and includes all of the Subsidiaries of Pierce Leahy existing as of
the Issue Date having either assets or shareholders' equity in excess of $5,000.
The Board of Directors of Pierce Leahy may designate any Unrestricted Subsidiary
or any as a Restricted Subsidiary if immediately after giving effect to such
action (and treating any Acquired Indebtedness as having been incurred at the
time of such action), Pierce Leahy or a Restricted Subsidiary could have
incurred at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to the "Limitation on Additional Indebtedness" covenant.
"SALE AND LEASE-BACK TRANSACTION" means any arrangement with any Person
providing for the leasing by Pierce Leahy or any Restricted Subsidiary of Pierce
Leahy of any real or tangible personal property, which property (i) has been or
is to be sold or transferred by Pierce Leahy or such Restricted Subsidiary to
such Person in contemplation of such leasing and (ii) would constitute an Asset
Sale if such property had been sold in an outright sale thereof.
"SENIOR INDEBTEDNESS" means the principal of and premium, if any, and interest
(including, without limitation, interest accruing or that would have accrued but
for the filing of a bankruptcy, reorganization or other insolvency proceeding
whether or not such interest constitutes an allowable claim in such proceeding)
on, and any and all other fees, expense reimbursement obligations and other
amounts due pursuant to the terms of all agreements, documents and instruments
providing for, creating, securing or evidencing or otherwise entered into in
connection with (a) all Indebtedness of Pierce Leahy or its Restricted
Subsidiaries owed to lenders under or in respect of the Credit Facility, (b) all
obligations of Pierce Leahy or its Restricted Subsidiaries with respect to any
Interest Rate Agreement, (c) all obligations of Pierce Leahy or its Restricted
Subsidiaries to reimburse any bank or other person in respect of amounts paid
under letters of credit, acceptances or other similar instruments, (d) all other
Indebtedness of Pierce Leahy or its Restricted Subsidiaries which does not
provide that (1) with respect to Indebtedness of the Issuer or a Canadian
Guarantor, such Indebtedness is subordinate to the Notes or such Canadian
Guarantee, as applicable, and (2) with respect to Indebtedness of a Domestic
Guarantor, such Indebtedness is to rank pari passu with or subordinate to such
Domestic Guarantee and (e) all deferrals, renewals, extensions, replacements,
refundings, refinancings and restructurings of, and amendments, modifications
and supplements to, any of the Senior
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Indebtedness described above. Notwithstanding anything to the contrary in the
foregoing, Senior Indebtedness will not include (i) Indebtedness of Pierce Leahy
to any of its Subsidiaries, (ii) Indebtedness represented by any Domestic
Guarantees, (iii) Indebtedness represented by the 1996 Notes, the 1997 Notes and
their respective guarantees, (iv) any Indebtedness which by the express terms of
the agreement or instrument creating, evidencing or governing the same is junior
or subordinate in right of payment to any item of Senior Indebtedness, (v) any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business, or (vi) Indebtedness (other than
that described in clause (a) above) incurred in violation of the Indenture.
"SUBSIDIARY" of any specified Person means any corporation, partnership, joint
venture, association or other business entity, whether now existing or hereafter
organized or acquired, (i) in the case of a corporation, of which more than 50%
of the total voting power of the Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, officers or
trustees thereof is held by such first-named Person or any of its Subsidiaries;
or (ii) in the case of a partnership, joint venture, association or other
business entity, with respect to which such first-named Person or any of its
Subsidiaries has the power to direct or cause the direction of the management
and policies of such entity by contract or otherwise or if in accordance with
GAAP such entity is consolidated with the first-named Person for financial
statement purposes.
"TEMPORARY CASH INVESTMENTS" means (i) Investments in marketable direct
obligations issued or guaranteed by the United States of America, or of any
governmental agency or political subdivision thereof, maturing within 365 days
of the date of purchase; (ii) Investments in demand deposits or certificates of
deposit issued by a bank organized under the laws of the United States of
America or any state thereof or the District of Columbia, in each case having
capital, surplus and undivided profits totaling more than $500,000,000 and rated
at least A by Standard & Poor's Ratings Group and A-2 by Moody's Investors
Service, Inc., maturing within 365 days of purchase; (iii) Investments not
exceeding 365 days in duration in money market funds that invest substantially
all of such funds' assets in the Investments described in the preceding clauses
(i) and (ii); (iv) any security maturing not more than 180 days after the date
of acquisition, backed by a stand-by or direct pay letter of credit issued by a
bank meeting the qualifications described in clause (ii) above; or (v)
commercial paper, maturing not more than one year after the date of acquisition,
issued by a corporation (other than an Affiliate or Subsidiary of Pierce Leahy)
organized and existing under the laws of the United States of America or any
state thereof or the District of Columbia with a rating, at the time as of which
any investment therein is made, of "P-1" by Moody's Investors Service, Inc. or
"A-1" by Standard & Poor's Ratings Group.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of an Unrestricted
Subsidiary and (ii) any Subsidiary of Pierce Leahy which is classified after the
Issue Date as an Unrestricted Subsidiary by a resolution adopted by the Board of
Directors; provided that the Issuer may not be an Unrestricted Subsidiary; and
provided further, however, that a Subsidiary organized or acquired after the
Issue Date may be so classified as an Unrestricted Subsidiary only if such
classification is in compliance with the covenant set forth under "Limitation on
Restricted Payments." The Trustee shall be given prompt notice by Pierce Leahy
of each resolution adopted by the Board of Directors under this provision,
together with a copy of each such resolution adopted.
"WHOLLY-OWNED SUBSIDIARY" means any Restricted Subsidiary, 99% or more of the
outstanding Capital Stock (other than directors' qualifying shares) of which is
owned, directly or indirectly, by Pierce Leahy.
BOOK-ENTRY; DELIVERY AND FORM
The Original Notes were issued in the form of either a Regulation S Global
Note which was sold in an offshore transaction in reliance on Regulation S
(each, a "Regulation S Global Note") or a Restricted Global Note which was
issued in reliance on Rule 144A (each, a Restricted Global Note", and together
with the Regulation S Global Note, the "Original Global Notes"). The Original
Notes were represented by one or more Original Global Notes, in definitive,
fully registered form without interest coupons and were deposited with the
Trustee as custodian for The Depository Trust Company ("DTC" or the
"Depository") and registered in the name of a nominee of DTC for the accounts of
Euroclear and
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The Exchange Notes will initially be issued in the form of one or more Global
Notes (collectively, the "Exchange Global Notes"). The Exchange Global Notes
will be deposited on the date of the closing of the Exchange Offer, with, or on
behalf of, and registered in the name of a nominee of the DTC. "Global Notes"
means the Original Global Notes or the Exchange Global Notes, as the case may
be.
Notes that are issued as described below under "--Certificated Securities"
will be issued, in registered form, without interest coupons ("Certificated
Securities").
THE GLOBAL NOTES
Upon issuance of each Regulation S Global Note and Restricted Global Note, DTC
or the custodian will credit, on its internal system, the respective principal
amount of the individual beneficial interest represented by such Global Note to
the accounts of Persons who have accounts with such depository. Such accounts
initially will be designated by or on behalf of the Initial Purchasers.
Ownership of beneficial interests in a Global Note will be limited to Persons
who have accounts with DTC ("participants") or Persons who hold interests
through participants. Ownership of beneficial interests in the Global Note will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC or its nominee (with respect to interests of
participants) and the records of participants (with respect to interests of
persons other than participants). Qualified Institutional Buyers may hold their
interests in the Restricted Global Note directly through DTC if they are
participants in such system, or indirectly through organizations which are
participants in such system.
Investors may hold their interests in a Regulation S Global Note directly
through Cedel or Euroclear, if they are participants in such systems, indirectly
through organizations that are participants in such systems or through
organizations other than Euroclear and Cedel that are participants in the DTC
system. Cedel and Euroclear will hold interests in a Regulation S Global Note
on behalf of their participants through DTC.
So long as DTC, or its nominee, is the registered owner or holder of a Global
Note, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the Notes represented by such Global Note for all purposes under
the Indenture and the Notes. In addition, no beneficial owner of an interest in
a Global Note will be able to transfer that interest except in accordance with
DTC's applicable procedures, in addition to those provided for under the
Indenture and, if applicable, those of Euroclear and Cedel.
Payments of the principal of, and interest on, the Global Notes will be made
to DTC or its nominee, as the case may be, as the registered owner thereof.
Neither the Issuer, the Trustee nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Notes
or for maintaining, supervising or reviewing any records relating to such
beneficiary ownership interests.
The Issuer expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of a Global Note, will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Note as shown on the records of
DTC or its nominee. The Issuer also expects that payments by participants to
owners of beneficial interests in such Global Note held
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through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in the names of nominees for such customers. Such payments
will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way in
accordance with DTC rules and will be settled in next-day funds. Transfers
between participants in Euroclear and Cedel will be effected in the ordinary way
in accordance with their respective rules and operating procedures.
The Issuer understands that DTC will take any action permitted to be taken by
a holder (including the presentation of Notes for exchange) only at the
direction of one or more participants to whose account DTC interests in the
Global Notes is credited and only in respect of such portion of the aggregate
principal amount of Notes as to which such participant or participants has or
have given such direction. However, if there is an Event of Default under the
Notes, DTC will exchange the Global Notes for Certificated Notes which it will
distribute to its participants.
The Issuer understands that DTC is a limited purpose trust company organized
under the laws of the State of New York, a "banking organization" within the
meaning of New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the Uniform Commercial Code and a
"Clearing Agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participants and
facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies and clearing corporations and certain other organizations. Indirect
access to the DTC system is available to others such as banks, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly ("indirect participants").
Although DTC, Euroclear and Cedel have agreed to the foregoing procedures in
order to facilitate transfers of interests in the Global Notes among
participants of DTC, Euroclear and Cedel, they are under no obligation to
perform or continue to perform such procedures, and such procedures may be
discontinued at any time. Neither the Issuer, Pierce Leahy nor the Trustee will
have any responsibility for the performance by DTC, Euroclear or Cedel or their
respective participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
CERTIFICATED NOTES
A Global Note is exchangeable for Certificated Notes if (i) the Depository
notifies the Issuer that it is unwilling or unable to continue as a Depository
for such Global Note or if at any time the Depository ceases to be a clearing
agency registered under the Exchange Act and in either case the Issuer thereupon
fails to appoint a successor Depository within 90 days, (ii) the Issuer executes
and delivers to the Trustee a written notice that such Global Note shall be
issuable and transferable in certificated form or (iii) there shall have
occurred and be continuing an Event of Default or an event which, with the
giving of notice or lapse of time or both, would constitute an Event of Default
with respect to the Notes represented by such Global Note. Any Global Note that
is exchangeable for Certificated Notes pursuant to the preceding sentence will
be transferred to, and registered and exchanged for, Certificated Notes in
authorized denominations, without legends applicable to a Global Note but with
the legend referred to under "Notice to Investors" (unless the Issuer determines
otherwise in accordance with applicable law), subject, with respect to such
Notes, to the provisions of such legend, and registered in such names as the
Depository holding such Global Note may direct. Subject to the foregoing, a
Global Note is not exchangeable, except for a Global Note of like denomination
to be registered in the name of the Depository or its nominee. In the event
that a Global Note becomes exchangeable for Certificated Notes, (i) Certificated
Notes will be issued only in fully registered form in denominations of $1,000 or
integral multiples thereof, (ii) payment of principal, any repurchase price, and
interest on the Certificated Notes will be payable, and the transfer of the
Certificated Notes will be registrable, at the office or agency of the Issuer
maintained for such purposes, and (iii) no service charge will be
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made for any registration or transfer or exchange of the Certificated Notes,
although the Issuer may require payment of a sum sufficient to cover any tax or
governmental charge imposed in connection therewith.
DESCRIPTION OF CAPITAL STOCK OF PIERCE LEAHY
The authorized capital stock of Pierce Leahy consists of 80,000,000 shares of
Common Stock, par value $.01 per share (the "Common Stock"), and 10,000,000
shares of Preferred Stock, par value $.01 per share (the "Preferred Stock"). As
of May 31, 1998, there were 17,025,990 shares of Common Stock outstanding. No
shares of Preferred Stock are currently outstanding.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on each matter
to be decided by the shareholders and do not have cumulative voting rights.
Accordingly, the holders of a majority of Common Stock entitled to vote in any
election of directors may elect all of the directors standing for election. The
holders of Common Stock have no preemptive, redemption or conversion rights. The
holders of Common Stock will be entitled to receive ratably such dividends, if
any, as the Board of Directors may declare from time to time out of funds
legally available for such purpose. In the event of liquidation, dissolution or
winding up of the affairs of Pierce Leahy, after payment or provision for
payment of all of Pierce Leahy's debts and obligations and any preferential
distributions to holders of Preferred Stock, if any, the holders of the Common
Stock will be entitled to share ratably in Pierce Leahy's remaining assets. All
outstanding shares of Common Stock are, and the Common Stock offered hereby will
be, validly issued, fully paid and nonassessable.
PREFERRED STOCK
The Board of Directors is authorized, without further action by the
shareholders, to provide for the issuance of shares of Preferred Stock as a
class without series or in one or more series, to establish the number of shares
in each class or series and to fix the designations, powers, preferences and
rights of each such class or series and the qualifications, limitations or
restrictions thereof. Because the Board of Directors has the power to establish
the preferences and rights of each class or series of Preferred Stock, the Board
of Directors may afford the holders of any class or series of Preferred Stock
preferences, powers and rights, voting or otherwise, senior to the rights of
holders of Common Stock. The issuance of Preferred Stock could have the effect
of delaying or preventing a change in control of Pierce Leahy. As of the date of
this Offering Memorandum, Pierce Leahy has not authorized the issuance of any
Preferred Stock and there are no plans, agreements or understandings for the
issuance of any shares of Preferred Stock.
CERTAIN PROVISIONS OF PENNSYLVANIA LAW AND PIERCE LEAHY'S ARTICLES OF
INCORPORATION AND BYLAWS
Pierce Leahy is subject to the provisions of Section 2538 and Sections 2551-
2556 of the Pennsylvania Business Corporation Law of 1988, as amended (the
"PBCL"), which in certain cases provide for supermajority shareholder approval
of business combinations involving Pierce Leahy and any "interested shareholder"
(as defined in such statute and includes generally, in the case of Section 2538,
shareholders who are a party to the business combination or who are treated
differently from other shareholders, and, in the case of Sections 2551-2556,
shareholders beneficially owning 20% or more of the voting power of a
"registered" corporation, such as Pierce Leahy). In addition, Sections 2551-
2556 also impose certain restrictions on business combinations involving Pierce
Leahy and any "interested shareholder." The term "business combination" includes
a merger, asset sale or other transaction involving an interested shareholder.
The PBCL also provides that the directors of a corporation, making decisions
concerning takeovers or any other matters, may consider, to the extent that they
deem appropriate, among other things, (i) the effects of any proposed
transaction upon any or all groups affected by such action, including, among
others, shareholders, employees,
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suppliers, customers and creditors, (ii) the short-term and long-term interests
of the corporation and (iii) the resources, intent and conduct of the person
seeking control.
Pierce Leahy's Bylaws provide that its Board of Directors is to be composed of
three classes, with staggered three-year terms, each class to contain as nearly
as possible one-third of the number of members of the Board of Directors.
Accordingly, at each annual meeting of shareholders, only approximately one-
third of Pierce Leahy's directors will be elected.
Certain other provisions of Pierce Leahy's Articles of Incorporation and
Bylaws could also have the effect of preventing or delaying any change in
control of Pierce Leahy, including (i) the advance notification procedures
governing certain shareholder nominations of candidates for the Board of
Directors and for certain other shareholder business to be conducted at an
annual meeting, (ii) the absence of authority for shareholders to call special
shareholder meetings of Pierce Leahy, except in certain limited circumstances
mandated by the PBCL, and (iii) the absence of authority for shareholder action
by written consent by less than all of Pierce Leahy's shareholders. These
provisions, the classified board and "supermajority" voting rights, could have
the effect of making it more difficult for a third party to acquire, or
discouraging a third party from seeking to acquire, control of Pierce Leahy.
As permitted by the PBCL, the Bylaws provide that a director shall not be
personally liable in such capacity for monetary damages for any action taken, or
any failure to take any action, unless the director breaches or fails to perform
the duties of his office under the PBCL, and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness. These provisions
of the Bylaws, however, do not apply to the responsibility or liability of a
director pursuant to any criminal statute, or to the liability of a director for
the payment of Pierce Leahy's taxes pursuant to local, Pennsylvania or federal
law. These provisions offer persons who serve on the Board of Directors of
Pierce Leahy protection against awards of monetary damages for negligence in the
performance of their duties.
The Bylaws also provide that every person who is or was a director or officer
of Pierce Leahy, or a director, officer, employee, agent, partner or fiduciary
of, or in any other capacity for any corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which he served as such at the
request of Pierce Leahy, shall be indemnified by Pierce Leahy to the fullest
extent permitted by law against all expenses and liabilities reasonably incurred
by or imposed upon him, in connection with any proceeding to which he may be
made, or threatened to be made, a party, or in which he may become involved by
reason of his being or having been a director or officer of Pierce Leahy, or a
director, officer, employee, agent, or fiduciary of, or in any other capacity
for such other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, whether or not he is a director or officer of Pierce
Leahy or a director, officer, employee, agent, partner or fiduciary of, or in
any other capacity for such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise at the time the expenses or
liabilities are incurred.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes certain federal income tax considerations
for holders who elect to exchange their Original Notes for Exchange Notes in the
Exchange Offer. This summary is for general information purposes only and does
not address specific tax aspects of the Exchange Offer which may be relevant to
certain holders such as foreign persons, financial institutions, broker-dealers,
tax-exempt organizations or insurance companies. THEREFORE, EACH HOLDER OF A
NOTE SHOULD CONSULT HIS OR HER OWN TAX ADVISOR CONCERNING THE PARTICULAR
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF EXCHANGING HIS OR HER
ORIGINAL NOTES FOR EXCHANGE NOTES IN THE EXCHANGE OFFER.
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Under current provisions of the Internal Revenue Code of 1986, as amended, the
Treasury Regulations promulgated thereunder and current judicial authority and
administrative rulings and practice, an exchange of the debt instrument of an
issuer for a new debt instrument of the issuer will be treated as an "exchange"
for federal income tax purposes if the new debt instrument differs materially
either in kind or in extent from the old debt instrument. Because the Exchange
Notes are substantially identical to the Original Notes and because the exchange
was contemplated by the Indenture pursuant to which the Original Notes were
sold, the Exchange Notes and Original Notes should not be considered to differ
materially either in kind or in extent and, accordingly, the exchange should not
constitute an "exchange" for federal income tax purposes. Therefore, for federal
income tax purposes, no gain or loss should be recognized by the holder on the
exchange of an Original Note for an Exchange Note, the holder's adjusted tax
basis in the Exchange Note should be the same as his or her basis in the
Original Note and the holding period for the Exchange Note should be the same as
the holding period for the Original Note.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of the principal Canadian federal income
tax considerations generally applicable to a holder of the Notes or the Exchange
Notes acquired hereunder. This summary is generally applicable to a holder who,
for purposes of the Income Tax Act (Canada) (the "Act"), holds the Notes and the
Exchange Notes acquired hereunder as capital property, deals at arms' length
with the Issuer and each Canadian Guarantor, is not affiliated with the Issuer
or a Canadian Guarantor (under the Proposed Tax Amendments, as defined below),
is a non-resident or is deemed to be a non-resident of Canada for purposes of
the Act, is a resident of the United States for purposes of the Canada-United
States Income Tax Convention (1980) (the "Convention"), and has not and will not
use or hold or be deemed to use or hold the Notes or the Exchange Notes in or in
the course of carrying on business in Canada. This summary does not apply to a
holder that is a "financial institution," as defined in section 142.2 of the
Act, as such definition is proposed to be amended by the Proposed Tax Amendments
(as hereinafter defined).
This summary is based on the current provisions of the Act, the regulations
thereunder (the "Regulations"), the Convention, counsel's understanding of the
current published administrative and assessing practices of Revenue Canada,
Customs, Excise & Taxation ("Revenue Canada") and on a certificate of an officer
of the Issuer as to certain matters of fact.
This summary also takes into account all specific proposals to amend the Act
and regulations publicly announced by the Department of Finance of Canada prior
to the date hereof (collectively, the "Proposed Tax Amendments"). No assurances
can be given that the Proposed Tax Amendments will be enacted or will be enacted
as tabled, announced or advised. Otherwise this summary does not take into
account or anticipate any changes in law, or the administration thereof, whether
by legislative, governmental or administrative action, nor does it take into
account provincial, territorial or foreign income tax legislation or
considerations which may differ significantly from those discussed herein.
THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, NOR SHOULD
IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR HOLDER OF THE NOTES
OR THE EXCHANGE NOTES. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD CONSULT THEIR
OWN TAX ADVISORS WITH RESPECT TO THEIR OWN PARTICULAR CIRCUMSTANCES.
FOREIGN CURRENCY TRANSLATION ISSUES
Generally, all amounts relevant to the computation of income under the Act
which are payable, paid, receivable, received or expressed in a foreign currency
must be translated into Canadian Dollars using an appropriate exchange rate. A
holder's cost and proceeds of disposition of a Note or an Exchange Note must be
translated into Canadian Dollars at the date of acquisition and at the date of
disposition, respectively. Interest on the Notes or the Exchange Notes will
generally be translated into Canadian Dollars at the date on which such interest
is paid or credited.
NOTES AND EXCHANGE NOTES
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In the absence of an exemption under the Act or the Convention, interest paid
or credited by the Issuer to a holder is subject to a non-resident withholding
tax of 25% of the gross amount of the interest under the Act. The rate of such
withholding tax is reduced by the Convention to 10%. The Act provides for an
exemption from non-resident withholding tax on interest payable on indebtedness
of the Issuer to a holder who deals at arm's length with the Issuer provided
that the Issuer may not under any circumstances be obliged to pay more than 25%
of the aggregate principal amount of the indebtedness within five years from the
date of issue of the indebtedness, except in the event of a failure or a default
under the terms of the indebtedness or in the case of certain other events
including in the event the terms of the indebtedness become unlawful. Based in
part on a certificate of an officer of the Issuer, amounts of interest paid or
credited by the Issuer on the Notes and the Exchange Notes to holders dealing at
arm's length with the Issuer will not be subject to non-resident withholding
under the Act.
A holder will not generally be subject to tax under the Act in respect of any
capital gain, or entitled to deduct any capital loss, realized on the
disposition of a Note or an Exchange Note.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with the resale of Exchange Notes received in exchange for Original
Notes where such Original Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that for a period
of 180 days after the Expiration Date, it will use reasonable efforts to make
this Prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale; provided that such broker-dealer
indicates in the Letter of Transmittal that it is a broker-dealer. In addition,
until _______ __, 1998, all broker-dealers effecting transactions in the
Exchange Notes may be required to deliver a Prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers or any other persons. Exchange Notes received by broker-dealers
for their own account pursuant to the Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells Exchange Notes that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Notes may be
deemed to be an "underwriter" within the meaning of the Securities Act, and any
profit on any such resale of Exchange Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of 180 days after the Expiration Date, the Company will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter
of Transmittal.
By acceptance of this Exchange Offer, each broker-dealer that receives
Exchange Notes pursuant to the Exchange Offer agrees that, upon receipt of
notice form the Company of the happening of any event which makes any statement
in the Prospectus untrue in any material respect or which requires the making of
any changes in the Prospectus in order to make the statements therein not
misleading (which notice the Company agrees to deliver promptly to such broker-
dealer, such broker-dealer will suspend use of the Prospectus until the Company
has amended or supplements the Prospectus to correct such misstatement or
omission and has furnished copies of the
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amended or supplemented Prospectus to such broker-dealer. If the Company gives
any such notice to suspend the use of the Prospectus, it shall extend the 180-
day period referred to the above by the number of days during the period from
and including the date of the giving of such notice up to and including when
broker-dealers have received copies of the supplement or amended Prospectus
necessary to permit resales of Exchange Notes.
The Company has agreed to pay all expenses incident to the Company's
performance of, or compliance with, the Registration Agreement and will
indemnify the holders (including any broker-dealers) and certain parties related
to the holders against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the Notes offered hereby will be passed
upon for the Issuer and Pierce Leahy by Cozen and O'Connor, Philadelphia,
Pennsylvania. Two members of Cozen and O'Connor are limited partners in certain
limited partnerships that lease facilities to the Company.
EXPERTS
The financial statements and schedules of Pierce Leahy Corp. as of December
31, 1997 and 1996, and for each of the three years in the period ended December
31, 1997, incorporated by reference in this Prospectus and elsewhere in the
Registration Statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in reliance upon the authority of said firm as
experts in giving said reports.
The financial statements of Archivex Inc. as of November 30, 1997 and 1996,
and for the three years in the period ended November 30, 1997, incorporated by
reference in this Prospectus and elsewhere in this Registration Statement, have
been audited by Friedman & Friedman, chartered accountants, as indicated in
their report with respect thereto, and are incorporated by reference in reliance
upon the authority of said firm as experts in giving said reports.
The financial statements of Kestrel Holdings, Inc. as of September 30, 1997
and for the year then ended, incorporated by reference in this Prospectus and
elsewhere in this Registration Statement, have been audited by James N. Howard
and Associates, P.C., independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference in reliance upon
the authority of said firm as experts in giving said reports.
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No dealer, salesperson or other person has been authorized to give any
information or to make any representations in connection with the offer
contained herein other than those contained in this Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Issuer, Pierce Leahy Corp. or any other person. This
Prospectus does not constitute an offer to sell or the solicitation of an offer
to buy to any person in any jurisdiction in which such offer or solicitation is
not authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create an implication that there has
been no change in the affairs of the Issuer or Pierce Leahy Corp. since the date
as of which information is given in this Prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information.................................................... 1
Incorporation of Certain Documents by Reference.......................... 1
Prospectus Summary....................................................... 2
Risk Factors............................................................. 10
The Exchange Offer....................................................... 24
The Company.............................................................. 33
The Issuer............................................................... 33
Use of Proceeds.......................................................... 34
Capitalization........................................................... 35
Pro Forma Financial Data of Pierce Leahy Corp............................ 36
Selected Historical and Pro Forma
Consolidated Statements of Operations, Other Data and
Balance Sheets of Pierce Leahy Corp..................................... 41
Management's Discussion and Analysis of
Financial Condition and Results of Operations........................... 44
Business................................................................. 54
Management............................................................... 66
Certain Transactions..................................................... 73
Principal Shareholders of Pierce Leahy................................... 74
Description of Certain Indebtedness...................................... 76
Description of Credit Facility........................................... 77
Description of the Notes................................................. 78
Description of Capital Stock of Pierce Leahy............................. 106
Certain United States Federal Income Tax Considerations.................. 107
Canadian Federal Income Tax Considerations............................... 108
Plan of Distribution..................................................... 109
Legal Matters............................................................ 110
Experts.................................................................. 110
</TABLE>
---------
Until ____________ __, 1998, (90 days after the date of this Prospectus), all
dealers effecting transactions in the Exchange Notes, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
selling Exchange Notes received in exchange for Original Notes held for their
own account. See "Plan of Distribution."
[LOGO]
PIERCE LEAHY COMMAND COMPANY
Offer to Exchange its 8-1/8% Senior Notes due 2008 which have been registered
under the Securities Act for any and all outstanding 8-1/8% Senior Subordinated
Notes due 2008
-----------------
PROSPECTUS
-----------------
__________, 1998
---------------------------------------------
---------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Subchapter D (Sections 1741 through 1750) of Chapter 17 the
Pennsylvania Business Corporation Law of 1988, as amended (the "PBCL"), contains
provisions for mandatory and discretionary indemnification of a corporation's
directors, officers, employees and agents (collectively "Representatives"), and
related matters.
Under Section 1741, subject to certain limitations, a corporation has
the power to indemnify directors, officers and other Representatives under
certain prescribed circumstances against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with a threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative, to which any of them
is a party or threatened to be made a party by reason of his being a
Representative of the corporation or serving at the request of the corporation
as a Representative of another corporation, partnership, joint venture, trust or
other enterprise, if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation and,
with respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 1742 provides for indemnification with respect to derivative
and corporate actions similar to that provided by Section 1741. However,
indemnification is not provided under Section 1742 in respect of any claim,
issue or matter as to which a Representative has been adjudged to be liable to
the corporation unless and only to the extent that the proper court determines
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, a Representative is fairly and reasonably
entitled to indemnity for the expenses that the court deems proper.
Section 1743 provides that indemnification against expenses is
mandatory to the extent that a Representative has been successful on the merits
or otherwise in defense of any such action or proceeding referred to in Section
1741 or 1742.
Section 1744 provides that unless ordered by a court, any
indemnification under Section 1741 or 1742 shall be made by the corporation as
authorized in the specific case upon a determination that indemnification of a
Representative is proper because the Representative met the applicable standard
of conduct, and such determination will be made by the board of directors by a
majority vote of a quorum of directors not parties to the action or proceeding;
if a quorum is not obtainable or if obtainable and a majority of disinterested
directors so directs, by independent legal counsel; or by the shareholders.
Section 1745 provides that expenses incurred by a Representative in
defending any action or proceeding referred to in Subchapter D of Chapter 17 of
the PBCL may be paid by the corporation in advance of the final disposition of
such action or proceeding upon receipt of an undertaking by or on behalf of the
Representative to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the corporation.
Section 1746 provides generally that except in any case where the act
or failure to act giving rise to the claim for indemnification is determined by
a court to have constituted willful misconduct or recklessness, the
indemnification and advancement of expenses provided by Subchapter D of Chapter
17 of the PBCL shall not be deemed exclusive of any other rights to which a
Representative seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding that office.
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Section 1747 grants a corporation the power to purchase and maintain
insurance on behalf of any Representative against any liability incurred by him
in his capacity as a Representative, whether or not the corporation would have
the power to indemnify him against that liability under Subchapter D of Chapter
17 of the PBCL.
Sections 1748 and 1749 apply the indemnification and advancement of
expenses provisions contained in Subchapter D of Chapter 17 of the PBCL to
successor corporations resulting from consolidation, merger or division and to
service as a representative of a corporation or an employee benefit plan.
Section 7.2 of the Company's Bylaws provides indemnification to
directors and officers for all actions taken by them and for all failures to
take action to the fullest extent permitted by Pennsylvania law against all
expense, liability and loss reasonably incurred or suffered by them in
connection with any threatened, pending or completed action, suit or proceeding
(including, without limitation, an action, suit or proceeding by or in the right
of the Company), whether civil, criminal, administrative, investigative or
through arbitration. Section 7.2 also permits the Company, by action of its
Board of Directors, to indemnify officers, employees and other persons to the
same extent as directors. Amendments, repeals or modifications of Section 7.2
can only be prospective and such changes require the affirmative vote of not
less than all of the directors then serving or holders of a majority of the
outstanding shares of stock of the Company entitled to vote in elections of
directors. Section 7.2 further permits the Company to maintain insurance, at its
expense, for the benefit of any person on behalf of whom insurance is permitted
to be purchased by Pennsylvania law against any such expenses, liability or
loss, whether or not the Company would have the power to indemnify such person
against such expense, liability or loss under Pennsylvania or other law.
Item 21. Exhibits and Financial Statement Schedules.
Exhibit
No. Exhibit
- ----------------
3.1(a) Memorandum of Association of Pierce Leahy Command Company (the
"Issuer")
3.1(b) Certificate of Incorporation of Pierce Leahy (incorporated by
reference to Exhibit 3.1 to Pierce Leahy's Registration Statement on
Form S-1, File No. 333-23121)
3.1(c) Certificate of Incorporation of Monarch Box, Inc. ("Monarch")
3.1(d) Certificate of Incorporation of Advanced Box, Inc. ("Advanced")
3.1(e) Memorandum of Association of Archivex Limited ("Archivex")
3.2(a) Articles of Association of the Issuer
3.2(b) Amended and Restated By-laws of Pierce Leahy (incorporated by
reference to Exhibit 3.2 to Pierce Leahy's Registration Statement on
Form S-1, File No. 333-23121)
3.2(c) By-Laws of Monarch
3.2(d) By-Laws of Advanced
3.2(e) Articles of Association of Archivex
4.1(a) Indenture dated as of July 15, 1996 by and between Pierce Leahy and
The United States Trust Company of New York, as trustee (incorporated
by reference to Exhibit 4.4 to Pierce Leahy's Registration Statement
on Form S-1, File No. 333-23121)
4.1(b) Indenture, dated as of July 7, 1997, by and between Pierce Leahy and
The Bank of New York ("Bank"), as trustee (incorporated by reference
to Exhibit 10.5 to Pierce Leahy's Annual Report on Form 10-K for the
year ended December 31, 1997)
4.1(c) Indenture, dated as of April 7, 1998, by and among the Issuer, Pierce
Leahy and the Bank, as trustee
4.2 Forms of Original Notes for $135,000,000 principal amount of 8 1/8%
Senior Notes of Issuer due 2008 ("1998 Notes")
4.3 Forms of Exchange Notes for the 1998 Notes (included in Exhibit
4.1(c))
4.4 Registration Agreement, dated as of April 7, 1998, by and among the
Issuer, Pierce Leahy, Salomon Brothers Inc, CIBC Oppenheimer Corp.
and PaineWebber Incorporated (the "Initial Purchasers")
*5 Opinion of Cozen and O'Connor
9 Amended and Restated Voting Trust Agreement by and among certain
shareholders of Pierce Leahy
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(incorporated by reference to Exhibit 9 to Pierce Leahy's Annual
Report on Form 10-K for the year ended December 31, 1997)
10(a) Stock Purchase Agreement, dated as of February 27, 1997, between
Pierce Leahy, Records Management Services, Inc. and certain
shareholders of Records Management Services, Inc. (incorporated by
reference to Exhibit 10.7 to Pierce Leahy's Annual Report on Form
10-K for the year ended December 31, 1996)
10(b) Purchase Agreement (the "Purchase Agreement"), dated as of April
2, 1998 by and among the Issuer, Pierce Leahy and the Initial
Purchasers
10(c) Domestic Guarantee of Monarch
10(d) Domestic Guarantee of Advanced
10(e) Canadian Guarantee of Archivex
10(f) Non-Qualified Stock Option Plan of Pierce Leahy (incorporated by
reference to Exhibit 10.3 to Pierce Leahy's Registration Statement
on Form S-1, File No. 333-23121)
10(g) 1997 Stock Option Plan of Pierce Leahy (incorporated by reference
to Exhibit 10.2 to Pierce Leahy's Registration Statement on Form
S-1, File No. 333-23121)
10(h)(i) Credit Agreement dated as of August 12, 1997, as amended by
Amendment No. 1, by and among the Issuer, Pierce Leahy, the
several lenders from time to time parties thereto, Canadian
Imperial Bank of Commerce, as Canadian Administrative Agent, and
Canadian Imperial Bank of Commerce, New York Agency, as U.S.
administrative agent, together with certain collateral documents
attached thereto, including the form of US$ Note, the form of
Canadian$ Note, and the form of the U.S. Global Guarantee and
Security Agreement made by Pierce Leahy, certain of its affiliates
and subsidiaries and its shareholders in favor of the U.S.
Administrative Agent (the "Credit Agreement") (incorporated by
reference to Exhibit 10.3 to Pierce Leahy's Annnual Report on Form
10-K for the year ended December 31, 1997)
10(h)(ii) Amendments Nos. 2 and 3 to the Credit Agreement
*10(h)(iii) Amendment No. 4 to the Credit Agreement
10(i) Tax Indemnification Agreement by and among Pierce Leahy and
certain of its shareholders (incorporated by reference to Exhibit
10.8 to Pierce Leahy's Registration Statement on Form S-1, File
No. 333-23121)
10(j) Guarantee of Advanced of the $200,000.00 principal amount of 11
1/8% Senior Subordinated Notes of Pierce Leahy due 2006 ("1996
Notes")
10(k) Guarantee of Advanced of the $120,000.00 principal amount of 9
1/8% of Senior Subordinated Notes of Pierce Leahy due 2007 ("1997
Notes")
10(l) Guarantee of Monarch of the 1996 Notes
10(m) Guarantee of Monarch of the 1997 Notes
12 Statement re: Computation of Ratios
21 Subsidiaries of Pierce Leahy (incorporated by reference to Exhibit
21 to Pierce Leahy's Annnual Report on Form 10-K for the year
ended December 31, 1997)
23(a) Consent of Arthur Andersen LLP
23(b) Consent of Friedman & Friedman, Chartered Accountants
23(c) Consent of James N. Howard and Associates, P.C.
*23(d) Consent of Cozen and O'Connor (included in Exhibit 5)
24 Power of Attorney (included on signature page)
25 Statement of eligibility of Trustee, The Bank of New York, on Form
T-1
*99.1 Form of Letter of Transmittal
*99.2 Form of Notice of Guaranteed Delivery
____________
* To be filed by amendment.
II-3
<PAGE>
(b) FINANCIAL STATEMENT SCHEDULES
Schedule of Valuation and Qualifying Accounts
All other financial statement schedules are omitted because they either are
not applicable or the required information is included in the financial
statements or notes thereto appearing elsewhere in this Registration Statement.
(c) NOT APPLICABLE.
Item 22. Undertakings.
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes to file an application
for the purposes of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
(c) The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(d) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(e) The undersigned Registrant hereby undertakes; (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement; (i) to include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus any
facts or events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which individually or in
the aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of the
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of Prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in the
"calculation of registration fee" table in the effective Registration Statement;
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; (2) that, for
the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a
II-4
<PAGE>
post-effective amendment any of the securities being offered which remain unsold
at the termination of the offering.
(f) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) of 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN KING OF PRUSSIA,
PENNSYLVANIA, ON JULY 6, 1998:
PIERCE LEAHY CORP. ("Pierce Leahy")
BY: /s/J. Peter Pierce
--------------------------------------------
J. Peter Pierce as President of Pierce Leahy
PIERCE LEAHY COMMAND COMPANY ("Command")
ARCHIVEX INC. ("Archivex")
ADVANCED BOX, INC. ("Advanced")
MONARCH BOX, INC. ("Monarch")
BY: /s/Douglas B. Huntley
-----------------------------------------------
Douglas B. Huntley as Treasurer of Command
Vice President of Archivex
Treasurer of Advanced
Treasurer of Monarch
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints J. Peter Pierce and Douglas B. Huntley,
and each of them, his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all thereto, and other documentation in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or their substitute
or substitutes, may lawfully do or cause to be done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- --------------------- ------------------------- ------------
/s/Leo W. Pierce, Sr.
- --------------------- Director of Pierce Leahy July 6, 1998
LEO W. PIERCE, SR.
/s/J. Peter Pierce Director and July 6, 1998
- --------------------- Principal Executive
J. PETER PIERCE Officer of Pierce
Leahy,
Director of Command
and Archivex
<PAGE>
SIGNATURE TITLE DATE
- --------------------- ------------------------- ------------
/s/Douglas B. Huntley
- --------------------- Director and Principal July 6, 1998
DOUGLAS B. HUNTLEY Financial and Accounting
Officer of Pierce Leahy
and Command and
Principal Financial and
Accounting Officer of
Archivex Advanced and
Monarch
/s/Richard S. Ingram
- --------------------- Director and Principal July 6, 1998
RICHARD S. INGRAM Executive Officer of
Archivex and Principal
Executive Officer of
Command
/s/Thomas A. Decker
- --------------------- Director of Pierce Leahy July 6, 1998
THOMAS A. DECKER
/s/Lisa G. Goldschmidt
- ---------------------- Principal Executive July 6, 1998
LISA G. GOLDSCHMIDT Officer of Advanced and
Monarch and Director of
Archivex
/s/J. Anthony Hayden
- --------------------- Director of Pierce Leahy July 6, 1998
J. ANTHONY HAYDEN
/s/Alan B. Campbell
- --------------------- Director of Pierce Leahy July 6, 1998
ALAN B. CAMPBELL
/s/Delbert S. Conner
- --------------------- Director of Pierce Leahy July 6, 1998
DELBERT S. CONNER
/s/Joseph P. Linaugh
- --------------------- Director of Pierce Leahy July 6, 1998
JOSEPH P. LINAUGH Advanced and Monarch
<PAGE>
SIGNATURE TITLE DATE
- --------------------- ------------------------- ------------
/s/Thomas Grogan
- --------------------- Director of Advanced July 6, 1998
THOMAS GROGAN and Monarch
- --------------------- Director of Advanced
VICTORIA GARRETT and Monarch
- --------------------- Director of Archivex
KIMBERLY A. BUNGAY
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<C> <S> <C>
3.1(a) Memorandum of Association of Pierce Leahy Command Company (the
"Issuer")
3.1(b) Certificate of Incorporation of Pierce Leahy (incorporated by
reference to Exhibit 3.1 to Pierce Leahy's Registration Statement on
Form S-1, File No. 333-23121)
3.1(c) Certificate of Incorporation of Monarch Box, Inc. ("Monarch")
3.1(d) Certificate of Incorporation of Advanced Box, Inc. ("Advanced")
3.1(e) Memorandum of Association of Archivex Limited ("Archivex")
3.2(a) Articles of Association of the Issuer
3.2(b) Amended and Restated By-laws of Pierce Leahy (incorporated by
reference to Exhibit 3.2 to Pierce Leahy's Registration Statement on
Form S-1, File No. 333-23121)
3.2(c) By-Laws of Monarch
3.2(d) By-Laws of Advanced
3.2(e) Articles of Association of Archivex
4.1(a) Indenture dated as of July 15, 1996 by and between Pierce Leahy and
The United States Trust Company of New York, as trustee (incorporated by
reference to Exhibit 4.4 to Pierce Leahy's Registration Statement on
Form S-1, File No. 333-23121)
4.1(b) Indenture, dated as of July 7, 1997, by and between Pierce Leahy and
The Bank of New York ("Bank"), as trustee (incorporated by reference to
Exhibit 10.5 to Pierce Leahy's Annual Report on Form 10-K for the year ended
December 31, 1997)
4.1(c) Indenture, dated as of April 7, 1998, by and among the Issuer, Pierce
Leahy and the Bank, as trustee
4.2 Forms of Original Notes for $135,000,000 principal amount of 8 1/8%
Senior Notes of Issuer due 2008 ("1998 Notes")
4.3 Forms of Exchange Notes for the 1998 Notes (included in Exhibit
4.1(c))
4.4 Registration Agreement, dated as of April 7, 1998, by and among the
Issuer, Pierce Leahy, Salomon Brothers Inc, CIBC Oppenheimer Corp. and
PaineWebber Incorporated (the "Initial Purchasers")
*5 Opinion of Cozen and O'Connor
9 Amended and Restated Voting Trust Agreement by and among certain
shareholders of Pierce Leahy (incorporated by reference to Exhibit 9
to Pierce Leahy's Annual Report on Form 10-K for the year ended December
31, 1997)
10(a) Stock Purchase Agreement, dated as of February 27, 1997, between
Pierce Leahy, Records Management Services, Inc. and certain shareholders of
Records Management Services, Inc. (incorporated by reference to Exhibit 10.7
to Pierce Leahy's Annual Report on Form 10-K for the year ended December 31,
1996)
10(b) Purchase Agreement (the "Purchase Agreement"), dated as of April 2,
1998 by and among the Issuer, Pierce Leahy and the Initial Purchasers
10(c) Domestic Guarantee of Monarch
10(d) Domestic Guarantee of Advanced
10(e) Canadian Guarantee of Archivex
10(f) Non-Qualified Stock Option Plan of Pierce Leahy (incorporated by
reference to Exhibit 10.3 to Pierce Leahy's Registration Statement on
Form S-1, File No. 333-23121)
10(g) 1997 Stock Option Plan of Pierce Leahy (incorporated by reference to
Exhibit 10.2 to Pierce Leahy's Registration Statement on Form S-1, File No.
333-23121)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<C> <S> <C>
10(h)(i) Credit Agreement dated as of August 12, 1997, as amended by Amendment
No. 1, by and among the Issuer, Pierce Leahy, the several lenders from time
to time parties thereto, Canadian Imperial Bank of Commerce, as Canadian
Administrative Agent, and Canadian Imperial Bank of Commerce, New York Agency,
as U.S. administrative agent, together with certain collateral documents
attached thereto, including the form of US$ Note, the form of Canadian$ Note,
and the form of the U.S. Global Guarantee and Security Agreement made by
Pierce Leahy, certain of its affiliates and subsidiaries and its shareholders
in favor of the U.S. Administrative Agent (the "Credit Agreement")
(incorporated by reference to Exhibit 10.3 to Pierce Leahy's Annual Report on
Form 10-K for the year ended December 31, 1997)
10(h)(ii) Amendments Nos. 2 and 3 to the Credit Agreement
*10(h)(iii) Amendment No. 4 to the Credit Agreement
10(i) Tax Indemnification Agreement by and among Pierce Leahy and certain of
its shareholders (incorporated by reference to Exhibit 10.8 to Pierce Leahy's
Registration Statement on Form S-1, File No. 333-23121)
10(j) Guarantee of Advanced of the $200,000.00 principal amount of 11 1/8% Senior
Subordinated Notes of Pierce Leahy due 2006 ("1996 Notes")
10(k) Guarantee of Advanced of the $120,000.00 principal amount of 9 1/8% of Senior
Subordinated Notes of Pierce Leahy due 2007 ("1997 Notes")
10(l) Guarantee of Monarch of the 1996 Notes
10(m) Guarantee of Monarch of the 1997 Notes
12 Statement re: Computation of Ratios
21 Subsidiaries of Pierce Leahy (incorporated by reference to Exhibit 21 to
Pierce Leahy's Annual Report on Form 10-K for the year ended December 31,
1997)
23(a) Consent of Arthur Andersen LLP
23(b) Consent of Friedman & Friedman, Chartered Accountants
23(c) Consent of James N. Howard and Associates, P.C.
*23(d) Consent of Cozen and O'Connor (included in Exhibit 5)
24 Power of Attorney (included on signature page)
25 Statement of eligibility of Trustee, The Bank of New York, on Form T-1
*99.1 Form of Letter of Transmittal
*99.2 Form of Notice of Guaranteed Delivery
</TABLE>
__________
* To be filed by amendment.
<PAGE>
EXHIBIT 3.1(a)
MEMORANDUM OF ASSOCIATION
OF
PIERCE LEAHY COMMAND COMPANY
1. The name of the Company is PIERCE LEAHY COMMAND COMPANY.
2. There are no restrictions on the objects and powers of the Company and the
Company shall expressly have the following powers:
(1) to sell or dispose of its undertaking, or a substantial part thereof;
(2) to distribute any of its property in specie among its members; and
(3) to amalgamate with any company or other body of persons.
3. The liability of the members is unlimited.
<PAGE>
EXHIBIT 3.1(c)
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:30 PM 07/08/1997
971226467 - 2770900
CERTIFICATE OF INCORPORATION
OF
Monarch Box, Inc.
*****
1. The name of the corporation is Monarch Box, Inc.
2. The address of its registered office in the State of Delaware is 900
Market Street, Suite 200, Wilmington, New Castle County, Delaware 19801. The
name of its registered agent at such address is Griffin Corporate Services, Inc.
3. The nature of the business or purposes to be conducted or promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware; provided, however, that
the corporation shall engage in no activity other than the maintenance and
management of intangible investments and the collection and distribution of the
income from such intangible investments and from tangible property physically
located outside of the State of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is: 100 shares of Common Stock, par value $.01 per share.
5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Alan Werther, Esq. Cozen and O'Connor, 1900 Market Street,
Philadelphia, Pennsylvania 19103
6. The corporation is to have perpetual existence.
7. Elections of directors need not be by written ballot unless the by-laws
of the corporation shall so provide.
8. Each meeting of the stockholders of the corporation
-1-
<PAGE>
shall be held within the State of Delaware.
9. The books and records of the corporation physically shall be maintained
in the State of Delaware.
10. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
11. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholder, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any
improper personal benefit.
12. Each director, officer, employee and agent of the corporation shall
be indemnified and held harmless by the corporation to the fullest extent
authorized by the General Corporation Law of Delaware, as currently in effect or
as hereafter enacted.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 8th day of July, 1997.
/s/ Alan S. Werther
---------------------
Alan S. Werther
-2-
<PAGE>
EXHIBIT 3.1(d)
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:30 PM 07/08/1997
971226463 - 2770901
CERTIFICATE OF INCORPORATION
OF
Advanced Box, Inc.
*****
1. The name of the corporation is Advanced Box, Inc.
2. The address of its registered office in the State of Delaware is 900
Market Street, Suite 200, Wilmington, New Castle County, Delaware 19801. The
name of its registered agent at such address is Griffin Corporate Services, Inc.
3. The nature of the business or purposes to be conducted or promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware; provided, however, that
the corporation shall engage in no activity other than the maintenance and
management of intangible investments and the collection and distribution of the
income from such intangible investments and from tangible property physically
located outside of the State of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is: 100 shares of Common Stock, par value $.01 per share.
5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Alan Werther, Esq. Cozen and O'Connor, 1900 Market Street, Philadelphia,
Pennsylvania 19103
6. The corporation is to have perpetual existence.
7. Elections of directors need not be by written ballot unless the by-
laws of the corporation shall so provide.
8. Each meeting of the stockholders of the corporation
-1-
<PAGE>
shall be held within the State of Delaware.
9. The books and records of the corporation physically shall be
maintained in the State of Delaware.
10. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
11. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholder, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
12. Each director, officer, employee and agent of the corporation shall be
indemnified and held harmless by the corporation to the fullest extent
authorized by the General Corporation Law of Delaware, as currently in effect or
as hereafter enacted.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 8th day of July, 1997.
(s) Alan S. Werther
-------------------------
Alan S. Werther
-2-
<PAGE>
Exhibit 3.1 (e)
MEMORANDUM OF ASSOCIATION
OF
ARCHIVEX LIMITED
----------------
1. The name of the Company is ARCHIVEX LIMITED.
----------------
2. There are no restrictions on the objects and powers of the Company and the
Company shall expressly have the following powers:
(1) to sell or dispose of its undertaking, or a substantial part thereof;
(2) to distribute any of its property in specie among its members; and
(3) to amalgamate with any company or other body of persons.
3. The liability of the members is limited.
4. The Company proposes to issue 10,000,000 common shares without nominal or par
value with power to divide the shares in the capital for the time being into
classes or series and to attach thereto respectively any preferred, deferred or
qualified rights, privileges or conditions, including restrictions on voting
rights and including redemption, purchase and other acquisition of such shares,
subject, however, to the provisions of the Companies Act (Nova Scotia).
I, the undersigned, whose name, address and occupation are subscribed, am
desirous of being formed into a company in pursuance of this Memorandum of
Association, and I agree to take the number and kind of shares in the capital
stock of the Company written opposite my name.
NAME, ADDRESS & OCCUPATION NO. & KIND OF SHARES TAKEN
OF SUBSCRIBER BY THE SUBSCRIBER
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL SHARES TAKEN: one common share
DATED this 24th day of March, 1998.
Witness to the above signature: Dawn L. Cottreau
-----------------------------
Name of Witness
900-1959 UPPER WATER ST.,
Halifax, Nova Scotia, B3J 2X2
-----------------------------
Address
Corporate Records Assistant
-----------------------------
Occupation
<PAGE>
EXHIBIT 3.2(a)
ARTICLES OF ASSOCIATION
OF
PIERCE LEAHY COMMAND COMPANY
INTERPRETATION
1. In these Articles, unless there be something in the subject or context
inconsistent therewith:
(1) "Act" means the Companies Act (Nova Scotia);
(2) "Articles" means these Articles of Association of the Company and all
amendments hereto;
(3) "Company" means the company named above;
(4) "director" means a director of the Company;
(5) "Memorandum" means the Memorandum of Association of the Company and
all amendments thereto;
(6) "month" means calendar month;
(7) "Office" means the registered office of the Company;
(8) "person" includes a body corporate;
(9) "proxyholder" includes an alternate proxyholder;
(10) "Register" means the register of members kept pursuant to the Act, and
where the context permits includes a branch register of members;
(11) "Registrar" means the Registrar as defined in the Act;
(12) "Secretary" includes any person appointed to perform the duties of the
Secretary temporarily;
(13) "shareholder" means member as that term is used in the Act in
connection with an unlimited company having share capital and as that
term is used in the Memorandum;
(14) "special resolution" has the meaning assigned by the Act;
(15) "in writing" and "written" includes printing, lithography and other
modes of
<PAGE>
-2-
representing or reproducing words in visible form;
(16) words importing number or gender include all numbers and genders
unless the context otherwise requires.
2. The regulations in Table A in the First Schedule to the Act shall not apply
to the Company.
3. The directors may enter into and carry into effect or adopt and carry into
effect any agreement made by the promoters of the Company on behalf of the
Company and may agree to any modification in the terms of any such
agreement, either before or after its execution.
4. The directors may, out of the funds of the Company, pay all expenses
incurred for the incorporation and organization of the Company.
5. The Company may commence business on the day following incorporation or so
soon thereafter as the directors think fit, notwithstanding that part only
of the shares has been allotted.
SHARES
6. The capital of the company shall consist of 10,000 common shares without
nominal or par value, with the power to divide the shares in the capital
for the time being into classes or series and to attach thereto
respectively any preferred, deferred or qualified rights, privileges or
conditions, including restrictions on voting rights and including
redemption, purchase and other acquisition of such shares, subject,
however, to the provisions of the Act.
7. The directors shall control the shares and, subject to the provisions of
these Articles, may allot or otherwise dispose of them to such person at
such times, on such terms and conditions and, if the shares have a par
value, either at a premium or at par, as they think fit.
8. The directors may pay on behalf of the Company a reasonable commission to
any person in consideration of subscribing or agreeing to subscribe
(whether absolutely or conditionally) for any shares in the Company, or
procuring or agreeing to procure subscriptions (whether absolute or
conditional) for any shares in the Company. Subject to the Act, the
commission may be paid or satisfied in shares of the Company.
9. On the issue of shares the Company may arrange among the holders thereof
differences in the calls to be paid and in the times for their payment.
<PAGE>
-3-
10. If the whole or part of the allotment price of any shares is, by the
conditions of their allotment, payable in instalments, every such
instalment shall, when due, be payable to the Company by the person who is
at such time the registered holder of the shares.
11. Shares may be registered in the names of joint holders not exceeding three
in number.
12. Joint holders of a share shall be jointly and severally liable for the
payment of all instalments and calls due in respect of such share. On the
death of one or more joint holders of shares the survivor or survivors of
them shall alone be recognized by the Company as the registered holder or
holders of the shares.
13. Save as herein otherwise provided, the Company may treat the registered
holder of any share as the absolute owner thereof and accordingly shall
not, except as ordered by a court of competent jurisdiction or required by
statute, be bound to recognize any equitable or other claim to or interest
in such share on the part of any other person.
14. The Company is a private company, and:
(1) no transfer of any share or prescribed security of the Company shall
be effective unless or until approved by the directors;
(2) the number of holders of issued and outstanding prescribed securities
or shares of the Company, exclusive of persons who are in the
employment of the Company or in the employment of an affiliate of the
Company and exclusive of persons who, having been formerly in the
employment of the Company or the employment of an affiliate of the
Company, were, while in that employment, and have continued after
termination of that employment, to own at least one prescribed
security or share of the Company, shall not exceed 50 in number, two
or more persons or companies who are the joint registered owners of
one or more prescribed securities or shares being counted as one
holder; and
(3) the Company shall not invite the public to subscribe for any of its
securities.
In this Article, "private company" and "securities" have the meanings
ascribed to those terms in the Securities Act (Nova Scotia), and
"prescribed security" means any of the securities prescribed by the Nova
Scotia Securities Commission from time to time for the purpose of the
definition of "private company" in the Securities Act (Nova Scotia).
CERTIFICATES
15. Certificates of title to shares shall comply with the Act and may otherwise
be in such form as the directors may from time to time determine. Unless
the directors otherwise determine, every certificate of title to shares
shall be signed manually by at least one of
<PAGE>
-4-
the Chairman, President, Secretary, Treasurer, a vice-president, an
assistant secretary, any other officer of the Company or any director of
the Company or by or on behalf of a share registrar transfer agent or
branch transfer agent appointed by the Company or by any other person whom
the directors may designate. When signatures of more than one person appear
on a certificate all but one may be printed or otherwise mechanically
reproduced. All such certificates when signed as provided in this Article
shall be valid and binding upon the Company. If a certificate contains a
printed or mechanically reproduced signature of a person, the Company may
issue the certificate, notwithstanding that the person has ceased to be a
director or an officer of the Company and the certificate is as valid as if
such person were a director or an officer at the date of its issue. Any
certificate representing shares of a class publicly traded on any stock
exchange shall be valid and binding on the Company if it complies with the
rules of such exchange whether or not it otherwise complies with this
Article.
16. Except as the directors may determine, each shareholder's shares may be
evidenced by any number of certificates so long as the aggregate of the
shares stipulated in such certificates equals the aggregate registered in
the name of the shareholder.
17. Where shares are registered in the names of two or more persons, the
Company shall not be bound to issue more than one certificate or set of
certificates, and such certificate or set of certificates shall be
delivered to the person first named on the Register.
18. Any certificate that has become worn, damaged or defaced may, upon its
surrender to the directors, be cancelled and replaced by a new certificate.
Any certificate that has become lost or destroyed may be replaced by a new
certificate upon proof of such loss or destruction to the satisfaction of
the directors and the furnishing to the Company of such undertakings of
indemnity as the directors deem adequate.
19. The sum of one dollar or such other sum as the directors from time to time
determine shall be paid to the Company for every certificate other than the
first certificate issued to any holder in respect of any share or shares.
20. The directors may cause one or more branch Registers of shareholders to be
kept in any place or places, whether inside or outside of Nova Scotia.
CALLS
21. The directors may make such calls upon the shareholders in respect of all
amounts unpaid on the shares held by them respectively and not made payable
at fixed times by the conditions on which such shares were allotted, and
each shareholder shall pay the amount of every call so made to the person
and at the times and places appointed by the directors. A call may be made
payable by instalments.
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22. A call shall be deemed to have been made at the time when the resolution of
the directors authorizing such call was passed.
23. At least 14 days' notice of any call shall be given, and such notice shall
specify the time and place at which and the person to whom such call shall
be paid.
24. If the sum payable in respect of any call or instalment is not paid on or
before the day appointed for the payment thereof, the holder for the time
being of the share in respect of which the call has been made or the
instalment is due shall pay interest on such call or instalment at the rate
of 9% per year or such other rate of interest as the directors may
determine from the day appointed for the payment thereof up to the time of
actual payment.
25. At the trial or hearing of any action for the recovery of any amount due
for any call, it shall be sufficient to prove that the name of the
shareholder sued is entered on the Register as the holder or one of the
holders of the share or shares in respect of which such debt accrued, that
the resolution making the call is duly recorded in the minute book and that
such notice of such call was duly given to the shareholder sued in
pursuance of these Articles. It shall not be necessary to prove the
appointment of the directors who made such call or any other matters
whatsoever and the proof of the matters stipulated shall be conclusive
evidence of the debt.
FORFEITURE OF SHARES
26. If any shareholder fails to pay any call or instalment on or before the day
appointed for payment, the directors may at any time thereafter while the
call or instalment remains unpaid serve a notice on such shareholder
requiring payment thereof together with any interest that may have accrued
and all expenses that may have been incurred by the Company by reason of
such non-payment.
27. The notice shall name a day (not being less than 14 days after the date of
the notice) and a place or places on and at which such call or instalment
and such interest and expenses are to be paid. The notice shall also state
that, in the event of non-payment on or before the day and at the place or
one of the places so named, the shares in respect of which the call was
made or instalment is payable will be liable to be forfeited.
28. If the requirements of any such notice are not complied with, any shares in
respect of which such notice has been given may at any time thereafter,
before payment of all calls or instalments, interest and expenses due in
respect thereof, be forfeited by a resolution of the directors to that
effect. Such forfeiture shall include all dividends declared in respect of
the forfeited shares and not actually paid before the forfeiture.
29. When any share has been so forfeited, notice of the resolution shall be
given to the
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shareholder in whose name it stood immediately prior to the forfeiture and
an entry of the forfeiture shall be made in the Register.
30. Any share so forfeited shall be deemed the property of the Company and the
directors may sell, re-allot or otherwise dispose of it in such manner as
they think fit.
31. The directors may at any time before any share so forfeited has been sold,
re-allotted or otherwise disposed of, annul the forfeiture thereof upon
such conditions as they think fit.
32. Any shareholder whose shares have been forfeited shall nevertheless be
liable to pay and shall forthwith pay to the Company all calls,
instalments, interest and expenses owing upon or in respect of such shares
at the time of the forfeiture together with interest thereon at the rate of
9% per year or such other rate of interest as the directors may determine
from the time of forfeiture until payment. The directors may enforce such
payment if they think fit, but are under no obligation to do so.
33. A certificate signed by the Secretary stating that a share has been duly
forfeited on a specified date in pursuance of these Articles and the time
when it was forfeited shall be conclusive evidence of the facts therein
stated as against any person who would have been entitled to the share but
for such forfeiture.
LIEN ON SHARES
34. The Company shall have a first and paramount lien upon all shares (other
than fully paid-up shares) registered in the name of a shareholder (whether
solely or jointly with others) and upon the proceeds from the sale thereof
for debts, liabilities and other engagements of the shareholder, solely or
jointly with any other person, to or with the Company, whether or not the
period for the payment, fulfilment or discharge thereof has actually
arrived, and such lien shall extend to all dividends declared in respect of
such shares. Unless otherwise agreed, the registration of a transfer of
shares shall operate as a waiver of any lien of the Company on such shares.
35. For the purpose of enforcing such lien the directors may sell the shares
subject to it in such manner as they think fit, but no sale shall be made
until the period for the payment, fulfilment or discharge of such debts,
liabilities or other engagements has arrived, and until notice in writing
of the intention to sell has been given to such shareholder or the
shareholder's executors or administrators and default has been made by them
in such payment, fulfilment or discharge for seven days after such notice.
36. The net proceeds of any such sale after the payment of all costs shall be
applied in or towards the satisfaction of such debts, liabilities or
engagements and the residue, if any, paid to such shareholder.
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VALIDITY OF SALES
37. Upon any sale after forfeiture or to enforce a lien in purported exercise
of the powers given by these Articles the directors may cause the
purchaser's name to be entered in the Register in respect of the shares
sold, and the purchaser shall not be bound to see to the regularity of the
proceedings or to the application of the purchase money, and after the
purchaser's name has been entered in the Register in respect of such shares
the validity of the sale shall not be impeached by any person and the
remedy of any person aggrieved by the sale shall be in damages only and
against the Company exclusively.
TRANSFER OF SHARES
38. The instrument of transfer of any share in the Company shall be signed by
the transferor. The transferor shall be deemed to remain the holder of such
share until the name of the transferee is entered in the Register in
respect thereof and shall be entitled to receive any dividend declared
thereon before the registration of the transfer.
39. The instrument of transfer of any share shall be in writing in the
following form or to the following effect:
For value received, _________ hereby sell, assign, and transfer unto
__________________, ___________ shares in the capital of the Company
represented by the within certificate, and do hereby irrevocably
constitute and appoint __________________ attorney to transfer such
shares on the books of the Company with full power of substitution in
the premises.
Dated the ____ day of _______________ 19__
Witness:
40. The directors may, without assigning any reason therefor, decline to
register any transfer of shares
(1) not fully paid-up or upon which the Company has a lien, or
(2) the transfer of which is restricted by any agreement to which the
Company is a party.
41. Every instrument of transfer shall be left for registration at the Office
of the Company, or at any office of its transfer agent where a Register is
maintained, together with the certificate of the shares to be transferred
and such other evidence as the Company may require to prove title to or the
right to transfer the shares.
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42. The directors may require that a fee determined by them be paid before or
after registration of any transfer.
43. Every instrument of transfer shall, after its registration, remain in the
custody of the Company. Any instrument of transfer that the directors
decline to register shall, except in case of fraud, be returned to the
person who deposited it.
TRANSMISSION OF SHARES
44. The executors or administrators of a deceased shareholder (not being one of
several joint holders) shall be the only persons recognized by the Company
as having any title to the shares registered in the name of such
shareholder. When a share is registered in the names of two or more joint
holders, the survivor or survivors or the executors or administrators of
the deceased survivor, shall be the only persons recognized by the Company
as having any title to, or interest in, such share.
45. Notwithstanding anything in these Articles, if the Company has only one
shareholder (not being one of several joint holders) and that shareholder
dies, the executors or administrators of the deceased shareholder shall be
entitled to register themselves in the Register as the holders of the
shares registered in the name of the deceased shareholder whereupon they
shall have all the rights given by these Articles and by law to
shareholders.
46. Any person entitled to shares upon the death or bankruptcy of any
shareholder or in any way other than by allotment or transfer, upon
producing such evidence of entitlement as the directors require, may be
registered as a shareholder in respect of such shares, or may, without
being registered, transfer such shares subject to the provisions of these
Articles respecting the transfer of shares. The directors shall have the
same right to refuse registration as if the transferee were named in an
ordinary transfer presented for registration.
SURRENDER OF SHARES
47. The directors may accept the surrender of any share by way of compromise of
any question as to the holder being properly registered in respect thereof.
Any share so surrendered may be disposed of in the same manner as a
forfeited share.
INCREASE AND REDUCTION OF CAPITAL
48. Subject to the Act, the shareholders may by special resolution amend these
Articles to increase or alter the share capital of the Company as they
think expedient. Without prejudice to any special rights previously
conferred on the holders of existing shares, any share may be issued with
such preferred, deferred or other special rights, or with such
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restrictions, whether in regard to dividends, voting, return of share
capital or otherwise, as the shareholders may from time to time determine
by special resolution. Except as otherwise provided by the conditions of
issue, or by these Articles, any capital raised by the creation of new
shares shall be considered part of the original capital and shall be
subject to the provisions herein contained with reference to payment of
calls and instalments, transfer and transmission, forfeiture, lien and
otherwise.
49. The Company may, by special resolution where required, reduce its share
capital in any way and with and subject to any incident authorized and
consent required by law. Subject to the Act and any provisions attached to
such shares, the Company may redeem, purchase or acquire any of its shares
and the directors may determine the manner and the terms for redeeming,
purchasing or acquiring such shares and may provide a sinking fund on such
terms as they think fit for the redemption, purchase or acquisition of
shares of any class or series.
MEETINGS AND VOTING BY CLASS OR SERIES
50. Where the holders of shares of a class or series have, under the Act, the
terms or conditions attaching to such shares or otherwise, the right to
vote separately as a class in respect of any matter then, except as
provided in the Act, these Articles or such terms or conditions, all the
provisions in these Articles concerning general meetings (including,
without limitation, provisions respecting notice, quorum and procedure)
shall, mutatis mutandis, apply to every meeting of holders of such class or
series of shares convened for the purpose of such vote.
51. Unless the rights, privileges, terms or conditions attached to a class or
series of shares provide otherwise, such class or series of shares shall
not have the right to vote separately as a class or series upon an
amendment to the Memorandum or Articles to:
(1) increase or decrease any maximum number of authorized shares of such
class or series, or increase any maximum number of authorized shares
of a class or series having rights or privileges equal or superior to
the shares of such class or series;
(2) effect an exchange, reclassification or cancellation of all or part of
the shares of such class or series; or
(3) create a new class or series of shares equal or superior to the shares
of such class or series.
BORROWING POWERS
52. The directors on behalf of the Company may:
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(1) raise or borrow money for the purposes of the Company or any of them;
(2) secure, subject to the sanction of a special resolution where required
by the Act, the repayment of funds so raised or borrowed in such
manner and upon such terms and conditions in all respects as they
think fit, and in particular by the execution and delivery of
mortgages of the Company's real or personal property, or by the issue
of bonds, debentures or other securities of the Company secured by
mortgage or other charge upon all or any part of the property of the
Company, both present and future including its uncalled capital for
the time being;
(3) sign or endorse bills, notes, acceptances, cheques, contracts, and
other evidence of or securities for funds borrowed or to be borrowed
for the purposes aforesaid;
(4) pledge debentures as security for loans;
(5) guarantee obligations of any person.
53. Bonds, debentures and other securities may be made assignable, free from
any equities between the Company and the person to whom such securities
were issued.
54. Any bonds, debentures and other securities may be issued at a discount,
premium or otherwise and with special privileges as to redemption,
surrender, drawings, allotment of shares, attending and voting at general
meetings of the Company, appointment of directors and other matters.
GENERAL MEETINGS
55. Ordinary general meetings of the Company shall be held at least once in
every calendar year at such time and place as may be determined by the
directors and not later than 15 months after the preceding ordinary general
meeting. All other meetings of the Company shall be called special general
meetings. Ordinary or special general meetings may be held either within
or without the Province of Nova Scotia.
56. The President, a vice-president or the directors may at any time convene a
special general meeting, and the directors, upon the requisition of
shareholders in accordance with the Act shall forthwith proceed to convene
such meeting or meetings to be held at such time and place or times and
places as the directors determine.
57. The requisition shall state the objects of the meeting requested, be signed
by the requisitionists and deposited at the Office of the Company. It may
consist of several documents in like form each signed by one or more of
the requisitionists.
58. At least seven clear days' notice, or such longer period of notice as may
be required by the
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Act, of every general meeting, specifying the place, day and hour of the
meeting and, when special business is to be considered, the general nature
of such business, shall be given to the shareholders entitled to be present
at such meeting by notice given as permitted by these Articles. With the
consent in writing of all the shareholders entitled to vote at such
meeting, a meeting may be convened by a shorter notice and in any manner
they think fit, or notice of the time, place and purpose of the meeting may
be waived by all of the shareholders.
59. When it is proposed to pass a special resolution, the two meetings may be
convened by the same notice, and it shall be no objection to such notice
that it only convenes the second meeting contingently upon the resolution
being passed by the requisite majority at the first meeting.
60. The accidental omission to give notice to a shareholder, or non-receipt of
notice by a shareholder, shall not invalidate any resolution passed at any
general meeting.
RECORD DATES
61. (1) The directors may fix in advance a date as the record date for the
determination of shareholders
(a) entitled to receive payment of a dividend or entitled to receive
any distribution;
(b) entitled to receive notice of a meeting; or
(c) for any other purpose.
(2) If no record date is fixed, the record date for the determination of
shareholders
(a) entitled to receive notice of a meeting shall be the day
immediately preceding the day on which the notice is given, or,
if no notice is given, the day on which the meeting is held; and
(b) for any other purpose shall be the day on which the directors
pass the resolution relating to the particular purpose.
PROCEEDINGS AT GENERAL MEETINGS
62. The business of an ordinary general meeting shall be to receive and
consider the financial statements of the Company and the report of the
directors and the report, if any, of the auditors, to elect directors in
the place of those retiring and to transact any other business which under
these Articles ought to be transacted at an ordinary general meeting.
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63. No business shall be transacted at any general meeting unless the requisite
quorum is present at the commencement of the business. A corporate
shareholder of the Company that has a duly authorized agent or
representative present at any such meeting shall for the purpose of this
Article be deemed to be personally present at such meeting.
64. One person, being a shareholder, proxyholder or representative of a
corporate shareholder, present and entitled to vote shall constitute a
quorum for a general meeting, and may hold a meeting.
65. The Chairman shall be entitled to take the chair at every general meeting
or, if there be no Chairman, or if the Chairman is not present within
fifteen minutes after the time appointed for holding the meeting, the
President or, failing the President, a vice-president shall be entitled to
take the chair. If the Chairman, the President or a vice-president is not
present within 15 minutes after the time appointed for holding the meeting
or if all such persons present decline to take the chair, the shareholders
present entitled to vote at the meeting shall choose another director as
chairman and if no director is present or if all the directors present
decline to take the chair, then such shareholders shall choose one of their
number to be chairman.
66. If within half an hour from the time appointed for a general meeting a
quorum is not present, the meeting, if it was convened pursuant to a
requisition of shareholders, shall be dissolved; if it was convened in any
other way, it shall stand adjourned to the same day, in the next week, at
the same time and place. If at the adjourned meeting a quorum is not
present within half an hour from the time appointed for the meeting, the
shareholders present shall be a quorum and may hold the meeting.
67. Subject to the Act, at any general meeting a resolution put to the meeting
shall be decided by a show of hands unless, either before or on the
declaration of the result of the show of hands, a poll is demanded by the
chairman, a shareholder or a proxyholder; and unless a poll is so demanded,
a declaration by the chairman that the resolution has been carried, carried
by a particular majority, lost or not carried by a particular majority and
an entry to that effect in the Company's book of proceedings shall be
conclusive evidence of the fact without proof of the number or proportion
of the votes recorded in favour or against such resolution.
68. When a poll is demanded, it shall be taken in such manner and at such time
and place as the chairman directs, and either at once or after an interval
or adjournment or otherwise. The result of the poll shall be the resolution
of the meeting at which the poll was demanded. The demand of a poll may be
withdrawn. When any dispute occurs over the admission or rejection of a
vote, it shall be resolved by the chairman and such determination made in
good faith shall be final and conclusive.
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69. The chairman shall not have a casting vote in addition to any vote or votes
that the Chairman has as a shareholder.
70. The chairman of a general meeting may with the consent of the meeting
adjourn the meeting from time to time and from place to place, but no
business shall be transacted at any adjourned meeting other than the
business left unfinished at the meeting that was adjourned.
71. Any poll demanded on the election of a chairman or on a question of
adjournment shall be taken forthwith without adjournment.
72. The demand of a poll shall not prevent the continuance of a meeting for the
transaction of any business other than the question on which a poll has
been demanded.
VOTES OF SHAREHOLDERS
73. Subject to the Act and to any provisions attached to any class or series of
shares concerning or restricting voting rights:
(1) on a show of hands every shareholder to vote present in person, every
duly authorized representative of a corporate shareholder, and, if not
prevented from voting by the Act, every proxyholder, shall have one
vote; and
(2) on a poll every shareholder present in person, every duly authorized
representative of a corporate shareholder, and every proxyholder,
shall have one vote for every share held;
whether or not such representative or proxyholder is a shareholder.
74. Any person entitled to transfer shares upon the death or bankruptcy of any
shareholder or in any way other than by allotment or transfer may vote at
any general meeting in respect thereof in the same manner as if such person
were the registered holder of such shares so long as the directors are
satisfied at least 48 hours before the time of holding the meeting of such
person's right to transfer such shares.
75. Where there are joint registered holders of any share, any of such holders
may vote such share at any meeting, either personally or by proxy, as if
solely entitled to it. If more than one joint holder is present at any
meeting, personally or by proxy, the one whose name stands first on the
Register in respect of such share shall alone be entitled to vote it.
Several executors or administrators of a deceased shareholder in whose name
any share stands shall for the purpose of this Article be deemed joint
holders thereof.
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76. Votes may be cast either personally or by proxy or, in the case of a
corporate shareholder by a representative duly authorized under the Act.
77. A proxy shall be in writing and executed in the manner provided in the Act.
A proxy or other authority of a corporate shareholder does not require its
seal.
78. A shareholder of unsound mind in respect of whom an order has been made by
any court of competent jurisdiction may vote by guardian or other person in
the nature of a guardian appointed by that court, and any such guardian or
other person may vote by proxy.
79. A proxy and the power of attorney or other authority, if any, under which
it is signed or a notarially certified copy of that power or authority
shall be deposited at the Office of the Company or at such other place as
the directors may direct. The directors may, by resolution, fix a time not
exceeding 48 hours excluding Saturdays and holidays preceding any meeting
or adjourned meeting before which time proxies to be used at that meeting
must be deposited with the Company at its Office or with an agent of the
Company. Notice of the requirement for depositing proxies shall be given in
the notice calling the meeting. The chairman of the meeting shall
determine all questions as to validity of proxies and other instruments of
authority.
80. A vote given in accordance with the terms of a proxy shall be valid
notwithstanding the previous death of the principal, the revocation of the
proxy, or the transfer of the share in respect of which the vote is given,
provided no intimation in writing of the death, revocation or transfer is
received at the Office of the Company before the meeting or by the chairman
of the meeting before the vote is given.
81. Every form of proxy shall comply with the Act and its regulations and
subject thereto may be in the following form:
I, _________________________ of _______________ being a shareholder of
_________________________hereby appoint
__________________________________of _________________________(or
failing him/her ________________________ of ____________________) as
my proxyholder to attend and to vote for me and on my behalf at the
ordinary/special general meeting of the Company, to be held on the
day of and at any adjournment thereof, or at any meeting
of the Company which may be held prior to [insert specified date or
event].
[If the proxy is solicited by or behalf of the management of the
Company, insert a statement to that effect.]
Dated this _____ day of ____________ _____.
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Shareholder
82. Subject to the Act, no shareholder shall be entitled to be present or to
vote on any question, either personally or by proxy, at any general meeting
or be reckoned in a quorum while any call is due and payable to the Company
in respect of any of the shares of such shareholder.
83. Any resolution passed by the directors, notice of which has been given to
the shareholders in the manner in which notices are hereinafter directed to
be given and which is, within one month after it has been passed, ratified
and confirmed in writing by shareholders entitled on a poll to three-fifths
of the votes, shall be as valid and effectual as a resolution of a general
meeting. This Article shall not apply to a resolution for winding up the
Company or to a resolution dealing with any matter that by statute or these
Articles ought to be dealt with by a special resolution or other method
prescribed by statute.
84. A resolution, including a special resolution, in writing and signed by
every shareholder who would be entitled to vote on the resolution at a
meeting is as valid as if it were passed by such shareholders at a meeting
and satisfies all of the requirements of the Act respecting meetings of
shareholders.
DIRECTORS
85. Unless otherwise determined by resolution of shareholders, the number of
directors shall not be less than one or more than ten.
86. The directors may be paid out of the funds of the Company as remuneration
for their service such sums, if any, as the Company may by resolution of
its shareholders determine, and such remuneration shall be divided among
them in such proportions and manner as the directors determine. The
directors may also be paid their reasonable travelling, hotel and other
expenses incurred in attending meetings of directors and otherwise in the
execution of their duties as directors.
87. The continuing directors may act notwithstanding any vacancy in their body,
but if their number falls below the minimum permitted, the directors shall
not, except in emergencies or for the purpose of filling vacancies, act so
long as their number is below the minimum.
88. A director may, in conjunction with the office of director, and on such
terms as to remuneration and otherwise as the directors arrange or
determine, hold any other office or place of profit under the Company or
under any company in which the Company is a shareholder or is otherwise
interested.
89. The office of a director shall ipso facto be vacated, if the director:
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(1) becomes bankrupt or makes an assignment for the benefit of creditors;
(2) is, or is found by a court of competent jurisdiction to be, of unsound
mind;
(3) by notice in writing to the Company, resigns the office of director;
or
(4) is removed in the manner provided by these Articles.
90. No director shall be disqualified by holding the office of director from
contracting with the Company, either as vendor, purchaser, or otherwise,
nor shall any such contract, or any contract or arrangement entered into or
proposed to be entered into by or on behalf of the Company in which any
director is in any way interested, either directly or indirectly, be
avoided, nor shall any director so contracting or being so interested be
liable to account to the Company for any profit realized by any such
contract or arrangement by reason only of such director holding that office
or of the fiduciary relations thereby established, provided the director
makes a declaration or gives a general notice in accordance with the Act.
No director shall, as a director, vote in respect of any contract or
arrangement in which the director is so interested, and if the director
does so vote, such vote shall not be counted. This prohibition may at any
time or times be suspended or relaxed to any extent by a resolution of the
shareholders and shall not apply to any contract by or on behalf of the
Company to give to the directors or any of them any security for advances
or by way of indemnity.
ELECTION OF DIRECTORS
91. At the dissolution of every ordinary general meeting at which their
successors are elected, all the directors shall retire from office and be
succeeded by the directors elected at such meeting. Retiring directors
shall be eligible for re-election.
92. If at any ordinary general meeting at which an election of directors ought
to take place no such election takes place, or if no ordinary general
meeting is held in any year or period of years, the retiring directors
shall continue in office until their successors are elected.
93. The Company may by resolution of its shareholders elect any number of
directors permitted by these Articles and may determine or alter their
qualification.
94. The Company may, by special resolution or in any other manner permitted by
statute, remove any director before the expiration of such director's
period of office and may, if desired, appoint a replacement to hold office
during such time only as the director so removed would have held office.
95. The directors may appoint any other person as a director so long as the
total number of directors does not at any time exceed the maximum number
permitted. No such
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appointment, except to fill a casual vacancy, shall be effective unless
two-thirds of the directors concur in it. Any casual vacancy occurring
among the directors may be filled by the directors, but any person so
chosen shall retain office only so long as the vacating director would have
retained it if the vacating director had continued as director.
MANAGING DIRECTOR
96. The directors may appoint one or more of their body to be managing
directors of the Company, either for a fixed term or otherwise, and may
remove or dismiss them from office and appoint replacements.
97. Subject to the provisions of any contract between a managing director and
the Company, a managing director shall be subject to the same provisions as
to resignation and removal as the other directors of the Company. A
managing director who for any reason ceases to hold the office of director
shall ipso facto immediately cease to be a managing director.
98. The remuneration of a managing director shall from time to time be fixed by
the directors and may be by way of any or all of salary, commission and
participation in profits.
99. The directors may from time to time entrust to and confer upon a managing
director such of the powers exercisable under these Articles by the
directors as they think fit, and may confer such powers for such time, and
to be exercised for such objects and purposes and upon such terms and
conditions, and with such restrictions as they think expedient; and they
may confer such powers either collaterally with, or to the exclusion of,
and in substitution for, all or any of the powers of the directors in that
behalf; and may from time to time revoke, withdraw, alter or vary all or
any of such powers.
CHAIRMAN OF THE BOARD
100. The directors may elect one of their number to be Chairman and may
determine the period during which the Chairman is to hold office. The
Chairman shall perform such duties and receive such special remuneration as
the directors may provide.
PRESIDENT AND VICE-PRESIDENTS
101. The directors shall elect the President of the Company, who need not be a
director, and may determine the period for which the President is to hold
office. The President shall have general supervision of the business of the
Company and shall perform such duties as may be assigned from time to time
by the directors.
102. The directors may also elect vice-presidents, who need not be directors,
and may determine the periods for which they are to hold office. A vice-
president shall, at the request of the President or the directors and
subject to the directions of the directors,
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perform the duties of the President during the absence, illness or
incapacity of the President, and shall also perform such duties as may be
assigned by the President or the directors.
SECRETARY AND TREASURER
103. The directors shall appoint a Secretary of the Company to keep minutes of
shareholders' and directors' meetings and perform such other duties as may
be assigned by the directors. The directors may also appoint a temporary
substitute for the Secretary who shall, for the purposes of these Articles,
be deemed to be the Secretary.
104. The directors may appoint a treasurer of the Company to carry out such
duties as the directors may assign.
OFFICERS
105. The directors may elect or appoint such other officers of the Company,
having such powers and duties, as they think fit.
106. If the directors so decide the same person may hold more than one of the
offices provided for in these Articles.
PROCEEDINGS OF DIRECTORS
107. The directors may meet together for the dispatch of business, adjourn and
otherwise regulate their meetings and proceedings, as they think fit, and
may determine the quorum necessary for the transaction of business. Until
otherwise determined, one director shall constitute a quorum and may hold a
meeting.
108. If all directors of the Company entitled to attend a meeting either
generally or specifically consent, a director may participate in a meeting
of directors or of a committee of directors by means of such telephone or
other communications facilities as permit all persons participating in the
meeting to hear each other, and a director participating in such a meeting
by such means is deemed to be present at that meeting for purposes of these
Articles.
109. Meetings of directors may be held either within or without the Province of
Nova Scotia and the directors may from time to time make arrangements
relating to the time and place of holding directors' meetings, the notices
to be given for such meetings and what meetings may be held without notice.
Unless otherwise provided by such arrangements:
(1) A meeting of directors may be held at the close of every ordinary
general meeting of the Company without notice.
<PAGE>
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(2) Notice of every other directors' meeting may be given as permitted by
these Articles to each director at least 48 hours before the time
fixed for the meeting.
(3) A meeting of directors may be held without formal notice if all the
directors are present or if those absent have signified their assent
to such meeting or their consent to the business transacted at such
meeting.
110. The President or any director may at any time, and the Secretary, upon the
request of the President or any director, shall summon a meeting of the
directors to be held at the Office of the Company. The President, the
Chairman or a majority of the directors may at any time, and the Secretary,
upon the request of the President, the Chairman or a majority of the
directors, shall summon a meeting to be held elsewhere.
111. (1) Questions arising at any meeting of directors shall be decided by a
majority of votes. The chairman of the meeting may vote as a director
but shall not have a second or casting vote.
(2) At any meeting of directors the chairman shall receive and count the
vote of any director not present in person at such meeting on any
question or matter arising at such meeting whenever such absent
director has indicated by telegram, letter or other writing lodged
with the chairman of such meeting the manner in which the absent
director desires to vote on such question or matter and such question
or matter has been specifically mentioned in the notice calling the
meeting as a question or matter to be discussed or decided thereat. In
respect of any such question or matter so mentioned in such notice any
director may give to any other director a proxy authorizing such other
director to vote for such first named director at such meeting, and
the chairman of such meeting, after such proxy has been so lodged,
shall receive and count any vote given in pursuance thereof
notwithstanding the absence of the director giving such proxy.
112. If no Chairman is elected, or if at any meeting of directors the Chairman
is not present within five minutes after the time appointed for holding the
meeting, or declines to take the chair, the President, if a director, shall
preside. If the President is not a director, is not present at such time or
declines to take the chair, a vice-president who is also a director shall
preside. If no person described above is present at such time and willing
to take the chair, the directors present shall choose some one of their
number to be chairman of the meeting.
113. A meeting of the directors at which a quorum is present shall be competent
to exercise all or any of the authorities, powers and discretions for the
time being vested in or exercisable by the directors generally.
114. The directors may delegate any of their powers to committees consisting of
such number
<PAGE>
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of directors as they think fit. Any committee so formed shall in the
exercise of the powers so delegated conform to any regulations that may be
imposed on them by the directors.
115. The meetings and proceedings of any committee of directors shall be
governed by the provisions contained in these Articles for regulating the
meetings and proceedings of the directors insofar as they are applicable
and are not superseded by any regulations made by the directors.
116. All acts done at any meeting of the directors or of a committee of
directors or by any person acting as a director shall, notwithstanding that
it is afterwards discovered that there was some defect in the appointment
of the director or person so acting, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed
and was qualified to be a director.
117. A resolution in writing and signed by every director who would be entitled
to vote on the resolution at a meeting is as valid as if it were passed by
such directors at a meeting.
118. If any one or more of the directors is called upon to perform extra
services or to make any special exertions in going or residing abroad or
otherwise for any of the purposes of the Company or the business thereof,
the Company may remunerate the director or directors so doing, either by a
fixed sum or by a percentage of profits or otherwise. Such remuneration
shall be determined by the directors and may be either in addition to or in
substitution for remuneration otherwise authorized by these Articles.
REGISTERS
119. The directors shall cause to be kept at the Company's Office in accordance
with the provisions of the Act a Register of the shareholders of the
Company, a register of the holders of bonds, debentures and other
securities of the Company and a register of its directors. Branch registers
of the shareholders and of the holders of bonds, debentures and other
securities may be kept elsewhere, either within or without the Province of
Nova Scotia, in accordance with the Act.
MINUTES
120. The directors shall cause minutes to be entered in books designated for the
purpose:
(1) of all appointments of officers;
(2) of the names of directors present at each meeting of directors and of
any committees of directors;
<PAGE>
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(3) of all orders made by the directors and committees of directors; and
(4) of all resolutions and proceedings of meetings of shareholders and of
directors.
Any such minutes of any meeting of directors or of any committee of
directors or of shareholders, if purporting to be signed by the chairman of
such meeting or by the chair man of the next succeeding meeting, shall be
receivable as prima facie evidence of the matters stated in such minutes.
POWERS OF DIRECTORS
121. The management of the business of the Company is vested in the directors
who, in addition to the powers and authorities by these Articles or
otherwise expressly conferred upon them, may exercise all such powers and
do all such acts and things as may be exercised or done by the Company and
are not hereby or by statute expressly directed or required to be exercised
or done by the shareholders, but subject nevertheless to the provisions of
any statute, the Memorandum or these Articles. No modification of the
Memorandum or these Articles shall invalidate any prior act of the
directors that would have been valid if such modification had not been
made.
122. Without restricting the generality of the terms of any of these Articles
and without prejudice to the powers conferred thereby, the directors may:
(1) take such steps as they think fit to carry out any agreement or
contract made by or on behalf of the Company;
(2) pay costs, charges and expenses preliminary and incidental to the
promotion, formation, establishment, and registration of the Company;
(3) purchase or otherwise acquire for the Company any property, rights or
privileges that the Company is authorized to acquire, at such price
and generally on such terms and conditions as they think fit;
(4) pay for any property, rights or privileges acquired by, or services
rendered to the Company either wholly or partially in cash or in
shares (fully paid-up or otherwise), bonds, debentures or other
securities of the Company;
(5) subject to the Act, secure the fulfilment of any contracts or
engagements entered into by the Company by mortgaging or charging all
or any of the property of the Company and its unpaid capital for the
time being, or in such other manner as they think fit;
<PAGE>
-22-
(6) appoint, remove or suspend at their discretion such experts, managers,
secretaries, treasurers, officers, clerks, agents and servants for
permanent, temporary or special services, as they from time to time
think fit, and determine their powers and duties and fix their
salaries or emoluments and require security in such instances and to
such amounts as they think fit;
(7) accept a surrender of shares from any shareholder insofar as the law
permits and on such terms and conditions as may be agreed;
(8) appoint any person or persons to accept and hold in trust for the
Company any property belonging to the Company, or in which it is
interested, execute and do all such deeds and things as may be
required in relation to such trust, and provide for the remuneration
of such trustee or trustees;
(9) institute, conduct, defend, compound or abandon any legal proceedings
by and against the Company, its directors or its officers or otherwise
concerning the affairs of the Company, and also compound and allow
time for payment or satisfaction of any debts due and of any claims or
demands by or against the Company;
(10) refer any claims or demands by or against the Company to arbitration
and observe and perform the awards;
(11) make and give receipts, releases and other discharges for amounts
payable to the Company and for claims and demands of the Company;
(12) determine who may exercise the borrowing powers of the Company and
sign on the Company's behalf bonds, debentures or other securities,
bills, notes, receipts, acceptances, assignments, transfers,
hypothecations, pledges, endorsements, cheques, drafts, releases,
contracts, agreements and all other instruments and documents;
(13) provide for the management of the affairs of the Company abroad in
such manner as they think fit, and in particular appoint any person to
be the attorney or agent of the Company with such powers (including
power to sub-delegate) and upon such terms as may be thought fit;
(14) invest and deal with any funds of the Company in such securities and
in such manner as they think fit; and vary or realize such
investments;
(15) subject to the Act, execute in the name and on behalf of the Company
in favour of any director or other person who may incur or be about to
incur any personal liability for the benefit of the Company such
mortgages of the Company's
<PAGE>
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property, present and future, as they think fit;
(16) give any officer or employee of the Company a commission on the
profits of any particular business or transaction or a share in the
general profits of the Company;
(17) set aside out of the profits of the Company before declaring any
dividend such amounts as they think proper as a reserve fund to meet
contingencies or provide for dividends, depreciation, repairing,
improving and maintaining any of the property of the Company and such
other purposes as the directors may in their absolute discretion think
in the interests of the Company; and invest such amounts in such
investments as they think fit, and deal with and vary such
investments, and dispose of all or any part of them for the benefit of
the Company, and divide the reserve fund into such special funds as
they think fit, with full power to employ the assets constituting the
reserve fund in the business of the Company without being bound to
keep them separate from the other assets;
(18) make, vary and repeal rules respecting the business of the Company,
its officers and employees, the shareholders of the Company or any
section or class of them;
(19) enter into all such negotiations and contracts, rescind and vary all
such contracts, and execute and do all such acts, deeds and things in
the name and on behalf of the Company as they consider expedient for
or in relation to any of the matters aforesaid or otherwise for the
purposes of the Company;
(20) provide for the management of the affairs of the Company in such
manner as they think fit.
SOLICITORS
123. The Company may employ or retain solicitors any of whom may, at the request
or on the instruction of the directors, the Chairman, the President or a
managing director, attend meetings of the directors or shareholders,
whether or not the solicitor is a shareholder or a director of the Company.
A solicitor who is also a director may nevertheless charge for services
rendered to the Company as a solicitor.
THE SEAL
124. The directors shall arrange for the safe custody of the common seal of the
Company (the "Seal"). The Seal may be affixed to any instrument in the
presence of and contemporaneously with the attesting signature of (i) any
director or officer acting within such person's authority or (ii) any
person under the authority of a resolution of the directors or a committee
thereof. For the purpose of certifying documents or proceedings the Seal
may be affixed by any director or the President, a vice-president, the
Secretary,
<PAGE>
-24-
an assistant secretary or any other officer of the Company without the
authorization of a resolution of the directors.
125. The Company may have facsimiles of the Seal which may be used
interchangeably with the Seal.
126. The Company may have for use at any place outside the Province of Nova
Scotia, as to all matters to which the corporate existence and capacity of
the Company extends, an official seal that is a facsimile of the Seal of
the Company with the addition on its face of the name of the place where it
is to be used; and the Company may by writing under its Seal authorize any
person to affix such official seal at such place to any document to which
the Company is a party.
DIVIDENDS
127. The directors may from time to time declare such dividend as they deem
proper upon shares of the Company according to the rights and restrictions
attached to any class or series of shares, and may determine the date upon
which such dividend will be payable and that it will be payable to the
persons registered as the holders of the shares on which it is declared at
the close of business upon a record date. No transfer of such shares
registered after the record date shall pass any right to the dividend so
declared.
128. Dividends may be paid as permitted by law and, without limitation, may be
paid out of the profits, retained earnings or contributed surplus of the
Company. No interest shall be payable on any dividend except insofar as the
rights attached to any class or series of shares provide otherwise.
129. The declaration of the directors as to the amount of the profits, retained
earnings or contributed surplus of the Company shall be conclusive.
130. The directors may from time to time pay to the shareholders such interim
dividends as in their judgment the position of the Company justifies.
131. Subject to these Articles and the rights and restrictions attached to any
class or series of shares, dividends may be declared and paid to the
shareholders in proportion to the amount of capital paid-up on the shares
(not including any capital paid-up bearing interest) held by them
respectively.
132. The directors may deduct from the dividends payable to any shareholder
amounts due and payable by the shareholder to the Company on account of
calls, instalments or otherwise, and may apply the same in or towards
satisfaction of such amounts so due and payable.
<PAGE>
-25-
133. The directors may retain any dividends on which the Company has a lien, and
may apply the same in or towards satisfaction of the debts, liabilities or
engagements in respect of which the lien exists.
134. The directors may retain the dividends payable upon shares to which a
person is entitled or entitled to transfer upon the death or bankruptcy of
a shareholder or in any way other than by allotment or transfer, until such
person has become registered as the holder of such shares or has duly
transferred such shares.
135. When the directors declare a dividend on a class or series of shares and
also make a call on such shares payable on or before the date on which the
dividend is payable, the directors may retain all or part of the dividend
and set off the amount retained against the call.
136. The directors may declare that a dividend be paid by the distribution of
cash, paid-up shares (at par or at a premium), debentures, bonds or other
securities of the Company or of any other company or any other specific
assets held or to be acquired by the Company or in any one or more of such
ways.
137. The directors may settle any difficulty that may arise in regard to the
distribution of a dividend as they think expedient, and in particular
without restricting the generality of the foregoing may issue fractional
certificates, may fix the value for distribution of any specific assets,
may determine that cash payments will be made to any shareholders upon the
footing of the value so fixed or that fractions may be disregarded in order
to adjust the rights of all parties, and may vest cash or specific assets
in trustees upon such trusts for the persons entitled to the dividend as
may seem expedient to the directors.
138. Any person registered as a joint holder of any share may give effectual
receipts for all dividends and payments on account of dividends in respect
of such share.
139. Unless otherwise determined by the directors, any dividend may be paid by a
cheque or warrant delivered to or sent through the post to the registered
address of the shareholder entitled, or, when there are joint holders, to
the registered address of that one whose name stands first on the register
for the shares jointly held. Every cheque or warrant so delivered or sent
shall be made payable to the order of the person to whom it is delivered or
sent. The mailing or other transmission to a shareholder at the
shareholder's registered address (or, in the case of joint shareholders at
the address of the holder whose name stands first on the register) of a
cheque payable to the order of the person to whom it is addressed for the
amount of any dividend payable in cash after the deduction of any tax which
the Company has properly withheld, shall discharge the Company's liability
for the dividend unless the cheque is not paid on due presentation. If any
cheque for a dividend payable in cash is not received, the Company shall
issue to the shareholder a replacement cheque for the same amount on such
terms as to indemnity and evidence of non-receipt as
<PAGE>
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the directors may impose. No shareholder may recover by action or other
legal process against the Company any dividend represented by a cheque that
has not been duly presented to a banker of the Company for payment or that
otherwise remains unclaimed for 6 years from the date on which it was
payable.
ACCOUNTS
140. The directors shall cause proper books of account to be kept of the amounts
received and expended by the Company, the matters in respect of which such
receipts and expenditures take place, all sales and purchases of goods by
the Company, and the assets, credits and liabilities of the Company.
141. The books of account shall be kept at the head office of the Company or at
such other place or places as the directors may direct.
142. The directors shall from time to time determine whether and to what extent
and at what times and places and under what conditions the accounts and
books of the Company or any of them shall be open to inspection of the
shareholders, and no shareholder shall have any right to inspect any
account or book or document of the Company except as conferred by statute
or authorized by the directors or a resolution of the shareholders.
143. At the ordinary general meeting in every year the directors shall lay
before the Company such financial statements and reports in connection
therewith as may be required by the Act or other applicable statute or
regulation thereunder and shall distribute copies thereof at such times and
to such persons as may be required by statute or regulation.
AUDITORS AND AUDIT
144. Except in respect of a financial year for which the Company is exempt from
audit requirements in the Act, the Company shall at each ordinary general
meeting appoint an auditor or auditors to hold office until the next
ordinary general meeting. If at any general meeting at which the
appointment of an auditor or auditors is to take place and no such
appointment takes place, or if no ordinary general meeting is held in any
year or period of years, the directors shall appoint an auditor or auditors
to hold office until the next ordinary general meeting.
145. The first auditors of the Company may be appointed by the directors at any
time before the first ordinary general meeting and the auditors so
appointed shall hold office until such meeting unless previously removed by
a resolution of the shareholders, in which event the shareholders may
appoint auditors.
146. The directors may fill any casual vacancy in the office of the auditor but
while any such vacancy continues the surviving or continuing auditor or
auditors, if any, may act.
<PAGE>
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147. The Company may appoint as auditor any person, including a shareholder, not
disqualified by statute.
148. An auditor may be removed or replaced in the circumstances and in the
manner specified in the Act.
149. The remuneration of the auditors shall be fixed by the shareholders, or by
the directors pursuant to authorization given by the shareholders, except
that the remuneration of an auditor appointed to fill a casual vacancy may
be fixed by the directors.
150. The auditors shall conduct such audit as may be required by the Act and
their report, if any, shall be dealt with by the Company as required by the
Act.
NOTICES
151. A notice (including any communication or document) shall be sufficiently
given, delivered or served by the Company upon a shareholder, director,
officer or auditor by personal delivery at such person's registered address
(or, in the case of a director, officer or auditor, last known address) or
by prepaid mail, telegraph, telex, facsimile machine or other electronic
means of communication addressed to such person at such address.
152. Shareholders having no registered address shall not be entitled to receive
notice.
153. All notices with respect to registered shares to which persons are jointly
entitled may be sufficiently given to all joint holders thereof by notice
given to whichever of such persons is named first in the Register for such
shares.
154. Any notice sent by mail shall be deemed to be given, delivered or served on
the earlier of actual receipt and the third business day following that
upon which it is mailed, and in proving such service it shall be sufficient
to prove that the notice was properly addressed and mailed with the postage
prepaid thereon. Any notice given by electronic means of communication
shall be deemed to be given when entered into the appropriate transmitting
device for transmission. A certificate in writing signed on behalf of the
Company that the notice was so addressed and mailed or transmitted shall be
conclusive evidence thereof.
155. Every person who by operation of law, transfer or other means whatsoever
becomes entitled to any share shall be bound by every notice in respect of
such share that prior to such person's name and address being entered on
the Register was duly served in the manner hereinbefore provided upon the
person from whom such person derived title to such share.
<PAGE>
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156. Any notice delivered, sent or transmitted to the registered address of any
shareholder pursuant to these Articles, shall, notwithstanding that such
shareholder is then deceased and that the Company has notice thereof, be
deemed to have been served in respect of any registered shares, whether
held by such deceased shareholder solely or jointly with other persons,
until some other person is registered as the holder or joint holder
thereof, and such service shall for all purposes of these Articles be
deemed a sufficient service of such notice on the heirs, executors or
administrators of the deceased shareholder and all joint holders of such
shares.
157. Any notice may bear the name or signature, manual or reproduced, of the
person giving the notice written or printed.
158. When a given number of days' notice or notice extending over any other
period is required to be given, the day of service and the day upon which
such notice expires shall not, unless it is otherwise provided, be counted
in such number of days or other period.
INDEMNITY
159. Every director or officer, former director or officer, or person who acts
or acted at the Company's request, as a director or officer of the Company,
a body corporate, partnership or other association of which the Company is
or was a shareholder, partner, member or creditor, and the heirs and legal
representatives of such person, in the absence of any dishonesty on the
part of such person, shall be indemnified by the Company against, and it
shall be the duty of the directors out of the funds of the Company to pay,
all costs, losses and expenses, including an amount paid to settle an
action or claim or satisfy a judgment, that such director, officer or
person may incur or become liable to pay in respect of any claim made
against such person or civil, criminal or administrative action or
proceeding to which such person is made a party by reason of being or
having been a director or officer of the Company or such body corporate,
partnership or other association, whether the Company is a claimant or
party to such action or proceeding or otherwise; and the amount for which
such indemnity is proved shall immediately attach as a lien on the property
of the Company and have priority as against the shareholders over all other
claims.
160. No director or officer, former director or officer, or person who acts or
acted at the Company's request, as a director or officer of the Company, a
body corporate, partnership or other association of which the Company is or
was a shareholder, partner, member or creditor, in the absence of any
dishonesty on such person's part, shall be liable for the acts, receipts,
neglects or defaults of any other director, officer or such person, or for
joining in any receipt or other act for conformity, or for any loss, damage
or expense happening to the Company through the insufficiency or deficiency
of title to any property acquired for or on behalf of the Company, or
through the insufficiency or deficiency of any security in or upon which
any of the funds of the Company are invested, or for any
<PAGE>
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loss or damage arising from the bankruptcy, insolvency or tortious acts of
any person with whom any funds, securities or effects are deposited, or for
any loss occasioned by error of judgment or oversight on the part of such
person, or for any other loss, damage or misfortune whatsoever which
happens in the execution of the duties of such person or in relation
thereto.
REMINDERS
161. The directors shall comply with the following provisions of the Act or the
Corporations Registration Act (Nova Scotia) where indicated:
(1) Keep a current register of shareholders (Section 42).
(2) Keep a current register of directors, officers and managers, send to
the Registrar a copy thereof and notice of all changes therein
(Section 98).
(3) Keep a current register of holders of bonds, debentures and other
securities (Section 111 and Third Schedule).
(4) Call a general meeting every year within the proper time (Section 83).
Meetings must be held not later than 15 months after the preceding
general meeting.
(5) Send to the Registrar copies of all special resolutions (Section 88).
(6) When shares are issued for a consideration other than cash, file a
copy of the contract with the Registrar on or before the date on which
the shares are issued (Section 109).
(7) Send to the Registrar notice of the address of the Company's Office
and of all changes in such address (Section 79).
(8) Keep proper minutes of all shareholders' meetings and directors'
meetings in the Company's minute book kept at the Company's Office
(Sections 89 and 90).
(9) Obtain a certificate under the Corporations Registration Act (Nova
Scotia) as soon as business is commenced.
(10) Send notice of recognized agent to the Registrar under the
Corporations Registration Act (Nova Scotia).
<PAGE>
EXHIBIT 3.2(c)
MONARCH BOX, INC.
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meeting.
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An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix, which date
shall be within thirteen (13) months subsequent to the later of the date of
incorporation or the last annual meeting of stockholders.
Section 2. Special Meetings.
- --------- ----------------
Special meetings of the stockholders, for any purpose or purposes
prescribed in the notice of the meeting, may be called by the Board of Directors
or the chief executive officer and shall be held at such place on such date, and
at such time as they or he or she shall fix.
Section 3. Notice of Meetings.
- --------- ------------------
Written notice of the place, date, and time of all meetings of the
stockholders shall be given not less than ten (10) nor more than sixty (60) days
before the date on which the meeting is to be held, to each stockholder entitled
to vote at such meeting, except as otherwise provided herein or required by law
(meaning, here and hereinafter, as required from time to time by the
<PAGE>
Delaware General Corporations Law or the Certificate of Incorporation of the
Corporation).
When a meeting is adjourned to another place, date, or time, written notice
need not be given of the adjourned meeting if the place, date, and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date, and
time of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 4. Quorum.
- --------- ------
At any meeting of the stockholders the holders of a majority of all of the
shares of the stock entitled to vote at the meeting, present in person or by
proxy, shall constitute a quorum for all purposes, unless or except to the
extent that the presence of a larger number may be required by law. When a
separate vote by a class or classes is required a majority of the shares of such
class or classes present in person or represented by proxy shall constitute a
quorum entitled to take action with respect to that vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of
-2-
<PAGE>
stock entitled to vote who are present, in person or by proxy, may adjourn the
meeting to another place, date, or time.
If a notice of any adjourned special meeting or stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present constituting a quorum, then except as otherwise required by law, those
present at such adjourned meeting shall constitute a quorum, and all matters
shall be determined by a majority of the votes cast at such meeting.
Section 5. Organization.
- --------- ------------
Such person as the Board of Directors may have designate and/or in the
absence of such a person, the chief executive officer of the Corporation or, in
his or her absence, such person as may be chosen by the holders of a majority of
the shares entitled to vote who are present, in person or by proxy, shall call
to order any meeting of the stockholders and act as chairman of the meeting. In
the absence of the Secretary of the Corporation, the secretary of the meeting
shall be such person as the chairman appoints.
Section 6. Conduct of Business.
- --------- -------------------
The chairman of any meeting of stockholders shall determine the order of
business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of discussion as seem to him or her in order.
-3-
<PAGE>
Section 7. Proxies and Voting.
- --------- ------------------
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing filed in
accordance with the procedure established for the meeting.
Each stockholder shall have one (1) vote for every share of stock entitled
to vote which is registered in his or her name on the record date for the
meeting, except as otherwise provided herein or required by law. All voting,
including on the election of directors but excepting where otherwise required by
law, may be by a voice vote; provided, however, that upon demand therefore by a
stockholder entitled to vote or by his or her proxy, a stock vote shall be
taken. Every stock vote shall be taken by ballots, each of which shall state
the name of the stockholder or proxy voting and such other information as may be
required under the procedure established for the meeting. Every vote taken by
ballots shall be counted by an inspector or inspectors appointed by the chairman
of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law, all other matters shall be determined by a
majority of the votes cast.
Section 8. Stock List.
- --------- ----------
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be
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<PAGE>
open to the examination of any such stockholder, for any propose germane to the
meeting, during ordinary business hours for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or if not
so specified, at the place where the meeting is to be held.
The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present. This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
Section 9. Consent of Stockholders in Lieu of Meeting.
- --------- ------------------------------------------
Any action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any annual
or special meeting of the stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted and shall be delivered to the Corporation by
delivery to its registered office in Delaware, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of
-5-
<PAGE>
stockholders are recorded. Delivery made to the Corporation's registered office
shall be made by hand or by certified or registered mail, return receipt
requested.
Every written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the date
the earliest dated consent is delivered to the Corporation, a written consent or
consents signed by a sufficient number of holders to take action are delivered
to the Corporation in the manner prescribed in the first paragraph of this
Section.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Number and Term of Officer.
- --------- --------------------------
The number of directors who shall constitute the whole Board shall be such
number as the Board of Directors shall from time to time have designated, except
that in the absence of any such designation, such number shall be three (3).
Each director shall be elected for a term of one year and until his or her
successor is elected and qualified, except as otherwise provided herein or
required by law.
Whenever the authorized number of directors is increased between annual
meetings of the stockholders, a majority of the directors then in office shall
have the power to elect such new directors for the balance of a term and until
their successors are elected and qualified. Any decrease in the authorized
number
-6-
<PAGE>
of directors shall not become effective until the expiration of the term of the
directors then in office unless, at the time of such decrease, there shall be
vacancies on the board which are being eliminated by the decrease.
Section 2. Vacancies.
- --------- ---------
If the office of any director becomes vacant by reason of death,
resignation, disqualification, removal or other cause, a majority of the
directors remaining in office, although less than a quorum, may elect a
successor for the unexpired term and until his or her successor is elected and
qualified.
Section 3. Regular Meetings.
- --------- ----------------
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
- --------- ----------------
Special meetings of the Board of Directors may be called by one third (1/3)
of the directors then in office (rounded up to the nearest whole number) or by
the chief executive officer and shall be held at such place, on such date, and
at such time as they or he or she shall fix. Notice of the place, date, and
time of each such special meeting shall be given each director by whom it is not
waived by mailing written notice not less than five (5) days before the meeting
or by telegraphing or telexing or by facsimile transmission of the same not less
than twenty-four (24)
-7-
<PAGE>
hours before the meeting. Unless otherwise indicated in the notice thereof, any
and all business may be transacted at a special meeting.
Section 5. Quorum.
- --------- ------
At any meeting of the Board of Directors, a majority of the total number of
the whole Board shall constitute a quorum for all purposes. If a quorum shall
fail to attend any meeting, a majority of those present may adjourn the meeting
to another place, date, or time, without further notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
- --------- -------------------------------------------------
Members of the Board of Directors, or of any committee thereto may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person to such meeting.
Section 7. Conduct of Business.
- --------- -------------------
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting of all members thereof consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
-8-
<PAGE>
Section 8. Powers.
- --------- ------
The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or privileges on
such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form as it may
determine, or written obligations of every kind, negotiable or
nonnegotiable, secured or unsecured, and to do all things necessary in
connection therewith;
(4) To remove any officer of the Corporation with or without cause, and
from time to time to confer the powers and duties of any officer upon
any other person for the time being;
(5) To confer upon any officer of the Corporation the power to appoint,
remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option, stock purchase, bonus
or other compensation plans for directors, officers, employees and
agents of the Corporation and its subsidiaries as it may determine;
-9-
<PAGE>
(7) To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and,
(8) To adopt from time to time regulations, not inconsistent with these
By-laws, for the management of the Corporation's business affairs.
ARTICLE III
COMMITTEES
Section 1. Committees of the Board of Directors.
- --------- ------------------------------------
The Board of Directors, by a vote of a majority of the whole Board, may
from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a director or directors to serve as the member or members, designating, if
it desires, other directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so
designated may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt a certificate
of ownership and merger pursuant to Section 253 of the Delaware General
Corporation Law if the resolution which designates the committee or a
supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
-10-
<PAGE>
member in his or her place, the member or members of the committee present at
the meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the Board
of Directors to act at the meeting in the place of the absent or disqualified
member.
Section 2. Conduct of Business.
- --------- -------------------
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event, one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing, and the writing or writings are filed with the minutes of
the proceedings of such committee.
ARTICLE IV
OFFICERS
Section 1. Officers.
- --------- --------
The officers of the Corporation shall be elected by the Board of Directors,
and shall include a President, a Secretary, a Treasurer, and such other
officers, employees and agents as appointed, from time to time, in accordance
with these By-laws.
-11-
<PAGE>
Additionally, the President shall have the power to appoint such Vice Presidents
and other officers equivalent or junior thereto as the President may deem
appropriate.
Section 2. Term.
- --------- ----
Each officer of the Corporation shall serve at the pleasure of the Board of
Directors and the Board may remove any officer at any time with or without
cause. Any officer, if appointed by the President of the Corporation, may
likewise be removed by the President of the Corporation.
Section 3. Authority and Duties.
- --------- --------------------
All officers and agents of the Corporation shall have such authority and
perform such duties in the management of the property and affairs of the
Corporation as generally pertain to their respective offices, as well as such
authority and duties as may be determined by the Board of Directors.
Section 4. Execution of Instruments.
- --------- ------------------------
Checks, notes, drafts, other commercial instruments, assignments,
guarantees of signatures, and contracts (except as otherwise provided herein or
by law) shall be executed by the President, any Vice President, the Secretary,
the Treasurer, or such officers or employees or agents as the Board of Directors
or any such designated officers may direct.
Section 5. Compensation.
- --------- ------------
The Board of Directors shall have power to fix, or to delegate the power to
fix, the compensation for services in any capacity of all officers, employees or
agents of the Corporation.
-12-
<PAGE>
The Board of Directors shall have the authority to establish within legal
limits, such pension, retirement, stock purchase and stock option plans, and
such other fringe benefit plans for the benefit of officers, employees, or
agents as it deems to be in the best interest of the Corporation.
Section 6. Action with Respect to Securities of Other
- --------- -------------------------------------------
Corporations.
------------
Unless otherwise directed by the Board of Directors, the President, any
Vice President, the Secretary, the Treasurer or any officer of the Corporation
authorized by such officers shall have power to vote and otherwise act on behalf
of the Corporation, in person or by proxy, at any meeting of stockholders of or
with respect to any action of stockholders of any other corporation in which
this Corporation may hold securities and otherwise to exercise any and all
rights and powers which this Corporation may possess by reason of its ownership
of securities in such other corporation.
ARTICLE V
STOCK
Section 1. Certificates of Stock.
- --------- ---------------------
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the President or a Vice President, and by the
Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by him or her. Any or all of the
signatures on the certificate may be by facsimile.
-13-
<PAGE>
Section 2. Transfers of Stock.
- --------- ------------------
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these By-
Laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
Section 3. Record Date.
- --------- -----------
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is
-14-
<PAGE>
given or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held, and, for determining
stockholders entitled to receive payment of any dividend or other distribution
or allotment of rights or to exercise any rights of change, conversion, or
exchange of stock or for any other purpose, the record date shall be at the
close of business on the day on which the Board of Directors adopts a resolution
relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than ten (10) days after the date upon which
the resolution fixing the record date is adopted. If no record date has been
fixed by the Board of Directors and no prior action by the Board of Directors is
required by the Delaware General Corporation Law, the record date shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation in the manner prescribed by
Article I, Section 9 hereof. If no record date has been fixed by the Board of
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<PAGE>
Directors and prior action by the Board of Directors is required by the Delaware
General Corporation Law with respect to the proposed action by written consent
of the stockholders, the record date for determining stockholders entitled to
consent to corporate action in writing shall be at the close of business on the
day on which the Board of Directors adopts the resolution taking such prior
action.
Section 4. Lost, Stolen or Destroyed Certificates.
- --------- --------------------------------------
In the event of the loss, theft, or destruction of any certificate of
stock, another may be issued in its place pursuant to such regulations as the
Board of Directors may establish concerning proof of such loss, theft, or
destruction and concerning the giving of a satisfactory bond or bonds or
indemnity.
Section 5. Regulations.
- --------- -----------
The issue, transfer, conversion, and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI
NOTICES
Section 1. Notices.
- --------- -------
Except as otherwise specifically provided herein or required by law, all
notices required to be given to any stockholder, director, officer, employee or
agent shall be in writing and may in every instance be effectively given by hand
delivery to the recipient thereof, by depositing such notice in
-16-
<PAGE>
the mails, postage paid, or by sending such notice by prepaid telegram or
mailgram. Any such notice shall be addressed to such stockholder, director,
officer, employee, or agent at his or her last known address as the same appears
on the books of the Corporation. The time when such notice is received, if hand
delivered, or dispatched, if delivered through the mails or by telegram or
mailgram, shall be the time of the giving of the notice.
Section 2. Waivers.
- --------- -------
A written waiver of any notice, signed by a stockholder, director, officer,
employee, or agent, whether before or after the time of the event for which
notice is to be given, shall be deemed equivalent to the notice required to be
given to such stockholder, director, officer, employee, or agent. Neither the
business nor the purpose of any meeting need be specified in such a waiver.
ARTICLE VII
MISCELLANEOUS
Section 1. Facsimile Signatures.
- --------- --------------------
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these By-Laws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
-17-
<PAGE>
Section 2. Corporate Seal.
- --------- --------------
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and
when so directed by the Board of Directors or a committee thereof, duplicates of
the seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.
Section 3. Reliance upon Books, Reports, and Records.
- --------- -----------------------------------------
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinion,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
- --------- -----------
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
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<PAGE>
Section 5. Time Periods.
- --------- ------------
In applying any provision of these By-Laws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Right to Indemnification.
- --------- ------------------------
Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative, or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation or of a
partnership, joint venture, trust, or other enterprise, including service with
respect to an employee benefit plan (hereinafter an "indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as a
director, officer, employee, or agent or in any other capacity while serving as
a director, officer, employee, or agent, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
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<PAGE>
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes, or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section 3 of this Article VIII with respect to proceedings
to enforce rights to indemnification, the corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation.
Section 2. Right to Advancement of Expenses.
- --------- --------------------------------
The right to indemnification conferred in Section 1 of this Article VIII
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking
-20-
<PAGE>
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter a "final
adjudication") that such indemnitee is not entitled to be indemnified for such
expenses under this Section 2 or otherwise. The rights to indemnification and
to the advancement of expenses conferred in Sections 1 and 2 of this Article
VIII shall be contract rights and such rights shall continue as to an indemnitee
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the indemnitee's heirs, executors, and administrators.
Section 3. Right of Indemnitee to Bring Suit.
- --------- ---------------------------------
If a claim under Section 1 or 2 of this Article VIII is not paid in full
by the Corporation within sixty (60) days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty (20) days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, or in a suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder not in a suit brought by the indemnitee
-21-
<PAGE>
to enforce a right to an advancement of expenses) it shall be a defense that,
and (ii) in any suit brought by the Corporation to recover an advancement of
expense pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication, that the indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article VIII or otherwise shall be on the Corporation.
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<PAGE>
Section 4. Non-Exclusivity of Rights.
--------- -------------------------
The rights to indemnification and to the advancement of expenses conferred
in this Article VIII shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, the Corporation's Certificate
of Incorporation, By-Laws, agreement, vote of stockholders, or disinterested
directors or otherwise.
Section 5. Insurance.
- --------- ---------
The Corporation may maintain insurance, at its expense, to protect itself
and any director, officer, employee, or agent of the Corporation or another
corporation, partnership, joint venture, trust, or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Indemnification of Employees and Agents of the
- --------- ----------------------------------------------
Corporation.
-----------
The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent of
the provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the Corporation.
-23-
<PAGE>
ARTICLE IX
AMENDMENTS
These By-Laws may be amended or repealed by the Board of Directors at any
meeting or by the stockholders at any meeting.
-24-
<PAGE>
EXHIBIT 3.2(d)
ADVANCED BOX, INC.
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meeting.
- --------- --------------
An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix, which date
shall be within thirteen (13) months subsequent to the later of the date of
incorporation or the last annual meeting of stockholders.
Section 2. Special Meetings.
- --------- ----------------
Special meetings of the stockholders, for any purpose or purposes
prescribed in the notice of the meeting, may be called by the Board of Directors
or the chief executive officer and shall be held at such place on such date, and
at such time as they or he or she shall fix.
Section 3. Notice of Meetings.
- --------- ------------------
Written notice of the place, date, and time of all meetings of the
stockholders shall be given not less than ten (10) nor more than sixty (60) days
before the date on which the meeting is to be held, to each stockholder entitled
to vote at such meeting, except as otherwise provided herein or required by law
(meaning, here and hereinafter, as required from time to time by the
<PAGE>
Delaware General Corporations Law or the Certificate of Incorporation of the
Corporation).
When a meeting is adjourned to another place, date, or time, written notice
need not be given of the adjourned meeting if the place, date, and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date, and
time of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 4. Quorum.
- --------- ------
At any meeting of the stockholders the holders of a majority of all of the
shares of the stock entitled to vote at the meeting, present in person or by
proxy, shall constitute a quorum for all purposes, unless or except to the
extent that the presence of a larger number may be required by law. When a
separate vote by a class or classes is required a majority of the shares of such
class or classes present in person or represented by proxy shall constitute a
quorum entitled to take action with respect to that vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of
-2-
<PAGE>
stock entitled to vote who are present, in person or by proxy, may adjourn the
meeting to another place, date, or time.
If a notice of any adjourned special meeting or stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present constituting a quorum, then except as otherwise required by law, those
present at such adjourned meeting shall constitute a quorum, and all matters
shall be determined by a majority of the votes cast at such meeting.
Section 5. Organization.
- --------- ------------
Such person as the Board of Directors may have designate and/or in the
absence of such a person, the chief executive officer of the Corporation or, in
his or her absence, such person as may be chosen by the holders of a majority of
the shares entitled to vote who are present, in person or by proxy, shall call
to order any meeting of the stockholders and act as chairman of the meeting. In
the absence of the Secretary of the Corporation, the secretary of the meeting
shall be such person as the chairman appoints.
Section 6. Conduct of Business.
- --------- -------------------
The chairman of any meeting of stockholders shall determine the order of
business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of discussion as seem to him or her in order.
-3-
<PAGE>
Section 7. Proxies and Voting.
- --------- ------------------
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing filed in
accordance with the procedure established for the meeting.
Each stockholder shall have one (1) vote for every share of stock entitled
to vote which is registered in his or her name on the record date for the
meeting, except as otherwise provided herein or required by law. All voting,
including on the election of directors but excepting where otherwise required by
law, may be by a voice vote; provided, however, that upon demand therefore by a
stockholder entitled to vote or by his or her proxy, a stock vote shall be
taken. Every stock vote shall be taken by ballots, each of which shall state
the name of the stockholder or proxy voting and such other information as may be
required under the procedure established for the meeting. Every vote taken by
ballots shall be counted by an inspector or inspectors appointed by the chairman
of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law, all other matters shall be determined by a
majority of the votes cast.
Section 8. Stock List.
- --------- ----------
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be
-4-
<PAGE>
open to the examination of any such stockholder, for any propose germane to the
meeting, during ordinary business hours for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or if not
so specified, at the place where the meeting is to be held.
The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present. This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
Section 9. Consent of Stockholders in Lieu of Meeting.
- --------- ------------------------------------------
Any action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any annual
or special meeting of the stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted and shall be delivered to the Corporation by
delivery to its registered office in Delaware, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of
-5-
<PAGE>
stockholders are recorded. Delivery made to the Corporation's registered office
shall be made by hand or by certified or registered mail, return receipt
requested.
Every written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the date
the earliest dated consent is delivered to the Corporation, a written consent or
consents signed by a sufficient number of holders to take action are delivered
to the Corporation in the manner prescribed in the first paragraph of this
Section.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Number and Term of Officer.
- --------- --------------------------
The number of directors who shall constitute the whole Board shall be such
number as the Board of Directors shall from time to time have designated, except
that in the absence of any such designation, such number shall be three (3).
Each director shall be elected for a term of one year and until his or her
successor is elected and qualified, except as otherwise provided herein or
required by law.
Whenever the authorized number of directors is increased between annual
meetings of the stockholders, a majority of the directors then in office shall
have the power to elect such new directors for the balance of a term and until
their successors are elected and qualified. Any decrease in the authorized
number
-6-
<PAGE>
of directors shall not become effective until the expiration of the term of the
directors then in office unless, at the time of such decrease, there shall be
vacancies on the board which are being eliminated by the decrease.
Section 2. Vacancies.
- --------- ---------
If the office of any director becomes vacant by reason of death,
resignation, disqualification, removal or other cause, a majority of the
directors remaining in office, although less than a quorum, may elect a
successor for the unexpired term and until his or her successor is elected and
qualified.
Section 3. Regular Meetings.
- --------- ----------------
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
- --------- ----------------
Special meetings of the Board of Directors may be called by one third (1/3)
of the directors then in office (rounded up to the nearest whole number) or by
the chief executive officer and shall be held at such place, on such date, and
at such time as they or he or she shall fix. Notice of the place, date, and
time of each such special meeting shall be given each director by whom it is not
waived by mailing written notice not less than five (5) days before the meeting
or by telegraphing or telexing or by facsimile transmission of the same not less
than twenty-four (24)
-7-
<PAGE>
hours before the meeting. Unless otherwise indicated in the notice thereof, any
and all business may be transacted at a special meeting.
Section 5. Quorum.
- --------- ------
At any meeting of the Board of Directors, a majority of the total number of
the whole Board shall constitute a quorum for all purposes. If a quorum shall
fail to attend any meeting, a majority of those present may adjourn the meeting
to another place, date, or time, without further notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
- --------- -------------------------------------------------
Members of the Board of Directors, or of any committee thereto may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person to such meeting.
Section 7. Conduct of Business.
- --------- -------------------
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting of all members thereof consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
-8-
<PAGE>
Section 8. Powers.
- --------- ------
The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or privileges on
such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form as it may
determine, or written obligations of every kind, negotiable or
nonnegotiable, secured or unsecured, and to do all things necessary in
connection therewith;
(4) To remove any officer of the Corporation with or without cause, and
from time to time to confer the powers and duties of any officer upon
any other person for the time being;
(5) To confer upon any officer of the Corporation the power to appoint,
remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option, stock purchase, bonus
or other compensation plans for directors, officers, employees and
agents of the Corporation and its subsidiaries as it may determine;
-9-
<PAGE>
(7) To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and,
(8) To adopt from time to time regulations, not inconsistent with these
By-laws, for the management of the Corporation's business affairs.
ARTICLE III
COMMITTEES
Section 1. Committees of the Board of Directors.
- --------- ------------------------------------
The Board of Directors, by a vote of a majority of the whole Board, may
from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a director or directors to serve as the member or members, designating, if
it desires, other directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so
designated may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt a certificate
of ownership and merger pursuant to Section 253 of the Delaware General
Corporation Law if the resolution which designates the committee or a
supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
-10-
<PAGE>
member in his or her place, the member or members of the committee present at
the meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the Board
of Directors to act at the meeting in the place of the absent or disqualified
member.
Section 2. Conduct of Business.
- --------- -------------------
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event, one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing, and the writing or writings are filed with the minutes of
the proceedings of such committee.
ARTICLE IV
OFFICERS
Section 1. Officers.
- --------- --------
The officers of the Corporation shall be elected by the Board of Directors,
and shall include a President, a Secretary, a Treasurer, and such other
officers, employees and agents as appointed, from time to time, in accordance
with these By-laws.
-11-
<PAGE>
Additionally, the President shall have the power to appoint such Vice Presidents
and other officers equivalent or junior thereto as the President may deem
appropriate.
Section 2. Term.
- --------- ----
Each officer of the Corporation shall serve at the pleasure of the Board of
Directors and the Board may remove any officer at any time with or without
cause. Any officer, if appointed by the President of the Corporation, may
likewise be removed by the President of the Corporation.
Section 3. Authority and Duties.
- --------- --------------------
All officers and agents of the Corporation shall have such authority and
perform such duties in the management of the property and affairs of the
Corporation as generally pertain to their respective offices, as well as such
authority and duties as may be determined by the Board of Directors.
Section 4. Execution of Instruments.
- --------- ------------------------
Checks, notes, drafts, other commercial instruments, assignments,
guarantees of signatures, and contracts (except as otherwise provided herein or
by law) shall be executed by the President, any Vice President, the Secretary,
the Treasurer, or such officers or employees or agents as the Board of Directors
or any such designated officers may direct.
Section 5. Compensation.
- --------- ------------
The Board of Directors shall have power to fix, or to delegate the power to
fix, the compensation for services in any capacity of all officers, employees or
agents of the Corporation.
-12-
<PAGE>
The Board of Directors shall have the authority to establish within legal
limits, such pension, retirement, stock purchase and stock option plans, and
such other fringe benefit plans for the benefit of officers, employees, or
agents as it deems to be in the best interest of the Corporation.
Section 6. Action with Respect to Securities of Other
- --------- -------------------------------------------
Corporations.
------------
Unless otherwise directed by the Board of Directors, the President, any
Vice President, the Secretary, the Treasurer or any officer of the Corporation
authorized by such officers shall have power to vote and otherwise act on behalf
of the Corporation, in person or by proxy, at any meeting of stockholders of or
with respect to any action of stockholders of any other corporation in which
this Corporation may hold securities and otherwise to exercise any and all
rights and powers which this Corporation may possess by reason of its ownership
of securities in such other corporation.
ARTICLE V
STOCK
Section 1. Certificates of Stock.
- --------- ---------------------
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the President or a Vice President, and by the
Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by him or her. Any or all of the
signatures on the certificate may be by facsimile.
-13-
<PAGE>
Section 2. Transfers of Stock.
- --------- ------------------
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these By-
Laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
Section 3. Record Date.
- --------- -----------
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is
-14-
<PAGE>
given or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held, and, for determining
stockholders entitled to receive payment of any dividend or other distribution
or allotment of rights or to exercise any rights of change, conversion, or
exchange of stock or for any other purpose, the record date shall be at the
close of business on the day on which the Board of Directors adopts a resolution
relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than ten (10) days after the date upon which
the resolution fixing the record date is adopted. If no record date has been
fixed by the Board of Directors and no prior action by the Board of Directors is
required by the Delaware General Corporation Law, the record date shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation in the manner prescribed by
Article I, Section 9 hereof. If no record date has been fixed by the Board of
-15-
<PAGE>
Directors and prior action by the Board of Directors is required by the Delaware
General Corporation Law with respect to the proposed action by written consent
of the stockholders, the record date for determining stockholders entitled to
consent to corporate action in writing shall be at the close of business on the
day on which the Board of Directors adopts the resolution taking such prior
action.
Section 4. Lost, Stolen or Destroyed Certificates.
- --------- --------------------------------------
In the event of the loss, theft, or destruction of any certificate of
stock, another may be issued in its place pursuant to such regulations as the
Board of Directors may establish concerning proof of such loss, theft, or
destruction and concerning the giving of a satisfactory bond or bonds or
indemnity.
Section 5. Regulations.
- --------- -----------
The issue, transfer, conversion, and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI
NOTICES
Section 1. Notices.
- --------- -------
Except as otherwise specifically provided herein or required by law, all
notices required to be given to any stockholder, director, officer, employee or
agent shall be in writing and may in every instance be effectively given by hand
delivery to the recipient thereof, by depositing such notice in
-16-
<PAGE>
the mails, postage paid, or by sending such notice by prepaid telegram or
mailgram. Any such notice shall be addressed to such stockholder, director,
officer, employee, or agent at his or her last known address as the same appears
on the books of the Corporation. The time when such notice is received, if hand
delivered, or dispatched, if delivered through the mails or by telegram or
mailgram, shall be the time of the giving of the notice.
Section 2. Waivers.
- --------- -------
A written waiver of any notice, signed by a stockholder, director, officer,
employee, or agent, whether before or after the time of the event for which
notice is to be given, shall be deemed equivalent to the notice required to be
given to such stockholder, director, officer, employee, or agent. Neither the
business nor the purpose of any meeting need be specified in such a waiver.
ARTICLE VII
MISCELLANEOUS
Section 1. Facsimile Signatures.
- --------- --------------------
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these By-Laws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
-17-
<PAGE>
Section 2. Corporate Seal.
- --------- --------------
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and
when so directed by the Board of Directors or a committee thereof, duplicates of
the seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.
Section 3. Reliance upon Books, Reports, and Records.
- --------- -----------------------------------------
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinion,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
- --------- -----------
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
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<PAGE>
Section 5. Time Periods.
- --------- ------------
In applying any provision of these By-Laws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Right to Indemnification.
- --------- ------------------------
Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative, or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation or of a
partnership, joint venture, trust, or other enterprise, including service with
respect to an employee benefit plan (hereinafter an "indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as a
director, officer, employee, or agent or in any other capacity while serving as
a director, officer, employee, or agent, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
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case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes, or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section 3 of this Article VIII with respect to proceedings
to enforce rights to indemnification, the corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation.
Section 2. Right to Advancement of Expenses.
- --------- --------------------------------
The right to indemnification conferred in Section 1 of this Article VIII
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking
-20-
<PAGE>
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter a "final
adjudication") that such indemnitee is not entitled to be indemnified for such
expenses under this Section 2 or otherwise. The rights to indemnification and
to the advancement of expenses conferred in Sections 1 and 2 of this Article
VIII shall be contract rights and such rights shall continue as to an indemnitee
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the indemnitee's heirs, executors, and administrators.
Section 3. Right of Indemnitee to Bring Suit.
- --------- ---------------------------------
If a claim under Section 1 or 2 of this Article VIII is not paid in full
by the Corporation within sixty (60) days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty (20) days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, or in a suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder not in a suit brought by the indemnitee
-21-
<PAGE>
to enforce a right to an advancement of expenses) it shall be a defense that,
and (ii) in any suit brought by the Corporation to recover an advancement of
expense pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication, that the indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article VIII or otherwise shall be on the Corporation.
-22-
<PAGE>
Section 4. Non-Exclusivity of Rights.
--------- -------------------------
The rights to indemnification and to the advancement of expenses conferred
in this Article VIII shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, the Corporation's Certificate
of Incorporation, By-Laws, agreement, vote of stockholders, or disinterested
directors or otherwise.
Section 5. Insurance.
- --------- ---------
The Corporation may maintain insurance, at its expense, to protect itself
and any director, officer, employee, or agent of the Corporation or another
corporation, partnership, joint venture, trust, or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Indemnification of Employees and Agents of the
- --------- ----------------------------------------------
Corporation.
-----------
The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent of
the provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the Corporation.
-23-
<PAGE>
ARTICLE IX
AMENDMENTS
These By-Laws may be amended or repealed by the Board of Directors at any
meeting or by the stockholders at any meeting.
-24-
<PAGE>
EXHIBIT 3.2(e)
TABLE OF CONTENTS TO ARTICLES OF ASSOCIATION
--------------------------------------------
Article Description Page
- ------- ----------- ----
1. Interpretation 1
2. Table A not to apply 1
3. Pre-Incorporation Agreement 1
SHARES
4. Payment of expenses of Incorporation, etc. 2
5. May commence business at once 2
6. Shares under control of directors 2
7. Commission on subscription 2
8. Amount and timing of calls, etc. 2
9. Instalments payable by registered holder 2
10. Joint registration of shares 2
11. Liability of joint holders - survivor only recognized 2
12. Registered holder treated as absolute owner 2
13. Private company 2
CERTIFICATES
14. Share certificates 3
15. Entitlement to share certificate 3
16. Certificate issued to joint holders 3
17. Worn out, defaced or lost certificates 3
18. Fee for certificate 3
19. Branch registers 3
CALLS
20. Directors may make calls 4
21. When calls deemed made 4
22. Notice of call - timing and contents 4
23. Interest on unpaid call 4
24. Resolution making call conclusive evidence 4
25. Shareholders advances on unpaid shares 4
FORFEITURE OF SHARES
26. Notice before forfeiture 4
27. Contents of notice 4
28. Forfeiture when notice not complied with 4
29. Notice of forfeiture resolution, register entry 5
30. Forfeited share becomes property of Company 5
31. Annulment of forfeiture, etc. 5
32. Liability of shareholders to pay call after forfeiture 5
33. Certificate of forfeiture conclusive evidence 5
<PAGE>
ii
LIEN ON SHARES
34. Lien on shares for debts of shareholder 5
35. Sale of shares not paid up to enforce lien 5
36. Application of proceeds of shares by Company 5
VALIDITY OF SALES
37. Validity of sale on forfeiture or to enforce lien 6
TRANSFER OF SHARES
38. How transfer effected 6
39. Form of transfer instrument 6
40. Directors may decline to register transfer 6
41. Delivery of transfer for registration 6
42. Fee on transfer 6
43. Transfer instrument to remain with Company 6
TRANSMISSION OF SHARES
44. Executors of deceased recognized as holder 7
45. Right of executor of sole shareholder 7
46. Transmission of shares on death, bankruptcy 7
SURRENDER OF SHARES
47. Surrender of shares in compromise 7
SHARE WARRANTS
48. Issue of Share Warrants 7
49. Conditions under which Share Warrants issued 7
INCREASE AND REDUCTION OF CAPITAL
50. Increase of capital 8
51. Terms of issue of new shares 8
52. New shares may be offered to existing shareholders 8
53. New capital within control of directors 8
54. Reduction of capital 8
ALTERATION OF CAPITAL
55. Altering capital by ordinary resolution 8
56. Altering capital by special resolution 8
57. Redemption and purchase of shares 9
<PAGE>
iii
INTEREST ON SHARE CAPITAL
58. When share capital may bear interest 9
CLASSES AND SERIES OF SHARES
59. Shares with preferred, deferred or special rights 9
MEETINGS AND VOTING BY CLASS OR SERIES
60. Procedure, etc. for class vote 10
61. Restrictions on separate class and series votes 10
BORROWING POWERS
62. Directors' authority to borrow, give security, guarantee 10
63. Securities assignable free from equities 10
64. Securities at discount, premium, with preference 10
GENERAL MEETINGS
65. Ordinary general meetings 11
66. Special general meetings - how called 11
67. Contents of requisition 11
68. Notice of meeting - Waiver of notice 11
69. Notice of two meetings for special resolution 11
70. Accidental omission of notice 11
RECORD DATES
71. Setting record dates - when no record date set 11
PROCEEDINGS AT GENERAL MEETINGS
72. Business of ordinary general meeting 12
73. Quorum prerequisite to holding meeting 12
74. Requirements for quorum 12
75. Chairman of meeting 12
76. If quorum not present - dissolution or adjournment 12
77. Resolution by show of hands - demand of poll 12
78. Conduct of poll 12
79. Casting vote 12
80. Adjournment of meeting 12
81. Poll on question of adjournment, election of chairman 13
82. Effect of demand of poll on continuance of meeting 13
VOTES OF SHAREHOLDERS
<PAGE>
iv
83. Voting generally 13
84. Votes on transmission by death, bankruptcy, etc. 13
85. Votes of joint registered shareholders 13
86. Voting in person, by proxy, by corporate representative 13
87. Proxy requirements generally 13
88. Votes of shareholders of unsound mind 13
89. Depositing proxies before meeting 13
90. Votes by proxy after authority revoked 14
91. Form of proxy 14
92. Votes when call due on shares 14
93. Resolution of directors ratified by shareholders 14
94. Resolution in writing without meeting 14
DIRECTORS
95. Number of directors 14
96. First directors 14
97. Remuneration of directors 15
98. Directors may act notwithstanding 15
99. Directors may also be officers 15
100. Vacation of office on bankruptcy, etc. 15
101. Directors' conflicts of interest 15
ELECTION OF DIRECTORS
102. Election of directors at general meeting 15
103. Retiring directors remain in office until succeeded 15
104. Number of directors elected, qualification 16
105. Removal of director 16
106. When directors may be appointed by other directors 16
MANAGING DIRECTOR
107. Authority to appoint managing director 16
108. Resignation and removal of managing director 16
109. Remuneration of managing director 16
110. Powers and duties of managing director 16
CHAIRMAN OF THE BOARD
111. Chairman of the Board 16
PRESIDENT AND VICE-PRESIDENTS
112. President 16
113. Vice-Presidents 16
SECRETARY AND TREASURER
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v
114. Secretary 17
115. Treasurer 17
OFFICERS
116. Other officers 17
117. Same person may hold more than one office 17
PROCEEDINGS OF DIRECTORS
118. Meetings of directors - quorum requirement 17
119. Participation at meeting by telephone 17
120. Place of meetings - When notice required 17
121. Summoning of meetings 17
122. Questions decided by majority - casting vote - proxies 18
123. Chairman of directors' meeting 18
124. Authority of meeting when quorum present 18
125. Committees of directors 18
126. Proceedings of committees of directors 18
127. Effect on meeting of defectively appointed director 18
128. Resolution of directors in writing without meeting 18
129. Remuneration of directors for extra services 18
REGISTERS
130. Registers and branch registers 19
MINUTES
131. Minutes and Minute books - minutes prima facie evidence 19
POWERS OF DIRECTORS
132. General powers of directors 19
133. Specifically enumerated powers of directors 19
SOLICITORS
134. Solicitors 21
THE SEAL
135. Use of common seal 21
136. Facsimiles of common seal 21
137. Facsimile seal for use outside Nova Scotia 21
DIVIDENDS
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vi
138. Declaration of dividends 22
139. Dividends payable from profits, etc. 22
140. Declaration of amount of profits, etc., conclusive 22
141. Interim dividends 22
142. Dividends differentiated by paid-up capital 22
143. Right to set off debts against dividends 22
144. Where lien on dividends 22
145. Dividends on shares of deceased, etc. 22
146. Setting off calls and dividends 22
147. Cash dividend, dividend in kind, stock dividend, etc. 22
148. Power of directors to settle issues re dividends 22
149. Dividends on jointly registered shares 23
150. Satisfaction of dividend 23
ACCOUNTS
151. Directors' duty to keep accounts 23
152. Where books to be kept 23
153. Inspection of books by shareholders 23
154. Reports on accounts to general meeting 23
AUDITORS AND AUDIT
155. Appointment of auditors at ordinary general meeting 23
156. First auditors 23
157. Directors may fill casual vacancy 24
158. Persons qualified for appointment as auditors 24
159. Removal of auditor 24
160. Remuneration 24
161. Duties of auditors 24
NOTICES
162. How notice given 24
163. Notice to shareholder without registered address 24
164. Holders of share warrants not entitled to notice 24
165. Notice to joint holders 24
166. When notice deemed given - proof of notice 24
167. Transferees bound by prior notice 24
168. Notice valid through shareholder deceased 24
169. How notice to be signed 25
170. How time to be counted 25
INDEMNITY
171. Indemnity of directors, officers, etc. 25
172. Individual liability of directors, officers, etc. 25
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REMINDERS
173. Reminders of directors of obligations under Act 25
<PAGE>
ARTICLES OF ASSOCIATION
OF
ARCHIVEX LIMITED
-----------------------------------------
INTERPRETATION
1. In these Articles, unless there is something in the subject or context
inconsistent therewith:
(1) "Act" means the Companies Act (Nova Scotia);
(2) "Articles" means these Articles of Association of the Company and all
amendments hereto;
(3) "Company" means the company named above;
(4) "director" means a director of the Company;
(5) "Memorandum" means the Memorandum of Association of the Company and
all amendments thereto;
(6) "month" means calendar month;
(7) "Office" means the registered office of the Company;
(8) "person" includes a body corporate;
(9) "proxyholder" includes an alternate proxyholder;
(10) "Register" means the register of members kept pursuant to the Act, and
where the context permits includes a branch register of members;
(11) "Registrar" means the Registrar as defined in the Act;
(12) "Secretary" includes any person appointed to perform the duties of the
Secretary temporarily;
(13) "shareholder" means member as that term is used in the Act in
connection with a company limited by shares;
(14) "special resolution" has the meaning assigned by the Act;
(15) "in writing" and "written" includes printing, lithography and other
modes of representing or reproducing words in visible form;
(16) words importing number or gender include all numbers and genders
unless the context otherwise requires;
2. The regulations in Table A in the First Schedule to the Act shall not apply
to the Company.
3. The directors may enter into and carry into effect or adopt and carry into
effect any agreement made by the promoters of the Company on behalf of the
Company and may agree to any modification in the terms of any such
agreement, either before or after its execution.
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4. The directors may, out of the funds of the Company, pay all expenses
incurred for the incorporation and organization of the Company.
5. The Company may commence business as soon after incorporation as the
directors think fit, notwithstanding that part only of the shares has been
allotted.
SHARES
6. The directors shall control the shares and, subject to the provisions of
these Articles, may allot or otherwise dispose of them to such person, at
such times, on such terms and conditions and, if the shares have a par
value, either at a premium or at par, as they think fit.
7. The directors may pay on behalf of the Company a reasonable commission to
any person in consideration of subscribing or agreeing to subscribe
(whether absolutely or conditionally) for any shares in the Company, or
procuring or agreeing to procure subscriptions (whether absolute or
conditional) for any shares in the Company. Subject to the Act, the
commission may be paid or satisfied in shares of the Company.
8. On the issue of shares the Company may arrange among the holders thereof
differences in the calls to be paid and in the times for their payment.
9. If the whole or part of the allotment price of any shares is, by the
conditions of their allotment, payable in instalments, every such
instalment shall, when due, be payable to the Company by the person who is
at such time the registered holder of the shares.
10. Shares may be registered in the names of joint holders not exceeding three
in number.
11. Joint holders of a share shall be jointly and severally liable for the
payment of all instalments and calls due in respect of such share. On the
death of one or more joint holders of shares the survivor or survivors of
them shall alone be recognized by the Company as the registered holder or
holders of the shares.
12. Save as herein otherwise provided, the Company may treat the registered
holder of any share as the absolute owner thereof and accordingly shall
not, except as ordered by a court of competent jurisdiction or required by
statute, be bound to recognize any equitable or other claim to or interest
in such share on the part of any other person.
13. The Company is a private company, and:
(1) no transfer of any share or prescribed security of the Company shall
be effective unless or until approved by the directors;
(2) the number of holders of issued and outstanding prescribed securities
or shares of the Company, exclusive of persons who are in the
employment of the Company or in the employment of an affiliate of the
Company and exclusive of persons who, having been formerly in the
employment of the Company or the employment of an affiliate of the
Company, were, while in that employment, and have continued after
termination of that employment, to own at least one prescribed
security or share of the Company, shall not exceed 50 in number, two
or more persons or companies who are the joint registered owners of
one or more prescribed securities or shares being counted as one
holder; and
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(3) the Company shall not invite the public to subscribe for any of its
securities.
In this Article, "private company" and "securities" have the meanings
ascribed to those terms in the Securities Act (Nova Scotia), and
"prescribed security" means any of the securities prescribed by the Nova
Scotia Securities Commission from time to time for the purpose of the
definition of "private company" in the Securities Act (Nova Scotia).
CERTIFICATES
14. Certificates of title to shares shall comply with the Act and may otherwise
be in such form as the directors may from time to time determine. Unless
the directors otherwise determine, every certificate of title to shares
shall be signed manually by at least one of the Chairman, President,
Secretary, Treasurer, a vice-president, an assistant secretary, any other
officer of the Company or any director of the Company or by or on behalf of
a share registrar transfer agent or branch transfer agent appointed by the
Company or by any other person whom the directors may designate. When
signatures of more than one person appear on a certificate all but one may
be printed or otherwise mechanically reproduced. All such certificates
when signed as provided in this Article shall be valid and binding upon the
Company. If a certificate contains a printed or mechanically reproduced
signature of a person, the Company may issue the certificate,
notwithstanding that the person has ceased to be a director or an officer
of the Company and the certificate is as valid as if such person were a
director or an officer at the date of its issue. Any certificate
representing shares of a class publicly traded on any stock exchange shall
be valid and binding on the Company if it complies with the rules of such
exchange whether or not it otherwise complies with this Article.
15. Except as the directors may determine, each shareholder's shares may be
evidenced by any number of certificates so long as the aggregate of the
shares stipulated in such certificates equals the aggregate registered in
the name of the shareholder.
16. Where shares are registered in the names of two or more persons, the
Company shall not be bound to issue more than one certificate or set of
certificates, and such certificate or set of certificates shall be
delivered to the person first named on the Register.
17. Any certificate that has become worn, damaged or defaced may, upon its
surrender to the directors, be cancelled and replaced by a new certificate.
Any certificate that has become lost or destroyed may be replaced by a new
certificate upon proof of such loss or destruction to the satisfaction of
the directors and the furnishing to the Company of such undertakings of
indemnity as the directors deem adequate.
18. The sum of one dollar or such other sum as the directors from time to time
determine shall be paid to the Company for every certificate other than the
first certificate issued to any holder in respect of any share or shares.
19. The directors may cause one or more branch Registers of shareholders to be
kept in any place or places, whether inside or outside of Nova Scotia.
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CALLS
20. The directors may make such calls upon the shareholders in respect of all
amounts unpaid on the shares held by them respectively and not made payable
at fixed times by the conditions on which such shares were allotted, and
each shareholder shall pay the amount of every call so made to the person
and at the times and places appointed by the directors. A call may be made
payable by instalments.
21. A call shall be deemed to have been made at the time when the resolution of
the directors authorizing such call was passed.
22. At least 14 days' notice of any call shall be given, and such notice shall
specify the time and place at which and the person to whom such call shall
be paid.
23. If the sum payable in respect of any call or instalment is not paid on or
before the day appointed for the payment thereof, the holder for the time
being of the share in respect of which the call has been made or the
instalment is due shall pay interest on such call or instalment at the rate
of 9% per year or such other rate of interest as the directors may
determine from the day appointed for the payment thereof up to the time of
actual payment.
24. At the trial or hearing of any action for the recovery of any amount due
for any call, it shall be sufficient to prove that the name of the
shareholder sued is entered on the Register as the holder or one of the
holders of the share or shares in respect of which such debt accrued, that
the resolution making the call is duly recorded in the minute book and that
such notice of such call was duly given to the shareholder sued in
pursuance of these Articles. It shall not be necessary to prove the
appointment of the directors who made such call or any other matters
whatsoever and the proof of the matters stipulated shall be conclusive
evidence of the debt.
25. The directors may receive from any shareholder willing to advance it all or
any part of the amount due upon shares held by such shareholder beyond the
sums called for; and upon the amount so paid or satisfied in advance or so
much thereof as from time to time exceeds the amount of the calls then made
upon the shares in respect of which such advance has been made, the Company
may pay interest at such rate or permit such participation in profits upon
the amount so paid or satisfied in advance as the shareholder paying such
sum in advance and the directors agree.
FORFEITURE OF SHARES
26. If any shareholder fails to pay any call or instalment on or before the day
appointed for payment, the directors may at any time thereafter while the
call or instalment remains unpaid serve a notice on such shareholder
requiring payment thereof together with any interest that may have accrued
and all expenses that may have been incurred by the Company by reason of
such non-payment.
27. The notice shall name a day (not being less than 14 days after the date of
the notice) and a place or places on and at which such call or instalment
and such interest and expenses are to be paid. The notice shall also state
that, in the event of non-payment on or before the day and at the place or
one of the places so named, the shares in respect of which the call was
made or instalment is payable will be liable to be forfeited.
28. If the requirements of any such notice are not complied with, any shares in
respect of which such notice has been given may at any time thereafter,
before payment of all calls or instalments, interest and expenses due in
respect
<PAGE>
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thereof, be forfeited by a resolution of the directors to that effect. Such
forfeiture shall include all dividends declared in respect of the forfeited
shares and not actually paid before the forfeiture.
29. When any share has been so forfeited, notice of the resolution shall be
given to the shareholder in whose name it stood immediately prior to the
forfeiture and an entry of the forfeiture shall be made in the Register.
30. Any share so forfeited shall be deemed the property of the Company and the
directors may sell, re-allot or otherwise dispose of it in such manner as
they think fit.
31. The directors may at any time before any share so forfeited has been sold,
re-allotted or otherwise disposed of, annul the forfeiture thereof upon
such conditions as they think fit.
32. Any shareholder whose shares have been forfeited shall nevertheless be
liable to pay and shall forthwith pay to the Company all calls,
instalments, interest and expenses owing upon or in respect of such shares
at the time of the forfeiture together with interest thereon at the rate of
9% per year or such other rate of interest as the directors may determine
from the time of forfeiture until payment. The directors may enforce such
payment if they think fit, but are under no obligation to do so.
33. A certificate signed by the Secretary stating that a share has been duly
forfeited on a specified date in pursuance of these Articles and the time
when it was forfeited shall be conclusive evidence of the facts therein
stated as against any person who would have been entitled to the share but
for such forfeiture.
LIEN ON SHARES
34. The Company shall have a first and paramount lien upon all shares (other
than fully paid-up shares) registered in the name of a shareholder (whether
solely or jointly with others) and upon the proceeds from the sale thereof
for debts, liabilities and other engagements of the shareholder, solely or
jointly with any other person, to or with the Company, whether or not the
period for the payment, fulfilment or discharge thereof has actually
arrived, and such lien shall extend to all dividends declared in respect of
such shares. Unless otherwise agreed, the registration of a transfer of
shares shall operate as a waiver of any lien of the Company on such shares.
35. For the purpose of enforcing such lien the directors may sell the shares
subject to it in such manner as they think fit, but no sale shall be made
until the period for the payment, fulfilment or discharge of such debts,
liabilities or other engagements has arrived, and until notice in writing
of the intention to sell has been given to such shareholder or the
shareholder's executors or administrators and default has been made by them
in such payment, fulfilment or discharge for seven days after such notice.
36. The net proceeds of any such sale after the payment of all costs shall be
applied in or towards the satisfaction of such debts, liabilities or
engagements and the residue, if any, paid to such shareholder.
<PAGE>
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VALIDITY OF SALES
37. Upon any sale after forfeiture or to enforce a lien in purported exercise
of the powers given by these Articles the directors may cause the
purchaser's name to be entered in the Register in respect of the shares
sold, and the purchaser shall not be bound to see to the regularity of the
proceedings or to the application of the purchase money, and after the
purchaser's name has been entered in the Register in respect of such shares
the validity of the sale shall not be impeached by any person and the
remedy of any person aggrieved by the sale shall be in damages only and
against the Company exclusively.
TRANSFER OF SHARES
38. The instrument of transfer of any share in the Company shall be signed by
the transferor. The transferor shall be deemed to remain the holder of
such share until the name of the transferee is entered in the Register in
respect thereof and shall be entitled to receive any dividend declared
thereon before the registration of the transfer.
39. The instrument of transfer of any share shall be in writing in the
following form or to the following effect:
For value received, ____________________ hereby sell, assign, and transfer
unto _____________________________________________________________________
___________________________________________ shares in the capital of the
Company represented by the within certificate, and do hereby irrevocably
constitute and appoint ______________________________________________
attorney to transfer such shares on the books of the Company with full
power of substitution in the premises.
Dated the ____________ day of ______________________, 19__.
Witness:
40. The directors may, without assigning any reason therefor, decline to
register any transfer of shares
(1) not fully paid-up or upon which the Company has a lien, or
(2) the transfer of which is restricted by any agreement to which the
Company is a party.
41. Every instrument of transfer shall be left for registration at the Office
of the Company, or at any office of its transfer agent where a Register is
maintained, together with the certificate of the shares to be transferred
and such other evidence as the Company may require to prove title to or the
right to transfer the shares.
42. The directors may require that a fee determined by them be paid before or
after registration of any transfer.
43. Every instrument of transfer shall, after its registration, remain in the
custody of the Company. Any instrument of transfer that the directors
decline to register shall, except in case of fraud, be returned to the
person who deposited it.
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TRANSMISSION OF SHARES
44. The executors or administrators of a deceased shareholder (not being one of
several joint holders) shall be the only persons recognized by the Company
as having any title to the shares registered in the name of such
shareholder. When a share is registered in the names of two or more joint
holders, the survivor or survivors or the executors or administrators of
the deceased survivor, shall be the only persons recognized by the Company
as having any title to, or interest in, such share.
45. Notwithstanding anything in these Articles, if the Company has only one
shareholder (not being one of several joint holders) and that shareholder
dies, the executors or administrators of the deceased shareholder shall be
entitled to register themselves in the Register as the holders of the
shares registered in the name of the deceased shareholder whereupon they
shall have all the rights given by these Articles and by law to
shareholders.
46. Any person entitled to shares upon the death or bankruptcy of any
shareholder or in any way other than by allotment or transfer may, upon
producing such evidence of entitlement as the directors require, may be
registered as a shareholder in respect of such shares, or may, without
being registered, transfer such shares subject to the provisions of these
Articles respecting the transfer of shares. The directors shall have the
same right to refuse registration as if the transferee were named in an
ordinary transfer presented for registration.
SURRENDER OF SHARES
47. The directors may accept the surrender of any share by way of compromise of
any question as to the holder being properly registered in respect thereof.
Any share so surrendered may be disposed of in the same manner as a
forfeited share.
SHARE WARRANT
48. The Company, with respect to any fully paid-up shares, may issue warrants
("Share Warrants") stating that the bearer is entitled to the shares
therein specified, and may provide, by coupons or otherwise, for the
payment of future dividends on the shares included in the Share Warrants.
49. The directors may determine and vary the conditions upon which Share
Warrants will be issued and, without limiting the generality of the
foregoing, may determine the conditions upon which
(1) a new Share Warrant or coupon will be issued in the place of one worn
out, defaced, lost or destroyed, or
(2) the bearer of a Share Warrant will be entitled to attend and vote at
general meetings, or
(3) a Share Warrant may be surrendered and the name of the bearer entered
in the Register in respect of the shares therein specified.
Subject to such conditions and to these Articles the bearer of a Share
Warrant shall be a shareholder to the full extent. The bearer of a Share
Warrant shall be subject to the conditions for the time being in force,
whether made before or after the issue of the Share Warrant.
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INCREASE AND REDUCTION OF CAPITAL
50. Subject to the Act, the Company may by resolution of its shareholders
increase its share capital by the creation of new shares of such amount as
it thinks expedient.
51. Subject to the Act, the new shares may be issued upon such terms and
conditions and with such rights, privileges, limitations, restrictions and
conditions attached thereto as the Company by resolution of its
shareholders determines or, if no direction is given, as the directors
determine.
52. The Company by resolution of its shareholders may, before the issue of any
new shares, determine that such shares or any of them shall be offered in
the first instance to all the then shareholders or to the holders of any
class or series of shares in proportion to the amount of the capital held
by them, or make any other provisions as to the issue and allotment of such
shares. In default of any such determination or to the extent that it does
not apply, the directors shall control the new shares.
53. Except as otherwise provided by the conditions of issue, or by these
Articles, any capital raised by the creation of new shares shall be
considered part of the original capital and shall be subject to the
provisions herein contained with reference to payment of calls and
instalments, transfer and transmission, forfeiture, lien and otherwise.
54. The Company may, by special resolution where required, reduce its share
capital in any way and with and subject to any incident authorized and
consent required by law.
ALTERATION OF CAPITAL
55. Subject to the Act, the Company may by resolution of its shareholders:
(1) consolidate and divide all or any of its share capital into shares of
larger amount than its existing shares;
(2) convert all or any of its paid-up shares into stock and reconvert that
stock into paid-up shares of any denomination;
(3) exchange shares of one denomination for another; or
(4) cancel shares which, at the date of the passing of the resolution in
that behalf, have not been taken or agreed to be taken by any person,
and diminish the amount of its share capital by the amount of the
share so cancelled.
56. Subject to the Act, the Company may by special resolution:
(1) subdivide its shares, or any of them, into shares of smaller amount
than is fixed by the Memorandum, so, however, that in the subdivision
the proportion between the amount paid and the amount, if any, unpaid
on each reduced share shall be the same as it was in the case of the
share from which the reduced share is derived and the special
resolution whereby any share is subdivided may determine that as
between the holders of the shares resulting from such subdivision, one
or more of such shares shall have some preference or special advantage
as regards dividend, capital, voting or otherwise, over, or as
compared with, the others or other;
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(2) convert any part of its issued or unissued share capital into
preference shares redeemable or purchasable by the Company;
(3) provide for the issue of shares without any nominal or par value
provided that, upon any such issue, a declaration executed by the
Secretary must be filed with the Registrar stating the number of
shares issued and the amount received therefor;
(4) convert all or any of its previously authorized, unissued or issued,
fully paid-up shares, other than preferred shares, with nominal or par
value into the same number of shares without any nominal or par value,
and reduce, maintain or increase accordingly its liability on any of
its shares so converted; provided that the power to reduce its
liability on any of its shares so converted may, where it results in a
reduction of capital, only be exercised subject to confirmation by the
court as provided by the Act; or
(5) convert all or any of its previously authorized, unissued or issued,
fully paid-up shares without nominal or par value into the same or a
different number of shares with nominal or par value, and for such
purpose the shares issued without nominal or par value and replaced by
shares with a nominal or par value shall be considered as fully paid,
but their aggregate par value shall not exceed the value of the net
assets of the Company as represented by the shares without par value
issued before the conversion.
57. Subject to the Act and any provisions attached to such shares, the Company
may redeem, purchase or acquire any of its shares and the directors may
determine the manner and the terms for redeeming, purchasing or acquiring
such shares and may provide a sinking fund on such terms as they think fit
for the redemption, purchase or acquisition of shares of any class or
series.
INTEREST ON SHARE CAPITAL
58. The Company may pay interest at a rate not exceeding 6% per year on share
capital issued and paid-up for the purpose of raising funds to defray the
expenses of the construction of any works or buildings or the provision of
any plant which cannot be operated profitably for a lengthy period of time.
Such interest may be paid for such period and may be charged to capital as
part of the cost of construction of the work or building or of the
provision of the plant. The payment of the interest shall not operate to
reduce the amount paid-up on the shares in respect of which it is paid.
The accounts of the Company shall show full particulars of the payment
during the period to which the accounts relate.
CLASSES AND SERIES OF SHARES
59. Subject to the Act and the Memorandum, and without prejudice to any special
rights previously conferred on the holders of existing shares, any share
may be issued with such preferred, deferred or other special rights, or
with such restrictions, whether in regard to dividends, voting, return of
share capital or otherwise, as the Company may from time to time determine
by special resolution.
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MEETINGS AND VOTING BY CLASS OR SERIES
60. Where the holders of shares of a class or series have, under the Act, the
Memorandum, the terms or conditions attaching to such shares or otherwise,
the right to vote separately as a class in respect of any matter then,
except as provided in the Act, the Memorandum, these Articles or such terms
or conditions, all the provisions in these Articles concerning general
meetings (including, without limitation, provisions respecting notice,
quorum and procedure) shall, mutatis mutandis, apply to every meeting of
holders of such class or series of shares convened for the purpose of such
vote.
61. Unless the rights, privileges, terms or conditions attached to a class or
series of shares provide otherwise, such class or series of shares shall
not have the right to vote separately as a class or series upon an
amendment to the Memorandum or Articles to:
(1) increase or decrease any maximum number of authorized shares of such
class or series, or increase any maximum number of authorized shares
of a class or series having rights or privileges equal or superior to
the shares of such class or series;
(2) effect an exchange, reclassification or cancellation of all or part of
the shares of such class or series; or
(3) create a new class or series of shares equal or superior to the shares
of such class or series.
BORROWING POWERS
62. The directors on behalf of the Company may:
(1) raise or borrow money for the purposes of the Company or any of them;
(2) secure, subject to the sanction of a special resolution where required
by the Act, the repayment of funds so raised or borrowed in such
manner and upon such terms and conditions in all respects as they
think fit, and in particular by the execution and delivery of
mortgages of the Company's real or personal property, or by the issue
of bonds, debentures or other securities of the Company secured by
mortgage or other charge upon all or any part of the property of the
Company, both present and future, including its uncalled capital for
the time being;
(3) sign or endorse bills, notes, acceptances, cheques, contracts, and
other evidence of or securities for funds borrowed or to be borrowed
for the purposes aforesaid;
(4) pledge debentures as security for loans;
(5) guarantee obligations of any person.
63. Bonds, debentures and other securities may be made assignable, free from
any equities between the Company and the person to whom such securities
were issued.
64. Any bonds, debentures and other securities may be issued at a discount,
premium or otherwise and with special privileges as to redemption,
surrender, drawings, allotment of shares, attending and voting at general
meetings of the Company, appointment of directors and other matters.
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GENERAL MEETINGS
65. Ordinary general meetings of the Company shall be held at least once in
every calendar year at such time and place as may be determined by the
directors and not later than 15 months after the preceding ordinary general
meeting. All other meetings of the Company shall be called special general
meetings. Ordinary or special general meetings may be held either within
or without the Province of Nova Scotia.
66. The President, a vice-president or the directors may at any time convene a
special general meeting, and the directors, upon the requisition of
shareholders in accordance with the Act shall forthwith proceed to convene
such meeting or meetings to be held at such time and place or times and
places as the directors determine.
67. The requisition shall state the objects of the meeting requested, be signed
by the requisitionists and deposited at the Office of the Company. It may
consist of several documents in like form each signed by one or more of the
requisitionists.
68. At least seven clear days' notice, or such longer period of notice as may
be required by the Act, of every general meeting, specifying the place, day
and hour of the meeting and, when special business is to be considered, the
general nature of such business, shall be given to the shareholders
entitled to be present at such meeting by notice given as permitted by
these Articles. With the consent in writing of all the shareholders
entitled to vote at such meeting, a meeting may be convened by a shorter
notice and in any manner they think fit, or notice of the time, place and
purpose of the meeting may be waived by all of the shareholders.
69. When it is proposed to pass a special resolution, the two meetings may be
convened by the same notice, and it shall be no objection to such notice
that it only convenes the second meeting contingently upon the resolution
being passed by the requisite majority at the first meeting.
70. The accidental omission to give notice to a shareholder, or non-receipt of
notice by a shareholder, shall not invalidate any resolution passed at any
general meeting.
RECORD DATES
71. (1) The directors may fix in advance a date as the record date for the
determination of shareholders
(a) entitled to receive payment of a dividend or entitled to receive
any distribution;
(b) entitled to receive notice of a meeting; or
(c) for any other purpose.
(2) If no record date is fixed, the record date for the determination of
shareholders
(a) entitled to receive notice of a meeting shall be the day
immediately preceding the day on which the notice is given, or,
if no notice is given, the day on which the meeting is held; and
(b) for any other purpose shall be the day on which the directors
pass the resolution relating to the particular purpose.
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PROCEEDINGS AT GENERAL MEETINGS
72. The business of an ordinary general meeting shall be to receive and
consider the financial statements of the Company and the report of the
directors and the report, if any, of the auditors, to elect directors in
the place of those retiring and to transact any other business which under
these Articles ought to be transacted at an ordinary general meeting.
73. No business shall be transacted at any general meeting unless the requisite
quorum is present at the commencement of the business. A corporate
shareholder of the Company that has a duly authorized agent or
representative present at any such meeting shall for the purpose of this
Article be deemed to be personally present at such meeting.
74. One person, being a shareholder, proxyholder or representative of a
corporate shareholder, present and entitled to vote shall constitute a
quorum for a general meeting, and may hold a meeting.
75. The Chairman shall be entitled to take the chair at every general meeting
or, if there be no Chairman, or if the Chairman is not present within
fifteen 15 minutes after the time appointed for holding the meeting, the
President or, failing the President, a vice-president shall be entitled to
take the chair. If the Chairman, the President or a vice-president is not
present within 15 minutes after the time appointed for holding the meeting
or if all such persons present decline to take the chair, the shareholders
present entitled to vote at the meeting shall choose another director as
chairman and if no director is present or if all the directors present
decline to take the chair, then such shareholders shall choose one of their
number to be chairman.
76. If within half an hour from the time appointed for a general meeting a
quorum is not present, the meeting, if it was convened pursuant to a
requisition of shareholders, shall be dissolved; if it was convened in any
other way, it shall stand adjourned to the same day, in the next week, at
the same time and place. If at the adjourned meeting a quorum is not
present within half an hour from the time appointed for the meeting, the
shareholders present shall be a quorum and may hold the meeting.
77. Subject to the Act, at any general meeting a resolution put to the meeting
shall be decided by a show of hands unless, either before or on the
declaration of the result of the show of hands, a poll is demanded by the
chairman, a shareholder or a proxyholder; and unless a poll is so demanded,
a declaration by the chairman that the resolution has been carried, carried
by a particular majority, lost or not carried by a particular majority and
an entry to that effect in the Company's book of proceedings shall be
conclusive evidence of the fact without proof of the number or proportion
of the votes recorded in favour or against such resolution.
78. When a poll is demanded, it shall be taken in such manner and at such time
and place as the chairman directs, and either at once or after an interval
or adjournment or otherwise. The result of the poll shall be the
resolution of the meeting at which the poll was demanded. The demand of a
poll may be withdrawn. When any dispute occurs over the admission or
rejection of a vote, it shall be resolved by the chairman and such
determination made in good faith shall be final and conclusive.
79. The chairman shall not have a casting vote in addition to any vote or votes
that the Chairman has as a shareholder.
80. The chairman of a general meeting may with the consent of the meeting
adjourn the meeting from time to time and from place to place, but no
business shall be transacted at any adjourned meeting other than the
business left unfinished at the meeting that was adjourned.
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81. Any poll demanded on the election of a chairman or on a question of
adjournment shall be taken forthwith without adjournment.
82. The demand of a poll shall not prevent the continuance of a meeting for the
transaction of any business other than the question on which a poll has
been demanded.
VOTES OF SHAREHOLDERS
83. Subject to the Act and to any provisions attached to any class or series of
shares concerning voting rights
(1) on a show of hands every shareholder present in person, every duly
authorized representative of a corporate shareholder, and, if not
prevented from voting by the Act, every proxyholder, shall have one
vote; and
(2) on a poll every shareholder present in person, every duly authorized
representative of a corporate shareholder, and every proxyholder,
shall have one vote for every share held;
whether or not such representative or proxyholder is a shareholder.
84. Any person entitled to transfer shares upon the death or bankruptcy of any
shareholder or in any way other than by allotment or transfer may vote at
any general meeting in respect thereof in the same manner as if such person
were the registered holder of such shares so long as the directors are
satisfied at least 48 hours before the time of holding the meeting of such
person's right to transfer such shares.
85. Where there are joint registered holders of any share, any of such holders
may vote such share at any meeting, either personally or by proxy, as if
solely entitled to it. If more than one joint holder is present at any
meeting, personally or by proxy, the one whose name stands first on the
Register in respect of such share shall alone be entitled to vote it.
Several executors or administrators of a deceased shareholder in whose name
any share stands shall for the purpose of this Article be deemed joint
holders thereof.
86. Votes may be cast either personally or by proxy or, in the case of a
corporate shareholder by a representative duly authorized under the Act.
87. A proxy shall be in writing and executed in the manner provided in the Act.
A proxy or other authority of a corporate shareholder does not require its
seal. Holders of Share Warrants shall not be entitled to vote by proxy in
respect of the shares included in such warrants unless otherwise expressed
in such warrants.
88. A shareholder of unsound mind in respect of whom an order has been made by
any court of competent jurisdiction may vote by guardian or other person in
the nature of a guardian appointed by that court, and any such guardian or
other person may vote by proxy.
89. A proxy and the power of attorney or other authority, if any, under which
it is signed or a notarially certified copy of that power or authority
shall be deposited at the Office of the Company or at such other place as
the directors may direct. The directors may, by resolution, fix a time not
exceeding 48 hours excluding Saturdays and holidays preceding any meeting
or adjourned meeting before which time proxies to be used at that meeting
must be deposited with the Company at its Office or with an agent of the
Company. Notice of the requirement for depositing proxies shall be given
in the notice calling the meeting. The chairman of the meeting shall
determine all questions as to validity of proxies and other instruments of
authority.
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90. A vote given in accordance with the terms of a proxy shall be valid
notwithstanding the previous death of the principal, the revocation of the
proxy, or the transfer of the share in respect of which the vote is given,
provided no intimation in writing of the death, revocation or transfer is
received at the Office of the Company before the meeting or by the chairman
of the meeting before the vote is given.
91. Every form of proxy shall comply with the Act and its regulations and
subject thereto may be in the following form:
I, _____________________________________________________ of
______________________________________________________ being a
shareholder of ___________________________________________________
hereby appoint ___________________________________________________
of ________________________________ (or failing him/her
____________________________________________ of __________________
_______________) as proxyholder to attend and to vote for me and on my
behalf at the ordinary/special general meeting of the Company, to be
held on the __________________ day of ____________ and at any
adjournment thereof, or at any meeting of the Company which may be
held prior to [insert specified date or event].
[If the proxy is solicited by or behalf of the management of the
Company, insert a statement to that effect.]
Dated this _____ day of ____________ _____.
--------------------------------------------
Shareholder
92. Subject to the Act, no shareholder shall be entitled to be present or to
vote on any question, either personally or by proxy, at any general meeting
or be reckoned in a quorum while any call is due and payable to the Company
in respect of any of the shares of such shareholder.
93. Any resolution passed by the directors, notice of which has been given to
the shareholders in the manner in which notices are hereinafter directed to
be given and which is, within one month after it has been passed, ratified
and confirmed in writing by shareholders entitled on a poll to three-fifths
of the votes, shall be as valid and effectual as a resolution of a general
meeting. This Article shall not apply to a resolution for winding up the
Company or to a resolution dealing with any matter that by statute or these
Articles ought to be dealt with by a special resolution or other method
prescribed by statute.
94. A resolution, including a special resolution, in writing and signed by
every shareholder who would be entitled to vote on the resolution at a
meeting is as valid as if it were passed by such shareholders at a meeting
and satisfies all of the requirements of the Act respecting meetings of
shareholders.
DIRECTORS
95. Unless otherwise determined by resolution of shareholders, the number of
directors shall not be less than one or more than ten.
96. Notwithstanding anything herein contained the subscribers to the Memorandum
shall be the first directors of the Company.
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97. The directors may be paid out of the funds of the Company as remuneration
for their service such sums, if any, as the Company may by resolution of
its shareholders determine, and such remuneration shall be divided among
them in such proportions and manner as the directors determine. The
directors may also be paid their reasonable travelling, hotel and other
expenses incurred in attending meetings of directors and otherwise in the
execution of their duties as directors.
98. The continuing directors may act notwithstanding any vacancy in their body,
but if their number falls below the minimum permitted, the directors shall
not, except in emergencies or for the purpose of filling vacancies, act so
long as their number is below the minimum.
99. A director may, in conjunction with the office of director, and on such
terms as to remuneration and otherwise as the directors arrange or
determine, hold any other office or place of profit under the Company or
under any company in which the Company is a shareholder or is otherwise
interested.
100. The office of a director shall ipso facto be vacated if the director:
(1) becomes bankrupt or makes an assignment for the benefit of creditors;
(2) is, or is found by a court of competent jurisdiction to be, of unsound
mind;
(3) by notice in writing to the Company, resigns the office of director;
or
(4) is removed in the manner provided by these Articles.
101. No director shall be disqualified by holding the office of director from
contracting with the Company, either as vendor, purchaser, or otherwise,
nor shall any such contract, or any contract or arrangement entered into or
proposed to be entered into by or on behalf of the Company in which any
director is in any way interested, either directly or indirectly, be
avoided, nor shall any director so contracting or being so interested be
liable to account to the Company for any profit realized by any such
contract or arrangement by reason only of such director holding that office
or of the fiduciary relations thereby established, provided the director
makes a declaration or gives a general notice in accordance with the Act.
No director shall, as a director, vote in respect of any contract or
arrangement in which the director is so interested, and if the director
does so vote, such vote shall not be counted. This prohibition may at any
time or times be suspended or relaxed to any extent by a resolution of the
shareholders and shall not apply to any contract by or on behalf of the
Company to give to the directors or any of them any security for advances
or by way of indemnity.
ELECTION OF DIRECTORS
102. At the dissolution of every ordinary general meeting at which their
successors are elected, all the directors shall retire from office and be
succeeded by the directors elected at such meeting. Retiring directors
shall be eligible for re-election.
103. If at any ordinary general meeting at which an election of directors ought
to take place no such election takes place, or if no ordinary general
meeting is held in any year or period of years, the retiring directors
shall continue in office until their successors are elected.
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104. The Company may by resolution of its shareholders elect any number of
directors permitted by these Articles and may determine or alter their
qualification.
105. The Company may, by special resolution or in any other manner permitted by
statute, remove any director before the expiration of such director's
period of office and may, if desired, appoint a replacement to hold office
during such time only as the director so removed would have held office.
106. The directors may appoint any other person as a director so long as the
total number of directors does not at any time exceed the maximum number
permitted. No such appointment, except to fill a casual vacancy, shall be
effective unless two-thirds of the directors concur in it. Any casual
vacancy occurring among the directors may be filled by the directors, but
any person so chosen shall retain office only so long as the vacating
director would have retained it if the vacating director had continued as
director.
MANAGING DIRECTORS
107. The directors may appoint one or more of their body to be managing
directors of the Company, either for a fixed term or otherwise , and may
remove or dismiss them from office and appoint replacements.
108. Subject to the provisions of any contract between a managing director and
the Company, a managing director shall be subject to the same provisions as
to resignation and removal as the other directors of the Company. A
managing director who for any reason ceases to hold the office of director
shall ipso facto immediately cease to be a managing director.
109. The remuneration of a managing director shall from time to time be fixed by
the directors and may be by way of any or all of salary, commission and
participation in profits.
110. The directors may from time to time entrust to and confer upon a managing
director such of the powers exercisable under these Articles by the
directors as they think fit, and may confer such powers for such time, and
to be exercised for such objects and purposes and upon such terms and
conditions, and with such restrictions as they think expedient; and they
may confer such powers either collaterally with, or to the exclusion of,
and in substitution for, all or any of the powers of the directors in that
behalf; and may from time to time revoke, withdraw, alter or vary all or
any of such powers.
CHAIRMAN OF THE BOARD
111. The directors may elect one of their number to be Chairman and may
determine the period during which the Chairman is to hold office. The
Chairman shall perform such duties and receive such special remuneration as
the directors may provide.
PRESIDENT AND VICE-PRESIDENTS
112. The directors shall elect the President of the Company, who need not be a
director, and may determine the period for which the President is to hold
office. The President shall have general supervision of the business of
the Company and shall perform such duties as may be assigned from time to
time by the directors.
113. The directors may also elect vice-presidents, who need not be directors,
and may determine the periods for which they are to hold office. A vice-
president shall, at the request of the President or the directors and
subject to the
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directions of the directors, perform the duties of the President during the
absence, illness or incapacity of the President, and shall also perform
such duties as may be assigned by the President or the directors.
SECRETARY AND TREASURER
114. The directors shall appoint a Secretary of the Company to keep minutes of
shareholders' and directors' meetings and perform such other duties as may
be assigned by the directors. The directors may also appoint a temporary
substitute for the Secretary who shall, for the purposes of these Articles,
be deemed to be the Secretary.
115. The directors may appoint a treasurer of the Company to carry out such
duties as the directors may assign.
OFFICERS
116. The directors may elect or appoint such other officers of the Company,
having such powers and duties, as they think fit.
117. If the directors so decide the same person may hold more than one of the
offices provided for in these Articles.
PROCEEDINGS OF DIRECTORS
118. The directors may meet together for the dispatch of business, adjourn and
otherwise regulate their meetings and proceedings, as they think fit, and
may determine the quorum necessary for the transaction of business. Until
otherwise determined, one director shall constitute a quorum and may hold a
meeting.
119. If all directors of the Company entitled to attend a meeting either
generally or specifically consent, a director may participate in a meeting
of directors or of a committee of directors by means of such telephone or
other communications facilities as permit all persons participating in the
meeting to hear each other, and a director participating in such a meeting
by such means is deemed to be present at that meeting for purposes of these
Articles.
120. Meetings of directors may be held either within or without the Province of
Nova Scotia and the directors may from time to time make arrangements
relating to the time and place of holding directors' meetings, the notices
to be given for such meetings and what meetings may be held without notice.
Unless otherwise provided by such arrangements:
(1) a meeting of directors may be held at the close of every ordinary
general meeting of the Company without notice;
(2) notice of every other directors' meeting may be given as permitted by
these Articles to each director at least 48 hours before the time
fixed for the meeting; and
(3) a meeting of directors may be held without formal notice if all the
directors are present or if those absent have signified their assent
to such meeting or their consent to the business transacted at such
meeting.
121. The President or any director may at any time, and the Secretary, upon the
request of the President or any director, shall summon a meeting of the
directors to be held at the Office of the Company. The President, the
Chairman or a majority of the directors may at any time, and the Secretary,
upon the request of the President, the Chairman or a majority of the
directors, shall summon a meeting to be held elsewhere.
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122. (1) Questions arising at any meeting of directors shall be decided by a
majority of votes. The chairman of the meeting may vote as a director
but shall not have a second or casting vote.
(2) At any meeting of directors the chairman shall receive and count the
vote of any director not present in person at such meeting on any
question or matter arising at such meeting whenever such absent
director has indicated by telegram, letter or other writing lodged
with the chairman of such meeting the manner in which the absent
director desires to vote on such question or matter and such question
or matter has been specifically mentioned in the notice calling the
meeting as a question or matter to be discussed or decided thereat.
In respect of any such question or matter so mentioned in such notice
any director may give to any other director a proxy authorizing such
other director to vote for such first named director at such meeting,
and the chairman of such meeting, after such proxy has been so lodged,
shall receive and count any vote given in pursuance thereof
notwithstanding the absence of the director giving such proxy.
123. If no Chairman is elected, or if at any meeting of directors the Chairman
is not present within five minutes after the time appointed for holding the
meeting, or declines to take the chair, the President, if a director, shall
preside. If the President is not a director, is not present at such time
or declines to take the chair, a vice-president who is also a director
shall preside. If no person described above is present at such time and
willing to take the chair, the directors present shall choose some one of
their number to be chairman of the meeting.
124. A meeting of the directors at which a quorum is present shall be competent
to exercise all or any of the authorities, powers and discretions for the
time being vested in or exercisable by the directors generally.
125. The directors may delegate any of their powers to committees consisting of
such number of directors as they think fit. Any committee so formed shall
in the exercise of the powers so delegated conform to any regulations that
may be imposed on them by the directors.
126. The meetings and proceedings of any committee of directors shall be
governed by the provisions contained in these Articles for regulating the
meetings and proceedings of the directors insofar as they are applicable
and are not superseded by any regulations made by the directors.
127. All acts done at any meeting of the directors or of a committee of
directors or by any person acting as a director shall, notwithstanding that
it is afterwards discovered that there was some defect in the appointment
of the director or person so acting, or that they or any of them were
disqualified, be as valid if every such person had been duly appointed and
was qualified to be a director.
128. A resolution in writing and signed by every director who would be entitled
to vote on the resolution at a meeting is as valid as if it were passed by
such directors at a meeting.
129. If any one or more of the directors is called upon to perform extra
services or to make any special exertions in going or residing abroad or
otherwise for any of the purposes of the Company or the business thereof,
the Company may remunerate the director or directors so doing, either by a
fixed sum or by a percentage of profits or otherwise. Such remuneration
shall be determined by the directors and may be either in addition to or in
substitution for remuneration otherwise authorized by these Articles.
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REGISTERS
130. The directors shall cause to be kept at the Company's Office in accordance
with the provisions of the Act a Register of the shareholders of the
Company, a register of the holders of bonds, debentures and other
securities of the Company and a register of its directors. Branch
registers of the shareholders and of the holders of bonds, debentures and
other securities may be kept elsewhere, either within or without the
Province of Nova Scotia, in accordance with the Act.
MINUTES
131. The directors shall cause minutes to be entered in books designated for the
purpose:
(1) of all appointments of officers;
(2) of the names of directors present at each meeting of directors and of
any committees of directors;
(3) of all orders made by the directors and committees of directors; and
(4) of all resolutions and proceedings of meetings of shareholders and of
directors.
Any such minutes of any meeting of directors or of any committee of
directors or of shareholders, if purporting to be signed by the chairman of
such meeting or by the chairman of the next succeeding meeting, shall be
receivable as prima facie evidence of the matters stated in such minutes.
POWERS OF DIRECTORS
132. The management of the business of the Company is vested in the directors
who, in addition to the powers and authorities by these Articles or
otherwise expressly conferred upon them, may exercise all such powers and
do all such acts and things as may be exercised or done by the Company and
are not hereby or by statute expressly directed or required to be exercised
or done by the shareholders, but subject nevertheless to the provisions of
any statute, the Memorandum or these Articles. No modification of the
Memorandum or these Articles shall invalidate any prior act of the
directors that would have been valid if such modification had not been
made.
133. Without restricting the generality of the terms of any of these Articles
and without prejudice to the powers conferred thereby, the directors may:
(1) take such steps as they think fit to carry out any agreement or
contract made by or on behalf of the Company;
(2) pay costs, charges and expenses preliminary and incidental to the
promotion, formation, establishment, and registration of the Company;
(3) purchase or otherwise acquire for the Company any property, rights or
privileges that the Company is authorized to acquire, at such price
and generally on such terms and conditions as they think fit;
<PAGE>
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(4) pay for any property, rights or privileges acquired by, or services
rendered to the Company either wholly or partially in cash or in
shares (fully paid-up or otherwise), bonds, debentures or other
securities of the Company;
(5) subject to the Act, secure the fulfilment of any contracts or
engagements entered into by the Company by mortgaging or charging all
or any of the property of the Company and its unpaid capital for the
time being, or in such other manner as they think fit;
(6) appoint, remove or suspend at their discretion such experts, managers,
secretaries, treasurers, officers, clerks, agents and servants for
permanent, temporary or special services, as they from time to time
think fit, and determine their powers and duties and fix their
salaries or emoluments and require security in such instances and to
such amounts as they think fit;
(7) accept a surrender of shares from any shareholder insofar as the law
permits and on such terms and conditions as may be agreed;
(8) appoint any person or persons to accept and hold in trust for the
Company any property belonging to the Company, or in which it is
interested, execute and do all such deeds and things as may be
required in relation to such trust, and provide for the remuneration
of such trustee or trustees;
(9) institute, conduct, defend, compound or abandon any legal proceedings
by and against the Company, its directors or its officers or otherwise
concerning the affairs of the Company, and also compound and allow
time for payment or satisfaction of any debts due and of any claims or
demands by or against the Company;
(10) refer any claims or demands by or against the Company to arbitration
and observe and perform the awards;
(11) make and give receipts, releases and other discharges for amounts
payable to the Company and for claims and demands of the Company;
(12) determine who may exercise the borrowing powers of the Company and
sign on the Company's behalf bonds, debentures or other securities,
bills, notes, receipts, acceptances, assignments, transfers,
hypothecations, pledges, endorsements, cheques, drafts, releases,
contracts, agreements and all other instruments and documents;
(13) provide for the management of the affairs of the Company abroad in
such manner as they think fit, and in particular appoint any person to
be the attorney or agent of the Company with such powers (including
power to sub-delegate) and upon such terms as may be thought fit;
(14) invest and deal with any funds of the Company in such securities and
in such manner as they think fit; and vary or realize such
investments;
(15) subject to the Act, execute in the name and on behalf of the Company
in favour of any director or other person who may incur or be about to
incur any personal liability for the benefit of the Company such
mortgages of the Company's property, present and future, as they think
fit;
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(16) give any officer or employee of the Company a commission on the
profits of any particular business or transaction or a share in the
general profits of the Company;
(17) set aside out of the profits of the Company before declaring any
dividend such amounts as they think proper as a reserve fund to meet
contingencies or provide for dividends, depreciation, repairing,
improving and maintaining any of the property of the Company and such
other purposes as the directors may in their absolute discretion think
in the interests of the Company; and invest such amounts in such
investments as they think fit, and deal with and vary such
investments, and dispose of all or any part of them for the benefit of
the Company, and divide the reserve fund into such special funds as
they think fit, with full power to employ the assets constituting the
reserve fund in the business of the Company without being bound to
keep them separate from the other assets;
(18) make, vary and repeal rules respecting the business of the Company,
its officers and employees, the shareholders of the Company or any
section or class of them;
(19) enter into all such negotiations and contracts, rescind and vary all
such contracts, and execute and do all such acts, deeds and things in
the name and on behalf of the Company as they consider expedient for
or in relation to any of the matters aforesaid or otherwise for the
purposes of the Company;
(20) provide for the management of the affairs of the Company in such
manner as they think fit.
SOLICITORS
134. The Company may employ or retain solicitors any of whom may, at the request
or on the instruction of the directors, the Chairman, the President or a
managing director, attend meetings of the directors or shareholders,
whether or not the solicitor is a shareholder or a director of the Company.
A solicitor who is also a director may nevertheless charge for services
rendered to the Company as a solicitor.
THE SEAL
135. The directors shall arrange for the safe custody of the common seal of the
Company (the "Seal"). The Seal may be affixed to any instrument in the
presence of and contemporaneously with the attesting signature of (i) any
director or officer acting within such person's authority or (ii) any
person under the authority of a resolution of the directors or a committee
thereof. For the purpose of certifying documents or proceedings the Seal
may be affixed by any director or the President, a vice-president, the
Secretary, an assistant secretary or any other officer of the Company
without the authorization of a resolution of the directors.
136. The Company may have facsimiles of the Seal which may be used
interchangeably with the Seal.
137. The Company may have for use at any place outside the Province of Nova
Scotia, as to all matters to which the corporate existence and capacity of
the Company extends, an official seal that is a facsimile of the Seal of
the Company with the addition on its face of the name of the place where it
is to be used; and the Company may by writing under its Seal authorize any
person to affix such official seal at such place to any document to which
the Company is a party.
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DIVIDENDS
138. The directors may from time to time declare such dividend as they deem
proper upon shares of the Company according to the rights and restrictions
attached to any class or series of shares, and may determine the date upon
which such dividend will be payable and that it will be payable to the
persons registered as the holders of the shares on which it is declared at
the close of business upon a record date. No transfer of such shares
registered after the record date shall pass any right to the dividend so
declared.
139. No dividends shall be payable except out of the profits, retained earnings
or contributed surplus of the Company and no interest shall be payable on
any dividend except insofar as the rights attached to any class or series
of shares provide otherwise.
140. The declaration of the directors as to the amount of the profits, retained
earnings or contributed surplus of the Company shall be conclusive.
141. The directors may from time to time pay to the shareholders such interim
dividends as in their judgment the position of the Company justifies.
142. Subject to the Memorandum, these Articles and the rights and restrictions
attached to any class or series of shares, dividends may be declared and
paid to the shareholders in proportion to the amount of capital paid-up on
the shares (not including any capital paid-up bearing interest) held by
them respectively.
143. The directors may deduct from the dividends payable to any shareholder
amounts due and payable by the shareholder to the Company on account of
calls, instalments or otherwise, and may apply the same in or towards
satisfaction of such amounts so due and payable.
144. The directors may retain any dividends on which the Company has a lien, and
may apply the same in or towards satisfaction of the debts, liabilities or
engagements in respect of which the lien exists.
145. The directors may retain the dividends payable upon shares to which a
person is entitled or entitled to transfer upon the death or bankruptcy of
a shareholder or in any way other than by allotment or transfer, until such
person has become registered as the holder of such shares or has duly
transferred such shares.
146. When the directors declare a dividend on a class or series of shares and
also make a call on such shares payable on or before the date on which the
dividend is payable, the directors may retain all or part of the dividend
and set off the amount retained against the call.
147. The directors may declare that a dividend be paid by the distribution of
cash, paid-up shares (at par or at a premium), debentures, bonds or other
securities of the Company or of any other company or any other specific
assets held or to be acquired by the Company or in any one or more of such
ways.
148. The directors may settle any difficulty that may arise in regard to the
distribution of a dividend as they think expedient, and in particular
without restricting the generality of the foregoing may issue fractional
certificates, may fix the value for distribution of any specific assets,
may determine that cash payments will be made to any shareholders upon the
footing of the value so fixed or that fractions may be disregarded in order
to adjust the rights of all parties, and may vest cash or specific assets
in trustees upon such trusts for the persons entitled to the dividend as
may seem expedient to the directors.
<PAGE>
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149. Any person registered as a joint holder of any share may give effectual
receipts for all dividends and payments on account of dividends in respect
of such share.
150. Unless otherwise determined by the Directors, any dividend may be paid by a
cheque or warrant delivered to or sent through the post to the registered
address of the member entitled, or, when there are joint holders, to the
registered address of that one whose name stands first on the register for
the shares jointly held. Every cheque or warrant so delivered or sent
shall be made payable to the order of the person to whom it is delivered or
sent. The mailing or other transmission to a shareholder at the
shareholder's registered address (or, in the case of joint shareholders at
the address of the holder whose name stands first on the register) of a
cheque payable to the order of the person to whom it is addressed for the
amount of any dividend payable in cash after the deduction of any tax which
the Company has properly withheld, shall discharge the Company's liability
for the dividend unless the cheque is not paid on due presentation. If any
cheque for a dividend payable in cash is not received, the Company shall
issue to the shareholder a replacement cheque for the same amount on such
terms as to indemnity and evidence of non-receipt as the directors may
impose. No shareholder may recover by action or other legal process
against the Company any dividend represented by a cheque that has not been
duly presented to a banker of the Company for payment or that otherwise
remains unclaimed for 6 years from the date on which it was payable.
ACCOUNTS
151. The directors shall cause proper books of account to be kept of the amounts
received and expended by the Company, the matters in respect of which such
receipts and expenditures take place, all sales and purchases of goods by
the Company, and the assets, credits and liabilities of the Company.
152. The books of account shall be kept at the head office of the Company or at
such other place or places as the directors may direct.
153. The directors shall from time to time determine whether and to what extent
and at what times and places and under what conditions the accounts and
books of the Company or any of them shall be open to inspection of the
shareholders, and no shareholder shall have any right to inspect any
account or book or document of the Company except as conferred by statute
or authorized by the directors or a resolution of the shareholders.
154. At the ordinary general meeting in every year the directors shall lay
before the Company such financial statements and reports in connection
therewith as may be required by the Act or other applicable statute or
regulation thereunder and shall distribute copies thereof at such times and
to such persons as may be required by statute or regulation.
AUDITORS AND AUDIT
155. The Company shall at each ordinary general meeting appoint an auditor or
auditors to hold office until the next ordinary general meeting. If at any
general meeting at which the appointment of an auditor or auditors is to
take place and no such appointment takes place, or if no ordinary general
meeting is held in any year or period of years, the directors shall appoint
an auditor or auditors to hold office until the next ordinary general
meeting.
156. The first auditors of the Company may be appointed by the directors at any
time before the first ordinary general meeting and the auditors so
appointed shall hold office until such meeting unless previously removed by
a resolution of the shareholders, in which event the shareholders may
appoint auditors.
<PAGE>
-24-
157. The directors may fill any casual vacancy in the office of the auditor but
while any such vacancy continues the surviving or continuing auditor or
auditors, if any, may act.
158. The Company may appoint as auditor any person, including a shareholder, not
disqualified by statute.
159. An auditor may be removed or replaced in the circumstances and in the
manner specified in the Act.
160. The remuneration of the auditors shall be fixed by the shareholders, or by
the directors pursuant to authorization given by the shareholders, except
that the remuneration of an auditor appointed to fill a casual vacancy may
be fixed by the directors.
161. The auditors shall conduct such audit as may be required by the Act and
their report, if any, shall be dealt with by the Company as required by the
Act.
NOTICES
162. A notice (including any communication or document) shall be sufficiently
given, delivered or served by the Company upon a shareholder, director,
officer or auditor by personal delivery at such person's registered address
(or, in the case of a director, officer or auditor, last known address) or
by prepaid mail, telegraph, telex, facsimile machine or other electronic
means of communication addressed to such person at such address.
163. Shareholders having no registered address shall not be entitled to receive
notice.
164. The holder of a Share Warrant shall not, unless otherwise expressed
therein, be entitled in respect thereof to notice of any general meeting of
the Company.
165. All notices with respect to registered shares to which persons are jointly
entitled may be sufficiently given to all joint holders thereof by notice
given to whichever of such persons is named first in the Register for such
shares.
166. Any notice sent by mail shall be deemed to be given, delivered or served on
the earlier of actual receipt and the third business day following that
upon which it is mailed, and in proving such service it shall be sufficient
to prove that the notice was properly addressed and mailed with the postage
prepaid thereon. Any notice given by electronic means of communication
shall be deemed to be given when entered into the appropriate transmitting
device for transmission. A certificate in writing signed on behalf of the
Company that the notice was so addressed and mailed or transmitted shall be
conclusive evidence thereof.
167. Every person who by operation of law, transfer or other means whatsoever
becomes entitled to any share shall be bound by every notice in respect of
such share that prior to such person's name and address being entered on
the Register was duly served in the manner hereinbefore provided upon the
person from whom such person derived title to such share.
168. Any notice delivered, sent or transmitted to the registered address of any
shareholder pursuant to these Articles, shall, notwithstanding that such
shareholder is then deceased and that the Company has notice thereof, be
deemed to have been served in respect of any registered shares, whether
held by such deceased shareholder solely or jointly with other persons,
until some other person is registered as the holder or joint holder
thereof, and such service shall for all purposes of these Articles be
deemed a sufficient service of such notice on the heirs, executors or
administrators of the deceased shareholder and all joint holders of such
shares.
<PAGE>
-25-
169. Any notice may bear the name or signature, manual or reproduced, of the
person giving the notice.
170. When a given number of days' notice or notice extending over any other
period is required to be given, the day of service and the day upon which
such notice expires shall not, unless it is otherwise provided, be counted
in such number of days or other period.
INDEMNITY
171. Every director or officer, former director or officer, or person who acts
or acted at the Company's request, as a director or officer of the Company,
a body corporate, partnership or other association of which the Company is
or was a shareholder, partner, member or creditor, and the heirs and legal
representatives of such person, in the absence of any dishonesty on the
part of such person, shall be indemnified by the Company against, and it
shall be the duty of the directors out of the funds of the Company to pay,
all costs, losses and expenses, including an amount paid to settle an
action or claim or satisfy a judgment, that such director, officer or
person may incur or become liable to pay in respect of any claim made
against such person or civil, criminal or administrative action or
proceeding to which such person is made a party by reason of being or
having been a director or officer of the Company or such body corporate,
partnership or other association, whether the Company is a claimant or
party to such action or proceeding or otherwise; and the amount for which
such indemnity is proved shall immediately attach as a lien on the property
of the Company and have priority as against the shareholders over all other
claims.
172. No director or officer, former director or officer, or person who acts or
acted at the Company's request, as a director or officer of the Company, a
body corporate, partnership or other association of which the Company is or
was a shareholder, partner, member or creditor, in the absence of any
dishonesty on such person's part, shall be liable for the acts, receipts,
neglects or defaults of any other director, officer or such person, or for
joining in any receipt or other act for conformity, or for any loss, damage
or expense happening to the Company through the insufficiency or deficiency
of title to any property acquired for or on behalf of the Company, or
through the insufficiency or deficiency of any security in or upon which
any of the funds of the Company are invested, or for any loss or damage
arising from the bankruptcy, insolvency or tortious acts of any person with
whom any funds, securities or effects are deposited, or for any loss
occasioned by error of judgment or oversight on the part of such person, or
for any other loss, damage or misfortune whatsoever which happens in the
execution of the duties of such person or in relation thereto.
REMINDERS
173. The directors shall comply with the following provisions of the Act or the
Corporations Registration Act (Nova Scotia) where indicated:
(1) Keep a current register of shareholders (Section 42).
(2) Keep a current register of directors, officers and managers, send to
the Registrar a copy thereof and notice of all changes therein
(Section 98).
(3) Keep a current register of holders of bonds, debentures and other
securities (Section 111 and Third Schedule).
(4) Send notice to the Registrar of any redemption or purchase of
preference shares (Section 50).
<PAGE>
-26-
(5) Send notice to the Registrar of any consolidation, division,
conversion or reconversion of the share capital or stock of the
Company (Section 53).
(6) Send notice to the Registrar of any increase of capital (Section 55).
(7) Call a general meeting every year within the proper time (Section 83).
Meetings must be held not later than 15 months after the preceding
general meeting.
(8) Send to the Registrar copies of all special resolutions (Section 88).
(9) When shares are issued for a consideration other than cash, file a
copy of the contract with the Registrar on or before the date on which
the shares are issued (Section 109).
(10) Send to the Registrar notice of the address of the Company's Office
and of all changes in such address (Section 79).
(11) Keep proper minutes of all shareholders' meetings and directors'
meetings in the Company's minute book kept at the Company's Office
(Sections 89 and 90).
(12) Obtain a certificate under the Corporations Registration Act (Nova
Scotia) as soon as business is commenced.
(13) Send notice of recognized agent to the Registrar under the
Corporations Registration Act (Nova Scotia).
<PAGE>
-27-
NAME(S) OF SUBSCRIBER(S)
Kimberly A. Bungay
Dated at Halifax, Nova Scotia the 24th day of March, 1998
Witness to above signature(s):
/s/ Marcella J. Forhart
- -----------------------------
Halifax, Nova Scotia
<PAGE>
EXHIBIT 4.1 (c)
================================================================================
PIERCE LEAHY COMMAND COMPANY, as Issuer,
PIERCE LEAHY CORP., for Itself and as a Domestic Guarantor
and
THE BANK OF NEW YORK, as Trustee
------------------------------
INDENTURE
Dated as of April 7, 1998
------------------------------
$135,000,000
8-1/8% Senior Notes due 2008
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1. DEFINITIONS AND INCORPORATION
BY REFERENCE.............................................. 1
Section 1.1. Definitions..................................... 1
Section 1.2. Other Definitions............................... 31
Section 1.3. Incorporation by Reference of Trust
Indenture Act................................... 32
Section 1.4. Rules of Construction........................... 32
ARTICLE 2. THE NOTES................................................. 33
Section 2.1. Dating; Incorporation of Form in
Indenture....................................... 33
Section 2.2. Execution and Authentication.................... 34
Section 2.3. Registrar and Paying Agent...................... 36
Section 2.4. Paying Agent to Hold Money in Trust............. 36
Section 2.5. Noteholder Lists................................ 37
Section 2.6. Transfer and Exchange........................... 37
Section 2.7. Replacement Notes............................... 41
Section 2.8. Outstanding Notes............................... 42
Section 2.9. Temporary Notes................................. 42
Section 2.10. Cancellation.................................... 42
Section 2.11. Defaulted Interest.............................. 43
Section 2.12. Deposit of Moneys............................... 43
Section 2.13. CUSIP Number.................................... 44
Section 2.14. Restrictive Legends............................. 44
Section 2.15. Special Transfer Provisions; Proxies............ 46
ARTICLE 3. REDEMPTION................................................ 49
Section 3.1. Notices to Trustee.............................. 49
Section 3.2. Selection by Trustee of Notes to Be Redeemed.... 50
Section 3.3. Notice of Redemption............................ 50
Section 3.4. Effect of Notice of Redemption.................. 52
Section 3.5. Deposit of Redemption Price..................... 52
Section 3.6. Notes Redeemed in Part.......................... 53
Section 3.7. Optional Redemption............................. 53
Section 3.8. Redemption for Changes in Canadian Withholding
Taxes........................................... 53
i
<PAGE>
ARTICLE 4. COVENANTS................................................. 54
Section 4.1. Payment of Notes................................ 54
Section 4.2. SEC Reports..................................... 54
Section 4.3. Waiver of Stay, Extension or Usury Laws......... 55
Section 4.4. Compliance Certificate.......................... 56
Section 4.5. Taxes........................................... 57
Section 4.6. Limitation on Additional Indebtedness........... 57
Section 4.7. Limitation on Preferred Stock of Restricted
Subsidiaries.................................... 58
Section 4.8. Limitation on Capital Stock of Restricted
Subsidiaries.................................... 58
Section 4.9. Limitation on Restricted Payments............... 59
Section 4.10. Limitation on Certain Asset Sales............... 61
Section 4.11. Limitation on Transactions with Affiliates...... 65
Section 4.12. Limitations on Liens............................ 67
Section 4.13. Limitations on Investments...................... 67
Section 4.14. Limitation on Creation of Subsidiaries.......... 67
Section 4.15. Limitation on Senior Subordinated Debt.......... 68
Section 4.16. Limitation on Sale and Lease-Back Transactions.. 69
Section 4.17. Payments for Consent............................ 69
Section 4.18. Corporate Existence............................. 69
Section 4.19. Change of Control............................... 70
Section 4.20. Maintenance of Office or Agency................. 73
Section 4.21. Maintenance of Properties and Insurance......... 74
Section 4.22. Additional Amounts.............................. 75
ARTICLE 5. SUCCESSOR CORPORATION..................................... 77
Section 5.1. Limitation on Consolidation, Merger and Sale
of Assets....................................... 77
Section 5.2. Successor Person Substituted.................... 78
ARTICLE 6. DEFAULTS AND REMEDIES..................................... 79
Section 6.1. Events of Default............................... 79
Section 6.2. Acceleration.................................... 81
Section 6.3. Other Remedies.................................. 82
ii
<PAGE>
Section 6.4. Waiver of Past Defaults and Events of Default... 83
Section 6.5. Control by Majority............................. 83
Section 6.6. Limitation on Suits............................. 83
Section 6.7. Rights of Holders to Receive Payment............ 84
Section 6.8. Collection Suit by Trustee...................... 84
Section 6.9. Trustee May File Proofs of Claim................ 85
Section 6.10. Priorities...................................... 86
Section 6.11. Undertaking for Costs........................... 86
Section 6.12. Restoration of Rights and Remedies.............. 87
ARTICLE 7. TRUSTEE................................................... 87
Section 7.1. Duties of Trustee............................... 87
Section 7.2. Rights of Trustee............................... 89
Section 7.3. Individual Rights of Trustee.................... 90
Section 7.4. Trustee's Disclaimer............................ 90
Section 7.5. Notice of Defaults.............................. 90
Section 7.6. Reports by Trustee to Holders................... 90
Section 7.7. Compensation and Indemnity...................... 91
Section 7.8. Replacement of Trustee.......................... 92
Section 7.9. Successor Trustee by Consolidation, Merger or
Conversion...................................... 94
Section 7.10. Eligibility; Disqualification................... 94
Section 7.11. Preferential Collection of Claims Against Issuer
and Pierce Leahy................................ 94
Section 7.12. Paying Agents................................... 95
ARTICLE 8. AMENDMENTS, SUPPLEMENTS AND WAIVERS....................... 95
Section 8.1. Without Consent of Holders...................... 95
Section 8.2. With Consent of Holders......................... 96
Section 8.3. Compliance with Trust Indenture Act............. 98
Section 8.4. Revocation and Effect of Consents............... 98
Section 8.5. Notation on or Exchange of Notes................ 99
Section 8.6. Trustee to Sign Amendments, etc................. 99
iii
<PAGE>
ARTICLE 9. DISCHARGE OF INDENTURE; DEFEASANCE............................ 100
Section 9.1. Discharge of Indenture............................. 100
Section 9.2. Legal Defeasance................................... 100
Section 9.3. Covenant Defeasance................................ 101
Section 9.4. Conditions to Defeasance or Covenant Defeasance.... 102
Section 9.5. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Other Miscellaneous
Provisions......................................... 104
Section 9.6. Reinstatement...................................... 105
Section 9.7. Moneys Held by Paying Agent........................ 105
Section 9.8. Moneys Held in Trust............................... 106
ARTICLE 10. GUARANTEE OF NOTES............................................ 107
Section 10.1. Guarantee.......................................... 107
Section 10.2. Execution and Delivery of Guarantees............... 108
Section 10.3. Limitation of Guarantee............................ 109
Section 10.4. Release of Guarantor............................... 109
Section 10.5. Domestic Guarantee Obligations Subordinated to
Domestic Guarantor Senior Indebtedness............. 110
Section 10.6. Payment Over of Proceeds upon Dissolution,
etc., of a Domestic Guarantor...................... 110
Section 10.7. Suspension of Domestic Guarantee Obligations When
Domestic Guarantor Senior Indebtedness in Default.. 113
Section 10.8. Subrogation to Rights of Holders of Domestic
Guarantor Senior Indebtedness...................... 116
Section 10.9. Domestic Guarantee Subordination Provisions Solely
to Define Relative Rights.......................... 116
Section 10.10. Rights of Trustee as a Holder of Domestic Guarantor
Senior Indebtedness; Preservation of Trustee's
Rights............................................. 118
Section 10.11. Trustee's Relation to Domestic Guarantor Senior
Indebtedness....................................... 118
iv
<PAGE>
Section 10.12. Trustee to Effectuate Subordination............... 118
Section 10.13. No Waiver of Subordination Provisions............. 119
Section 10.14. Notice to Trustee................................. 120
Section 10.15. Reliance on Judicial Order or Certificate of
Liquidating Agent................................. 121
Section 10.16. Article Applicable to Paying Agents............... 121
Section 10.17. No Suspension of Remedies......................... 122
Section 10.18. Canadian Guarantee Obligations Senior Ranking..... 122
ARTICLE 11. MISCELLANEOUS................................................ 122
Section 11.1. Trust Indenture Act Controls...................... 122
Section 11.2. Notices........................................... 123
Section 11.3. Communications by Holders with Other Holders...... 124
Section 11.4. Certificate and Opinion as to Conditions Precedent 124
Section 11.5. Statements Required in Certificate and Opinion.... 125
Section 11.6. When Treasury Notes Disregarded................... 125
Section 11.7. Rules by Trustee and Agents....................... 126
Section 11.8. Business Days; Legal Holidays..................... 126
Section 11.9. Governing Law..................................... 126
Section 11.10. No Adverse Interpretation of Other Agreements..... 126
Section 11.11. No Recourse Against Others........................ 127
Section 11.12. Successors........................................ 128
Section 11.13. Multiple Counterparts............................. 128
Section 11.14. Table of Contents, Headings, etc.................. 128
Section 11.15. Separability...................................... 128
v
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ---------------------------------------------------------------------
310 (a)(1)......................................... 7.10
(a)(2)......................................... 7.10
(a)(3)......................................... N.A.
(a)(4)......................................... N.A.
(b)............................................ 7.8;13.2
(b)(1)......................................... 7.10
(b)(9)......................................... 7.10
(c)............................................ N.A.
311 (a)............................................ 7.11
(b)............................................ 7.11
(c)............................................ N.A.
312 (a)............................................ 2.5
(b)............................................ 13.3
(c)............................................ 13.3
313 (a)............................................ 7.6
(b)(1)......................................... 7.6
(b)(2)......................................... 7.6
(c)............................................ 13.2
(d)............................................ 7.6
314 (a)............................................ 4.2;4.4;13.2
(b)............................................ 12.2
(c)(1)......................................... 12.2;13.4;13.5
(c)(2)......................................... 12.2;13.4;13.5
(c)(3)......................................... N.A.
(d)............................................ 12.2
(e)............................................ 12.3;13.5
(f)............................................ N.A.
315 (a)............................................ 7.1;7.2
(b)............................................ 7.5; 13.2
(c)............................................ 7.1
(d)............................................ 6.5;7.1;7.2
(e)............................................ 6.11
316 (a) (last sentence)............................ 13.6
(a)(1)(A)...................................... 6.5
(a)(1)(B)...................................... 6.4
(a)(2)......................................... 8.2
(b)............................................ 6.7
(c)............................................ 8.4
317 (a)(1)......................................... 6.8
(a)(2)......................................... 6.9
(b)............................................ 7.12
318 (a)............................................ 13.1
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
vi
<PAGE>
INDENTURE, dated as of April 7, 1998, by and among PIERCE LEAHY
COMMAND COMPANY, a Nova Scotia unlimited liability company, as Issuer (the
"Issuer"), PIERCE LEAHY CORP., a Pennsylvania corporation, for itself and as a
Domestic Guarantor ("Pierce Leahy"), and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's 8-1/8% Senior
Notes due 2008 (the "Notes").
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or assumed in connection with the acquisition of assets from a
Person.
"Acquisition EBITDA" means, without duplication, (i) EBITDA for the
last four fiscal quarters for which financial statements are available at the
date of determination (the "Acquisition EBITDA Period") with respect to a
business or Person which has been acquired by Pierce Leahy or one of its
Restricted Subsidiaries or which is the subject of a binding acquisition
agreement requiring the calculation of EBITDA for purposes of Section 4.6 and,
in each case, with respect to which financial results on a consolidated basis
with Pierce Leahy or one of its Restricted Subsidiaries have not been made
available for an entire fiscal quarter; plus (ii) in connection with any such
acquisition, projected quantifiable improvements in operating results due to
cost reductions calculated in good faith, by Pierce Leahy or one of its
Restricted Subsidiaries through a Board Resolution certified by an Officers'
Certificate filed with the Trustee (calculated on a pro forma basis for the
Acquisition EBITDA Period as if the
<PAGE>
program had been implemented at the beginning of the Acquisition EBITDA Period),
without giving effect to any operating losses of the acquired Person. Each such
Officers' Certificate shall be signed by the Chief Financial Officer and
another officer of Pierce Leahy. The Trustee may rely on such Officers'
Certificate (subject to the provisions of Section 7.1 of this Indenture).
Acquisition EBITDA of a business shall be a fixed number determined as of the
date the calculation of EBITDA for purposes of Section 4.6 is first required
with respect to the acquisition of such business (the "Determination Date") and
shall be utilized from the Determination Date through the date financial results
are available for the first full fiscal quarter following the acquisition
(following which the actual EBITDA of such business or Person shall be included
in the EBITDA of Pierce Leahy). For purposes of determining Acquisition EBITDA
with respect to the acquisition of a particular business or Person, Acquisition
EBITDA shall include not only the Acquisition EBITDA of such business or Person,
but also the Acquisition EBITDA of any business previously acquired by Pierce
Leahy or a Restricted Subsidiary or the subject of a pending acquisition
agreement to the extent that, as of the Determination Date, the financial
results for such business or Person on a consolidated basis with Pierce Leahy
for a full fiscal quarter subsequent to its acquisition by Pierce Leahy or a
Restricted Subsidiary are not yet available.
"Adjusted EBITDA" means, without duplication, for any Person, the sum
of (a) EBITDA of such Person and its Restricted Subsidiaries for the most recent
fiscal quarter for which internal financial statements are available, multiplied
by four and (b) Acquisition EBITDA.
"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser
of the amount by which (x) the fair value of the property of such Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities (including, without limitation, any guarantees of Senior
Indebtedness)), but excluding liabilities under the Guarantee of such Guarantor
at such date and (y) the present fair salable value of the assets of such
Guarantor at such date exceeds the amount
2
<PAGE>
that will be required to pay the probable liability of such Guarantor on its
debts (after giving effect to all other fixed and contingent liabilities
(including, without limitation, any guarantees of Senior Indebtedness) and after
giving effect to any collection from any Subsidiary of such Guarantor in respect
of the obligations of such Subsidiary under the Guarantee), excluding
Indebtedness in respect of the Guarantee as they become absolute and matured.
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling" "controlled by," and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.
"Agent" means any Registrar, Paying Agent, co-registrar or agent for
service of notices and demands.
"Asset Sale" means the sale, transfer or other disposition (other than
to Pierce Leahy or any of its Restricted Subsidiaries) in any single transaction
or series of related transactions involving assets with a fair market value in
excess of $500,000 of (a) any Capital Stock of or other equity interest in any
Restricted Subsidiary of Pierce Leahy, (b) all or substantially all of the
assets of Pierce Leahy or of any Restricted Subsidiary thereof, (c) real
property of Pierce Leahy or a Restricted Subsidiary or (d) all or substantially
all of the assets of any business property, or part thereof, owned by Pierce
Leahy or any Restricted Subsidiary thereof, or a division, line of business or
comparable business segment of Pierce Leahy or any Restricted Subsidiary
thereof; provided that Asset Sales shall not include (i) sales, leases,
--------
conveyances, transfers or other dispositions to Pierce Leahy or to a Restricted
Subsidiary or to any other Person if after giving effect to such sale,
lease, conveyance, transfer or other disposition such other Person becomes a
Restricted Sub-
3
<PAGE>
sidiary, (ii) transactions complying with Section 5.1 and (iii) transfers or
other distributions of assets which constitute (1) Permitted Investments or (2)
Restricted Payments made in compliance with Section 4.9.
"Asset Sale Proceeds" means, with respect to any Asset Sale, (i) cash
received by Pierce Leahy or any Restricted Subsidiary from such Asset Sale
(including cash received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset Sale), after (a)
provision for all income or other taxes measured by or resulting from such Asset
Sale; (b) payment of all brokerage commissions, underwriting and other fees and
expenses related to such Asset Sale, (c) provision for minority interest holders
in any Restricted Subsidiary as a result of such Asset Sale, (d) payments made
to retire Indebtedness secured by the assets subject to such Asset Sale and (e)
deduction of appropriate amounts to be provided by Pierce Leahy or a Restricted
Subsidiary as a reserve, in accordance with GAAP, against any liabilities
associated with the assets sold or disposed of in such Asset Sale and retained
by Pierce Leahy or a Restricted Subsidiary after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with the assets sold or disposed of in such Asset Sale,
and (ii) promissory notes and other non-cash consideration received by Pierce
Leahy or any Restricted Subsidiary from such Asset Sale or other disposition
upon the liquidation or conversion of such notes or non-cash consideration into
cash.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, as of the time of determination, the greater of (i) the fair
value of the property subject to such arrangement (as determined by the Board of
Directors) and (ii) 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 term of the lease included in such Sale and Lease-
Back Transaction (including any period for which such lease has been extended).
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"Available Asset Sale Proceeds" means, with respect to any Asset Sale,
the aggregate Asset Sale Proceeds from such Asset Sale that have not been
applied in accordance with clause (iii)(a) or (iii)(b) of Section 4.10(a) and
which have not been the basis for an Excess Proceeds Offer in accordance with
clause (iii)(c) of Section 4.10(a).
"Board of Directors" means the board of directors of the Issuer,
Pierce Leahy or a Guarantor, as appropriate, or any committee authorized to act
therefor.
"Board Resolution" means a copy of a resolution certified pursuant to
an Officers' Certificate to have been duly adopted by the Board of Directors of
the Issuer, Pierce Leahy or a Guarantor, as appropriate, and to be in full force
and effect, and delivered to the Trustee.
"Canadian Guarantee" means, as the context may require, individually,
a guarantee, or collectively, any and all guarantees of the Obligations of the
Issuer with respect to the Notes by each Canadian Guarantor pursuant to the
terms of Article 10 hereof, substantially in the form set forth as Exhibit F.
"Canadian Guarantor" means, Archivex Limited, a Nova Scotia company,
and each future Subsidiary of Pierce Leahy organized under the laws of Canada or
any province thereof, which is not prohibited by the laws of Canada or any
province thereof from acting as a guarantor of the Notes and this Indenture and
which has either assets or shareholders' equity in excess of $5,000, and
"Canadian Guarantors" means such entities collectively.
"Canadian Guarantor Senior Indebtedness," as to any Canadian
Guarantor, means the principal of and premium, if any, and interest (including,
without limitation, interest accruing or that would have accrued but for the
filing of a bankruptcy, reorganization or other insolvency proceeding whether or
not such interest constitutes an allowable claim in such proceeding) on, and any
and all other fees, expense reimbursement obligations, indemnities and other
amounts due pursuant to the terms of all agreements, documents and instruments
providing for, creating,
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securing or evidencing or otherwise entered into in connection with, (a) such
Canadian Guarantor's direct incurrence of any Indebtedness or its guarantee of
all Indebtedness of the Issuer, Pierce Leahy or any Restricted Subsidiaries, in
each case, owed to lenders under or in respect of the Credit Facility, (b) all
obligations of such Canadian Guarantor with respect to any Interest Rate
Agreement or any guarantee thereof, (c) all obligations of such Canadian
Guarantor to reimburse any bank or other person in respect of amounts paid under
letters of credit, acceptances or other similar instruments and all obligations
of such Canadian Guarantor with respect to guarantees of such reimbursement
obligations, (d) all other Indebtedness of such Canadian Guarantor which does
not provide that it is subordinate to the Canadian Guarantees and (e) all
deferrals, renewals, extensions, replacements, refundings, refinancings and
restructurings of, and amendments, modifications and supplements to, any of the
Canadian Guarantor Senior Indebtedness described above. Notwithstanding
anything to the contrary in the foregoing, Canadian Guarantor Senior
Indebtedness will not include (i) Indebtedness of such Canadian Guarantor to any
of its Subsidiaries, (ii) any Indebtedness which by the express terms of the
agreement or instrument creating, evidencing or governing the same is junior or
subordinate in right of payment to any item of Canadian Guarantor Senior
Indebtedness, (iii) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business or (iv)
Indebtedness (other than that described in clause (a) above) incurred in
violation of this Indenture.
"Capital Stock" means, with respect to any Person, any and all shares
or other equivalents (however designated) of capital stock, partnership
interests or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing.
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebted-
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ness shall be the capitalized amount of such obligations determined in
accordance with GAAP.
"Change of Control" will be deemed to have occurred at such time as
(i) any Person (including a Person's Affiliates and associates), other than a
Permitted Holder, becomes the beneficial owner (as defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of more
than 50% of the total voting power of the Common Stock of Pierce Leahy, (ii)
there shall be consummated any consolidation or merger of Pierce Leahy in which
Pierce Leahy is not the continuing or surviving corporation or pursuant to which
the Common Stock of Pierce Leahy would be converted into cash, securities or
other property, other than a merger or consolidation of Pierce Leahy in which
the holders of the Common Stock of Pierce Leahy outstanding immediately prior to
the consolidation or merger hold, directly or indirectly, at least a majority of
the Common Stock of the surviving corporation immediately after such
consolidation or merger, or (iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of Pierce Leahy (together with any new directors whose election by
such Board of Directors or whose nomination for election by the shareholders of
Pierce Leahy has been approved by a majority of the directors then still in
office who either were directors at the beginning of such period or whose
election or recommendation for election was previously so approved) cease to
constitute a majority of the Board of Directors of Pierce Leahy.
"Common Stock" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"Consolidated Interest Expense" means, with respect to any Person, for
any period, the aggregate amount of interest which, in conformity with GAAP,
would be set forth opposite the caption "interest expense" or any like caption
on an income statement for such Person and its
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Subsidiaries on a consolidated basis for such period (including, but not limited
to, Redeemable Dividends, whether paid or accrued, on Preferred Stock of a
Subsidiary, imputed interest included in Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, the net costs associated with
hedging obligations, the interest portion of any deferred payment obligation,
amortization of discount or premium, if any, and all other non-cash interest
expense (other than interest amortized to cost of sales)) plus, without
duplication, all net capitalized interest for such period and all interest paid
under any guarantee of Indebtedness (including a guarantee of principal,
interest or any combination thereof) of any Person, plus the amount of all
dividends or distributions paid on Disqualified Capital Stock (other than
dividends paid or payable in shares of Capital Stock of Pierce Leahy).
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that (a) the Net Income of any Person (the "other Person") in
- -------- -------
which the Person in question or any of its Subsidiaries has less than a 99%
interest (which interest does not cause the net income of such other Person to
be consolidated into the net income of the Person in question in accordance with
GAAP) shall be included only to the extent of the amount of dividends or
distributions paid to the Person in question or the Subsidiary, (b) the Net
Income of any Subsidiary of the Person in question, which Subsidiary is subject
to any restriction or limitation on the payment of dividends or the making of
other distributions (other than pursuant to the 1996 Indenture, the 1997
Indenture or this Indenture) shall be excluded to the extent of such restriction
or limitation (provided that if any such restriction or limitation by its terms
takes effect upon the occurrence of a default or event of default, such
exclusion shall become effective only upon the occurrence of such default or
event of default which is continuing), (c)(i) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition and (ii) any net gain (but
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not loss) resulting from an Asset Sale by the Person in question or any of its
Subsidiaries other than in the ordinary course of business shall be excluded and
(d) extraordinary, unusual and non-recurring gains and losses shall be excluded.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 101 Barclay Street-21W, New York, New York 10286.
"Credit Facility" means the credit agreement or credit agreements in
existence on the date hereof by and among Pierce Leahy, any or all of the
Restricted Subsidiaries and any one or more lenders from time to time parties
thereto, as the same may be amended, extended, increased, renewed, restated,
supplemented or otherwise modified (in whole or in part, and without limitation
as to amount, terms, conditions, covenants and other provisions) from time to
time, and any agreement or agreements governing Indebtedness incurred to
refinance, replace, restructure or refund in whole or in part the borrowings and
then maximum commitments under the Credit Facility or such agreement (whether
with the original administrative agent and lenders or other agents and lenders
or otherwise, and whether provided under the original Credit Facility or other
credit agreements or otherwise). Pierce Leahy shall promptly notify in writing
by means of an Officers' Certificate the Trustee of any such refunding,
replacement, restructuring or refinancing of the Credit Facility.
"Default" means any event that is, or with the passing of time or
giving of notice or both would be, an Event of Default.
"Depository" means, with respect to the Notes issued in the form of
one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Issuer, which Person must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness," as to the Issuer, Pierce Leahy or
any other Guarantor, as the case
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may be, means any Senior Indebtedness (a) under the Credit Facility, or (b)
which at the time of determination exceeds $15,000,000 in aggregate principal
amount (or accreted value in the case of Indebtedness issued at a discount)
outstanding or available under a committed facility and (x) unless such
designation is prohibited by the Credit Facility, which is specifically
designated in the instrument evidencing such Senior Indebtedness as "Designated
Senior Indebtedness" by such Person and (y) as to which the Trustee has been
given written notice by means of an Officers' Certificate of such designation.
"Disqualified Capital Stock" means any Capital Stock of Pierce Leahy
or a Restricted Subsidiary thereof which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Notes, for cash or securities constituting
Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock
shall be deemed to include (i) any Preferred Stock of a Restricted Subsidiary
of Pierce Leahy and (ii) any Preferred Stock of Pierce Leahy, with respect to
either of which, under the terms of such Preferred Stock, by agreement or
otherwise, such Restricted Subsidiary or Pierce Leahy is obligated to pay
current dividends or distributions in cash during the period prior to the
maturity date of the Notes; provided, however, that Preferred Stock of Pierce
-------- -------
Leahy or any Restricted Subsidiary thereof that is issued with the benefit of
provisions requiring a change of control offer to be made for such Preferred
Stock in the event of a Change of Control of Pierce Leahy or Restricted
Subsidiary, which provisions have substantially the same effect as the
provisions described in Section 4.19, shall not be deemed to be Disqualified
Capital Stock solely by virtue of such provisions; and provided, further, that
-------- -------
Capital Stock owned by Pierce Leahy or a Wholly-Owned Subsidiary shall not
constitute Disqualified Capital Stock.
"Domestic Guarantee" means, as the context may require, individually,
a guarantee, or collectively, any
10
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and all guarantees of the Obligations of the Issuer with respect to the Notes
and the Indenture by each Domestic Guarantor pursuant to the terms of Article 10
hereof, substantially in the form set forth as Exhibit E.
"Domestic Guarantor" means, Pierce Leahy, Advanced Box, Inc., a
Delaware corporation, Monarch Box, Inc., a Delaware corporation, and each future
Restricted Subsidiary of Pierce Leahy organized under the laws of the United
States, any state thereof or the District of Columbia and which has assets or
shareholders' equity in excess of $5,000, and "Domestic Guarantors" means such
entities, collectively.
"Domestic Guarantor Senior Indebtedness," as to any Domestic
Guarantor, means the principal of and premium, if any, and interest (including,
without limitation, interest accruing or that would have accrued but for the
filing of a bankruptcy, reorganization or other insolvency proceeding whether or
not such interest constitutes an allowable claim in such proceeding) on, and any
and all other fees, expense reimbursement obligations, indemnities and other
amounts due pursuant to the terms of all agreements, documents and instruments
providing for, creating, securing or evidencing or otherwise entered into in
connection with, (a) such Domestic Guarantor's direct incurrence of any
Indebtedness or its guarantee of all Indebtedness of the Issuer, Pierce Leahy or
any Restricted Subsidiaries, in each case, owed to lenders under or in respect
of the Credit Facility, (b) all obligations of such Domestic Guarantor with
respect to any Interest Rate Agreement or any guarantee thereof, (c) all
obligations of such Domestic Guarantor to reimburse any bank or other person in
respect of amounts paid under letters of credit, acceptances or other similar
instruments and all obligations of such Domestic Guarantor with respect to
guarantees of such reimbursement obligations, (d) all other Indebtedness of
such Domestic Guarantor which does not provide that it is to rank pari passu
---- -----
with or subordinate to the Domestic Guarantees and (e) all deferrals, renewals,
extensions, replacements, refundings, refinancings and restructurings of, and
amendments, modifications and supplements to, any of the Domestic Guarantor
Senior Indebtedness described above. Notwithstanding anything to
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the contrary in the foregoing, Domestic Guarantor Senior Indebtedness will not
include (i) Indebtedness of such Domestic Guarantor to any of its Subsidiaries,
(ii) Indebtedness represented by the Domestic Guarantees, (iii) any Indebtedness
which by the express terms of the agreement or instrument creating, evidencing
or governing the same is junior or subordinate in right of payment to any item
of Domestic Guarantor Senior Indebtedness, (iv) any trade payable arising from
the purchase of goods or materials or for services obtained in the ordinary
course of business or (v) Indebtedness (other than that described in clause (a)
above) incurred in violation of this Indenture.
"EBITDA" means, for any Person, for any period, an amount equal to (a)
the sum of (i) Consolidated Net Income for such period, plus (ii) the provision
for taxes for such period based on income or profits to the extent such income
or profits were included in computing Consolidated Net Income and any
provision for taxes utilized in computing net loss under clause (i) hereof, plus
(iii) Consolidated Interest Expense for such period (but only including
Redeemable Dividends in the calculation of such Consolidated Interest Expense to
the extent that such Redeemable Dividends have not been excluded in the
calculation of Consolidated Net Income), plus (iv) depreciation for such period
on a consolidated basis, plus (v) amortization of intangibles and other
deferred financing fees for such period on a consolidated basis, plus (vi) any
other non-cash items reducing Consolidated Net Income for such period, plus
(vii) Permitted Tax Distributions, except that with respect to Pierce Leahy each
of the foregoing items shall be determined on a consolidated basis with respect
to Pierce Leahy and its Restricted Subsidiaries only.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the 8-1/8% Senior Notes due 2008 to be issued
in exchange for the Initial Notes pursuant to the Registration Agreement.
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"GAAP" means generally accepted accounting principles consistently
applied as in effect in the United States from time to time.
"Guarantee" means, as the context may require, individually, a
guarantee, or collectively, any and all guarantees, of the Obligations of the
Issuer with respect to the Notes and this Indenture by each Guarantor, if any,
pursuant to the terms of Article 10 hereof, substantially in the form set forth
in Exhibit E or Exhibit F, as applicable, and which shall include, without
limitation, each Domestic Guarantee and each Canadian Guarantee.
"Guarantor" means Pierce Leahy and each Restricted Subsidiary of
Pierce Leahy that is or hereafter becomes a Guarantor pursuant to Section 4.14
including, without limitation each Domestic Guarantor and each Canadian
Guarantor, and "Guarantors" means such entities, collectively.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording (other than previously recorded), as required
pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on
the balance sheet of such Person (and "incurrence," "incurred," "incurrable,"
and "incurring" shall have meanings correlative to the foregoing); provided
--------
that a change in GAAP that results in an obligation of such Person that exists
at such time becoming Indebtedness shall not be deemed an incurrence of such
Indebtedness.
"Indebtedness" means, without duplication, with respect to any Person,
any indebtedness at any time outstanding, secured or unsecured, contingent or
otherwise, which is for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
representing the
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balance deferred and unpaid of the purchase price of any property
(excluding, without limitation, any balances that constitute accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, and shall also include, to the extent not otherwise included (i) any
Capitalized Lease Obligations, (ii) obligations secured by a Lien to which the
property or assets owned or held by such Person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed (provided,
--------
however, that if such obligation or obligations shall not have been assumed, the
- -------
amount of such Indebtedness shall be deemed to be the lesser of the principal
amount of the obligation or the fair market value of the pledged property or
assets), (iii) guarantees of items of other Persons which would be included
within this definition for such other Persons (whether or not such items would
appear upon the balance sheet of the guarantor), (iv) all obligations for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (provided that, in the case of any such letters of
--------
credit, the items for which such letters of credit provide credit support are
those of other Persons which would be included within this definition for such
other Persons), (v) in the case of Pierce Leahy, Disqualified Capital Stock of
Pierce Leahy or any Restricted Subsidiary thereof, and (vi) obligations of any
such Persons under any Interest Rate Agreement applicable to any of the
foregoing (if and to the extent such Interest Rate Agreement obligations would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP). The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the obligation,
provided (i) that the amount outstanding at any time of any Indebtedness issued
with original issue discount is the principal amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP and (ii) that
Indebtedness shall not include any liability for Federal,
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state, local or other taxes. Notwithstanding any other provision of the
foregoing definition, any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business or
contingent obligations arising out of customary indemnification agreements with
respect to the sale of assets or securities shall not be deemed to be
"Indebtedness" of Pierce Leahy or any Restricted Subsidiaries for purposes of
this definition. Furthermore, guarantees of (or obligations with respect to
letters of credit supporting) Indebtedness and Liens securing Indebtedness
otherwise included in the determination of such amount shall not also be
included.
"Indenture" means this Indenture as amended, restated or supplemented
from time to time.
"1996 Indenture" means the indenture dated as of July 16, 1996 between
Pierce Leahy and United States Trust Company of New York, as Trustee, as
amended, restated or supplemented from time to time.
"1997 Indenture" means the indenture dated as of July 7, 1997 between
Pierce Leahy and The Bank of New York, as Trustee, as amended, restated or
supplemented from time to time.
"Initial Notes" means the 8-1/8% Senior Notes due 2008 of the Issuer
issued on the Issue Date for so long as such Notes constitute Restricted
Securities (which interest rate is subject to increase as provided therein).
"Initial Purchasers" means, collectively, Salomon Brothers Inc, CIBC
Oppenheimer Corp. and PaineWebber Incorporated.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Rate Agreement" means, for any Person, any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
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"Investments" means, directly or indirectly, any advance, account
receivable (other than an account receivable arising in the ordinary course of
business or acquired as part of the assets acquired by Pierce Leahy or a
Restricted Subsidiary in connection with an acquisition of assets which is
otherwise permitted by the terms of this Indenture), loan or capital
contribution to (by means of transfers of property to others, payments for
property or services for the account or use of others or otherwise), the
purchase of any stock, bonds, notes, debentures, partnership or joint venture
interests or other securities of, the acquisition, by purchase or otherwise, of
all or substantially all of the business or assets or stock or other evidence of
beneficial ownership of, any Person or the making of any investment in any
Person. Investments shall exclude (i) extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices and (ii) the
repurchases or redemptions of securities of any Person by such Person.
"Issue Date" means the date the Notes are first issued by the Issuer
and authenticated by the Trustee under this Indenture.
"Issuer" means the party named as such in the first paragraph of this
Indenture until a successor replaces such party pursuant to Article 5 of this
Indenture and thereafter means the successor.
"Issuer Request" means any written request signed in the name of the
Issuer by any two of the following: the Chief Executive Officer; the President;
any Vice President; the Chief Financial Officer; the Treasurer; or the Secretary
or any Assistant Secretary (but not both the Secretary and any Assistant
Secretary) of the Issuer.
"Lien" means, with respect to any property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any Capitalized Lease Obligation, conditional sales, or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
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"Maturity Date" means May 15, 2008.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person determined in accordance with GAAP minus Permitted
Tax Distributions with respect to such period, and excluding any foreign
currency translation gains or losses added or deducted, as applicable, in the
computation of Net Income.
"Net Proceeds" means (a) in the case of any sale of Capital Stock by
Pierce Leahy or a Restricted Subsidiary, the aggregate net proceeds received
by Pierce Leahy or a Restricted Subsidiary, after payment of expenses,
commissions and the like incurred in connection therewith, whether such proceeds
are in cash or in property (valued at the fair market value thereof, as
determined in good faith by the Board of Directors, at the time of receipt), (b)
in the case of any exchange, exercise, conversion or surrender of outstanding
securities of any kind for or into shares of Capital Stock of Pierce Leahy or a
Restricted Subsidiary which is not Disqualified Capital Stock, the net book
value of such outstanding securities on the date of such exchange, exercise,
conversion or surrender (plus any additional amount required to be paid by the
holder to Pierce Leahy or a Restricted Subsidiary upon such exchange, exercise,
conversion or surrender, less any and all payments made to the holders, e.g., on
----
account of fractional shares and less all expenses incurred by Pierce Leahy or
any Restricted Subsidiary in connection therewith) and (c) in the case of any
issuance of any Indebtedness by Pierce Leahy or a Restricted Subsidiary, the
aggregate net cash proceeds received by such Person after payment of expenses,
commissions, underwriting discounts and the like incurred in connection
therewith.
"1996 Notes" means the 11-1/8% Senior Subordinated Notes of Pierce
Leahy due 2006.
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"1997 Notes" means the 9-1/8% Senior Subordinated Notes of Pierce
Leahy due 2007.
"Non-Payment Event of Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to accelerate the
maturity of any Designated Senior Indebtedness.
"Non-U.S. Person" means a person who is not a U.S. Person, as defined
in Regulation S.
"Notes" means, collectively, the Initial Notes and the Exchange Notes,
that are issued under this Indenture, as amended, restated or supplemented
from time to time pursuant to this Indenture.
"Obligations" means, with respect to any Indebtedness, any principal,
premium, interest, penalties, fees, indemnifications, reimbursements, damages
and other expenses payable under the documentation governing such Indebtedness.
"Officer" means the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Controller or the
Secretary of the Issuer, Pierce Leahy or a Guarantor, or any other officer
designated by the Board of Directors, as the case may be.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or any Vice
President and the Chief Financial Officer, the Controller, any Treasurer or any
Secretary or Assistant Secretary of such Person that shall comply with
applicable provisions of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel which
counsel is reasonably acceptable to the Trustee.
"Payment Default" means any default, whether or not any requirement
for the giving of notice, the lapse of time or both, or any other condition to
such default becoming an Event of Default has occurred, in the payment of
principal of (or premium, if any) or interest on or any
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other amount payable in connection with Designated Senior Indebtedness.
"Permitted Holders" means, collectively, Leo W. Pierce, Sr., his
children or other lineal descendants (whether adoptive or biological), the
spouses of any of the foregoing and any probate estate of any such individual
and any trust, so long as one or more of the foregoing individuals is the
principal beneficiary of such trust, and any other partnership, corporation or
other entity all of the partners, shareholders, members or owners of which are
any one or more of the foregoing.
"Permitted Indebtedness" means:
(i) Indebtedness of Pierce Leahy or any Restricted Subsidiary
arising under or in connection with the Credit Facility in an aggregate
amount at any one time outstanding not to exceed $100 million;
(ii) Indebtedness of the Issuer (and related guarantees) or a Canadian
Guarantor arising under or in connection with the Credit Facility in an
aggregate amount at any one time outstanding not to exceed Cdn. $40
million;
(iii) Indebtedness under the 1997 Notes and the guarantees thereof;
(iv) Indebtedness under the 1996 Notes and the guarantees thereof;
(v) Indebtedness under the Notes and the Guarantees;
(vi) Indebtedness not covered by any other clause of this definition
which is outstanding on the date of this Indenture;
(vii) Indebtedness of Pierce Leahy to any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary to Pierce Leahy or another
Restricted Subsidiary;
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(viii) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire property in the ordinary course of business which
Indebtedness and Capitalized Lease Obligations do not in the aggregate
exceed 5% of the consolidated total assets of Pierce Leahy and its
Subsidiaries;
(ix) Interest Rate Agreements;
(x) additional Indebtedness of Pierce Leahy or a Restricted
Subsidiary not to exceed an aggregate of $3,000,000 in principal amount
outstanding at any time; and
(xi) Refinancing Indebtedness.
"Permitted Investments" means, for any Person, Investments made on or
after the date of this Indenture consisting of:
(i) Investments by Pierce Leahy, or by a Restricted Subsidiary
thereof, in Pierce Leahy or a Restricted Subsidiary;
(ii) Temporary Cash Investments;
(iii) Investments by Pierce Leahy, or by a Restricted Subsidiary, in
a Person (or in all or substantially all of the business or assets of a
business or a Person), if as a result of such Investment (a) such Person
becomes a Restricted Subsidiary of Pierce Leahy, (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, Pierce Leahy or
a Restricted Subsidiary thereof or (c) such business or assets are owned by
Pierce Leahy or a Restricted Subsidiary;
(iv) reasonable and customary loans made to employees not to exceed
$500,000 in the aggregate at any one time outstanding, plus any loans which
may be required to be made under Pierce Leahy's Nonqualified Stock Option
Plan in an amount not to exceed $2,000,000;
20
<PAGE>
(v) an Investment that is made by Pierce Leahy or a Restricted
Subsidiary in the form of any stock, bonds, notes, debentures, partnership
or joint venture interests or other securities that are issued by a third
party to Pierce Leahy or Restricted Subsidiary solely as partial
consideration for the consummation of an Asset Sale that is otherwise
permitted by Section 4.10;
(vi) accounts receivable of Pierce Leahy and its Restricted
Subsidiaries generated in the ordinary course of business;
(vii) Investments existing on the Issue Date; and
(viii) Investments for any purpose not to exceed $2,000,000.
"Permitted Liens" means (i) Liens on property or assets of, or any
shares of stock of or secured debt of, any Person or business existing at the
time such Person becomes a Restricted Subsidiary of Pierce Leahy or at the time
such Person is merged into or consolidated with Pierce Leahy or any of its
Restricted Subsidiaries or at the time such business is acquired by Pierce Leahy
or a Restricted Subsidiary, provided that such Liens are not incurred in
--------
anticipation of such Person becoming a Restricted Subsidiary of Pierce Leahy
or merging into or consolidating with Pierce Leahy or any of its Restricted
Subsidiaries or such business being acquired by Pierce Leahy or a Restricted
Subsidiary, (ii) Liens securing Refinancing Indebtedness, provided that any such
--------
Lien does not extend to or cover any Property, shares or debt other than the
Property, shares or debt securing the Indebtedness so refunded, refinanced or
extended, (iii) Liens in favor of Pierce Leahy or any of its Restricted
Subsidiaries, (iv) Liens securing industrial revenue bonds or mortgages on real
property, (v) Liens to secure Purchase Money Indebtedness that is otherwise
permitted under this Indenture, provided that (a) any such Lien is created
--------
solely for the purpose of securing Indebtedness representing, or incurred to
finance, refinance or refund, the cost (including sales and excise taxes,
installation and delivery charges and other direct costs
21
<PAGE>
of, and other direct expenses paid or charged in connection with, such purchase
or construction) of such Property, (b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such costs, and (c) such Lien does
not extend to or cover any Property other than such item of Property and any
improvements on such item, (vi) statutory liens or landlords', 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, (vii) other Liens securing obligations incurred in the ordinary
course of business which obligations do not exceed $1,000,000 in the aggregate
at any one time outstanding, (viii) Liens for taxes, assessments or
governmental charges that are being contested in good faith by appropriate
proceedings, (ix) Liens securing Capitalized Lease Obligations or mortgage
loans related to real property permitted to be incurred under clause (viii) of
the definition of "Permitted Indebtedness," provided that such Lien does not
--------
extend to any property other than that subject to the underlying lease, (x)
Liens securing Designated Senior Indebtedness, (xi) easements or minor defects
or irregularities in title and other similar charges or encumbrances on
Property not interfering in any material respect with Pierce Leahy's or any
Restricted Subsidiary's use of such Property, (xii) Liens existing on the date
of this Indenture, (xiii) pledges or deposits made in the ordinary course of
business (a) in connection with (1) leases, performance bonds and similar bonds
or (2) workers' compensation, unemployment insurance and other social security
legislation or (b) securing the performance of surety bonds and appeal bonds
required (1) in the ordinary course of business or in connection with the
enforcement of rights or claims of Pierce Leahy or a Subsidiary thereof or (2)
in connection with judgments that do not give rise to an Event of Default and
which do not exceed $3,000,000 in the aggregate, (xiv) Liens securing Interest
Rate Agreements entered into with any lender under the Credit Facility or
any Affiliate thereof and any guarantees thereof and (xv) any extensions,
substitutions, replacements or renewals of the foregoing.
22
<PAGE>
"Permitted Tax Distributions" means, with respect to any period for
which Pierce Leahy was taxed as an S corporation or other pass-through entity
for Federal income tax purposes, distributions to the holders of Capital Stock
of Pierce Leahy based on estimates of the highest amount of federal, state and
local income tax per share of Capital Stock that any holder of Capital Stock of
Pierce Leahy would be required to pay as a result of Pierce Leahy's being
treated as a pass-through entity for income tax purposes.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government (including any agency or political subdivision thereof).
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the
holders of other Capital Stock issued by such Person.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.
"Public Equity Offering" means a public offering by Pierce Leahy of
shares of its Capital Stock and any and all rights, warrants or options to
acquire such Capital Stock.
"Purchase Money Indebtedness" means any Indebtedness incurred in the
ordinary course of business by a Person to finance the cost (including the cost
of construction) of an item of Property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and (ii)
reasonable fees and expenses of such Person incurred in connection therewith.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
23
<PAGE>
"Redeemable Dividend" means, for any dividend or distribution with
regard to Disqualified Capital Stock, the quotient of the dividend or
distribution divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and 0) then
applicable to the issuer of such Disqualified Capital Stock.
"Redemption Date" when used with respect to any Note to be redeemed
means the date fixed for such redemption pursuant to this Indenture.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances, renews, replaces or extends any Indebtedness of Pierce Leahy or a
Restricted Subsidiary outstanding on the Issue Date or other Indebtedness
permitted to be incurred by Pierce Leahy or its Restricted Subsidiaries pursuant
to the terms of this Indenture, whether involving the same or any other lender
or creditor or group of lenders or creditors, but only to the extent that (i)
the Refinancing Indebtedness is subordinated to the Notes with respect to
Indebtedness of the Issuer and the relevant Guarantee with respect to the
Indebtedness of a Guarantor to at least the same extent as the Indebtedness
being refunded, refinanced or extended, if at all, (ii) the Refinancing
Indebtedness is scheduled to mature either (a) no earlier than the Indebtedness
being refunded, refinanced or extended, or (b) after the maturity date of the
Notes, (iii) the portion, if any, of the Refinancing Indebtedness that is
scheduled to mature on or prior to the maturity date of the Notes has a weighted
average life to maturity at the time such Refinancing Indebtedness is incurred
that is equal to or greater than the weighted average life to maturity of the
portion of the Indebtedness being refunded, refinanced or extended that is
scheduled to mature on or prior to the maturity date of the Notes, (iv) such
Refinancing Indebtedness is in an aggregate principal amount that is equal to
or less than the sum of (a) the aggregate principal amount then outstanding
under the Indebtedness being refunded, refinanced or extended, (b) the amount of
accrued and unpaid interest, if any, and premiums owed, if any, not in excess of
preexisting prepayment provisions on such Indebtedness being refunded,
refinanced or extended and (c) the amount of customary fees, expenses and costs
24
<PAGE>
related to the incurrence of such Refinancing Indebtedness, and (v) such
Refinancing Indebtedness is incurred by the same Person that initially incurred
the Indebtedness being refunded, refinanced or extended, except that the Issuer
or any Guarantor may incur Refinancing Indebtedness to refund, refinance or
extend Indebtedness of the Issuer or any Guarantor.
"Registration Agreement" means the Registration Agreement dated the
Issue Date by and among the Issuer, Pierce Leahy and Salomon Brothers Inc, as
amended from time to time.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Payment" means any of the following: (i) the declaration
or payment of any dividend or any other distribution or payment on Capital Stock
of Pierce Leahy or any Restricted Subsidiary or any payment made to the direct
or indirect holders (in their capacities as such) of Capital Stock of Pierce
Leahy or any Restricted Subsidiary (other than (x) dividends or distributions
payable solely in Capital Stock (other than Disqualified Capital Stock) or in
options, warrants or other rights to purchase Capital Stock (other than
Disqualified Capital Stock), and (y) in the case of Restricted Subsidiaries,
dividends or distributions payable to Pierce Leahy or to a Wholly-Owned
Subsidiary of Pierce Leahy); (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of Pierce Leahy or any of its
Restricted Subsidiaries (other than Capital Stock owned by Pierce Leahy or a
Wholly-Owned Subsidiary of Pierce Leahy, excluding Disqualified Capital
Stock); (iii) the purchase, defeasance, repurchase, redemption or other
acquisition or retirement for value, prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment of, or the making of any principal
payment on, any Indebtedness which is subordinated in right of payment to (x)
the Notes with respect to such an action by the Issuer or (y) to the respective
Guarantee with respect to such an action by a Guarantor, in each case, (other
than subordinated Indebtedness acquired in anticipation of satisfying a
scheduled sinking fund obligation, principal installment or final
25
<PAGE>
maturity, in each case due within one year of the date of acquisition); (iv) the
making of any Investment or guarantee of any Investment in any Person other than
a Permitted Investment; (v) any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary on the basis of the Investment by Pierce Leahy; and (vi)
forgiveness of any Indebtedness of an Affiliate of Pierce Leahy (other than a
Restricted Subsidiary) to Pierce Leahy or a Restricted Subsidiary. For purposes
of determining the amount expended for Restricted Payments, cash distributed or
invested shall be valued at the face amount thereof and property other than cash
shall be valued at its fair market value in the good faith determination of the
Board of Directors. It is agreed that any payments made to Leo W. Pierce, Sr. or
his spouse pursuant to a pension obligation of Pierce Leahy in the annual amount
of $96,000 shall not constitute a Restricted Payment.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided however that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means a Subsidiary of Pierce Leahy having
either assets or shareholders' equity in excess of $5,000 other than an
Unrestricted Subsidiary and includes all of the Subsidiaries of Pierce Leahy
existing as of the Issue Date having either assets or shareholders' equity in
excess of $5,000. The Board of Directors of Pierce Leahy may designate any
Unrestricted Subsidiary or any Person that is to become a Subsidiary as a
Restricted Subsidiary if immediately after giving effect to such action (and
treating any Acquired Indebtedness as having been incurred at the time of such
action), Pierce Leahy or a Restricted Subsidiary could have incurred at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant
to Section 4.6.
"Rule 144A" means Rule 144A under the Securities Act.
26
<PAGE>
"Sale and Lease-Back Transaction" means any arrangement with any
Person providing for the leasing by Pierce Leahy or any Restricted Subsidiary of
Pierce Leahy of any real or tangible personal Property, which Property (i) has
been or is to be sold or transferred by Pierce Leahy or such Restricted
Subsidiary to such Person in contemplation of such leasing and (ii) would
constitute an Asset Sale if such property had been sold in an outright sale
thereof.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SEC" means the United States Securities and Exchange Commission as
constituted from time to time or any successor performing substantially the same
functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of and premium, if any, and
interest (including, without limitation, interest accruing or that would have
accrued but for the filing of a bankruptcy, reorganization or other insolvency
proceeding whether or not such interest constitutes an allowable claim in such
proceeding) on, and any and all other fees, expense reimbursement obligations
and other amounts due pursuant to the terms of all agreements, documents and
instruments providing for, creating, securing or evidencing or otherwise entered
into in connection with (a) all Indebtedness of Pierce Leahy or its Restricted
Subsidiaries owed to lenders under or in respect of the Credit Facility, (b) all
obligations of Pierce Leahy or its Restricted Subsidiaries with respect to any
Interest Rate Agreement, (c) all obligations of Pierce Leahy or its Restricted
Subsidiaries to reimburse any bank or other person in respect of amounts paid
under letters of credit, acceptances or other similar instruments, (d) all other
Indebtedness of Pierce Leahy or its Restricted Subsidiaries which does not
provide that (1) with respect to Indebtedness of the Issuer or a Canadian
Guarantor, such Indebtedness is subordinate to the Notes or such Canadian
Guarantee, as applicable, and (2) with respect to Indebtedness of a Domestic
Guarantor, such Indebtedness is to rank pari
----
27
<PAGE>
passu with or subordinate to such Domestic Guarantee and (e) all deferrals,
- -----
renewals, extensions, replacements, refundings, refinancings and restructurings
of, and amendments, modifications and supplements to, any of the Senior
Indebtedness described above. Notwithstanding anything to the contrary in the
foregoing, Senior Indebtedness will not include (i) Indebtedness of Pierce
Leahy to any of its Subsidiaries, (ii) Indebtedness represented by any Domestic
Guarantees, (iii) Indebtedness represented by the 1996 Notes, the 1997 Notes and
their respective guarantees; (iv) any Indebtedness which by the express terms of
the agreement or instrument creating, evidencing or governing the same is junior
or subordinate in right of payment to any item of Senior Indebtedness, (v) any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business, or (vi) Indebtedness (other than
that described in clause (a) above) incurred in violation of this Indenture.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the direction
of the management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with the first-named Person for
financial statement purposes.
"Temporary Cash Investments" means (i) Investments in marketable
direct obligations issued or guaranteed by the United States of America, or of
any governmental agency or political subdivision thereof, maturing within 365
days of the date of purchase; (ii) Investments in demand deposits or
certificates of deposit issued by a bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, in each case
28
<PAGE>
having capital, surplus and undivided profits totaling more than $500,000,000
and rated at least A by S&P's Rating Group and A-2 by Moody's, maturing within
365 days of purchase; (iii) Investments not exceeding 365 days in duration in
money market funds that invest substantially all of such funds' assets in the
Investments described in clauses (i) and (ii) above; (iv) any security maturing
not more than 180 days after the date of acquisition, backed by a stand-by or
direct pay letter of credit issued by a bank meeting the qualifications
described in clause (ii) above; or (v) commercial paper, maturing not more than
one year after the date of acquisition, issued by a corporation (other than an
Affiliate or Subsidiary of Pierce Leahy) organized and existing under the laws
of the United States of America or any state thereof or the District of Columbia
with a rating, at the time as of which any investment therein is made, of "P-1"
by Moody's or "A-1" by S&P's Rating Group.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb) as in effect on the date of this Indenture (except as provided in
Section 8.3 hereof).
"Trust Officer" when used with respect to the Trustee, means any
officer or assistant officer of the Trustee assigned to the Corporate Trust
Administration department or similar department performing corporate trust work
of the Trustee or any successor to such department or, in the case of a
successor-Trustee, any officer of such successor Trustee performing corporate
trust functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
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"Unrestricted Subsidiary" means (i) any Subsidiary of an
Unrestricted Subsidiary and (ii) any Subsidiary of Pierce Leahy which is
classified after the Issue Date as an Unrestricted Subsidiary by a resolution
adopted by the Board of Directors; provided that the Issuer may not be an
---------
Unrestricted Subsidiary; and provided further, however, that a Subsidiary
organized or acquired after the Issue Date may be so classified as an
Unrestricted Subsidiary only if such classification is in compliance with the
covenant set forth in Section 4.9 hereof. The Trustee shall be given prompt
written notice by Pierce Leahy of each resolution adopted by the Board of
Directors under this provision, together with a copy of each such resolution
adopted.
"U.S. Government Obligations" means (i) securities that are direct
obligations of the United States of America for the payment of which its full
faith and credit are pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
--------
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or a specific payment of principal or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt.
"Wholly-Owned Subsidiary" means any Restricted Subsidiary 99% or more
of the outstanding Capital Stock (other than directors' qualifying shares) of
which is owned, directly or indirectly, by Pierce Leahy.
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Section 1.2. Other Definitions.
-----------------
The definitions of the following terms may be found in the sections
indicated as follows:
<TABLE>
<CAPTION>
Term Defined in Section
- -------------------------------------------------------------------------------
<S> <C>
"Additional Amounts".................................................... 4.22
"Affiliate Transaction"................................................. 4.11
"Agent Member".......................................................... 2.6
"Bankruptcy Law"........................................................ 6.1
"Business Day".......................................................... 11.8
"Canadian Taxes"........................................................ 4.22
"Certificated Notes".................................................... 2.1
"Change of Control Offer"............................................... 4.19
"Change of Control Payment Date"........................................ 4.19
"Change of Control Purchase Price....................................... 4.19
"Covenant Defeasance"................................................... 9.3
"Custodian"............................................................. 6.1
"Domestic Guarantee Payment Blockage Period"............................ 10.7
"Domestic Guarantor Representative"..................................... 10.7
"Event of Default"...................................................... 6.1
"Excess Proceeds Offer"................................................. 4.10
"Excluded Holder"....................................................... 4.22
"Global Notes".......................................................... 2.1
"Initial Domestic Guarantee Blockage Period"............................ 10.7
"Legal Defeasance"...................................................... 9.2
"Legal Holiday"......................................................... 11.8
"Offer Period".......................................................... 4.10
"Participants".......................................................... 2.6
"Paying Agent".......................................................... 2.3
"Physical Notes"........................................................ 2.1
"Private Placement Legend".............................................. 2.14
"Purchase Date"......................................................... 4.10
"Registrar"............................................................. 2.3
"Registration Default".................................................. Ex. A
"Regulation S Global Note".............................................. 2.1
"Reinvestment Date"..................................................... 4.10
"Restricted Global Note"................................................ 2.1
"Special Interest"...................................................... EX. A
</TABLE>
Section 1.3. Incorporation by Reference of Trust
Indenture Act.
-----------------------------------
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Whenever this Indenture refers to a provision of the TIA, the portion
of such provision required to be incorporated herein in order for this Indenture
to be qualified under the TIA is incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture shall have the
following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securityholder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Issuer, the Guarantors
or any other obligor on the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by SEC rule have
the meanings therein assigned to them.
Section 1.4. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein, whether defined
expressly or by reference;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
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(5) words used herein implying any gender shall apply to every gender;
and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article,
Section or Subdivision, unless expressly stated otherwise.
ARTICLE 2.
THE NOTES
Section 2.1. Dating; Incorporation of Form in Indenture.
------------------------------------------
(a) The Initial Notes and the Trustee's certificate of
authentication thereon shall be substantially in the form of Exhibit A which is
hereby incorporated in and expressly made part of this Indenture. The Exchange
Notes and the Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit B hereto which is incorporated and
expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, stock exchange rule or usage. The Issuer may
use "CUSIP" numbers in issuing the Notes. The Issuer shall approve the form of
the Notes. Each Note shall be dated the date of its authentication.
The terms and provisions contained in the form of the Initial Notes
annexed hereto as Exhibit A and the Exchange Notes annexed hereto as Exhibit B,
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Issuer, Pierce Leahy and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
(b) Global Notes. The certificates representing Initial Notes
------------
offered and sold in reliance on Rule 144A (the "Restricted Global Note") and
Notes offered and sold in reliance on Regulation S (the "Regulation S Global
Note" and, together with the Restricted Global Notes, the "Global Notes") shall
be issued initially in the form of one or
33
<PAGE>
more permanent Global Notes in definitive, fully registered form without
interest coupons, in substantially the form of Exhibit A, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, at the Trustee's office in New York City, as custodian for the
Depository, and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Issuer and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Section 2.14. The
aggregate principal amount of the Global Notes may from time to time be
increased (but not beyond the limits set forth in Section 2.2 below) or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee in the limited circumstances hereinafter provided.
Notes issued in exchange for interests in Global Notes pursuant to
Section 2.6(B) may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the
"Certificated Notes") but only in the circumstances provided for in Section
2.6(B).
Section 2.2. Execution and Authentication.
----------------------------
The aggregate principal amount of Notes which may be authenticated and
delivered under the Indenture is $135,000,000.
The Notes shall be executed on behalf of the Issuer by two Officers of
the Issuer or an Officer and an Assistant Secretary of the Issuer. Such
signatures may be either manual or facsimile. The Issuer's seal shall be
impressed, affixed, imprinted or reproduced on the Notes and may be in facsimile
form.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note or at anytime thereafter, the
Note shall be valid nevertheless.
A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the
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<PAGE>
Note. Such signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee or an authenticating agent shall authenticate Notes for
original issue in the aggregate principal amount of $135,000,000 upon an Issuer
Request. The aggregate principal amount of Notes outstanding at any time may not
exceed such amount except as provided in Section 2.7 hereof. The Trustee shall
authenticate and make available for delivery (i) the Initial Notes for original
issuance in an aggregate principal amount of $135,000,000 and (ii) the Exchange
Notes from time to time for issue only in exchange for a like principal amount
of the Initial Notes, in each case, upon an Issuer Request. Such Issuer Request
shall specify the amount of the Notes to be authenticated, the date on which the
Notes are to be authenticated and, in the case of the Initial Notes, whether
such Initial Notes shall be a Restricted Global Note, a Regulation S Global
Note, or both and the principal amount of each thereof. The Notes shall be
issuable only in registered form without coupons and only in denominations of
$1,000 and integral multiples thereof.
The Trustee may appoint an authenticating agent acceptable to the
Issuer to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall have the same
right as the Trustee in dealing with the Issuer or an Affiliate.
Section 2.3. Registrar and Paying Agent.
--------------------------
The Issuer shall appoint a registrar, which shall maintain an office
or agency where Notes may be presented for registration of transfer or for
exchange ("Registrar"), and a paying agent, which shall maintain an office or
agency located in the Borough of Manhattan, City of New York, State of New York
where Notes may be presented for payment ("Paying Agent") and shall maintain an
office or agency where notices and demands to or upon the Issuer or Pierce Leahy
in respect of the Notes and this Indenture may be served. The Registrar shall
keep a register of the
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Notes and of their transfer and exchange. The Issuer may appoint one or more
co-registrars and one or more additional paying agents. Neither the Issuer,
Pierce Leahy nor any Affiliate thereof may act as Paying Agent. The Issuer may
change any Paying Agent, Registrar or co-registrar without notice to any
Noteholder.
The Issuer shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Issuer shall notify the Trustee of the name and address of any such Agent. If
the Issuer fails to maintain a Registrar or Paying Agent, or agent for service
of notices and demands, or fail to give the foregoing notice, the Trustee shall
act as such and shall be entitled to appropriate compensation pursuant to
Section 7.7. The Issuer initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the Notes.
Section 2.4. Paying Agent to Hold Money in Trust.
-----------------------------------
On or before each due date of the principal and interest on any Notes,
the Issuer shall deposit with the Paying Agent a sum sufficient to pay such
principal and interest so becoming due. Each Paying Agent shall hold in trust
for the benefit of the Noteholders or the Trustee all money held by the Paying
Agent for the payment of principal of or interest on the Notes (whether such
money has been paid to it by the Issuer or any other obligor on the Notes), and
the Issuer and the Paying Agent shall notify the Trustee of any default by the
Issuer (or any other obligor on the Notes) in making any such payment. Money
held in trust by the Paying Agent need not be segregated except as required by
law and in no event shall the Paying Agent be liable for any interest on any
money received by it hereunder. The Issuer at any time may require a Paying
Agent to pay all money held by it to the Trustee and the Trustee may, at any
time during the continuance of any Payment Default, upon written request to a
Paying Agent, require such Paying Agent to forthwith pay to the Trustee all sums
so held in trust by such Paying Agent together with a complete accounting of
such sums. Upon doing so,
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<PAGE>
the Paying Agent shall have no further liability for
the money delivered to the Trustee.
Section 2.5. Noteholder Lists.
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Registrar, the Issuer shall furnish to
the Trustee on or before each May 1 and November 1 in each year, and at such
other times as the Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Noteholders, including the aggregate principal amount of Notes held by each such
Noteholder.
Section 2.6. Transfer and Exchange.
---------------------
Subject to Section 2.15, when a Note is presented to the Registrar
with a request to register the transfer thereof, the Registrar shall register
the transfer as requested, when Notes are presented to the Registrar with a
request to exchange them for an equal principal amount of Notes of other
authorized denominations, the Registrar shall make the exchange as requested
provided that every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed or be accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Registrar duly executed by
the Holder thereof or his attorney, duly authorized in writing. To permit
registration of transfers and exchanges, upon surrender of any Note for
registration of transfer or exchange at the office or agency maintained pursuant
to Section 2.3 hereof, the Issuer shall issue and execute and the Trustee shall
authenticate and make available for delivery Notes at the Registrar's request in
the name of the transferee or Holder, as the case may be, designated by the
Registrar. Any exchange or transfer shall be without any service charge to the
Noteholder, except that the Issuer may require payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation to a transfer or exchange, but this provision shall not apply to any
exchange pursuant to Section 2.9, 3.6 or 8.5 hereof. The Registrar shall not be
37
<PAGE>
required to register transfers of Notes or to exchange Notes for a period of 15
days before the day of mailing of the notice of redemption of any Notes to be
redeemed. The Registrar shall not be required to exchange or register transfers
of any Notes called or being called for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
Prior to the due presentation for registration of transfer of any
Note, the Issuer, the Trustee, the Paying Agent or the Registrar may deem and
treat the person in whose name a Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of and interest on
such Note and for all other purposes whatsoever, whether or not such Note is
overdue, and none of the Issuer, the Trustee, the Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
All Notes issued upon any transfer or exchange pursuant to the terms
of this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Notes surrendered upon such transfer or
exchange.
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of the beneficial interests in such Global Note may
be effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Global Note shall be required to be reflected in a book entry.
With respect to Global Notes:
(A) Each Global Note authenticated under this Indenture shall (i) be
registered in the name of the Depository designated for such Global Note or a
nominee thereof, (ii) be deposited with such Depository or a nominee thereof or
custodian therefor, (iii) bear legends as set forth in Section 2.14 and (iv)
constitute a single Note for all purposes of this Indenture.
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<PAGE>
(B) Transfers of a Global Note shall be limited to transfers in whole
but not in part to the Depository, its successors or their respective nominees.
A Global Note is exchangeable for Certificated Notes only if (i) the Depository
notifies the Issuer that it is unwilling or unable to continue as a Depository
for such Global Note or if the at any time the Depository ceases to be a
clearing agency registered under the Exchange Act and in either case the Issuer
thereupon fails to appoint a successor Depository within 90 days, (ii) the
Issuer executes and delivers to the Trustee a written notice that such Global
Note shall be issuable and transferable in certificated form or (iii) there
shall have occurred and be continuing an Event of Default or an event which,
with the giving of notice or lapse of time or both, would constitute an Event of
Default with respect to the Notes represented by such Global Note. Any Global
Note that is exchangeable for Certificated Notes pursuant to the preceding
sentence will be transferred to, and registered and exchanged for, Certificated
Notes in authorized denominations, without legends applicable to a Global Note
but with the Private Placement Legend (unless the Issuer determines otherwise in
accordance with applicable law), subject, with respect to such Notes, to the
provisions of such legend, and registered in such names as the Depository
holding such Global Note may direct. Subject to the foregoing, a Global Note is
not exchangeable, except for a Global Note of like denomination to be registered
in the name of the Depository or its nominee. In the event that a Global Note
becomes exchangeable for Certificated Notes, (i) Certificated Notes will be
issued only in fully registered form in denominations of $1,000 or integral
multiples thereof, (ii) payment of principal, any repurchase price, and interest
on the Certificated Notes will be payable, and the transfer of the Certificated
Notes will be registrable, at the office or agency of the Issuer maintained for
such purposes, and (iii) no service charge will be made for any registration or
transfer or exchange of the Certificated Notes, although the Issuer may require
payment of a sum sufficient to cover any tax or governmental charge imposed in
connection therewith.
(C) Notes issued in exchange for a Global Note or any portion thereof
shall have an aggregate principal
39
<PAGE>
amount equal to that of such Global Note or portion thereof to be so exchanged,
shall be registered in such names and be in such authorized denominations as the
Depository shall designate and shall bear the applicable legends provided for
herein. Any Global Note to be exchanged in whole shall be surrendered by the
Depository to the Trustee. With respect to any Global Note to be exchanged in
part, either such Global Note shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depository or its nominee with respect to
such Global Note, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such surrender or
adjustment, the Trustee shall authenticate and deliver the Note issuable on such
exchange to or upon the order of the Depository or an authorized representative
thereof.
(D) Every Note authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Note or any portion
thereof, whether pursuant to this Section 2.6, Section 2.7, 2.9 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Note, unless such Note is registered in the name of a Person other than the
Depository for such Global Note or a nominee thereof. Members of, or
participants in, the Depository ("Participants") shall have no rights under this
Indenture with respect to any Global Note held on their behalf by the Depository
or by the Trustee as the custodian of the Depository or under such Global Note,
and the Depository may be treated by the Issuer, Pierce Leahy, the Trustee and
any agent of the Issuer, Pierce Leahy or the Trustee as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuer, Pierce Leahy, the Trustee or any agent
of the Issuer, Pierce Leahy or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Participants, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Note.
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Neither the Trustee nor the Registrar shall have any duty to monitor
the Issuer's or Pierce Leahy's compliance with or have any responsibility with
respect to the Issuer's or Pierce Leahy's compliance with any Federal or state
securities laws.
Neither the Trustee, the Issuer, Pierce Leahy, nor any agent of any
thereof, shall have any responsibility or obligation to any beneficial owner of
a Global Note, a member of ("Agent Member") or a Participant in the Depository
or other person with respect to the accuracy of the records of the Depository or
its nominee or of any Participant or an Agent Member, with respect to any
ownership interest in the Notes or with respect to the delivery to any
Participant, member, beneficial owner or other Person (other than the
Depository) of any notice (including any notice of redemption) or the payment of
any amount, under or with respect to such Notes. All notices and communications
to be given to the Holder and all payments to be made to Holders under the Notes
shall be given or made only to or upon the order of the registered Holders
(which shall be the Depository or its nominee in the case of a Global Note). The
rights of beneficial owners in any Global Note shall be exercised only through
the Depository subject to the applicable rules and procedures of the Depository.
The Trustee, the Issuer, Pierce Leahy and any such agent may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its members, Participants and any beneficial owners.
Neither the Trustee nor the Registrar shall have any obligation or
duty to monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under the Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or among
Participants, members or beneficial owners in any Global Note) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of the Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
Section 2.7. Replacement Notes.
-----------------
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If a mutilated Note is surrendered to the Registrar or Trustee or if
the Holder of a Note presents evidence to the satisfaction of the Issuer and the
Trustee that the Note has been lost, destroyed or wrongfully taken and of the
ownership thereof, the Issuer shall issue and the Trustee shall authenticate a
replacement Note if the requirements of Section 8-405 of the Uniform Commercial
Code as in effect on the date of this Indenture are met. An indemnity bond may
be required by the Issuer or the Trustee that is sufficient in the judgment of
the Issuer and the Trustee to protect the Issuer, the Trustee or any Agent from
any loss which any of them may suffer if a Note is replaced. The Issuer and the
Trustee each may charge for its expenses (including reasonable attorneys' fees
and expenses) in replacing a Note. Every replacement Note is an additional
obligation of the Issuer.
Section 2.8. Outstanding Notes.
-----------------
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section 2.8 as not outstanding.
If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding until the Issuer and the Trustee receive proof satisfactory to each
of them that the replaced Note is held by a bona fide purchaser.
If a Paying Agent holds on a Redemption Date or Maturity Date money
sufficient to pay the principal of, premium, if any, and all accrued interest on
Notes payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.
Subject to Section 11.6, a Note does not cease to be outstanding
solely because the Issuer, Pierce Leahy or an Affiliate thereof holds the Note.
Section 2.9. Temporary Notes.
---------------
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Until definitive Notes are ready for delivery, the Issuer may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form, and shall carry all rights, benefits and privileges,
of definitive Notes but may have variations that the Issuer considers
appropriate for temporary Notes. Without unreasonable delay, the Issuer shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes presented to it.
Section 2.10. Cancellation.
------------
The Issuer at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee
shall cancel and retain or, upon written request of the Issuer, return to the
Issuer, in accordance with its normal practice, all Notes surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.7 hereof, the
Issuer may not issue new Notes to replace Notes in respect of which it has
previously paid all principal, premium and interest accrued thereon, or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
------------------
If the Issuer defaults in a payment of interest on the Notes, it shall
pay the defaulted amounts, plus (to the extent permitted by law) any interest
payable on defaulted amounts pursuant to Section 4.1 hereof, to the persons who
are Noteholders on a subsequent special record date. The Issuer shall fix the
special record date and payment date in a manner satisfactory to the Trustee and
provide the Trustee at least 20 days notice of the proposed amount of default
interest to be paid and the special payment date. At least 15 days before the
special record date, the Issuer shall mail or cause to be mailed to each
Noteholder at his address as it appears on the Notes register maintained by the
Registrar a notice that states the special record date, the payment date (which
shall be not less than five nor more than ten days after the special record
date), and the amount to be paid. In lieu of the
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<PAGE>
foregoing procedures, the Issuer may pay defaulted interest in any other lawful
manner satisfactory to the Trustee.
Section 2.12. Deposit of Moneys.
-----------------
Prior to 10:00 a.m., New York City time, on each Interest Payment Date
and Maturity Date, the Issuer shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Trustee to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be. The principal and
interest on Global Notes shall be payable to the Depository or its nominee, as
the case may be, as the sole registered owner and the sole holder of the Global
Notes represented thereby. The principal and interest on Certificated Notes, if
any, shall be payable at the office of the Paying Agent.
Section 2.13. CUSIP Number.
------------
The Issuer in issuing the Notes may use a "CUSIP" number(s), and if
so, the Trustee shall use the CUSIP number(s) in notices of redemption or
exchange as a convenience to Holders, provided that any such notice may state
--------
that no representation is made as to the correctness or accuracy of the CUSIP
number(s) printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Issuer will
promptly notify in writing the Trustee of any such CUSIP number used by the
Issuer in connection with the Notes and any change in such CUSIP number.
Section 2.14. Restrictive Legends.
-------------------
Each Initial Note shall bear the following legend (the "Private
Placement Legend") on the face thereof until after the second anniversary of the
later of the Issue Date and the last date on which the Issuer or any Affiliate
of the Issuer was the owner of such security (or any predecessor security) (or
such shorter period of time as permitted by Rule 144(k) under the Securities Act
or any successor provision thereunder) (or such longer period of time as may
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be required under the Securities Act or applicable state securities laws in the
opinion of counsel for the Issuer, unless otherwise agreed by the Issuer and the
Holder thereof):
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE,
AGREES FOR THE BENEFIT OF THE ISSUER AND THE INITIAL PURCHASERS OF THIS NOTE
THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO
THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY
HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE ISSUER AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE,
OTHER THAN (1) TO THE ISSUER, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
NOTE), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT, AND, IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS
SPECIFIED IN THE INDENTURE (AS DEFINED BELOW) PRIOR TO THE EXPIRATION OF THE "40
DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S
UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE OBTAINED FROM THE ISSUER
OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE ISSUER AND THE TRUSTEE, (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR
THE BENEFIT OF THE ISSUER AND THE INITIAL PURCHASERS THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S. PERSON
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (o)(2)
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OR RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT. ANY TRANSFEREE OF THIS
NOTE SHALL BE DEEMED TO HAVE REPRESENTED EITHER (x) THAT IT IS NOT USING THE
ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT ("ERISA") OR THE INTERNAL REVENUE CODE (THE "CODE") TO PURCHASE
THIS NOTE OR (y) THAT ITS PURCHASE AND CONTINUED HOLDING OF THE NOTE WILL BE
COVERED BY A U.S. DEPARTMENT OF LABOR CLASS EXEMPTION (WITH RESPECT TO
PROHIBITED TRANSACTIONS UNDER SECTION 406(a) OF ERISA).
Each Global Note shall also bear the following legend on the face
thereof:
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 ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR 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, A NEW YORK CORPORATION ("DTC"), TO AN 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
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE 2 OF THE INDENTURE.
SECTION 2.15. Special Transfer Provisions; Proxies.
------------------------------------
(a) Transfers to Non-U.S. Persons. The following provisions shall
-----------------------------
apply with respect to the registration
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of any proposed transfer of an interest in a Restricted Global Note to any Non-
U.S. Person:
(i) the Registrar shall register the transfer of an interest in a
Restricted Global Note whether or not such Note bears the Private Placement
Legend, if the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit C hereto; and
(ii) if the proposed transferor is a Participant holding a beneficial
interest in the Restricted Global Note, upon receipt by the Registrar of
(x) the certificate, required by paragraph (i) above and (y) written
instructions given in accordance with the Depository's and the Registrar's
procedures therefor, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the Restricted Global
Note in an amount equal to the principal amount of the beneficial interest
in the Restricted Global Note to be transferred and a corresponding
increase in the principal amount of the Regulation S Global Note in an
amount equal to the principal amount of the beneficial interest in the
Restricted Global Note being transferred.
(b) Transfers by Non-U.S. Persons. The following provisions shall
-----------------------------
apply with respect to registration of any proposed transfer of an interest in a
Regulation S Global Note to a QIB:
(i) the Registrar shall register the transfer of an interest in a
Regulation S Global Note if the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit D hereto; and.
(ii) if the proposed transferor is a Participant holding a beneficial
interest in the Regulation S Global Note, upon receipt by the Registrar of
(x) the certificate required by paragraph (i) and (y) written instructions
given in accordance with the Depository's and the Registrar's procedures
therefor, the Registrar shall reflect on its books and records the date and
an increase in the principal amount of the Restricted
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Global Note in an amount equal to the principal amount of the beneficial
interest in the Regulation S Global Note to be transferred and a
corresponding decrease in the principal amount of the Regulation S Global
Note in an amount equal to the principal amount of the beneficial interest
in the Regulation S Global Note being transferred.
(c) Certificated Note. The Registrar shall register the transfer of
-----------------
a Certificated Note upon receipt of a properly completed assignment form and any
opinions and certifications referred to therein or contemplated thereby.
(d) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the requested transfer is after the second anniversary of the Issue
Date (provided, however, that neither the Issuer nor any Affiliate of the Issuer
-------- -------
has held any beneficial interest in such Note, or portion thereof, at any time
prior to or on the second anniversary of the Issue Date) as certified to the
Trustee and Registrar, or (ii) there is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to the Issuer and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(e) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.6 or this Section 2.15.
The Issuer shall have the right to inspect and make copies of all such letters,
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notices or other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.
(f) The Holder of any Global Note may grant proxies and otherwise
authorize any person, including Participants and persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture, the Notes or the Guarantees.
ARTICLE 3.
REDEMPTION
Section 3.1. Notices to Trustee.
------------------
If the Issuer elects to redeem Notes pursuant to Section 3.7 hereof,
(i) at least 60 days prior to the Redemption Date in the case of a partial
redemption, (ii) at least 45 days prior to the Redemption Date in the case of a
total redemption or (iii) during such other period as the Trustee may agree to
in writing, the Issuer shall notify the Trustee in writing of the Redemption
Date, the principal amount of Notes to be redeemed and the redemption price, and
deliver to the Trustee an Officers' Certificate stating that such redemption
will comply with the conditions contained in Section 3.7 hereof or 3.8 hereof,
as appropriate.
Section 3.2. Selection by Trustee of Notes to Be Redeemed.
--------------------------------------------
In the event that fewer than all of the Notes are to be redeemed, the
Trustee shall select the Notes to be redeemed, if the Notes are listed on a
national securities exchange, in accordance with the rules of such exchange or,
if the Notes are not so listed, on either a pro rata basis or by lot, or in such
other manner as it shall deem fair and appropriate; provided, however, that if a
-------- -------
partial redemption is made with the proceeds of a Public Equity Offering,
selection of the Notes or portion thereof for redemption shall be made by the
Trustee on a pro rata basis, unless such a method is prohibited by law or by the
--- ----
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<PAGE>
rules of such national securities exchange. The Trustee shall promptly notify
the Issuer of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to be redeemed.
The Trustee may select for redemption portions of the principal of the Notes
that have denominations larger than $1,000. Notes and portions thereof the
Trustee selects shall be redeemed in amounts of $1,000 or whole multiples of
$1,000. For all purposes of this Indenture unless the context otherwise
requires, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
Section 3.3. Notice of Redemption.
--------------------
At least 30 days, but no more than 60 days, before a Redemption Date,
the Issuer shall mail, or cause to be mailed, a notice of redemption by first-
class mail to each Holder of Notes to be redeemed at his or her last address as
the same appears on the registry books maintained by the Registrar pursuant to
Section 2.3 hereof.
The notice shall identify the Notes to be redeemed (including the
CUSIP numbers thereof) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date and upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(6) that unless the Issuer defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date;
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(7) the paragraph of Section 3.7 hereof pursuant to which the Notes called
for redemption are being redeemed, if appropriate;
(8) that the redemption is pursuant to Section 3.8 hereof, if appropriate;
and
(9) the aggregate principal amount of Notes that are being redeemed.
At the Issuer's request, the Trustee shall give the notice of
redemption in the Issuer's name and at the Issuer's sole expense.
Section 3.4. Effect of Notice of Redemption.
------------------------------
Once the notice of redemption described in Section 3.3 is mailed,
Notes called for redemption become due and payable on the Redemption Date and at
the redemption price, including any premium, plus interest accrued to the
Redemption Date. Upon surrender to the Paying Agent, such Notes shall be paid
at the redemption price, including any premium, plus interest accrued to the
Redemption Date, provided that if the Redemption Date is after a regular
--------
interest payment record date and on or prior to the Interest Payment Date, the
accrued interest shall be payable to the Holder of the redeemed Notes registered
on the relevant record date, and provided, further, that if a Redemption Date is
-------- -------
a Legal Holiday, payment shall be made on the next succeeding Business Day and
no interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
Section 3.5. Deposit of Redemption Price.
---------------------------
On or prior to 10:00 A.M., New York City time, on each Redemption
Date, the Issuer shall deposit with the Paying Agent in immediately available
funds money sufficient to pay the redemption price of and accrued interest on
all Notes to be redeemed on that date other than Notes or portions thereof
called for redemption on that date which have been delivered by the Issuer to
the Trustee for cancellation.
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On and after any Redemption Date, if money sufficient to pay the
redemption price of and accrued interest on Notes called for redemption shall
have been made available in accordance with the preceding paragraph and payment
thereof is not prohibited pursuant to the terms of this Indenture, the Notes
called for redemption will cease to accrue interest and the only right of the
Holders of such Notes will be to receive payment of the redemption price of and,
subject to the first proviso in Section 3.4, accrued and unpaid interest on such
Notes to the Redemption Date. If any Note called for redemption shall not be so
paid, interest will be paid, from the Redemption Date until such redemption
payment is made, on the unpaid principal of the Note and any interest not paid
on such unpaid principal, in each case, at the rate and in the manner provided
in the Notes.
Section 3.6. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
Section 3.7. Optional Redemption.
-------------------
(a) The Issuer, at its option, may redeem the Notes, in whole or in
part, at any time on or after May 15, 2003 at the following redemption prices
(expressed as a percentage of principal amount), together, in each case, with
accrued and unpaid interest to the Redemption Date, if redeemed during the
twelve-month period beginning on May 15 of each year listed below:
Year Percentage
---- ----------
2003.......................... 104.063%
2004.......................... 102.708%
2005.......................... 101.354%
2006 and thereafter........... 100.000%
(b) Notwithstanding the foregoing, the Issuer, at its option, may
redeem in the aggregate up to 35% of the original principal amount of Notes at
any time and from
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time to time prior to May 15, 2001 at a redemption price equal to
108-1/8% of the aggregate principal amount so redeemed, plus accrued
interest to the Redemption Date, out of the Net Proceeds of one or more Public
Equity Offerings; provided that at least 65% of the aggregate principal amount
--------
of Notes originally issued remains outstanding immediately after the occurrence
of any such redemption pursuant to a Public Equity Offering and that any such
redemption occurs within 90 days following the closing of any such Public Equity
Offering.
Section 3.8. Redemption for Changes in Canadian Withholding Taxes. The Notes
----------------------------------------------------
will be subject to redemption as a whole, but not in part, at the option of the
Issuer at any time at 100% of the principal amount thereof, plus accrued and
unpaid interest thereon (if any) to but excluding the Redemption Date, in the
event the Issuer has become, or would become, obligated to pay, on the next date
on which any amount would be payable with respect to the Notes, any Additional
Amounts as a result of a change in the laws (including any regulations
promulgated thereunder) of Canada (or any political subdivision or taxing
authority thereof or therein), or any change in any official position regarding
the application or interpretation of such laws or regulations, which change is
announced or becomes effective on or after the Issue Date.
ARTICLE 4.
COVENANTS
Section 4.1. Payment of Notes.
----------------
The Issuer shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes and this Indenture. An
installment of principal or interest shall be considered paid on the date it is
due if the Trustee or Paying Agent holds on that date money designated for and
sufficient to pay such installment.
The Issuer shall pay interest on overdue principal (including post-
petition interest in a proceeding
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under any Bankruptcy Law) and overdue interest, to the extent lawful, at the
rate specified in the Notes.
Section 4.2. SEC Reports.
-----------
(a) Pierce Leahy will file with the SEC all information, documents
and reports to be filed with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, whether or not Pierce Leahy is subject to such filing
requirements, so long as the SEC will accept such filings. Pierce Leahy (at its
own expense) will file with the Trustee within 15 days after it files them with
the SEC, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which Pierce Leahy files with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act. Upon qualification of the
Indenture under TIA, the Issuer shall comply with the provisions of TIA (S)
314(a). Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's or
Pierce Leahy's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
(b) Pierce Leahy will transmit to all Holders, in the manner and to
the extent provided in TIA Section 313(c), within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by Pierce Leahy pursuant to paragraph (a) of this
Section as may be required by rules and regulations prescribed from time to time
by the SEC.
Section 4.3. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Issuer and Pierce Leahy covenant (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead (as a
defense or otherwise) or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Issuer or
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Pierce Leahy, as the case may be, from paying all or any portion of the
principal of, premium, if any, and/or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) each of the Issuer or Pierce Leahy hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 4.4. Compliance Certificate.
----------------------
(a) The Issuer and Pierce Leahy shall deliver to the Trustee, within
100 days after the end of each fiscal year and on or before 50 days after the
end of the first, second and third quarters of each fiscal year, an Officers'
Certificate (one of the signers of which shall be the principal executive
officer, principal financial officer or principal accounting officer of the
Issuer and Pierce Leahy) stating that a review of the activities of Pierce
Leahy, the Issuer and their Subsidiaries during such fiscal year or fiscal
quarter, as the case may be, has been made under the supervision of the signing
Officers with a view to determining whether each of the Issuer and Pierce Leahy
has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge (and without regard to any
period of grace or requirement of notice provided hereunder) each of the Issuer
and Pierce Leahy has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all or such Defaults
or Events of Default of which he or she may have knowledge and what action the
Issuer and Pierce Leahy is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes are prohib-
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ited or, if such event has occurred, a description of the event and what action
the Issuer and Pierce Leahy are taking or propose to take with respect thereto.
(b) So long as (and to the extent) not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.2 above shall be
accompanied by a written statement of Pierce Leahy's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements
nothing has come to their attention which would lead them to believe that Pierce
Leahy and the Issuer have violated any provisions of this Article 4 or Article 5
of this Indenture or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly for any failure to obtain knowledge of any
such violation.
(c) The Issuer and Pierce Leahy will, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Issuer and Pierce Leahy are
taking or propose to take with respect thereto.
Section 4.5. Taxes.
-----
The Issuer and Pierce Leahy shall, and shall cause each of their
Subsidiaries to, pay prior to delinquency all material taxes, assessments, and
governmental levies except as contested in good faith and by appropriate
proceedings.
Section 4.6. Limitation on Additional Indebtedness.
-------------------------------------
Pierce Leahy will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness) unless (a) after giving effect to the incurrence of such
Indebtedness and the receipt and application of the proceeds thereof,
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the ratio of total Indebtedness of Pierce Leahy and its Restricted Subsidiaries
to Pierce Leahy's Adjusted EBITDA is less than 6.5 to 1; provided, however, that
-------- -------
if the Indebtedness which is the subject of a determination under this provision
is Acquired Indebtedness, or Indebtedness incurred in connection with the
simultaneous acquisition of any Person, business, property or assets, then such
ratio shall be determined by giving effect (on a pro forma basis, as if the
--- -----
transaction had occurred at the beginning of the four quarter period ending at
the end of the last fiscal quarter of such Person or business for which
financial statements are available) to the incurrence or assumption of such
Acquired Indebtedness or such other Indebtedness by Pierce Leahy or a Restricted
Subsidiary; and (b) no Default or Event of Default shall have occurred and be
continuing at the time or as a consequence of the incurrence of such
Indebtedness.
Notwithstanding the foregoing, Pierce Leahy and its Restricted
Subsidiaries may incur Permitted Indebtedness; provided, that no Domestic
--------
Guarantor may incur any Permitted Indebtedness, without meeting the Indebtedness
incurrence provisions of the preceding paragraph, that ranks pari passu or
---- -----
junior in right of payment to the Domestic Guarantees and that has a maturity or
mandatory sinking fund payment prior to the maturity of the Notes.
Section 4.7. Limitation on Preferred Stock of Restricted Subsidiaries.
--------------------------------------------------------
Pierce Leahy will not permit any Restricted Subsidiary to issue any
Preferred Stock (except Preferred Stock to Pierce Leahy or a Restricted
Subsidiary) or permit any Person (other than Pierce Leahy or a Subsidiary) to
hold any such Preferred Stock unless Pierce Leahy or such Restricted Subsidiary
would be entitled to incur or assume Indebtedness under Section 4.6 hereof in
the aggregate principal amount equal to the aggregate liquidation value of the
Preferred Stock to be issued; provided, however, that the Issuer and any
-------- -------
Restricted Subsidiary that guarantees the Notes shall be permitted to issue
Preferred Stock that is not Disqualified Capital Stock.
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Section 4.8. Limitation on Capital Stock of Restricted Subsidiaries.
------------------------------------------------------
Pierce Leahy will not (i) sell, pledge, hypothecate or otherwise
convey or dispose of any Capital Stock of a Restricted Subsidiary (other than
under the terms of the Credit Facility, under the terms of any Designated Senior
Indebtedness or as permitted in Section 4.12 hereof) or (ii) permit any of its
Restricted Subsidiaries to issue any Capital Stock, other than to Pierce Leahy
or a Wholly-Owned Subsidiary of Pierce Leahy. The foregoing restrictions shall
not apply to an Asset Sale made in compliance with Section 4.10 hereof or the
issuance of Preferred Stock in compliance with Section 4.7 hereof.
Section 4.9. Limitation on Restricted Payments.
---------------------------------
Pierce Leahy will not make, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(b) immediately after giving pro forma effect to such Restricted
--- -----
Payment, Pierce Leahy or a Restricted Subsidiary could incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under Section
4.6 hereof; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared (except to the extent not
made on the payment date) or made after the Issue Date does not exceed the
sum of (1) 50% of the cumulative Consolidated Net Income of Pierce Leahy
subsequent to the Issue Date (or minus 100% of any cumulative deficit in
Consolidated Net Income during such period) and (2) 100% of the aggregate
Net Proceeds and the fair market value of securities or other property
received by Pierce Leahy or the Issuer from the issue or sale, after the
Issue Date, of Capital Stock (other than Disqualified Capital Stock or
Capital Stock of Pierce
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Leahy or the Issuer issued to any Subsidiary of Pierce Leahy) of Pierce
Leahy or the Issuer or any Indebtedness or other securities of Pierce Leahy
or the Issuer convertible into or exercisable or exchangeable for Capital
Stock (other than Disqualified Capital Stock) of Pierce Leahy or the Issuer
which has been so converted or exercised or exchanged, as the case may be,
and (3) $3,000,000. For purposes of determining under this clause (c) the
amount expended for Restricted Payments, cash distributed shall be valued
at the face amount thereof and property other than cash shall be valued at
its fair market value.
Notwithstanding the foregoing, the provisions of this Section 4.9
shall not prohibit (i) the payment of any distribution within 60 days after the
date of declaration thereof, if at such date of declaration such payment would
comply with the provisions of this Indenture, (ii) the retirement of any shares
of Capital Stock of Pierce Leahy or the Issuer or subordinated Indebtedness by
conversion into, or by or in exchange for, shares of Capital Stock (other than
Disqualified Capital Stock), or out of, the Net Proceeds of the substantially
concurrent sale (other than to a Subsidiary of Pierce Leahy) of other shares of
Capital Stock of Pierce Leahy (other than Disqualified Capital Stock), (iii) the
redemption or retirement of Indebtedness of the Issuer subordinated to the Notes
in the case of the Issuer or of a Guarantor subordinated to its respective
Guarantee in exchange for, by conversion into, or out of the Net Proceeds of, a
substantially concurrent sale or incurrence of Indebtedness (other than any
Indebtedness owed to a Subsidiary) of the Issuer or a Guarantor that is
contractually subordinated in right of payment to the Notes in the case of the
Issuer or such Guarantor's Guarantee, as the case may be, to at least the same
extent as the subordinated Indebtedness being redeemed or retired, (iv) the
retirement of any shares of Disqualified Capital Stock by conversion into, or by
exchange for, shares of Disqualified Capital Stock, or out of the Net Proceeds
of the substantially concurrent sale (other than to a Subsidiary of Pierce
Leahy) of other shares of Disqualified Capital Stock, (v) Permitted Tax
Distributions, (vi) payments to employees of Pierce Leahy for repurchases of
stock or repurchases pursuant to the Pierce Leahy Nonqualified Stock
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Option Plan; provided, however, that the aggregate amount of all such payments
-------- -------
under this clause (vi) does not exceed $2,000,000 in the aggregate, exclusive of
amounts funded by insurance proceeds; and provided, further, that with respect
-------- -------
to clause (vi) (other than with respect to payments funded by insurance
proceeds) no Default or Event of Default shall have occurred and be continuing
at the time of any such distribution or payment or will occur immediately after
giving effect to any such distribution or payment; and provided, further, that,
-------- -------
in determining the aggregate amount of all Restricted Payments made subsequent
to the Issue Date, all distributions or payments made pursuant to clause (vi)
(exclusive of insurance proceeds) shall be included.
Not later than the date of making any Restricted Payment, Pierce Leahy
and the Issuer shall deliver to the Trustee an Officers' Certificate stating
that such Restricted Payment is permitted and setting forth the basis upon
which the calculations required by this Section 4.9 were computed, which
calculations may be based upon Pierce Leahy's latest available financial
statements, and that no Default or Event of Default exists and is continuing and
no Default or Event of Default will occur immediately after giving effect to
such Restricted Payment.
Section 4.10. Limitation on Certain Asset Sales.
---------------------------------
(a) Pierce Leahy will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) Pierce Leahy or its
Restricted Subsidiaries, as the case may be, receives consideration at the
time of such sale or other disposition at least equal to the fair market value
thereof (as determined for Asset Sales other than eminent domain, condemnation
or similar government proceedings in good faith by Pierce Leahy's Board of
Directors, and evidenced by a board resolution); (ii) not less than 85% of the
consideration received by Pierce Leahy or its Subsidiaries, as the case may be,
is in the form of cash or Temporary Cash Investments; and (iii) the Asset Sale
Proceeds received by Pierce Leahy or such Restricted Subsidiary are applied (a)
first, to the extent Pierce Leahy or such Restricted Subsidiaries elects, or is
required, to prepay, repay or purchase debt under any then
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existing Senior Indebtedness of Pierce Leahy or any Restricted Subsidiary within
180 days following the receipt of the Asset Sale Proceeds from any Asset Sale;
(b) second, to the extent of the balance of Asset Sale Proceeds after
application as described above, to the extent Pierce Leahy or such Restricted
Subsidiary elects, to an investment in assets (including Capital Stock or other
securities purchased in connection with the acquisition of Capital Stock or
property of another Person) used or useful in businesses similar or ancillary to
the business of Pierce Leahy or a Restricted Subsidiary as conducted at the time
of such Asset Sale, provided that such investment occurs or Pierce Leahy or a
Restricted Subsidiary enters into contractual commitments to make such
investment, subject only to customary conditions (other than the obtaining of
financing), on or prior to the 181st day following receipt of such Asset Sale
Proceeds (the "Reinvestment Date") and Asset Sale Proceeds contractually
committed are so applied within 270 days following the receipt of such Asset
Sale Proceeds; and (c) third, if on the Reinvestment Date with respect to any
Asset Sale, the Available Asset Sale Proceeds exceed $10 million, Pierce Leahy
or such Restricted Subsidiary, as applicable, shall apply an amount equal to
such Available Asset Sale Proceeds to an offer to repurchase the Notes, or any
Indebtedness ranking pari passu with the Notes with respect to Indebtedness of
---- -----
the Issuer or the relevant Guarantee with respect to Indebtedness of a
Guarantor, which Indebtedness contains similar provisions requiring Pierce Leahy
or a Restricted Subsidiary to repurchase such Indebtedness, at a purchase price
in cash equal to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of repurchase (an "Excess Proceeds Offer");
provided, however, that prior to making any such Excess Proceeds Offer, Pierce
Leahy or such Restricted Subsidiary may, to the extent required pursuant to the
terms of Indebtedness outstanding as of the Issue Date, offer to use such
Available Asset Sale Proceeds to repurchase and use all or a portion of such
Available Asset Sale Proceeds to repurchase such Indebtedness. If an Excess
Proceeds Offer is not fully subscribed, Pierce Leahy or such Restricted
Subsidiary may retain the portion of the Available Asset Sale Proceeds not
required to repurchase Notes for general corporate purposes. If the aggregate
principal amount of Notes tendered pursuant to such Excess
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Proceeds Offer is more than the amount of the Available Asset Sale Proceeds, the
Notes tendered will be repurchased on a pro rata basis or by such other method
as the Trustee shall deem fair and appropriate.
(b) If the Issuer is required to make an Excess Proceeds Offer, the
Issuer shall mail, within 30 days following the Reinvestment Date (or within 120
days following the Reinvestment Date if Pierce Leahy or a Restricted Subsidiary
is required to make an offer to purchase Indebtedness (other than the Notes)
outstanding as of the Issue Date), a notice to the Holders stating, among other
things: (1) that such Holders have the right to require Pierce Leahy to apply,
or cause a Restricted Subsidiary to apply, the Available Asset Sale Proceeds to
repurchase such Notes at a purchase price in cash equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase; (2) the purchase date (the "Purchase Date"), which shall be no earlier
than 30 days and not later than 60 days from the date such notice is mailed; (3)
the instructions, determined by the Issuer, that each Holder must follow in
order to have such Notes repurchased; and (4) the calculations used in
determining the amount of Available Asset Sale Proceeds to be applied to the
repurchase of such Notes. The Excess Proceeds Offer shall remain open for a
period of 20 Business Days following its commencement (the "Offer Period").
The notice, which shall govern the terms of the Excess Proceeds Offer, shall
state:
(1) that the Excess Proceeds Offer is being made pursuant to this
Section 4.10 and the length of time the Excess Proceeds Offer will remain
open;
(2) the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will not be
purchased and will continue to accrue interest;
(4) that any Note accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest on and after the Purchase
Date so long as
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payment thereof is not prohibited pursuant to the terms of the Indenture;
(5) that Holders electing to have a Note purchased pursuant to any
Excess Proceeds Offer will 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 Issuer, a depositary, if appointed by the Issuer, or a
Paying Agent at the address specified in the notice at least three
Business Days before the Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Issuer, depositary or Paying Agent, as the case may be, receives, not later
than the expiration 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 his election to have the Note purchased;
(7) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Available Asset Sale Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Issuer so that only Notes in denominations of
$l,000, or integral multiples thereof, shall be purchased) or by such other
method as the Trustee shall deem fair and appropriate; and
(8) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered.
On or before the Purchase Date, the Issuer shall, to the extent
lawful, accept for payment, on a pro rata basis or by such other method as the
Trustee shall deem fair and appropriate to the extent necessary, Notes or
portions thereof tendered pursuant to the Excess Proceeds Offer, and deposit
with the Paying Agent U.S. legal tender sufficient to pay the purchase price
plus accrued interest,
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if any, on the Notes to be purchased and deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Issuer in accordance with the terms of this Section 4.10. The
Paying Agent shall promptly (but in any case not later than 5 days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Note tendered by such Holder and accepted by the Issuer
for purchase, and the Issuer shall promptly issue a new Note, and the Trustee
shall authenticate and mail or make available for delivery such new Note to such
Holder equal in principal amount to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Issuer to the Holder thereof. The Issuer will publicly announce the results
of the Excess Proceeds Offer on the Purchase Date; provided, however, that prior
-------- -------
to making any such Excess Proceeds Offer, the Issuer may, to the extent required
pursuant to the terms of Indebtedness outstanding as of the Issue Date, offer to
use such Available Asset Sale Proceeds to repurchase and use all or a portion of
such Available Asset Sale Proceeds to repurchase such Indebtedness. If an Excess
Proceeds Offer is not fully subscribed, Pierce Leahy or the relevant Restricted
Subsidiary may retain the portion of the Available Asset Sale Proceeds not
required to repurchase Notes for general corporate purposes.
Section 4.11 Limitation on Transactions with Affiliates.
------------------------------------------
(a) Pierce Leahy will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series
of related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate
(including entities in which Pierce Leahy or any of its Restricted Subsidiaries
own a minority interest) or holder of 10% or more of Pierce Leahy's Common Stock
(an "Affiliate Transaction") or extend, renew, waive or otherwise modify the
terms of any Affiliate Transaction entered into prior to the Issue Date unless
(i) such Affiliate Transaction is between or among Pierce Leahy and its Wholly-
Owned Subsidiaries; (ii) such Affiliate Transaction is solely between or among
Wholly-Owned Subsidiaries of Pierce Leahy; or (iii) the terms of
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such Affiliate Transaction are fair and reasonable to Pierce Leahy or such
Restricted Subsidiary, as the case may be, and the terms of such Affiliate
Transaction are at least as favorable as the terms which could be obtained by
Pierce Leahy or such Restricted Subsidiary, as the case may be, in a comparable
transaction made on an arm's-length basis between unaffiliated parties;
provided, however, that Pierce Leahy and its Restricted Subsidiaries may renew
- -------- -------
any then existing Affiliate Transaction through either a renewal option or upon
expiration of an arrangement on substantially similar terms to those in effect
immediately preceding such expiration. In any Affiliate Transaction involving an
amount or having a value in excess of $1 million which is not permitted under
clause (i) or (ii) above, Pierce Leahy must obtain a resolution of the Board of
Directors certifying that such Affiliate Transaction complies with clause (iii)
above and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors. In transactions with a value in
excess of $3 million which are not permitted under clause (i) or (ii) above,
Pierce Leahy must obtain a written opinion as to the fairness from a financial
point of view of such a transaction from an independent investment banking firm
of national standing or real estate firm of national standing (as the case may
be).
(b) The limitations set forth in Section 4.11(a) will not apply to
(i) any Restricted Payment that is not prohibited by Section 4.9 hereof, (ii)
any transaction, approved by the Board of Directors of Pierce Leahy in good
faith, with an officer, director, employee or consultant of Pierce Leahy or of
any Subsidiary in his or her capacity as an officer, director, employee or
consultant entered into in the ordinary course of business, including
compensation, indemnity and employee benefit arrangements with any officer,
director, employee or consultant of Pierce Leahy or of any Subsidiary, or (iii)
customary investment banking, underwriting, placement agent or financial advisor
fees paid in connection with services rendered to Pierce Leahy or any
Subsidiary.
Section 4.12 Limitations on Liens.
--------------------
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Pierce Leahy will not, and will not permit any of its Restricted
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind (other than Permitted Liens) upon any property
or asset of Pierce Leahy or any Restricted Subsidiary or any shares of stock or
debt of any Restricted Subsidiary which owns property or assets, now owned or
hereafter acquired, in any case which secures Indebtedness pari passu with or
---- -----
subordinated to the Notes with respect to the Issuer or a Guarantor's Guarantee
with respect to the respective Guarantor unless (i) if such Lien secures
Indebtedness which is pari passu with the Notes in the case of the Issuer or a
---- -----
Guarantee with respect to the respective Guarantor, then the Notes or such a
Guarantee, as applicable, are secured on an equal and ratable or senior basis
with the obligations so secured until such time as such obligation is no longer
secured by a Lien or (ii) if such Lien secures Indebtedness which is
subordinated to the Notes in the case of the Issuer or a Guarantor's Guarantee
in the case of a Guarantor, any such Lien shall be subordinated to the Lien
granted to the Holders of the Notes in the same collateral to the same extent as
such subordinated Indebtedness is subordinated to the Notes or such Guarantee,
as applicable.
Section 4.13 Limitations on Investments.
--------------------------
Pierce Leahy will not, and will not permit any of its Restricted
Subsidiaries to, make any Investment other than (i) a Permitted Investment or
(ii) an Investment that is made as a Restricted Payment in compliance with
Section 4.9 hereof, after the Issue Date.
Section 4.14 Limitation on Creation of Subsidiaries.
--------------------------------------
Pierce Leahy shall not create or acquire, nor permit any of its
Restricted Subsidiaries to create or acquire, any Subsidiary other than (i) a
Restricted Subsidiary existing as of the date of this Indenture, (ii) a
Restricted Subsidiary that is acquired or created after the date of this
Indenture, or (iii) an Unrestricted Subsidiary; provided, however, that each
-------- -------
Restricted Subsidiary organized under the laws of the United States or any State
thereof or the District of Columbia acquired or
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created pursuant to clause (ii) at the time it has either assets or
shareholder's equity in excess of $5,000, and each Restricted Subsidiary
organized under the laws of Canada or any province thereof acquired or created
pursuant to clause (ii) which is not prohibited by the laws of Canada or any
province thereof from acting as a guarantor of the Notes, at the time it has
either assets or shareholders' equity in excess of $5,000, shall execute a
subordinated guarantee in the case of a Domestic Guarantor and a senior
guarantee in the case of a Canadian Guarantor, each in the form attached as
Exhibit E or Exhibit F, as applicable, to this Indenture and reasonably
satisfactory in form and substance to the Trustee (and with such documentation
relating thereto as the Trustee shall require, including, without limitation, a
supplement or amendment to this Indenture and an Opinion of Counsel as to the
enforceability of such Guarantee).
Section 4.15 Limitation on Senior Subordinated Debt.
--------------------------------------
Pierce Leahy will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur, contingently or otherwise, any
Indebtedness (other than the Notes and the Guarantees, as the case may be) that
is both (i) subordinate in right of payment to any Senior Indebtedness of Pierce
Leahy or its Restricted Subsidiaries, as the case may be, and (ii) senior in
right of payment to the Notes, with respect to the Issuer, or a Guarantor's
Guarantee with respect to such Guarantor, as the case may be. For purposes of
this Section 4.15, Indebtedness is deemed to be senior in right of payment to
a Domestic Guarantee if it is not explicitly subordinate in right of payment to
Senior Indebtedness at least to the same extent as the Domestic Guarantees are
subordinate to Senior Indebtedness.
Section 4.16 Limitation on Sale and Lease-Back Transactions.
-----------------------------------------------
Pierce Leahy will not, and will not permit any Restricted Subsidiary
to, enter into any Sale and Lease-Back Transaction unless (i) the consideration
received in such Sale and Lease-Back Transaction is at least equal to the fair
market value of the property sold, as determined
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by a Board Resolution of Pierce Leahy, and (ii) Pierce Leahy or a Restricted
Subsidiary could incur the Attributable Indebtedness in respect of such Sale and
Lease-Back Transaction in compliance with Section 4.6.
Section 4.17 Payments for Consent.
--------------------
Neither Pierce Leahy nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or agreed
to be paid to all Holders of the Notes which so consent, waive or agree to amend
in the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
Section 4.18 Corporate Existence.
-------------------
Subject to Article 5 hereof, each of the Issuer and Pierce Leahy shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, and the corporate, partnership or other
existence of each Restricted Subsidiary, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
Restricted Subsidiary and the rights (charter and statutory), licenses and
franchises of Pierce Leahy and its Restricted Subsidiaries; provided, however,
-------- -------
that Pierce Leahy and the Issuer shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Restricted Subsidiaries, if the Board of Directors of Pierce Leahy
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of Pierce Leahy and its Restricted Subsidiaries, taken
as a whole, and that the loss thereof is not adverse in any material respect to
the Holders.
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Section 4.19 Change of Control.
-----------------
(a) Within 30 days of the occurrence of a Change of Control of Pierce
Leahy, the Issuer shall notify the Trustee in writing of such occurrence and
shall make an offer to purchase (the "Change of Control Offer") the outstanding
Notes at a purchase price equal to 101% of the principal amount thereof plus any
accrued and unpaid interest thereon to the Change of Control Payment Date (as
hereinafter defined) (such applicable purchase price being hereinafter referred
to as the "Change of Control Purchase Price") in accordance with the procedures
set forth in this Section 4.19.
If the Credit Facility is in effect, or any amounts are owing
thereunder or in respect thereof, at the time of the occurrence of a Change of
Control, prior to the mailing of the notice to Holders described in paragraph
(b) below, but in any event within 30 days following any Change of Control,
Pierce Leahy and the Issuer covenant to (i) repay in full all obligations under
or in respect of the Credit Facility or offer to repay in full all obligations
under or in respect of the Credit Facility and repay the obligations under or in
respect of the Credit Facility of each lender who has accepted such offer or
(ii) obtain the requisite consent under Credit Facility to permit the repurchase
of the Notes pursuant to this Section 4.19. Pierce Leahy and the Issuer must
first comply with the covenant described in the preceding sentence before it
shall be required to purchase Notes in the event of a Change of Control;
provided that Pierce Leahy's or the Issuer's failure to comply with the covenant
- ---------
described in the preceding sentence constitutes an Event of Default described in
clause (3) under Section 6.1 hereof if not cured within 60 days after the notice
required by such clause.
(b) Within 30 days of the occurrence of a Change of Control, the
Issuer also shall (i) cause a notice of the Change of Control Offer to be sent
at least once to the Dow Jones News Service or similar business news service in
the United States and (ii) send by first-class mail, postage prepaid, to the
Trustee and to each Holder of the Notes, at
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the address appearing in the register maintained by the Registrar of the Notes,
a notice stating:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.19 and that all Notes tendered will be accepted for payment, and
otherwise subject to the terms and conditions set forth herein;
(ii) the Change of Control Purchase Price and the purchase date (which
shall be a Business Day no earlier than 20 Business Days and no later than
60 Business Days from the date such notice is mailed (the "Change of
Control Payment Date"));
(iii) that any Note not tendered will not be purchased and will
continue to accrue interest;
(iv) that, unless the Issuer defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(v) that Holders accepting the offer to have their Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the Business Day preceding
the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their acceptance if the
Paying Agent receives, not later than the close of business on the third
Business Day preceding the Change of Control Payment Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have such Notes purchased;
(vii) that Holders whose Notes are being pur chased only in part will
be issued new Notes equal in
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principal amount to the unpurchased portion of the Notes surrendered,
provided that each Note purchased and each such new Note issued shall be in
an original principal amount in denominations of $1,000 and integral
multiples thereof;
(viii) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(ix) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Issuer shall, to the extent
lawful, (i) accept for payment Notes or portions thereof or beneficial interests
under a Global Note properly tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent money sufficient to pay the Change of Control
Purchase Price of all Notes or portions thereof or beneficial interests so
tendered and (iii) deliver or cause to be delivered to the Trustee Notes so
accepted together with an Officers' Certificate stating the Notes or portions
thereof tendered to the Issuer. The Paying Agent shall as promptly as
practicable (1) mail to each holder of Notes so accepted and (2) cause to be
credited to the respective accounts of the Holders under a Global Note of
beneficial interest so accepted payment in an amount equal to the Change of
Control Purchase Price for such Notes, and the Issuer shall execute and issue,
and the Trustee shall promptly authenticate and mail to each such Holder, a new
Note equal in principal amount to any unpurchased portion of the Notes
surrendered and shall issue a Global Note equal in principal amount to any
unpurchased portion of beneficial interest so surrendered; provided that each
--------
such new Note shall be issued in an original principal amount in denominations
of $1,000 and integral multiples thereof.
(c) (i) If Pierce Leahy or any Subsidiary thereof has issued any
outstanding (A) Indebtedness that is subordinated in right of payment to the
Notes in the case of the Issuer or a Guarantee in the case of a Guarantor making
such Guarantee or (B) Preferred Stock, and Pierce Leahy or such Subsidiary is
required to make a change of control offer or to make a distribution with
respect to
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such subordinated Indebtedness or Preferred Stock in the event of a
Change of Control, Pierce Leahy or such Subsidiary, as the case may be, shall
not consummate any such offer or distribution with respect to such subordinated
Indebtedness or Preferred Stock until such time as the Issuer shall have paid
the Change of Control Purchase Price in full to the holders of Notes that have
accepted the Change of Control Offer and shall otherwise have consummated the
Change of Control Offer made to holders of the Notes and (ii) the Issuer and the
Guarantors will not issue Indebtedness that is subordinated in right of payment
to the Notes in the case of the Issuer or a Guarantee in the case of a Guarantor
making such Guarantee or Preferred Stock with change of control provisions
requiring the payment of such Indebtedness or Preferred Stock prior to the
payment of the Notes or such Guarantee, as the case may be, in the event of a
Change of Control under this Indenture.
In the event that a Change of Control occurs and the Holders of Notes
exercise their right to require the Issuer to purchase Notes, if such purchase
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at that time, the Issuer will comply with the requirements of Rule 14e-1 as then
in effect with respect to such repurchase.
Section 4.20 Maintenance of Office or Agency.
-------------------------------
The Issuer and Pierce Leahy shall maintain an office or agency where
Notes may be surrendered for registration or transfer or exchange or for
presentation for payment and where notices and demands to or upon the Issuer and
Pierce Leahy in respect of the Notes and this Indenture may be served. The
Issuer and Pierce Leahy shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Issuer or Pierce Leahy shall fail to maintain any such required office
or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee as set forth in Section 11.2.
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The Issuer and Pierce Leahy may also from time to time designate one
or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. The Issuer and Pierce Leahy shall give prompt written notice to
the Trustee of such designation or rescission and of any change in the location
of any such other office or agency.
The Issuer and Pierce Leahy hereby initially designate the Corporate
Trust Office of the Trustee set forth in Section 11.2 as such office of the
Issuer and Pierce Leahy.
Section 4.21 Maintenance of Properties and Insurance.
---------------------------------------
(a) Each of the Issuer and Pierce Leahy shall cause all material
properties used or useful to the conduct of its business or the business of any
of its Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) and supplied with all
equipment deemed necessary in the good faith judgment of the Officers of the
Issuer and Pierce Leahy and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in its
judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times unless the
failure to so maintain such properties (together with all other such failures)
would not have a material adverse effect on the financial condition or results
of operations of Pierce Leahy and its Subsidiaries, taken as a whole; provided,
--------
however, that nothing in this Section 4.21 shall prevent the Issuer, Pierce
- -------
Leahy or any Subsidiary from discontinuing the operation or maintenance of any
of such properties, or disposing of any of them, if such discontinuance or
disposal is in the good faith judgment of the Board of Directors of Pierce Leahy
or the Subsidiary concerned, as the case may be, desirable in the conduct of the
business of the Issuer, Pierce Leahy or such Subsidiary, as the case may be,
and is not adverse in any material respect to the Holders.
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(b) Each of the Issuer and Pierce Leahy shall provide or cause to be
provided, for itself and each of its Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Issuer and Pierce Leahy are adequate and
appropriate for the conduct of the business of the Issuer, Pierce Leahy and such
Subsidiaries in a prudent manner, with reputable insurers or with the government
of the United States of America or an agency or instrumentality thereof, in such
amounts, with such deductibles, and by such methods as shall be customary, in
the good faith judgment of the Issuer and Pierce Leahy, for corporations
similarly situated in the industry, unless the failure to provide such insurance
(together with all other such failures) would not have a material adverse effect
on the financial condition or results of operations of Pierce Leahy and its
Subsidiaries, taken as a whole.
Section 4.22 Additional Amounts.
------------------
(a) All payments made by the Issuer under or with respect to the Notes
will be made free and clear of, and without withholding or deduction for or on
account of, any present or future tax, duty, levy, impost, assessment or other
governmental charge imposed or levied by or on behalf of the government of
Canada or of any province or territory thereof or by any authority or agency
therein or thereof having power to tax ("Canadian Taxes"), unless the Issuer is
required to withhold or deduct Canadian Taxes by law or by the interpretation or
administration thereof by the relevant governmental authority or agency. If the
Issuer is so required to withhold or deduct any amount for or on account of
Canadian Taxes from any payment made under or with respect to the Notes, the
Issuer will pay such additional amounts ("Additional Amounts") as may be
necessary so that the net amount received by each Holder (including Additional
Amounts) after such withholding or deduction will not be less than the amount
the Holder would have received if such Canadian Taxes had not been withheld or
deducted; provided, that no Additional Amounts will be payable with respect to a
payment made to a Holder (an "Excluded Holder") (i) with which the Issuer does
not deal at arm's length (within the meaning of the Income Tax Act (Canada)) at
the time of making such payment, or (ii) which
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is subject to such Canadian Taxes by reason of its being connected with Canada
or any province or territory thereof otherwise than by the mere acquisition,
holding or disposi tion of Notes or the receipt of payments thereunder. The
Issuer will also (i) make such withholding or deduction and (ii) remit the full
amount deducted or withheld to the relevant governmental authority in accordance
with applicable law. The Issuer will furnish to the Holders (other than an
Excluded Holder), within 30 days after the date the payment of any Canadian
Taxes is due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by the Issuer. The Issuer will indemnify and hold
harmless each Holder (other than an Excluded Holder) and upon written request
reimburse each such Holder for the amount of (i) any Canadian Taxes so levied or
imposed and paid by such Holder as a result of payments made under or with
respect to the Notes, (ii) any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, and (iii) any Canadian
Taxes imposed with respect to any reimbursement under (i) or (ii), but excluding
any such Canadian Taxes on such Holder's net income.
(b) At least 30 days prior to each date on which any payment under or
with respect to the Notes is due and payable, if the Issuer will be obligated to
pay Additional Amounts with respect to such payment, the Issuer will deliver to
the Trustee an Officers' Certificate stating the fact that such Additional
Amounts will be payable, the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional Amounts to
Holders (other than an Excluded Holder) on the payment date. Whenever in this
Indenture there is mentioned in any context the payment of principal (and
premium, if any), redemption price, interest or any other amount payable under
or with respect to any Note, such mention shall be deemed to include mention of
the payment of Additional Amounts to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof.
ARTICLE 5.
SUCCESSOR CORPORATION
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Section 5.1. Limitation on Consolidation,
Merger and Sale of Assets.
----------------------------
(a) Pierce Leahy and the Issuer will not and will not permit any
Guarantor to consolidate with, merge with or into, or transfer all or
substantially all of its assets (as an entirety or substantially as an entirety
in one transaction or a series of related transactions), to any Person unless:
(i) Pierce Leahy, the Issuer or the Guarantor, as the case may be, shall be the
continuing Person, or the Person (if other than Pierce Leahy, the Issuer or the
Guarantor) formed by such consolidation or into which Pierce Leahy, the Issuer
or the Guarantor, as the case may be, is merged or to which the properties and
assets of Pierce Leahy, the Issuer or the Guarantor, as the case may be, are
transferred shall be a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia (and in the case
of the Issuer or a Canadian Guarantor, a corporation organized and existing
under the laws of Canada or any province thereof) and shall expressly assume, by
a supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of Pierce Leahy, the Issuer
or the Guarantor, as the case may be, under the Notes and this Indenture, and
the obligations under this Indenture shall remain in full force and effect; (ii)
immediately before and immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and (iii)
immediately after giving effect to such transaction on a pro forma basis Pierce
Leahy, a Restricted Subsidiary or such Person could incur at least $1.00
additional Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.6 hereof, provided, however, that (a) a Guarantor other than Pierce Leahy may
-------- -------
merge into the Issuer, Pierce Leahy or another Guarantor, (b) the Issuer may
merge into a Canadian Guarantor or another corporation or limited liability
company organized and existing under the laws of Canada or any province thereof
for the purpose of converting into a limited liability company or to change the
Issuer's jurisdiction of incorporation, and (c) the Issuer or a Canadian
Guarantor can transfer a portion of its assets to the Issuer or another Canadian
Guarantor, in the case of (a), (b) or (c), without complying with this clause
(iii).
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(b) In connection with any consolidation, merger or transfer of
assets contemplated by this Section 5.1, Pierce Leahy and the Issuer shall
deliver, or cause to be delivered, to the Trustee, in form and substance
reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion
of Counsel, each stating that such consolidation, merger or transfer and the
supplemental indenture in respect thereto comply with this Section 5.1 and that
all conditions precedent herein provided for relating to such transaction or
transactions have been complied with.
Section 5.2. Successor Person Substituted.
----------------------------
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of Pierce Leahy, the Issuer or any Guarantor in
accordance with Section 5.1 above, the successor corporation formed by such
consolidation or into which Pierce Leahy, the Issuer or such Guarantor is
merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, Pierce Leahy, the Issuer or such
Guarantor, as applicable, under this Indenture with the same effect as if such
successor corporation had been named as Pierce Leahy, the Issuer or such
Guarantor herein, and thereafter the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
-----------------
An "Event of Default" occurs if
(1) there is a default in the payment of any principal of, or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise, whether or not such
payment is prohibited by the provisions of Article 10 hereof;
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(2) there is a default in the payment of any interest on any Note
when the same becomes due and payable and the Default continues for a
period of 30 days, whether or not such payment is prohibited by the
provisions of Article 10 hereof;
(3) the Issuer, Pierce Leahy or any other Guarantor defaults in the
observance or performance of any other covenant in the Notes or this
Indenture for 60 days after written notice from the Trustee to the Issuer
and Pierce Leahy or written notice from the Holders of not less than 25% in
aggregate principal amount of the Notes then outstanding to the Issuer,
Pierce Leahy and the Trustee;
(4) there is a default in the payment at final maturity of principal
in an aggregate amount of $3,000,000 or more with respect to any
Indebtedness of Pierce Leahy or any Restricted Subsidiary thereof which
default shall not be cured, waived or postponed pursuant to an agreement
with the holders of such Indebtedness within 60 days after written notice,
or the acceleration of any such Indebtedness aggregating $3,000,000 or more
which acceleration shall not be rescinded or annulled within 20 days after
written notice to the Issuer and Pierce Leahy of such Default by the
Trustee or to the Issuer and Pierce Leahy and the Trustee by any Holder;
(5) a court of competent jurisdiction enters a final judgment or
judgments which can no longer be appealed for the payment of money in
excess of $3,000,000 (which are not paid or covered by third party
insurance by financially sound insurers that have not disclaimed coverage)
against Pierce Leahy or any Restricted Subsidiary thereof and such judgment
remains undischarged, for a period of 60 consecutive days during which a
stay of enforcement of such judgment shall not be in effect;
(6) Pierce Leahy, the Issuer or any other Restricted Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
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(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is not paying its debts as they become due; or
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against Pierce Leahy, the Issuer or any other
Restricted Subsidiary in an involuntary case,
(B) appoints a Custodian of Pierce Leahy, the Issuer or any
other Restricted Subsidiary or for all or substantially all of the
property of Pierce Leahy, the Issuer or any other Restricted
Subsidiary, or
(C) orders the liquidation of Pierce Leahy, the Issuer or any
other Restricted Subsidiary,
and, in each case, the order or decree remains unstayed and in effect
for 60 consecutive days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law (and in the case of the Issuer or a Canadian Guarantor
shall also include any similar law of Canada or any province thereof) for the
relief of debtors. The term "Custodian" means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
Subject to the provisions of Sections 7.1 and 7.2, the Trustee shall
not be charged with knowledge of any
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Default or Event of Default unless written notice thereof shall have been given
to a Trust Officer at the Corporate Trust Office by the Issuer, Pierce Leahy or
any other Person.
Section 6.2. Acceleration.
------------
If an Event of Default (other than an Event of Default arising under
Section 6.1(6) or (7) with respect to Pierce Leahy or the Issuer) occurs and is
continuing, the Trustee by notice to Pierce Leahy or the Issuer, or the Holders
of not less than 25% in aggregate principal amount of the Notes then outstanding
by written notice to the Issuer, Pierce Leahy and the Trustee, may declare to be
immediately due and payable the entire principal amount of all the Notes then
outstanding plus premium, if any, and accrued but unpaid interest to the date of
acceleration and (i) such amounts shall become immediately due and payable or
(ii) if there are any amounts outstanding under or in respect of the Credit
Facility, such amounts shall become due and payable upon the first to occur of
an acceleration of amounts outstanding under or in respect of the Credit
Facility or five Business Days after receipt by Pierce Leahy or the Issuer and
the Representative of notice of the acceleration of the Notes; provided,
--------
however, that after such acceleration but before a judgment or decree based on
- -------
such acceleration is obtained by the Trustee, the Holders of a majority in
aggregate principal amount of the outstanding Notes may rescind and annul such
acceleration and its consequences if all existing Events of Default, other than
the nonpayment of accelerated principal, premium, if any, or interest that has
become due solely because of the acceleration, have been cured or waived and if
the rescission would not conflict with any judgment or decree. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto. In case an Event of Default specified in Section 6.1 (6) or (7) with
respect to Pierce Leahy or the Issuer occurs, the principal, premium, if any,
and interest amount with respect to all of the Notes shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders of the Notes.
Section 6.3. Other Remedies.
--------------
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If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, or premium, if any, and interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture and may
take any necessary action requested of it as Trustee to settle, compromise,
adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.4. Waiver of Past Defaults and
Events of Default.
---------------------------
Subject to Sections 6.2, 6.7 and 8.2 hereof, the Holders of a majority
in principal amount of the Notes then outstanding have the right to waive any
existing Default or Event of Default or compliance with any provision of this
Indenture or the Notes. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto.
Section 6.5. Control by Majority.
-------------------
The Holders of a majority in principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee by this Indenture. The Trustee, however, may refuse to
follow any direction that conflicts with law or this Indenture or that the
Trustee determines may be unduly prejudicial to the rights of another Noteholder
not taking part in such direction, and the Trustee shall have
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the right to decline to follow any such direction if the Trustee, being advised
by counsel, determines that the action so directed may not lawfully be taken or
if the Trustee in good faith shall, by a Trust Officer, determine that the
proceedings so directed may involve it in personal liability; provided that the
--------
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 6.6. Limitation on Suits.
-------------------
Subject to Section 6.7 below, a Noteholder may not institute any
proceeding or pursue any remedy with respect to this Indenture or the Notes
unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer, and if requested, provide to the
Trustee indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60 day period by the Holders of a majority
in aggregate principal amount of the Notes then outstanding.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
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Section 6.7. Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal of, or premium, if any, and
interest of the Note on or after the respective due dates expressed in the Note,
or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.
Section 6.8. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal, premium or interest
specified in Section 6.1(1) or (2) hereof occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Issuer or the Guarantors (or any other obligor on the Notes) for the whole
amount of unpaid principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate then borne by the Notes, and such further amounts as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, including all sums due and owing to the Trustee pursuant to Section
7.7.
Section 6.9. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relative to the Issuer or the
Guarantors (or any other obligor upon the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same
after deduction of its reasonable charges and expenses to the extent that any
such
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charges and expenses are not paid out of the estate in any such proceedings
and any custodian in any such judicial proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
or reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceedings.
Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.7 hereof;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each, ratably, without preference
or priority of any kind, according to the amounts due and payable on the Notes;
and
THIRD: to the Issuer or, to the extent the Trustee collects any amount
from any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. The Trustee shall give the Issuer
and Pierce Leahy prior notice of any such record date and payment date;
provided, however, that the failure to give any such notice shall not affect the
- -------- -------
establishment of such record
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date or payment date or any payment to Noteholders pursuant to this Section
6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7 hereof or a suit by Holders of more than 10% in
principal amount of the Notes then outstanding.
Section 6.12. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Issuer, Pierce Leahy, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
ARTICLE 7.
TRUSTEE
Section 7.1. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent man
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would exercise or use under the same circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture but,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.1.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.2 and 6.5 hereof.
(4) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or other-
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wise incur any financial liability in the performance of any of its rights
or powers if it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity satisfactory to it against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, paragraphs (a),
(b), (c), (e) and (f) of this Section 7.1 shall govern every provision of this
Indenture that in any way relates to the Trustee.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity reasonably satisfactory to it against any
loss, liability, expense or fee.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer or any
Guarantor. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by the law.
Section 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1 hereof:
(1) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document reasonably believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, or both, which shall
conform to the provisions of Section 11.5 hereof. The Trustee shall be
protected and shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion.
(3) The Trustee may act through agents and attorneys and shall not be
responsible for the miscon-
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duct or negligence of any agent or attorney (other than the negligence or
willful misconduct of an agent who is an employee of the Trustee) appointed
by it with due care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers; provided that the Trustee's conduct does not
--------
constitute negligence or bad faith.
(5) The Trustee may consult with counsel of its selection, and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
Section 7.3. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may make loans to, accept deposits from, perform
services for or otherwise deal with the Issuer, Pierce Leahy or any other
Guarantor, or any Affiliates thereof, with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. The Trustee,
however, shall be subject to Sections 7.10 and 7.11 hereof.
Section 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Issuer's use of
the proceeds from the sale of Notes or any money paid to the Issuer pursuant to
the terms of this Indenture and it shall not be responsible for any statement in
the Notes or any document used in connection with the sale of the Notes other
than its certificate of authentication.
Section 7.5. Notice of Defaults.
------------------
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If a Default occurs and is continuing and if it is actually known to
the Trustee, the Trustee shall mail to each Noteholder notice of the Default
within 90 days after it occurs. Except in the case of a Default in payment of
the principal of, or premium, if any, or interest on any Note, the Trustee may
withhold the notice if and so long as the board of directors of the Trustee, the
executive committee or any trust committee of such board and/or its Trust
Officers in good faith determine(s) that withholding the notice is in the
interests of the Noteholders.
Section 7.6. Reports by Trustee to Holders.
-----------------------------
If required by TIA (S) 313(a), within 60 days after April 1 of any
year, commencing April 1, 1999, the Trustee shall mail to each Noteholder a
brief report dated as of such March 1 that complies with TIA (S) 313(a);
provided that no such report need be transmitted if no such events listed in TIA
- --------
(S) 313(a) have occurred within such period. The Trustee also shall comply with
TIA (S) 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA (S) 313(c) and TIA (S) 313(d).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange on which the Notes are listed.
The Issuer shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
Section 7.7. Compensation and Indemnity.
--------------------------
The Issuer and Pierce Leahy shall pay, and Pierce Leahy shall cause
the other Guarantors to pay, to the Trustee from time to time such reasonable
compensation as shall be agreed in writing between the Issuer, Pierce Leahy and
the Trustee for its services hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust). The Issuer, Pierce Leahy and the other Guarantors shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it in connection with its duties under this
Indenture, including the reasonable compensation, disbursements and expenses of
the Trustee's agents and counsel.
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The Issuer and Pierce Leahy shall indemnify, and Pierce Leahy shall
cause the other Guarantors to indemnify, each of the Trustee and any predecessor
Trustee for, and hold it harmless against, any and all loss, damage, claim,
liability, reasonable expense (including but not limited to reasonable
attorneys' fees and expenses) or taxes (other than taxes based on the income of
the Trustee) incurred by it in connection with the acceptance or performance of
its duties under this Indenture including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder (including, without
limitation, settlement costs). The Trustee shall notify the Issuer, Pierce
Leahy and the other Guarantors in writing promptly of any claim asserted against
the Trustee for which it may seek indemnity. However, the failure by the
Trustee to so notify the Issuer, Pierce Leahy and the other Guarantors shall not
relieve the Issuer, Pierce Leahy or the other Guarantors of their obligations
hereunder.
Notwithstanding the foregoing, the Issuer, Pierce Leahy and the other
Guarantors need not reimburse the Trustee for any expense or indemnify it
against any loss or liability incurred by the Trustee through its negligence or
bad faith. To secure the payment obligations of the Issuer, Pierce Leahy and
the other Guarantors in this Section 7.7, the Trustee shall have a lien prior to
the Notes on all money or property held or collected by the Trustee in its
capacity as such, except such money or property held in trust to pay principal
of and interest on particular Notes. The obligations of the Issuer, Pierce
Leahy and the other Guarantors under this Section 7.7 to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall be joint and several liabilities of the Issuer, Pierce Leahy and each of
the other Guarantors and shall survive the satisfaction and discharge of this
Indenture, including the termination or rejection hereof in any bankruptcy
proceeding to the extent permitted by law.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(6) or (7) hereof occurs, the expenses and the
compen-
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sation for the services are intended to constitute expenses of administration
under any Bankruptcy Law.
For purposes of this Section 7.7, the term "Trustee" shall include any
trustee appointed pursuant to Article 9.
Section 7.8. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Issuer, Pierce Leahy and
the other Guarantors in writing, such resignation to become effective upon the
appointment of a successor Trustee. The Holders of a majority in principal
amount of the outstanding Notes may remove the Trustee by notifying the removed
Trustee in writing and may appoint a successor Trustee with the Issuer's and
Pierce Leahy's written consent which consent shall not be unreasonably
withheld. The Issuer and Pierce Leahy may remove the Trustee at their election
if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuer and Pierce Leahy shall promptly
appoint a successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, Pierce
Leahy or the Holders of a majority in principal amount of the outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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If the Trustee fails to comply with Section 7.10 hereof, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer and Pierce Leahy.
Immediately following such delivery, the retiring Trustee shall, subject to its
rights under Section 7.7 hereof, transfer all property held by it as Trustee to
the successor Trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Noteholder. Notwithstanding replacement of the
Trustee pursuant to this Section 7.8, the Issuer's and Pierce Leahy's
obligations under Section 7.7 hereof shall continue for the benefit of the
retiring Trustee.
Section 7.9. Successor Trustee by Consolidation,
Merger or Conversion.
--------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation or national banking association, subject to Section 7.10 hereof, the
successor corporation or national banking association without any further act
shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1) and (2) in every respect. The Trustee shall
have a combined capital and surplus of at least $100,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
(S) TIA (S) 310(b), including the provision in (S) 310(b)(1); provided that
--------
there shall be excluded from the operation of TIA (S) 310(b)(1) any indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Issuer, Pierce Leahy or the other
Guarantors
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are outstanding if the requirements for exclusion set forth in TIA (S) 310(b)(1)
are met.
Section 7.11. Preferential Collection of
Claims Against Issuer and Pierce Leahy.
--------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
Section 7.12. Paying Agents.
-------------
The Issuer and Pierce Leahy shall cause each Paying Agent other than
the Trustee to execute and deliver to them and the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of this
Section 7.12:
(A) that it will hold all sums held by it as agent for the payment of
principal of, or premium, if any, or interest on, the Notes (whether such
sums have been paid to it by the Issuer, a Guarantor or by any other
obligor on the Notes) in trust for the benefit of Holders of the Notes or
the Trustee;
(B) that it will at any time during the continuance of any Event of
Default, upon written request from the Trustee, deliver to the Trustee all
sums so held in trust by it together with a full accounting thereof; and
(C) that it will give the Trustee written notice within three (3)
Business Days of any failure of the Issuer (or by any obligor on the Notes)
in the payment of any installment of the principal of, premium, if any, or
interest on, the Notes when the same shall be due and payable.
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ARTICLE 8.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.1. Without Consent of Holders.
--------------------------
The Issuer, Pierce Leahy and the other Guarantors when authorized by a
Board Resolution of each of them, and the Trustee may modify, waive, amend,
restate or supplement this Indenture or the Notes without notice to or consent
of any Noteholder:
(1) to comply with Section 5.1 hereof;
(2) to provide for uncertificated Notes in addition to or in place of
Certificated Notes;
(3) to comply with any requirements of the SEC under the TIA;
(4) to cure any ambiguity, defect or inconsistency, or to make any
other change that does not materially and adversely affect the rights of
any Noteholder; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes.
The Trustee is hereby authorized to join with the Issuer and Pierce
Leahy in the execution of any supplemental indenture authorized or permitted
by the terms of this Indenture and to make any further appropriate agreements
and stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which adversely affects
its own rights, duties or immunities under this Indenture.
Section 8.2. With Consent of Holders.
-----------------------
The Issuer, Pierce Leahy, the other Guarantors and the Trustee may
modify, amend, waive or supplement this Indenture or the Notes with the written
consent of the Holders of not less than a majority in aggregate principal
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amount of the outstanding Notes without notice to any Noteholder. The Holders of
not less than a majority in aggregate principal amount of the outstanding Notes
may waive compliance in a particular instance by the Issuer or Pierce Leahy with
any provision of this Indenture or the Notes without notice to any Noteholder.
Subject to Section 8.4, without the consent of each Noteholder affected,
however, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.4, may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, modification, supplement or waiver to this Indenture or the
Notes;
(2) reduce the rate of or change the time for payment of interest on
any Note;
(3) reduce the principal of or premium on or change the stated
maturity of any Note;
(4) make any Note payable in money other than that stated in the Note
or change the place of payment from New York, New York;
(5) change the amount or time of any payment required by the Notes
or reduce the premium payable upon any redemption of the Notes in
accordance with Section 3.7 hereof, or change the time before which no such
redemption may be made;
(6) waive a default in the payment of the principal of, or interest
on, or redemption payment with respect to, any Note (including any
obligation to make a Change of Control Offer or, after the Issuer's
obligation to purchase Notes arises thereunder, an Excess Proceeds Offer or
modify any of the provisions or definitions with respect to such offers);
(7) make any changes in Sections 6.4 or 6.7 hereof or this sentence
of Section 8.2; or
(8) affect the ranking of the Notes in a manner adverse to the
Holders.
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After a modification, amendment, supplement or waiver under this
Section 8.2 becomes effective, the Issuer shall mail to the Holders a notice
briefly describing the modification, amendment, supplement or waiver. Any
failure of the Issuer to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such modification,
amendment, supplement or waiver.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, modification,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
Section 8.3. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
Section 8.4. Revocation and Effect of Consents.
---------------------------------
Until a modification, amendment, supplement, waiver or other action
becomes effective, a consent to it by a Holder of a Note is a continuing consent
conclusive and binding upon such Holder and every subsequent Holder of the same
Note or portion thereof, and of any Note issued upon the transfer thereof or in
exchange therefor or in place thereof, even if notation of the consent is not
made on any such Note. Any such Holder or subsequent Holder, however, may
revoke the consent as to his Note or portion of a Note, if the Trustee receives
the notice of revocation before the date the modification, amendment,
supplement, waiver or other action becomes effective.
The Issuer and Pierce Leahy may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent to
any modification, amendment, supplement, or waiver. If a record date is fixed,
then, notwithstanding the preceding paragraph, those Persons who were Holders at
such record date (or their duly designated proxies), and only such Persons,
shall be entitled to consent to such modification, amendment,
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supplement, or waiver or to revoke any consent previously given, whether or not
such Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date unless
the consent of the requisite number of Holders has been obtained.
After a modification, amendment, supplement, waiver or other action
becomes effective, it shall bind every Noteholder, unless it makes a change
described in any of clauses (1) through (8) of Section 8.2 hereof. In that
case, the modification, amendment, supplement, waiver or other action shall bind
each Holder of a Note who has consented to it and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note.
Section 8.5. Notation on or Exchange of Notes.
--------------------------------
If a modification, amendment, supplement or waiver changes the terms
of a Note, the Trustee may request the Holder of the Note to deliver it to the
Trustee. In such case, the Trustee shall place an appropriate notation on the
Note about the changed terms and return it to the Holder. Alternatively, if the
Issuer or the Trustee so determines, the Issuer in exchange for the Note shall
issue and the Trustee shall authenticate and make available for delivery a new
security that reflects the changed terms. Failure to make the appropriate
notation or issue a new Note shall not affect the validity and effect of such
modification, amendment, supplement or waiver.
Section 8.6. Trustee to Sign Amendments, etc.
--------------------------------
The Trustee shall sign any modification, amendment, supplement or
waiver authorized pursuant to this Article 8 if the modification, amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may, but need not, sign
it. In signing or refusing to sign such modification, amendment, supplement or
waiver, the Trustee shall be entitled to receive and, subject to Section 7.1
hereof, shall be fully protected in relying upon an Officers' Certificate and an
Opinion of Counsel
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stating that such modification, amendment, supplement or waiver is authorized or
permitted by this Indenture and such supplemental indenture constitutes the
legal, valid and binding obligation of the Issuer and Pierce Leahy enforceable
against each of them in accordance with its terms (subject to customary
exceptions). The Issuer and Pierce Leahy may not sign a modification, amendment
or supplement until the Board of Directors of the Issuer and Pierce Leahy
approves it.
ARTICLE 9.
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.1. Discharge of Indenture.
----------------------
The Issuer, Pierce Leahy and the Guarantors may terminate their
obligations under the Notes, the Guarantees and this Indenture, except the
obligations referred to in the last paragraph of this Section 9.1, if there
shall have been cancelled by the Trustee or delivered to the Trustee for
cancellation all Notes theretofore authenticated and delivered (other than any
Notes that are asserted to have been destroyed, lost or stolen and that shall
have been replaced as provided in Section 2.7 hereof) and the Issuer has paid
all sums payable by it hereunder or deposited all required sums with the
Trustee.
After such delivery the Trustee upon request shall acknowledge in
writing the discharge of the Issuer's, Pierce Leahy's and the Guarantors'
obligations under the Notes, the Guarantees and this Indenture except for those
surviving obligations specified below.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer and Pierce Leahy in Sections 2.7, 7.7, 9.5, 9.6 and
9.8 hereof shall survive.
Section 9.2. Legal Defeasance.
----------------
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The Issuer may at its option, by Board Resolution, be discharged
from its obligations with respect to the Notes and the Guarantors, if any,
discharged from their obligations under the Guarantees, if any, on the date the
conditions set forth in Section 9.4 below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the Issuer
shall be deemed to have paid and discharged the entire indebtedness represented
by the Notes and to have satisfied all its other obligations under such Notes
and this Indenture insofar as such Notes are concerned (and the Trustee, at the
expense of the Issuer, shall, subject to Section 9.6 hereof, execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of outstanding Notes to receive solely from the trust funds described in
Section 9.4 hereof and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such Notes when
such payments are due, (B) the Issuer's and Pierce Leahy's obligations with
respect to such Notes under Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8 and 4.20
hereof, (C) the rights, powers, trusts, duties, and immunities of the Trustee
hereunder (including claims of, or payments to, the Trustee under or pursuant to
Section 7.7 hereof) and (D) this Article 9. Subject to compliance with this
Article 9, the Issuer may exercise its option under this Section 9.2 with
respect to the Notes notwithstanding the prior exercise of its option under
Section 9.3 below with respect to the Notes.
Section 9.3. Covenant Defeasance.
-------------------
At the option of the Issuer pursuant to a Board Resolution, the
Issuer, Pierce Leahy and the other Guarantors shall be released from their
respective obligations under Sections 4.2 through 4.19 and Section 4.21 hereof,
inclusive, and clause (a) (iii) of Section 5.1 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 9.4
hereof are satisfied (hereinafter, "Covenant Defeasance") and the Notes shall
thereafter be deemed to not be outstanding for purposes of any direction,
waiver, consent, declaration or act of the Holders (and the consequences
thereof) in connection with
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such covenants but shall continue to be outstanding for all other purposes
hereunder. For this purpose, such Covenant Defeasance means that the Issuer,
Pierce Leahy and the other Guarantors, if any, may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section or portion thereof, whether directly or indirectly by
reason of any reference elsewhere herein to any such specified Section or
portion thereof or by reason of any reference in any such specified Section or
portion thereof to any other provision herein or in any other document, but the
remainder of this Indenture and the Notes shall be unaffected thereby.
Section 9.4. Conditions to Defeasance or Covenant
Defeasance.
------------------------------------
The following shall be the conditions to application of Section 9.2
or Section 9.3 hereof to the outstanding Notes:
(1) the Issuer shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 7.10
hereof who shall agree to comply with the provisions of this Article 9
applicable to it) as funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Notes, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than the due date of any payment, money in an amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, the principal
of, premium, if any, and accrued interest on the outstanding Notes at the
maturity date of such principal, premium, if any, or interest, or on dates for
payment and redemption of such principal, premium, if any, and interest selected
in accordance with the terms of this Indenture and of the Notes;
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(2) no Event of Default or Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit, or shall have occurred
and be continuing at any time during the period ending on the 91st day after the
date of such deposit or, if longer, ending on the day following the expiration
of the longest preference period under any Bankruptcy Law applicable to the
Issuer or Pierce Leahy in respect of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such period);
(3) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute default under any other agreement or
instrument to which the Issuer or Pierce Leahy is a party or by which it is
bound;
(4) the Issuer shall have delivered to the Trustee an Opinion of Counsel
stating that, as a result of such Legal Defeasance or Covenant Defeasance,
neither the trust nor the Trustee will be required to register as an investment
company under the Investment Company Act of 1940, as amended;
(5) in the case of an election under Section 9.2 above, the Issuer shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the Issuer
has received from, or there has been published by, the Internal Revenue Service
a ruling to the effect that or (ii) there has been a change in any applicable
Federal income tax law with the effect that, and such opinion shall confirm
that, the Holders of the outstanding Notes or persons in their positions will
not recognize income, gain or loss for U.S. federal income tax purposes solely
as a result of such Legal Defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner, including as a result of
prepayment, and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(6) in the case of an election under Section 9.3 hereof, the Issuer shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the outstanding Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such
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Covenant Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(7) the Issuer shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent provided
for relating to either the Legal Defeasance under Section 9.2 above or the
Covenant Defeasance under Section 9.3 hereof (as the case may be) have been
complied with; and
(8) the Issuer shall have delivered to the Trustee an Officers' Certificate
stating that the deposit under clause (1) was not made by the Issuer with the
intent of defeating, hindering, delaying or defrauding any creditors of the
Issuer or others.
Section 9.5. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions.
-----------------------------------
All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 9.4 hereof in respect of
the outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent as the Trustee may determine, to the
Holders of such Notes, of all sums due and to become due thereon in respect of
principal, premium, if any, and accrued interest, but such money need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no duty to invest such money or U.S. Government Obligations.
The Issuer, Pierce Leahy and the other Guarantors shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
9.4 hereof or the principal, premium, if any, and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of the outstanding Notes.
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Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuer from time to time upon Issuer Request
any money or U.S. Government Obligations held by it as provided in Section 9.4
hereof which, in the opinion of a nationally-recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 9.6. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 9.1, 9.2 or 9.3 hereof by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the obligations of the Issuer, Pierce Leahy and any Guarantor
under this Indenture, the Notes and the Guarantees, if any, shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 9 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 9.1 hereof; provided,
--------
however, that if the Issuer, Pierce Leahy or any other Guarantors have made any
- -------
payment of, principal of, premium, if any, or accrued interest on any Notes
because of the reinstatement of their obligations, the Issuer, Pierce Leahy or
such other Guarantors, as the case may be, shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
Section 9.7. Moneys Held by Paying Agent.
---------------------------
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon demand of the Issuer, be paid to the Trustee, or if sufficient
moneys have been deposited pursuant to Section 9.4 hereof, to the Issuer (or, if
such moneys had been deposited by any Guarantors, to such Guarantors), and
thereupon such Paying
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Agent shall be released from all further liability with respect to such moneys.
Section 9.8. Moneys Held in Trust.
--------------------
Any moneys deposited with the Trustee or any Paying Agent or then held
by the Issuer or any Guarantors in trust for the payment of the principal of, or
premium, if any, or interest on any Note that are not applied but remain
unclaimed by the Holder of such Note for two years after the date upon which the
principal of, or premium, if any, or interest on such Note shall have
respectively become due and payable shall be paid to the Issuer or, if
appropriate, the Guarantors, upon Issuer Request, or if such moneys are then
held by the Issuer or any Guarantors in trust, such moneys shall be released
from such trust; and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
-------- -------
Trustee or any such Paying Agent, before being required to make any such
repayment, may, at the expense of the Issuer and the Guarantors, if any, either
mail to each Noteholder affected, at the address shown in the register of the
Notes maintained by the Registrar pursuant to Section 2.3 hereof, or cause to
be published once a week for two successive weeks, in a newspaper published in
the English language, customarily published each Business Day and of general
circulation in The City of New York, New York, a notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such mailing or publication, any unclaimed balance of
such moneys then remaining will be repaid to the Issuer. After payment to the
Issuer or the Guarantors, if any, or the release of any money held in trust by
the Issuer or any Guarantors, as the case may be, Noteholders entitled to the
money must look only to the Issuer and any Guarantors for payment as general
creditors unless applicable abandoned property law designates another person.
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ARTICLE 10.
GUARANTEE OF NOTES
Section 10.1. Guarantee.
---------
Subject to the provisions of this Article 10, each Guarantor, by
execution of the Guarantee (and in the case of Pierce Leahy execution of this
Indenture shall be deemed execution of its Guarantee for any and all purposes),
will jointly and severally unconditionally guarantee to each Holder
and to the Trustee, on behalf of the Holders, (i) the due and punctual payment
of the principal of, and premium, if any, and interest on each Note, when and as
the same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal of,
and premium, if any, and interest on the Notes, to the extent lawful, and the
due and punctual performance of all other Obligations of the Issuer to the
Holders or the Trustee all in accordance with the terms of such Note and this
Indenture, and (ii) in the case of any extension of time of payment or renewal
of any Notes or any of such other Obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, at stated maturity, by acceleration or otherwise. Each Guarantor,
by execution of the Guarantee, will agree that its obligations thereunder and
hereunder shall be absolute and unconditional, irrespective of, and shall be
unaffected by, any invalidity, irregularity or unenforceability of any such
Note or this Indenture, any failure to enforce the provisions of any such Note
or this Indenture, any waiver, modification or indulgence granted to the Issuer
with respect thereto by the Holder of such Note or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or such Guarantor.
Each Guarantor, by execution of the Guarantee, will waive diligence,
presentment, filing of claims with a court in the event of merger or bankruptcy
of the Issuer, any right to require a proceeding first against the Issuer,
protest or notice with respect to any such Note or the Indebtedness evidenced
thereby and all demands whatsoever,
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and will covenant that the Guarantee will not be discharged as to any such Note
except by payment in full of the principal thereof, premium if any, and interest
thereon and as provided in Section 9.1 hereof. Each Guarantor, by execution of
the Guarantee, will further agree that, as between such Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (i) the maturity of
the Obligations guaranteed by the Guarantee may be accelerated as provided in
Article 6 hereof for the purposes of the Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed thereby, and (ii in the event of any declaration of
acceleration of such Obligations as provided in Article 6 hereof, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of the Guarantee. In addition, without
limiting the foregoing provisions, upon the effectiveness of an acceleration
under Article 6 hereof, the Trustee shall promptly make a demand for payment on
the Notes under the Guarantee provided for in this Article 10 and not
discharged. Failure to make such demand shall not affect the validity or
enforceability of the Guarantee upon any Guarantor.
A Guarantee shall not be valid or become obligatory for any purpose
with respect to a Note unless the certificate of authentication on such Note
shall have been signed by or on behalf of the Trustee.
Section 10.2. Execution and Delivery of Guarantees.
------------------------------------
A Guarantee shall be executed on behalf of a Guarantor by the manual
or facsimile signature of an Officer of such Guarantor. A guarantee need not be
affixed to a Note, and the validity and enforceability of any Guarantee shall
not be affected by the fact that it is not so affixed.
If an Officer of a Guarantor whose signature is on the Guarantee no
longer holds that office, such Guarantee shall be valid nevertheless.
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Section 10.3. Limitation of Guarantee.
-----------------------
The obligations of each Domestic Guarantor will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Domestic Guarantor (including, without limitation, any
guarantees of Senior Indebtedness) and after giving effect to any collections
from or payments made by or on behalf of any other Domestic Guarantor in respect
of the obligations of such other Domestic Guarantor under its Domestic Guarantee
or pursuant to its contribution obligations under this Indenture, result in the
obligations of such Domestic Guarantor under the Domestic Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under Federal or
state law. Each Domestic Guarantor that makes a payment or distribution under a
Domestic Guarantee shall be entitled to a contribution from each other
Domestic Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Domestic Guarantor. The obligations of each Canadian Guarantor under each
Canadian Guarantee will be to the fullest extent permitted by applicable law,
including financial assistance restrictions imposed by corporate legislation.
Section 10.4. Release of Guarantor.
--------------------
A Guarantor (other than Pierce Leahy) shall be released from all of
its obligations under its Guarantee if:
(i) such Guarantor has sold all or substantially all of its assets or
Pierce Leahy and its Restricted Subsidiaries have sold all of the Capital
Stock of such Guarantor owned by them, in each case in a transaction in
compliance with Sections 4.10 and 5.1 hereof to the extent applicable; or
(ii) such Guarantor merges with or into or consolidates with, or
transfers all or substantially all of its assets to, Pierce Leahy or
another Guarantor in a transaction in compliance with Section 5.1 hereof;
and in each such case, Pierce Leahy and the Issuer have delivered to the Trustee
an Officers' Certificate and an
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Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to such transactions have been complied with.
Section 10.5. Domestic Guarantee Obligations Subordinated to Domestic Guarantor
Senior Indebtedness.
-----------------------------------------------------------------
Each Domestic Guarantor, by execution of the Domestic Guarantee, will
covenant and agree, and each Holder of Notes, by its acceptance thereof,
likewise covenants and agrees, that to the extent and in the manner hereinafter
set forth in this Article 10, the Indebtedness represented by the Domestic
Guarantees, including, without limitation, Pierce Leahy's, and the payment of
any Obligations pursuant to the Domestic Guarantees by such Domestic
Guarantors are hereby expressly made subordinate and subject in right of payment
as provided in this Article 10 to the prior indefeasible payment and
satisfaction in full in cash or, as acceptable to the holders of Domestic
Guarantor Senior Indebtedness of such Domestic Guarantor, in any other manner,
of all existing and future Domestic Guarantor Senior Indebtedness of such
Domestic Guarantor.
This Section 10.5 and the following Sections 10.6 through 10.17 shall
constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of or continue to hold Domestic Guarantor Senior
Indebtedness of any Domestic Guarantor; and such provisions are made for the
benefit of the holders of Domestic Guarantor Senior Indebtedness of each
Domestic Guarantor; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 10.6. Payment Over of Proceeds upon Dissolution, etc., of a Domestic
Guarantor.
--------------------------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to any Domestic Guarantor or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or (b)
any liquidation, dissolution or other winding-up of any Domestic Guarantor,
whether voluntary or involuntary and whether or not
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involving insolvency or bankruptcy or (c) any general assignment for the benefit
of creditors or any other marshaling of assets or liabilities of any Domestic
Guarantor (except in connection with the merger or consolidation of a Domestic
Guarantor or its liquidation or dissolution following the transfer of
substantially all of its assets, upon the terms and conditions permitted under
the circumstances described under Section 5.1 hereof), then and in any such
event:
(1) the holders of all Domestic Guarantor Senior Indebtedness of such
Domestic Guarantor shall be entitled to receive payment and satisfaction in
full in cash or, as acceptable to the holders of such Domestic Guarantor
Senior Indebtedness, in any other manner, of all amounts due on or in
respect of all such Domestic Guarantor Senior Indebtedness, before the
Holders of the Notes are entitled to receive or retain, pursuant to the
Domestic Guarantee of such Domestic Guarantor, any payment or distribution
of any kind or character by such Domestic Guarantor on account of any of
its Obligations on its Domestic Guarantee; and
(2) any payment or distribution of assets of such Domestic Guarantor
of any kind or character, whether in cash, property or securities, by set-
off or otherwise, to which the Holders or the Trustee would be entitled but
for the subordination provisions of this Article 10 shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Domestic Guarantor Senior
Indebtedness of such Domestic Guarantor or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Domestic Guarantor Senior
Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of such Domestic Guarantor Senior
Indebtedness held or represented by each, to the extent necessary to make
payment in full in cash or, as acceptable to the holders of such Domestic
Guarantor Senior Indebtedness
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of such Domestic Guarantor, in any other manner, of all such Domestic
Guarantor Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Domestic
Guarantor Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 10.6, the Trustee or the Holder of any Note shall have
received any payment or distribution of assets of such Domestic Guarantor
of any kind or character, whether in cash, property or securities,
including, without limitation, by way of set-off or otherwise, in respect
of any of its Obligations on its Domestic Guarantee before all Domestic
Guarantor Senior Indebtedness of such Domestic Guarantor is paid and
satisfied in full in cash or such payment and satisfaction thereof in cash
is provided for, then and in such event such payment or distribution upon
written notice to the Trustee or the Holder of such Note, as the case may
be, shall be held by the Trustee or the Holder of such Note, as the case
may be, in trust for the benefit of the holders of such Domestic Guarantor
Senior Indebtedness and shall be immediately paid over or delivered
forthwith to the liquidating trustee or agent or other Person making
payment or distribution of assets of such Domestic Guarantor for
application to the payment of all such Domestic Guarantor Senior
Indebtedness remaining unpaid, to the extent necessary to pay all of such
Domestic Guarantor Senior Indebtedness in full in cash or, as acceptable to
the holders of such Domestic Guarantor Senior Indebtedness, any other
manner, after giving effect to any concurrent payment or distribution to
or for the holders of such Domestic Guarantor Senior Indebtedness.
The consolidation of a Domestic Guarantor with, or the merger of a
Domestic Guarantor with or into, another Person or the liquidation or
dissolution of a Domestic Guarantor following the transfer of all of its assets
(as an entirety or substantially as an entirety) to another Person upon the
terms and conditions set forth in Article 5 hereof shall not be deemed a
dissolution, winding-up, liquidation, reorganization, assignment for the benefit
of
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creditors or marshaling of assets and liabilities of such Domestic Guarantor
for the purposes of this Article 10 if the Person formed by such consolidation
or the surviving entity of such merger or the Person which acquires by transfer
such assets (as an entirety or substantially as an entirety) shall, as a part of
such consolidation, merger or transfer comply with the conditions set forth in
such Article 5 hereof.
Section 10.7. Suspension of Domestic Guarantee Obligations When Domestic
Guarantor Senior Indebtedness in Default.
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(a) Unless Section 10.6 hereof shall be applicable, after the
occurrence of a Payment Default, no payment or distribution of any assets or
securities of a Domestic Guarantor of any kind or character (including, without
limitation, cash, property and any payment or distribution which may be payable
or deliverable by reason of the payment of any other Indebtedness of such
Domestic Guarantor being subordinated to its Obligations on its Domestic
Guarantee) may be made by or on behalf of such Domestic Guarantor, including,
without limitation, by way of set-off or otherwise, for or on account of its
Obligations on its Domestic Guarantee, and neither the Trustee nor any holder or
owner of any Notes shall take or receive from any Domestic Guarantor, directly
or indirectly in any manner, payment in respect of all or any portion of its
Obligations on its Domestic Guarantee following the delivery by the
representative of the holders of Domestic Guarantor Senior Indebtedness (the
"Domestic Guarantor Representative") to the Trustee of written notice of (i) the
occurrence of a Payment Default on Designated Senior Indebtedness which
constitutes Domestic Guarantor Senior Indebtedness or (ii the occurrence of a
Non-Payment Event of Default on Designated Senior Indebtedness which constitutes
Domestic Guarantor Senior Indebtedness and the acceleration of the maturity of
such Designated Senior Indebtedness in accordance with its terms, and in any
such event, such prohibition shall continue until such Payment Default is
cured, waived in writing or ceases to exist or such acceleration has been
rescinded or otherwise cured. At such time as the prohibition set forth in the
preceding sentence shall no longer be in effect, subject to the provisions of
the
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following paragraph (b), such Domestic Guarantor shall, if applicable,
resume making any and all required payments in respect of its Obligations under
its Domestic Guarantee.
(b) Unless Section 10.6 hereof shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness
which constitutes Domestic Guarantor Senior Indebtedness of any Domestic
Guarantor, no payment or distribution of any assets or securities of such
Domestic Guarantor of any kind or character (including, without limitation,
cash, property and any payment or distribution which may be payable or
deliverable by reason of the payment of any other Indebtedness of such
Domestic Guarantor being subordinated to its Obligations on its Domestic
Guarantee) shall be made by such Domestic Guarantor, including, without
limitation, by way of set-off or otherwise, for or on account of any of its
Obligations on its Domestic Guarantee, and neither the Trustee nor any holder or
owner of any Notes shall take or receive from any Domestic Guarantor (or any
U.S. Restricted Subsidiary or U.S. Subsidiary of such Domestic Guarantor),
directly or indirectly in any manner, payment in respect of all or any portion
of its Obligations on its Domestic Guarantee for a period (a "Domestic Guarantee
Payment Blockage Period") commencing on the date of receipt by the Trustee of
written notice from the Domestic Guarantor Representative of such Non-Payment
Event of Default, unless and until (subject to any blockage of payments that may
then be in effect under the preceding paragraph (a)) the earliest to occur of
the following events: (x) more than 179 days shall have elapsed since the date
of receipt of such written notice by the Trustee, (y) such Non-Payment Event of
Default shall have been cured or waived in writing or shall have ceased to exist
or such Designated Senior Indebtedness shall have been paid in full in cash and
the Trustee has been so notified either by the Domestic Guarantor Representative
or such Domestic Guarantor or (z) such Domestic Guarantee Payment Blockage
Period shall have been terminated by written notice to such Domestic Guarantor
or the Trustee from the Domestic Guarantor Representative, after which, in the
case of clause (x), (y) or (z), such Domestic Guarantor shall resume making any
and all required payments in respect of its Obligations on its Domestic
Guarantee, including, if applicable, any missed
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payments. Notwithstanding any other provisions of this Indenture, no event of
default with respect to Designated Senior Indebtedness which constitutes
Domestic Guarantor Senior Indebtedness (other than a Payment Default) which
existed or was continuing on the date of the commencement of any Domestic
Guarantee Payment Blockage Period initiated by the Domestic Guarantor
Representative shall be, or be made, the basis for the commencement of a second
Domestic Guarantee Payment Blockage Period initiated by the Domestic Guarantor
Representative unless such event of default shall have been cured or waived for
a period of not less than 90 consecutive days. In no event shall a Domestic
Guarantee Payment Blockage Period extend beyond 179 days from the date of the
receipt by the Trustee of the notice referred to in this Section 10.7(b)(the
"Initial Domestic Guarantee Blockage Period"). Any number of additional Domestic
Guarantee Payment Blockage Periods may be commenced during the Initial Domestic
Guarantee Blockage Period; provided, however, that no such additional Domestic
-------- -------
Guarantee Payment Blockage Period shall extend beyond the Initial Domestic
Guarantee Blockage Period. After the expiration of the Initial Domestic
Guarantee Blockage Period, no Domestic Guarantee Payment Blockage Period may be
commenced under this Section 10.7(b) hereof until at least 180 consecutive days
have elapsed from the last day of the Initial Domestic Guarantee Blockage
Period.
(c) In the event that, notwithstanding the foregoing, the Trustee or
the Holder of any Note shall have received any payment from a Domestic Guarantor
prohibited by the foregoing provisions of this Section 10.7, then and in such
event such payment shall be paid over and delivered forthwith to the Domestic
Guarantor Representative initiating the Domestic Guarantee Payment Blockage
Period, in trust for distribution to the holders of Domestic Guarantor Senior
Indebtedness or, if no amounts are then due in respect of Domestic Guarantor
Senior Indebtedness, promptly returned to the Domestic Guarantor, or as a court
of competent jurisdiction shall direct.
Section 10.8. Subrogation to Rights of Holders of Domestic Guarantor Senior
Indebtedness.
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Upon the payment in full of all amounts payable under or in respect of
all Domestic Guarantor Senior Indebtedness of a Domestic Guarantor, the Holders
shall be subrogated to the rights of the holders of such Domestic Guarantor
Senior Indebtedness to receive payments and distributions of cash, property and
securities of such Domestic Guarantor made on such Domestic Guarantor Senior
Indebtedness until all amounts due to be paid under the Domestic Guarantee shall
be paid in full. For the purposes of such subrogation, no payments or
distributions to holders of Domestic Guarantor Senior Indebtedness of any cash,
property or securities to which Holders of the Notes or the Trustee would be
entitled except for the provisions of this Article 10, and no payments over
pursuant to the provisions of this Article 10 to holders of Domestic Guarantor
Senior Indebtedness by Holders of the Notes or the Trustee, shall, as among each
Domestic Guarantor, its creditors other than holders of Domestic Guarantor
Senior Indebtedness and the Holders of the Notes, be deemed to be a payment or
distribution by such Domestic Guarantor to or on account of such Domestic
Guarantor Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article 10 shall have been
applied, pursuant to the provisions of this Article 10, to the payment of all
amounts payable under Domestic Guarantor Senior Indebtedness, then and in such
case, the Holders shall be entitled to receive from the holders of such Domestic
Guarantor Senior Indebtedness at the time outstanding any payments or
distributions received by such holders of Domestic Guarantor Senior Indebtedness
in excess of the amount sufficient to indefeasibly pay all amounts payable under
or in respect of such Domestic Guarantor Senior Indebtedness in full in cash.
Section 10.9. Domestic Guarantee Subordination Provisions Solely to Define
Relative Rights.
------------------------------------------------------------
The subordination provisions of this Article 10 are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Notes on the one hand and the holders of Domestic Guarantor Senior Indebtedness
on the other hand. Nothing contained in this Article 10 or
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elsewhere in this Indenture or in the Notes is intended to or shall (a) impair,
as among each Domestic Guarantor, its creditors other than holders of its
Domestic Guarantor Senior Indebtedness and the Holders of the Notes, the
obligation of such Domestic Guarantor, which is absolute and unconditional, to
make payments to the Holders in respect of its Obligations on its Domestic
Guarantee in accordance with its terms; or (b) affect the relative rights
against such Domestic Guarantor of the Holders of the Notes and creditors of
such Domestic Guarantor other than the holders of the Domestic Guarantor Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Note from
exercising all remedies otherwise permitted by applicable law upon a Default or
an Event of Default under this Indenture, subject to the rights, if any, under
this Article 10 of the holders of Domestic Guarantor Senior Indebtedness (1) in
any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, arrangement, reorganization or other similar case or proceeding in
connection therewith or any liquidation, dissolution or other winding-up, or any
assignment for the benefit of creditors or other marshaling of assets and
liabilities referred to in Section 10.6 hereof, to receive, pursuant to and in
accordance with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the conditions specified
in Section 10.7 hereof, to prevent any payment prohibited by such Section or
enforce their rights pursuant to Section 10.7(c) hereof.
The failure by any Domestic Guarantor to make a payment in respect of
its obligations on its Domestic Guarantee by reason of any provision of this
Article 10 shall not be construed as preventing the occurrence of a Default or
an Event of Default hereunder.
Section 10.10. Rights of Trustee as a Holder of Domestic Guarantor Senior
Indebtedness; Preservation of Trustee's Rights.
----------------------------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 10 with respect to any Domestic Guarantor
Senior Indebtedness
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which may at any time be held by it, to the same extent as any other holder of
Domestic Guarantor Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
10 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.7 hereof.
Section 10.11. Trustee's Relation to Domestic Guarantor Senior Indebtedness.
-------------------------------------------------------------
With respect to the holders of Domestic Guarantor Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of Domestic Guarantor
Senior Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Domestic
Guarantor Senior Indebtedness and the Trustee shall not be liable to any holder
of Domestic Guarantor Senior Indebtedness if it shall mistakenly pay over or
deliver to Holders, the Issuer or any other Person moneys or assets to which any
holder of Domestic Guarantor Senior Indebtedness shall be entitled by virtue of
this Article 10 or otherwise.
Section 10.12. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Note by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of a
Domestic Guarantor whether in bankruptcy, insolvency, receivership proceedings,
or otherwise, the timely filing of a claim for the unpaid balance of the
indebtedness of such Domestic Guarantor owing to such Holder pursuant to a
Domestic Guarantee in the form required in such proceedings and the causing of
such claim to be approved. If the Trustee does not file such a claim prior to
30 days before the expiration of the time to file such a claim, the holders of
Domestic Guarantor Senior Indebtedness, or any Domestic
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Guarantor Representative, may file such a claim on behalf of Holders of the
Notes.
Section 10.13. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Domestic Guarantor
Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Issuer or a Domestic Guarantor or by any act or failure to act, in
good faith, by any such holder, or by any non-compliance by the Issuer or a
Domestic Guarantor with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of subsection (a) of this Section
10.13, the holders of Domestic Guarantor Senior Indebtedness may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Holders of the Notes, without incurring responsibility to the Holders of the
Notes and without impairing or releasing the subordination provided in this
Article 10 or the obligations hereunder of the Holders of the Notes to the
holders of Domestic Guarantor Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Domestic Guarantor Senior Indebtedness or any
instrument evidencing the same (or any agreement under which Domestic Guarantor
Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Domestic
Guarantor Senior Indebtedness; (3) release any Person liable in any manner for
the collection or payment of Domestic Guarantor Senior Indebtedness; and (4)
exercise or refrain from exercising any rights against a Domestic Guarantor and
any other Person; provided, however, that in no event shall any such actions
-------- -------
limit the right of the Holders of the Notes to take any action to accelerate the
maturity of the Notes pursuant to Article 6 hereof or to pursue any rights or
remedies hereunder or under applicable laws if the taking of such action does
not otherwise violate the terms of this Indenture.
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Section 10.14. Notice to Trustee.
-----------------
(a) The Issuer and the Domestic Guarantors shall give prompt written
notice to the Trustee of any fact known to the Issuer or such Domestic Guarantor
which would prohibit the making of any payment to or by the Trustee at its
Corporate Trust Office in respect of a Guarantee. Notwithstanding the provisions
of this Article 10 or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee in respect of a Domestic
Guarantee, unless and until the Trustee shall have received written notice
thereof from the Issuer, a Domestic Guarantor or a holder of Domestic Guarantor
Senior Indebtedness or from any trustee, fiduciary or agent therefor; and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of this Section 10.14, shall be entitled in all respects to assume
that no such facts exist.
(b) Subject to the provisions of Section 7.1 hereof, the Trustee shall
be entitled to rely on the delivery to it of a written notice to the Trustee,
the Issuer and a Domestic Guarantor by a Person representing itself to be a
holder of Domestic Guarantor Senior Indebtedness (or a trustee, fiduciary or
agent therefor) to establish that such notice has been given by a holder of
Domestic Guarantor Senior Indebtedness (or a trustee, fiduciary or agent
therefor); provided, however, that failure to give such notice to the Issuer or
-------- -------
a Domestic Guarantor shall not affect in any way the ability of the Trustee to
rely on such notice. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Domestic Guarantor Senior Indebtedness to participate in any payment
or distribution pursuant to this Article 10, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Domestic Guarantor Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
10, and if such evidence is not furnished, the Trustee may defer any payment
to such Person
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pending judicial determination as to the right of such Person to receive such
payment.
Section 10.15. Reliance on Judicial Order or
Certificate of Liquidating Agent.
--------------------------------
Upon any payment or distribution of assets of the Issuer or a
Guarantor referred to in this Article 10, the Trustee, subject to the provisions
of Section 7.1 hereof, and the Holders shall be entitled to rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding-up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders, for
the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of Senior Indebtedness, Domestic Guarantor
Senior Indebtedness, Canadian Guarantor Senior Indebtedness and other
Indebtedness of the Issuer or a Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
Section 10.16. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Issuer and be then acting hereunder, the term "Trustee" as
used in this Article 10 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 10 in addition to or in place of the Trustee.
Section 10.17. No Suspension of Remedies.
-------------------------
Nothing contained in this Article 10 shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any,
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under this Article 10 of the holders, from time to time, of Domestic Guarantor
Senior Indebtedness.
Section 10.18. Canadian Guarantee Obligations Senior Ranking.
----------------------------------------------
Each Canadian Guarantor, by execution of a Canadian Guarantee, will
covenant and agree, and each Holder of Notes, by its acceptance thereof likewise
covenants and agrees that the Indebtedness represented by the Canadian Guarantee
and the payment of any obligations pursuant to the Canadian Guarantee will rank
pari passu with all Canadian Guarantor Senior Indebtedness.
- ---- -----
ARTICLE 11.
MISCELLANEOUS
Section 11.1. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 11.2. Notices.
-------
Any notice or communication shall be given in writing and delivered in
person, sent by facsimile, delivered by commercial courier service or mailed by
first-class mail, postage prepaid, addressed as follows:
If to the Issuer, Pierce Leahy
or any other Guarantor:
Pierce Leahy Corp.
631 Park Avenue
King of Prussia, Pennsylvania 19406
Attention: Chief Financial Officer
Fax Number: (610) 992-8394
Copy to:
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<PAGE>
Cozen and O'Connor
1900 Market Street
Philadelphia, Pennsylvania 19103
Attention: Richard J. Busis, Esq.
Fax Number: (215) 665-2013
If to the Trustee:
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Administration
Fax Number: (212) 815-5915
Such notices or communications shall be effective when received and
shall be sufficiently given if so given within the time prescribed in this
Indenture.
The Issuer, Pierce Leahy, any other Guarantor or the Trustee by
written notice to the others may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
him by first-class mail, postage prepaid, at his address shown on the register
kept by the Registrar. If a notice or communication to a Noteholder is mailed
in the manner provided above, it shall be deemed duly given on the date so
deposited in the mail, whether or not the addressee receives it.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Section 11.3. Communications by Holders with Other Holders.
--------------------------------------------
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Noteholders may communicate pursuant to TIA (S)312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Issuer, Pierce Leahy, the other Guarantors, the Trustee, the Registrar and
anyone else shall have the protection of TIA (S) 312(c).
Section 11.4. Certificate and Opinion as to Conditions
Precedent.
----------------------------------------
Upon any request or application by the Issuer, Pierce Leahy or any
other Guarantor to the Trustee to take any action under this Indenture, the
Issuer and Pierce Leahy shall furnish to the Trustee at the request of the
Trustee:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 11.5 below) in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 11.5 below) in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Section 11.5. Statements Required in Certificate
and Opinion.
----------------------------------
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(3) a statement that, in the opinion of such Person, it or he has made
such examination or investigation as is necessary to enable it or him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such covenant or condition has been complied with.
Section 11.6. When Treasury Notes Disregarded.
-------------------------------
In determining whether the Holders of the required aggregate principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Issuer, Pierce Leahy, any other Guarantor or any other obligor on the
Notes or by any Affiliate of any of them shall be disregarded as though they
were not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes which the Trustee actually knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to the Notes and that the pledgee is not
the Issuer, Pierce Leahy, any other Guarantor or any other obligor upon the
Notes or any Affiliate of any of them.
Section 11.7. Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or meetings of
Noteholders. The Registrar and Paying Agent may make reasonable rules for their
functions.
Section 11.8. Business Days; Legal Holidays.
-----------------------------
A "Business Day" is a day that is not a Legal Holiday. A "Legal
Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day on
which banking institutions are not required to be open in the State of New York.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next
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succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 11.9. Governing Law.
-------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AND ANY GUARANTOR AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 11.10. No Adverse Interpretation of
Other Agreements.
---------------------------
This Indenture may not be used to interpret another indenture, loan,
security or debt agreement of the Issuer, Pierce Leahy or any Subsidiary
thereof. No such indenture, loan, security or debt agreement may be used to
interpret this Indenture.
Section 11.11. No Recourse Against Others.
--------------------------
No recourse for the payment of the principal of or premium, if any, or
interest on any of the Notes, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Issuer, Pierce Leahy or any other Guarantor in this Indenture
or in any supplemental indenture, or in any of the Notes, or because of the
creation of any Indebtedness represented thereby, shall be had against any
shareholder, officer, director, partner, affiliate, beneficiary or employee, as
such, past, present or future, of the Issuer, Pierce Leahy or any other
Guarantor of any successor corporation or against the property or assets of any
such shareholder, officer, employee, partner, affiliate, beneficiary or
director, either directly or through the Issuer, Pierce Leahy or any other
Guarantor, or any successor corporation thereof, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being
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expressly understood that this Indenture and the Notes are solely obligations of
the Issuer and any Guarantors, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, any shareholder, officer,
employee, partner, affiliate, beneficiary or director of the Issuer or any
Guarantor, or any successor corporation thereof, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or the Notes or implied
therefrom, and that any and all such personal liability of, and any and all
claims against every shareholder, officer, employee, partner, affiliate,
beneficiary and director, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of the Notes. It is understood that this limitation on recourse is
made expressly for the benefit of any such shareholder, employee, officer,
partner, affiliate, beneficiary or director and may be enforced by any one or
all of them.
Section 11.12. Successors.
----------
All agreements of the Issuer, Pierce Leahy and the other Guarantors in
this Indenture and the Notes shall bind their respective successors. All
agreements of the Trustee, any additional trustee and any Paying Agents in this
Indenture shall bind its successor.
Section 11.13. Multiple Counterparts.
---------------------
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
Section 11.14. Table of Contents, Headings, etc.
---------------------------------
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 11.15. Separability.
------------
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Each provision of this Indenture shall be considered separable and if
for any reason any provision which is not essential to the effectuation of the
basic purpose of this Indenture or 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.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, and the Issuer's and Pierce Leahy's corporate seals to be hereunto
affixed and attested, all as of the date and year first written above.
PIERCE LEAHY COMMAND COMPANY
By: /s/ Joseph P. Linaugh
-------------------------
Name: Joseph P. Linaugh
Title: Vice President
ATTEST:
/s/ Lisa G. Goldschmidt
- -------------------------
Name: Lisa G. Goldschmidt
Title: Asst. Secretary
PIERCE LEAHY CORP., for itself and
as a Domestic Guarantor
By: /s/ Joseph P. Linaugh
-------------------------
Name: Joseph P. Linaugh
Title: Vice President
ATTEST:
/s/ Lisa G. Goldschmidt
- -------------------------
Name: Lisa G. Goldschmidt
Title: Asst. Secretary
The Bank of New York,
as Trustee
By: /s/ Lucille Firrincieli
-----------------------------
Name: Lucille Firrincieli
Title: Vice President
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<PAGE>
EXHIBIT A
---------
(FACE OF NOTE)
FACE OF NOTE
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 ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR 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, A NEW YORK CORPORATION ("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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE 2 OF THE INDENTURE.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE,
AGREES FOR THE BENEFIT OF THE ISSUER AND THE INITIAL PURCHASERS OF THIS NOTE
THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO
THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY
HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE ISSUER AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE,
OTHER THAN (1) TO THE ISSUER, (2)
A-1
<PAGE>
SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, AND, IF SUCH TRANSFER IS
BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE PRIOR TO THE
EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE ISSUER OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
ISSUER AND THE TRUSTEE, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE ISSUER AND THE INITIAL PURCHASERS THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT. ANY TRANSFEREE OF THIS NOTE SHALL BE DEEMED TO HAVE REPRESENTED
EITHER (X) THAT IT IS NOT USING THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT ("ERISA") OR THE INTERNAL REVENUE
CODE (THE "CODE") TO PURCHASE THIS NOTE OR (Y) THAT ITS PURCHASE AND CONTINUED
HOLDING OF THE NOTE WILL BE COVERED BY A U.S. DEPARTMENT OF LABOR CLASS
EXEMPTION (WITH RESPECT TO PROHIBITED TRANSACTIONS UNDER SECTION 406(a) OF
ERISA).
A-2
<PAGE>
CUSIP:
Number:
PIERCE LEAHY COMMAND COMPANY
8-1/8% SENIOR NOTE DUE 2008
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Issuer", which term includes any successor corporation), for value
received promises to pay to _______________ or registered assigns the principal
sum of ______________ Dollars, on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing November 15,
1998
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
A-3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
PIERCE LEAHY COMMAND COMPANY
By: ___________________________
By: ___________________________
[SEAL]
CERTIFICATE OF AUTHENTICATION:
This is one of the 8-1/8% Senior Notes due 2008 referred to in the within
mentioned Indenture
Dated:
The Bank of New York,
as Trustee
By: _____________________________
Authorized Signatory
A-4
<PAGE>
(REVERSE SIDE)
PIERCE LEAHY COMMAND COMPANY
8-1/8% SENIOR NOTE DUE 2008
I. INTEREST.
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Issuer"), promises to pay interest on the principal amount of this
Note semiannually on May 15 and November 15 of each year (each an "Interest
Payment Date"), commencing on November 15, 1998, at the rate of 8-1/8% per
annum. Interest will be computed on the basis of a 360-day year of twelve 30-
day months. 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
the original issuance of the Notes.
The Issuer shall pay interest on overdue principal, and on overdue
premium, if any, and overdue interest, to the extent lawful, at the rate equal
to 1% per annum in excess of the rate borne by the Notes. Interest on the Notes
is subject to increase as provided herein in Paragraph VIII.
II. METHOD OF PAYMENT.
The Issuer will pay interest on this Note provided for in Paragraph I
above (except defaulted interest) to the person who is the registered Holder
of this Note at the close of business on May 1 or November 1 preceding the
Interest Payment Date (whether or not such day is a Business Day). The Holder
must surrender this Note to a Paying Agent to collect principal payments. The
Issuer will pay principal, premium, if any, and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts; provided, however, that the Issuer may pay principal, premium, if
-------- -------
any, and interest by check payable in such money. It may mail an interest check
to the Holder's registered address.
A-5
<PAGE>
III. PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Issuer may change any
Paying Agent or Registrar without notice to the Holders of the Notes. Neither
the Issuer, Pierce Leahy Corp., a Pennsylvania corporation ("Pierce Leahy"),
nor any of their Subsidiaries or Affiliates may act as Paying Agent but may act
as registrar or co-registrar.
IV. INDENTURE; RESTRICTIVE COVENANTS.
The Issuer issued this Note under an Indenture dated as of April 7,
1998 (the "Indenture") by and among the Issuer, Pierce Leahy and the Trustee.
The terms of this Note include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. This Note is
subject to all such terms, and the Holder of this Note is referred to the
Indenture and said Trust Indenture Act for a statement of them. All
capitalized terms in this Note, unless otherwise defined, have the meanings
assigned to them by the Indenture.
The Notes are general unsecured obligations of the Issuer limited to
$135,000,000 aggregate principal amount. The Indenture imposes certain
restrictions on, among other things, the incurrence of indebtedness, the
incurrence of liens and the issuance of preferred stock by the Issuer, Pierce
Leahy and their subsidiaries, mergers and sale of assets, the payments of
dividends on, or the repurchase of, capital stock of the Issuer, Pierce Leahy
and their subsidiaries, certain other restricted payments by the Issuer, Pierce
Leahy and their subsidiaries, certain transactions with, and investments in,
their affiliates, certain sale and lease-back transactions and a provision
regarding change-of-control of Pierce Leahy transactions. The restrictions are
subject to a number of important qualifications and exceptions.
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V. OPTIONAL REDEMPTION.
The Issuer, at its option, may redeem the Notes, in whole or in part,
at any time on or after May 15, 2003 at the redemption prices set forth in
Section 3.7 of the Indenture, together, in each case, with accrued and unpaid
interest to the redemption date.
In addition, the Issuer, at its option, may redeem Notes out of the
Net Proceeds of one or more Public Equity Offerings at the redemption price, in
the amount and under the terms set forth in the Indenture.
In addition, the Issuer, at its option, may redeem the Notes as a
whole, but not in part, in the event the Issuer has become or would become
obligated to pay any Additional Amounts under the terms set forth in the
Indenture.
VI. NOTICE OF REDEMPTION.
Notice of redemption will be mailed via first class mail at least 30
days but not more than 60 days prior to the redemption date to each Holder of
Notes to be redeemed at its registered address as it shall appear on the
register of the Notes maintained by the Registrar. On and after any Redemption
Date, interest will cease to accrue on the Notes or portions thereof called for
redemption unless the Issuer shall fail to redeem any such Note or portion
thereof.
VII. OFFERS TO PURCHASE.
The Indenture requires that certain proceeds from Asset Sales be used,
subject to further limitations contained therein, to make an offer to purchase
certain amounts of Notes in accordance with the procedures set forth in the
Indenture. The Issuer is also required to make an offer to purchase Notes upon
occurrence of a Change of Control of Pierce Leahy in accordance with procedures
set forth in the Indenture.
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VIII. THE REGISTRATION AGREEMENT.
The Holder of this Note is entitled to the benefits of a Registration
Agreement, dated as of April 2, 1998 among the Issuer, Pierce Leahy and Salomon
Brothers Inc (as such may be amended from time to time, the "Registration
Agreement"). Capitalized terms used in this subsection but not defined herein
have the meanings assigned to them in the Registration Agreement.
In the event that (i) neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been filed with the
Commission within 90 days after the Issue Date, (ii) within 180 days after the
Issue Date, neither the Exchange Offer Registration Statement nor the Shelf
Registration Statement has been declared effective, (iii) within 210 days of the
Issue Date, neither the Registered Exchange Offer has been consummated with
respect to all Notes validly tendered in accordance with the terms of the
Registered Exchange Offer nor the Shelf Registration Statement has been declared
effective, or (iv) after either the Exchange Offer Registration Statement or the
Shelf Registration Statement has been declared effective, such Registration
Statement thereafter ceases to be effective or usable in connection with resales
of the Notes or the Exchange Notes at any time that the Issuer is obligated to
maintain the effectiveness thereof pursuant to the Registration Agreement
(each such event referred to in clauses (i) through (iv) above being referred to
herein as a "Registration Default"), the sole remedy available to holders of
Registrable Securities is that interest ("Special Interest") will accrue on
such Notes and Exchange Notes during the time that they constitute Registrable
Securities (in addition to the interest described above) from and including the
date on which any Registration Default shall occur to but excluding the date on
which all such Registration Defaults have been cured or with respect to any Note
or Exchange Note, it ceases to be a Registrable Security. Special Interest
shall accrue at a rate of 0.25% per annum during the 90-day period immediately
following the occurrence of any Registration Default and shall increase by 0.25%
per annum at the end of each subsequent 90-day period, but in no event shall
such Special Interest exceed 1.00% per annum in the aggregate above the interest
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rate stated on the face of the Notes regardless of the number or duration of
Registration Defaults.
There shall not be deemed to exist a Registration Default (a) with
respect to any delay in meeting the time periods set forth in clauses (i) -
(iii) above or keeping a Registratioln Statement continuously effective under
clause (iv) above during any period when the reason for such delay or lack of
continuous effectiveness is that a holder of Registrable Securities has failed
to provide the Issuer the information required to be provided to the Issuer by
such holder in the Registration Agreement following a request by the Issuer to
each such holder of Registrable Securities for such required information or (b)
with respect to clause (iv) above, during any period the Issuer has not kept the
Registration Statement continuously effective because it has determined in good
faith and for valid business reasons (not including avoidance of the Issuer's
obligations under the Registration Agreement), including without limitation the
acquisition or divestiture of assets, to take action which would cause the
continuous effectiveness of such Registration Statement not to be maintained,
provided the Issuer promptly thereafter complies with the requirements of
Section 4(k) of the Registration Agreement, if applicable.
IX. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. A Holder may register the transfer or
exchange of Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Note
selected for redemption for a period of 15 days before the day of mailing of the
notice of redemption of any such Notes to be redeemed or any Note after it is
called for redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part.
X. PERSONS DEEMED OWNERS.
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The registered Holder of this Note may be treated as the owner of it
for all purposes.
XI. UNCLAIMED MONEY.
If money for the payment of principal, premium or interest on any Note
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Issuer at its request. After that, Holders entitled to money must
look only to the Issuer for payment as general creditors unless an "abandoned
property" law designates another person.
XII. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
modified, amended or supplemented by the Issuer, Pierce Leahy, any other
Guarantors, and the Trustee with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding and any existing
default or compliance with any provision may be waived in a particular instance
with the consent of the Holders of a majority in principal amount of the Notes
then outstanding. Without the consent of Holders, the Issuer, Pierce Leahy, any
other Guarantors and the Trustee may amend the Indenture or the Notes or
supplement the Indenture for certain specified purposes including providing
for uncertificated Notes in addition to certificated Notes, and curing any
ambiguity, defect or inconsistency, or making any other change that does not
materially and adversely affect the rights of any Holder.
XIII. SUCCESSOR ENTITY.
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture and immediately before and
thereafter no Default exists and certain other conditions are satisfied, the
predecessor corporation will be released from those obligations.
XIV. DEFAULTS AND REMEDIES.
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Events of Default are set forth in the Indenture. If an Event of
Default (other than an Event of Default pursuant to Section 6.1(6) or (7) of the
Indenture with respect to the Issuer or Pierce Leahy) occurs and is continuing,
the Trustee by notice to Pierce Leahy or the Issuer, or the Holders of not less
than 25% in aggregate principal amount of the Notes then outstanding by written
notice to the Issuer, Pierce Leahy and the Trustee, may declare to be
immediately due and payable the entire principal amount of all the Notes then
outstanding plus accrued but unpaid interest to the date of acceleration and (i)
such amounts shall become immediately due and payable or (ii) if there are any
amounts outstanding under or in respect of the Credit Facility, such amounts
shall become due and payable upon the first to occur of an acceleration of
amounts outstanding under or in respect of the Credit Facility or five Business
Days after receipt by the Issuer or Pierce Leahy and the Representative of
notice of the acceleration of the Notes; provided, however, that after such
-------- -------
acceleration but before judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium or interest that has become due solely because of the
acceleration, have been cured or waived and if the rescission would not conflict
with any judgment or decree. No such rescission shall affect any subsequent
Default or impair any right consequent thereto. In case an Event of Default
specified in Section 6.1(6) or (7) of the Indenture with respect to the Issuer
or Pierce Leahy occurs, such principal amount, together with premium, if any,
and interest with respect to all of the Notes, shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders of the Notes. The Trustee may withhold from Holders notice of any
continuing default (except a default in payment of principal, premium, if any,
or interest) if it determines that withholding notice is in their interests.
XV. TRUSTEE DEALINGS WITH THE ISSUER.
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The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuer, any Guarantor or their Affiliates, and may otherwise deal with the
Issuer, any Guarantor or their Affiliates, as if it were not Trustee.
XVI. NO RECOURSE AGAINST OTHERS.
As more fully described in the Indenture, a director, officer,
employee, partner, affiliate, beneficiary or shareholder, as such, of the
Issuer, Pierce Leahy or any other Guarantor shall not have any liability for any
obligations of the Issuer or any Guarantor under the Notes or the Indenture or
for any claim based on, in respect or by reason of, such obligations or their
creation. The Holder of this Note by accepting this Note waives and releases
all such liability. The waiver and release are part of the consideration or the
issuance of this Note.
XVII. GUARANTEES.
This Note will be entitled to the benefits of certain Guarantees, if
any, made for the benefit of the Holders. Reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and obligations thereunder of the Domestic Guarantors and the Canadian
Guarantors, the Trustee and the Holders.
XVIIII. DEFEASANCE AND COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance of the entire
indebtedness on this Note and for defeasance of certain covenants in the
Indenture upon compliance by the Issuer with certain conditions set forth in the
Indenture.
XIX. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder of a Note
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
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as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
XX. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures, the Issuer has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders of the Notes. 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.
XXI. GOVERNING LAW.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AND EACH GUARANTOR, IF ANY, AGREE
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE OR THIS NOTE.
THE ISSUER WILL FURNISH TO ANY HOLDER OF THIS NOTE UPON WRITTEN
REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
PIERCE LEAHY COMMAND COMPANY, c/o PIERCE LEAHY CORP., 631 PARK AVENUE, KING OF
PRUSSIA, PENNSYLVANIA 19406, ATTENTION: CHIEF FINANCIAL OFFICER.
XXII. AUTHENTICATION.
This Note shall not be valid until the Trustee manually signs the
Certificate of Authentication on the other side of this Note.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________________ agent to transfer this Note on the
books of the Issuer. The agent may substitute another to act for him.
Date: _____________________
Your Signature: _____________________
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee: _______________________
(Signature must be guaranteed)
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the second anniversary of the issuance of the Note (or any
predecessor Note), the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer:
[Check one]
-----------
(1) [_] to the Issuer, Pierce Leahy Corp. or a subsidiary thereof;
or
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(2) [_] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) [_] outside the United States to a "foreign person" in
compliance with Rule 904 of Regulation S under the
Securities Act of 1933, as amended; or
(4) [_] pursuant to the exemption from registration provided by
Rule 144 under the Securities Act of 1933, as amended; or
(5) [_] pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(6) [_] pursuant to another available exemption from the
registration requirements of the Securities Act of 1933,
as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[_] The transferee is an Affiliate of the Issuer.
Unless one of the items is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if item
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(3), (4), or (6) is checked, the Issuer or the Trustee may require, prior to
registering any such transfer of the Notes, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3)) and other information as the Trustee or the Issuer has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in
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a transaction not subject to, the registration requirements of the Securities
Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar shall
not be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Article 2 of the Indenture shall have been
satisfied.
Dated: _______________________ Signed: ___________________________________
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee: _______________________________________________________
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TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ________________ ______________________________________________
NOTICE: To be executed by an executive officer
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Issuer pursuant to Section 4.10 or Section 4.19 of the Indenture, check the
appropriate box:
[_] Section 4.10 [_] Section 4.19
If you want to have only part of the Note purchased by the Issuer
pursuant to Section 4.10 or Section 4.19 of the Indenture, state the amount you
elect to have purchased:
$ _______________________
(multiple of $1,000)
Date: ___________________
Your Signature: ___________________________________________
(Sign exactly as your name appears on the face of this Note)
__________________________
Signature Guaranteed
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EXHIBIT B
---------
FORM OF LEGEND FOR GLOBAL NOTES
FACE OF NOTE
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 ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR 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, A NEW YORK CORPORATION ("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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE 2 OF THE INDENTURE.
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CUSIP:
Number:
PIERCE LEAHY COMMAND COMPANY
8-1/8% SENIOR NOTE DUE 2008
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Issuer", which term includes any successor corporation), for value
received promises to pay to _______________ or registered assigns the principal
sum of ______________ Dollars, on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing November 15,
1998
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
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IN WITNESS WHEREOF, the Issuer has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
PIERCE LEAHY COMMAND COMPANY
By: ________________________________
By: ________________________________
[SEAL]
CERTIFICATE OF AUTHENTICATION:
This is one of the 8-1/8% Senior Notes due 2008 referred to in the within
mentioned Indenture
Dated:
The Bank of New York,
as Trustee
By: _________________________
Authorized Signatory
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(REVERSE SIDE)
PIERCE LEAHY COMMAND COMPANY
8-1/8% SENIOR NOTE DUE 2008
I. INTEREST.
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Issuer"), promises to pay interest on the principal amount of this
Note semiannually on May 15 and November 15 of each year (each an "Interest
Payment Date"), commencing on November 15, 1998, at the rate of 8-1/8% per
annum. Interest will be computed on the basis of a 360-day year of twelve 30-
day months. 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
the original issuance of the Notes.
The Issuer shall pay interest on overdue principal, and on overdue
premium, if any, and overdue interest, to the extent lawful, at the rate equal
to 1% per annum in excess of the rate borne by the Notes.
II. METHOD OF PAYMENT.
The Issuer will pay interest on this Note provided for in Paragraph I
above (except defaulted interest) to the person who is the registered Holder
of this Note at the close of business on May 1 or November 1 preceding the
Interest Payment Date (whether or not such day is a Business Day). The Holder
must surrender this Note to a Paying Agent to collect principal payments. The
Issuer will pay principal, premium, if any, and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts; provided, however, that the Issuer may pay principal, premium, if
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any, and interest by check payable in such money. It may mail an interest check
to the Holder's registered address.
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III. PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Issuer may change any
Paying Agent or Registrar without notice to the Holders of the Notes. Neither
the Issuer, Pierce Leahy Corp., a Pennsylvania corporation ("Pierce Leahy"),
nor any of their Subsidiaries or Affiliates may act as Paying Agent but may act
as registrar or co-registrar.
IV. INDENTURE; RESTRICTIVE COVENANTS.
The Issuer issued this Note under an Indenture dated as of April 7,
1998 (the "Indenture") by and among the Issuer, Pierce Leahy and the Trustee.
The terms of this Note include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. This Note is
subject to all such terms, and the Holder of this Note is referred to the
Indenture and said Trust Indenture Act for a statement of them. All
capitalized terms in this Note, unless otherwise defined, have the meanings
assigned to them by the Indenture.
The Notes are general unsecured obligations of the Issuer limited to
$135,000,000 aggregate principal amount. The Indenture imposes certain
restrictions on, among other things, the incurrence of indebtedness, the
incurrence of liens and the issuance of preferred stock by the Issuer, Pierce
Leahy and their subsidiaries, mergers and sale of assets, the payments of
dividends on, or the repurchase of, capital stock of the Issuer, Pierce Leahy
and their subsidiaries, certain other restricted payments by the Issuer, Pierce
Leahy and their subsidiaries, certain transactions with, and investments in,
their affiliates, certain sale and lease-back transactions and a provision
regarding change-of-control of Pierce Leahy transactions. The restrictions are
subject to a number of important qualifications and exceptions.
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V. OPTIONAL REDEMPTION.
The Issuer, at its option, may redeem the Notes, in whole or in part,
at any time on or after May 15, 2003 at the redemption prices set forth in
Section 3.7 of the Indenture, together, in each case, with accrued and unpaid
interest to the redemption date.
In addition, the Issuer, at its option, may redeem Notes out of the
Net Proceeds of one or more Public Equity Offerings at the redemption price, in
the amount and under the terms set forth in the Indenture.
In addition, the Issuer, at its option, may redeem the Notes as a
whole, but not in part, in the event the Issuer has become or would become
obligated to pay any Additional Amounts, in the amount and under the terms set
forth in the Indenture.
VI. NOTICE OF REDEMPTION.
Notice of redemption will be mailed via first class mail at least 30
days but not more than 60 days prior to the redemption date to each Holder of
Notes to be redeemed at its registered address as it shall appear on the
register of the Notes maintained by the Registrar. On and after any Redemption
Date, interest will cease to accrue on the Notes or portions thereof called for
redemption unless the Issuer shall fail to redeem any such Note or portion
thereof.
VII. OFFERS TO PURCHASE.
The Indenture requires that certain proceeds from Asset Sales be used,
subject to further limitations contained therein, to make an offer to purchase
certain amounts of Notes in accordance with the procedures set forth in the
Indenture. The Issuer is also required to make an offer to purchase Notes upon
occurrence of a Change of Control of Pierce Leahy in accordance with procedures
set forth in the Indenture.
VIII. DENOMINATIONS, TRANSFER, EXCHANGE.
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The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. A Holder may register the transfer or
exchange of Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Note
selected for redemption for a period of 15 days before the day of mailing of the
notice of redemption of any such Notes to be redeemed or any Note after it is
called for redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part.
IX. PERSONS DEEMED OWNERS.
The registered Holder of this Note may be treated as the owner of it
for all purposes.
X. UNCLAIMED MONEY.
If money for the payment of principal, premium or interest on any Note
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Issuer at its request. After that, Holders entitled to money must
look only to the Issuer for payment as general creditors unless an "abandoned
property" law designates another person.
XI. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
modified, amended or supplemented by the Issuer, Pierce Leahy, any other
Guarantors, and the Trustee with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding and any existing
default or compliance with any provision may be waived in a particular instance
with the consent of the Holders of a majority in principal amount of the Notes
then outstanding. Without the consent of Holders, the Issuer, Pierce Leahy, any
other Guarantors, and the Trustee may amend the Indenture or the Notes or
supplement the Indenture for certain specified purposes including providing
for uncertificated Notes in addition to certificated Notes, and
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curing any ambiguity, defect or inconsistency, or making any other change that
does not materially and adversely affect the rights of any Holder.
XII. SUCCESSOR ENTITY.
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture and immediately before and
thereafter no Default exists and certain other conditions are satisfied, the
predecessor corporation will be released from those obligations.
XIII. DEFAULTS AND REMEDIES.
Events of Default are set forth in the Indenture. If an Event of
Default (other than an Event of Default pursuant to Section 6.1(6) or (7) of the
Indenture with respect to the Issuer or Pierce Leahy) occurs and is continuing,
the Trustee by notice to Pierce Leahy or the Issuer, or the Holders of not less
than 25% in aggregate principal amount of the Notes then outstanding by written
notice to the Issuer, Pierce Leahy and the Trustee, may declare to be
immediately due and payable the entire principal amount of all the Notes then
outstanding plus accrued but unpaid interest to the date of acceleration and (i)
such amounts shall become immediately due and payable or (ii) if there are any
amounts outstanding under or in respect of the Credit Facility, such amounts
shall become due and payable upon the first to occur of an acceleration of
amounts outstanding under or in respect of the Credit Facility or five Business
Days after receipt by the Issuer or Pierce Leahy and the Representative of
notice of the acceleration of the Notes; provided, however, that after such
-------- -------
acceleration but before judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium or interest that has become due solely because of the
acceleration, have been cured or waived and if the rescission would not conflict
with any judgment or decree. No such rescission shall affect any subsequent
Default or impair any right
B-8
<PAGE>
consequent thereto. In case an Event of Default specified in Section 6.1(6) or
(7) of the Indenture with respect to the Issuer or Pierce Leahy occurs, such
principal amount, together with premium, if any, and interest with respect to
all of the Notes, shall be due and payable immediately without any declaration
or other act on the part of the Trustee or the Holders of the Notes. The Trustee
may withhold from Holders notice of any continuing default (except a default in
payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interests.
XIV. TRUSTEE DEALINGS WITH THE ISSUER.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuer, any Domestic Guarantor or their Affiliates, and may otherwise deal with
the Issuer, any Domestic Guarantor or their Affiliates, as if it were not
Trustee.
XV. NO RECOURSE AGAINST OTHERS.
As more fully described in the Indenture, a director, officer,
employee, partner, affiliate, beneficiary or shareholder, as such, of the
Issuer, Pierce Leahy or any other Guarantor shall not have any liability for any
obligations of the Issuer or any Domestic Guarantor under the Notes or the
Indenture or for any claim based on, in respect or by reason of, such
obligations or their creation. The Holder of this Note by accepting this Note
waives and releases all such liability. The waiver and release are part of the
consideration or the issuance of this Note.
XVI. GUARANTEES.
This Note will be entitled to the benefits of certain Guarantees, if
any, made for the benefit of the Holders. Reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and obligations thereunder of the Domestic Guarantors and the Canadian
Guarantors, the Trustee and the Holders.
B-9
<PAGE>
XVII. DEFEASANCE AND COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance of the entire
indebtedness on this Note and for defeasance of certain covenants in the
Indenture upon compliance by the Issuer with certain conditions set forth in the
Indenture.
XVIII. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder of a Note
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).
XIX. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures, the Issuer has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders of the Notes. 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.
XX. GOVERNING LAW.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AND EACH GUARANTOR, IF ANY, AGREE
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE OR THIS NOTE.
THE ISSUER WILL FURNISH TO ANY HOLDER OF A NOTE UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: PIERCE
LEAHY COMMAND
B-10
<PAGE>
COMPANY, c/o PIERCE LEAHY CORP., 631 PARK AVENUE, KING OF PRUSSIA, PENNSYLVANIA
19406, ATTENTION: CHIEF FINANCIAL OFFICER.
XXI. AUTHENTICATION.
This Note shall not be valid until the Trustee manually signs the
Certificate of Authentication on the other side of this Note.
B-11
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _____________ agent to transfer this Note on the books
of the Issuer. The agent may substitute another to act for him.
Date: ____________________________
Your Signature: ______________________________
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee: _____________________________
(Signature must be guaranteed)
B-12
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer
pursuant to Section 4.10 or 4.19 of the Indenture, check the box: [_]
If you want to elect to have only part of this Note purchased by
the Issuer pursuant to Section 4.10 or 4.19 of the Indenture, state the
amount: $
Date: ________________ Your Signature: ______________________________
(Sign exactly as your name appears on the other
side of the Note)
Signature Guarantee: ________________________________________________
(Signature must be guaranteed)
B-13
<PAGE>
EXHIBIT C
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
[ ], [ ]
[ ]
[ ]
[ ]
Re: Pierce Leahy Command Company (the "Issuer") 8-1/8% Senior
Notes due 2008 (the "Notes")
---------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $______ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither we nor any person acting on
our behalf knows that the transaction has been prearranged with a buyer in the
United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements
C-1
<PAGE>
of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You, the Issuer and counsel for the Issuer are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: __________________________
Authorized Signature
C-2
<PAGE>
EXHIBIT D
---------
Form of Certificate To Be Delivered
in Connection with Certain Transfers
Pursuant to Rule 144A
---------------------
[ ], [ ]
[ ]
[ ]
[ ]
Re: Pierce Leahy Command Company (the "Issuer") 8-1/8% Senior
Notes due 2008 (the "Notes")
---------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $______ aggregate principal
amount of the Notes, we hereby certify that such transfer is being effected
pursuant to and in accordance with Rule 144A under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we hereby certify
that the Notes are being transferred to a person that we reasonably believe is
purchasing the Notes for its own account or an account with respect to which it
exercises sole investment discretion and such person and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act, in a transaction meeting the requirements of Rule 144A and such
Notes are being transferred in compliance with any applicable blue sky
securities laws of any such state of the United States.
D-1
<PAGE>
You, the Issuer and counsel for the Issuer are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By: _________________________________
Authorized Signature
D-2
<PAGE>
EXHIBIT E
---------
FORM OF DOMESTIC GUARANTEE
The undersigned (the "Domestic Guarantor") hereby unconditionally
guarantees, on a senior subordinated basis, jointly and severally with all other
domestic guarantors under the Indenture dated as of April 7, 1998 by and among
Pierce Leahy Command Company, a Nova Scotia unlimited liability company (the
"Issuer"), Pierce Leahy Corp., a Pennsylvania corporation, for itself and as a
Domestic Guarantor, and The Bank of New York, as trustee (as amended, restated
or supplemented from time to time, the "Indenture"), to the extent set forth
in the Indenture and subject to the provisions of the Indenture, (a) the due and
punctual payment of the principal of, and premium, if any, and interest on the
Notes, when and as the same shall become due and payable, whether at maturity,
by acceleration or otherwise, the due and punctual payment of interest on
overdue principal, and premium, if any, and, to the extent permitted by law,
interest, and the due and punctual performance of all other obligations of the
Issuer to the Noteholders or the Trustee, all in accordance with the terms set
forth in Article 10 of the Indenture, and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of the Domestic Guarantor to the Noteholders and to
the Trustee pursuant to this Domestic Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to the
Indenture for the precise terms and limitations of this Domestic Guarantee.
Dated:
E-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Domestic Guarantee
to be duly executed as of the date written above.
Domestic Guarantor:
By: _____________________________
Name:
Title:
E-2
<PAGE>
EXHIBIT F
---------
FORM OF CANADIAN GUARANTEE
The undersigned (the "Canadian Guarantor") hereby unconditionally
guarantees, on a senior basis, jointly and severally with all other Canadian
guarantors under the Indenture dated as of April 7, 1998 by and among Pierce
Leahy Command Company, a Nova Scotia unlimited liability company (the "Issuer"),
Pierce Leahy Corp., a Pennsylvania corporation, for itself and as a Domestic
Guarantor, and The Bank of New York, as trustee (as amended, restated or
supplemented from time to time, the "Indenture"), to the extent set forth in the
Indenture and subject to the provisions of the Indenture, (a) the due and
punctual payment of the principal of, and premium, if any, and interest on the
Notes, when and as the same shall become due and payable, whether at maturity,
by acceleration or otherwise, the due and punctual payment of interest on
overdue principal, and premium, if any, and, to the extent permitted by law,
interest, and the due and punctual performance of all other obligations of the
Issuer to the Noteholders or the Trustee, all in accordance with the terms set
forth in Article 10 of the Indenture, and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of the Canadian Guarantor to the Noteholders and to
the Trustee pursuant to this Canadian Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to the
Indenture for the precise terms and limitations of this Canadian Guarantee.
Dated:
F-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Canadian Guarantee
to be duly executed as of the date written above.
Canadian Guarantor:
By: _____________________________
Name:
Title:
F-2
<PAGE>
EXHIBIT 4.2
FACE OF NOTE
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 ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR 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, A NEW YORK CORPORATION ("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
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE 2 OF THE INDENTURE.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE,
AGREES FOR THE BENEFIT OF THE ISSUER AND THE INITIAL PURCHASERS OF THIS NOTE
THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO
THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY
HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE ISSUER AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE,
OTHER THAN (1) TO THE ISSUER, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A PURCHASING FOR ITS OWN
<PAGE>
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, AND, IF SUCH TRANSFER IS
BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE PRIOR TO THE
EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE ISSUER OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
ISSUER AND THE TRUSTEE, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES
ACT, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE ISSUER AND THE INITIAL PURCHASERS THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT. ANY TRANSFEREE OF THIS NOTE SHALL BE DEEMED TO HAVE REPRESENTED
EITHER (X) THAT IT IS NOT USING THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT ("ERISA") OR THE INTERNAL REVENUE
CODE (THE "CODE") TO PURCHASE THIS NOTE OR (Y) THAT ITS PURCHASE AND CONTINUED
HOLDING OF THE NOTE WILL BE COVERED BY A U.S. DEPARTMENT OF LABOR CLASS
EXEMPTION (WITH RESPECT TO PROHIBITED TRANSACTIONS UNDER SECTION 406(a) OF
ERISA).
2
<PAGE>
CUSIP: C2506E AA9
Number: A-2
PIERCE LEAHY COMMAND COMPANY
8-1/8% SENIOR NOTE DUE 2008
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Issuer", which term includes any successor corporation), for value
received promises to pay to Cede & Co. or registered assigns the principal sum
of ZERO DOLLARS (US $0), on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing November 15,
1998
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
PIERCE LEAHY COMMAND COMPANY
By: /s/ Joseph Linaugh
------------------------
By: /s/ Lisa Goldschmidt
------------------------
[SEAL]
CERTIFICATE OF AUTHENTICATION:
This is one of the
8-1/8% Senior Notes due 2008
referred to in the within
mentioned Indenture
Dated: April 7, 1998
The Bank of New York,
as Trustee
By: /s/ Lucille Firnncieli
-----------------------
Authorized Signatory
4
<PAGE>
(REVERSE SIDE)
PIERCE LEAHY COMMAND COMPANY
8-1/8% SENIOR NOTE DUE 2008
I. INTEREST.
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Issuer"), promises to pay interest on the principal amount of this
Note semiannually on May 15 and November 15 of each year (each an "Interest
Payment Date"), commencing on November 15, 1998, at the rate of 8-1/8% per
annum. Interest will be computed on the basis of a 360-day year of twelve 30-
day months. 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
the original issuance of the Notes.
The Issuer shall pay interest on overdue principal, and on overdue
premium, if any, and overdue interest, to the extent lawful, at the rate equal
to 1% per annum in excess of the rate borne by the Notes. Interest on the Notes
is subject to increase as provided herein in Paragraph VIII.
II. METHOD OF PAYMENT.
The Issuer will pay interest on this Note provided for in Paragraph I
above (except defaulted interest) to the person who is the registered Holder of
this Note at the close of business on May 1 or November 1 preceding the Interest
Payment Date (whether or not such day is a Business Day). The Holder must
surrender this Note to a Paying Agent to collect principal payments. The Issuer
will pay principal, premium, if any, and interest in money of the United States
that at the time of payment is legal tender for payment of public and private
debts; provided, however, that the Issuer may pay principal, premium, if any,
-------- -------
and interest by check payable in such money. It may mail an interest check to
the Holder's registered address.
5
<PAGE>
III. PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Issuer may change any
Paying Agent or Registrar without notice to the Holders of the Notes. Neither
the Issuer, Pierce Leahy Corp., a Pennsylvania corporation ("Pierce Leahy"),
nor any of their Subsidiaries or Affiliates may act as Paying Agent but may act
as registrar or co-registrar.
IV. INDENTURE; RESTRICTIVE COVENANTS.
The Issuer issued this Note under an Indenture dated as of April 7,
1998 (the "Indenture") by and among the Issuer, Pierce Leahy and the Trustee.
The terms of this Note include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. This Note is
subject to all such terms, and the Holder of this Note is referred to the
Indenture and said Trust Indenture Act for a statement of them. All capitalized
terms in this Note, unless otherwise defined, have the meanings assigned to
them by the Indenture.
The Notes are general unsecured obligations of the Issuer limited to
$135,000,000 aggregate principal amount. The Indenture imposes certain
restrictions on, among other things, the incurrence of indebtedness, the
incurrence of liens and the issuance of preferred stock by the Issuer, Pierce
Leahy and their subsidiaries, mergers and sale of assets, the payments of
dividends on, or the repurchase of, capital stock of the Issuer, Pierce Leahy
and their subsidiaries, certain other restricted payments by the Issuer, Pierce
Leahy and their subsidiaries, certain transactions with, and investments in,
their affiliates, certain sale and lease-back transactions and a provision
regarding change-of-control of Pierce Leahy transactions. The restrictions are
subject to a number of important qualifications and exceptions.
6
<PAGE>
V. OPTIONAL REDEMPTION.
The Issuer, at its option, may redeem the Notes, in whole or in part,
at any time on or after May 15, 2003 at the redemption prices set forth in
Section 3.7 of the Indenture, together, in each case, with accrued and unpaid
interest to the redemption date.
In addition, the Issuer, at its option, may redeem Notes out of the
Net Proceeds of one or more Public Equity Offerings at the redemption price, in
the amount and under the terms set forth in the Indenture.
In addition, the Issuer, at its option, may redeem the Notes as a
whole, but not in part, in the event the Issuer has become or would become
obligated to pay any Additional Amounts under the terms set forth in the
Indenture.
VI. NOTICE OF REDEMPTION.
Notice of redemption will be mailed via first class mail at least 30
days but not more than 60 days prior to the redemption date to each Holder of
Notes to be redeemed at its registered address as it shall appear on the
register of the Notes maintained by the Registrar. On and after any Redemption
Date, interest will cease to accrue on the Notes or portions thereof called for
redemption unless the Issuer shall fail to redeem any such Note or portion
thereof.
VII. OFFERS TO PURCHASE.
The Indenture requires that certain proceeds from Asset Sales be used,
subject to further limitations contained therein, to make an offer to purchase
certain amounts of Notes in accordance with the procedures set forth in the
Indenture. The Issuer is also required to make an offer to purchase Notes upon
occurrence of a Change of Control of Pierce Leahy in accordance with procedures
set forth in the Indenture.
7
<PAGE>
VIII. THE REGISTRATION AGREEMENT.
The Holder of this Note is entitled to the benefits of a Registration
Agreement, dated as of April 2, 1998 among the Issuer, Pierce Leahy and Salomon
Brothers Inc (as such may be amended from time to time, the "Registration
Agreement"). Capitalized terms used in this subsection but not defined herein
have the meanings assigned to them in the Registration Agreement.
In the event that (i) neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been filed with the
Commission within 90 days after the Issue Date, (ii) within 180 days after the
Issue Date, neither the Exchange Offer Registration Statement nor the Shelf
Registration Statement has been declared effective, (iii) within 210 days of the
Issue Date, neither the Registered Exchange Offer has been consummated with
respect to all Notes validly tendered in accordance with the terms of the
Registered Exchange Offer nor the Shelf Registration Statement has been declared
effective, or (iv) after either the Exchange Offer Registration Statement or the
Shelf Registration Statement has been declared effective, such Registration
Statement thereafter ceases to be effective or usable in connection with resales
of the Notes or the Exchange Notes at any time that the Issuer is obligated to
maintain the effectiveness thereof pursuant to the Registration Agreement
(each such event referred to in clauses (i) through (iv) above being referred to
herein as a "Registration Default"), the sole remedy available to holders of
Registrable Securities is that interest ("Special Interest") will accrue on
such Notes and Exchange Notes during the time that they constitute Registrable
Securities (in addition to the interest described above) from and including the
date on which any Registration Default shall occur to but excluding the date on
which all such Registration Defaults have been cured or with respect to any Note
or Exchange Note, it ceases to be a Registrable Security. Special Interest
shall accrue at a rate of 0.25% per annum during the 90-day period immediately
following the occurrence of any Registration Default and shall increase by
0.25% per annum at the end of each subsequent 90-day period, but in no event
shall such
8
<PAGE>
Special Interest exceed 1.00% per annum in the aggregate above the interest rate
stated on the face of the Notes regardless of the number or duration of
Registrable Defaults.
There shall not be deemed to exist a Registration Default (a) with
respect to any delay in meeting the time periods set forth in clauses (i) -
(iii) above or keeping a Registration Statement continuously effective under
clause (iv) above during any period when the reason for such delay or lack of
continuous effectiveness is that a holder of Registrable Securities has failed
to provide the Issuer the information required to be provided to the Issuer by
such holder in the Registration Agreement following a request by the Issuer to
each such holder of Registrable Securities for such required information or
(b) with respect to clause (iv) above, during any period the Issuer has not kept
the Registration Statement continuously effective because it has determined in
good faith and for valid business reasons (not including avoidance of the
Issuer's obligations under the Registration Agreement), including without
limitation the acquisition or divestiture of assets, to take action which would
cause the continuous effectiveness of such Registration Statement not to be
maintained, provided the Issuer promptly thereafter complies with the
requirements of Section 4(k) of the Registration Agreement, if applicable.
IX. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. A Holder may register the transfer or
exchange of Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Note
selected for redemption for a period of 15 days before the day of mailing of the
notice of redemption of any such Notes to be redeemed or any Note after it is
called for redemption in whole or in
9
<PAGE>
part, except the unredeemed portion of any Note being redeemed in part.
X. PERSONS DEEMED OWNERS.
The registered Holder of this Note may be treated as the owner of it
for all purposes.
XI. UNCLAIMED MONEY.
If money for the payment of principal, premium or interest on any Note
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Issuer at its request. After that, Holders entitled to money must
look only to the Issuer for payment as general creditors unless an "abandoned
property" law designates another person.
XII. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
modified, amended or supplemented by the Issuer, Pierce Leahy, any other
Guarantors, and the Trustee with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding and any existing
default or compliance with any provision may be waived in a particular instance
with the consent of the Holders of a majority in principal amount of the Notes
then outstanding. Without the consent of Holders, the Issuer, Pierce Leahy, any
other Guarantors and the Trustee may amend the Indenture or the Notes or
supplement the Indenture for certain specified purposes including providing for
uncertificated Notes in addition to certificated Notes, and curing any
ambiguity, defect or inconsistency, or making any other change that does not
materially and adversely affect the rights of any Holder.
XIII. SUCCESSOR ENTITY.
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture and immediately before and
thereafter no Default exists and certain other conditions are satisfied, the
predecessor corporation will be released from those obligations.
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<PAGE>
XIV. DEFAULTS AND REMEDIES.
Events of Default are set forth in the Indenture. If an Event of
Default (other than an Event of Default pursuant to Section 6.1(6) or (7) of the
Indenture with respect to the Issuer or Pierce Leahy) occurs and is
continuing, the Trustee by notice to Pierce Leahy or the Issuer, or the Holders
of not less than 25% in aggregate principal amount of the Notes then outstanding
by written notice to the Issuer, Pierce Leahy and the Trustee, may declare to be
immediately due and payable the entire principal amount of all the Notes then
outstanding plus accrued but unpaid interest to the date of acceleration and
(i) such amounts shall become immediately due and payable or (ii) if there are
any amounts outstanding under or in respect of the Credit Facility, such amounts
shall become due and payable upon the first to occur of an acceleration of
amounts outstanding under or in respect of the Credit Facility or five Business
Days after receipt by the Issuer or Pierce Leahy and the Representative of
notice of the acceleration of the Notes; provided, however, that after such
-------- -------
acceleration but before judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium or interest that has become due solely because of the
acceleration, have been cured or waived and if the rescission would not conflict
with any judgment or decree. No such rescission shall affect any subsequent
Default or impair any right consequent thereto. In case an Event of Default
specified in Section 6.1(6) or (7) of the Indenture with respect to the Issuer
or Pierce Leahy occurs, such principal amount, together with premium, if any,
and interest with respect to all of the Notes, shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders of the Notes. The Trustee may withhold from Holders notice of any
continuing default (except a default in payment of principal, premium, if
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any, or interest) if it determines that withholding notice is in their
interests.
XV. TRUSTEE DEALINGS WITH THE ISSUER.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuer, any Guarantor or their Affiliates, and may otherwise deal with the
Issuer, any Guarantor or their Affiliates, as if it were not Trustee.
XVI. NO RECOURSE AGAINST OTHERS.
As more fully described in the Indenture, a director, officer,
employee, partner, affiliate, beneficiary or shareholder, as such, of the
Issuer, Pierce Leahy or any other Guarantor shall not have any liability for any
obligations of the Issuer or any Guarantor under the Notes or the Indenture or
for any claim based on, in respect or by reason of, such obligations or their
creation. The Holder of this Note by accepting this Note waives and releases
all such liability. The waiver and release are part of the consideration or the
issuance of this Note.
XVII. GUARANTEES.
This Note will be entitled to the benefits of certain Guarantees, if
any, made for the benefit of the Holders. Reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and obligations thereunder of the Domestic Guarantors and the Canadian
Guarantors, the Trustee and the Holders.
XVIII. DEFEASANCE AND COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance of the entire
indebtedness on this Note and for defeasance of certain covenants in the
Indenture upon compliance by the Issuer with certain conditions set forth in the
Indenture.
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XIX. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder of a Note
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).
XX. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures, the Issuer has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders of the Notes. 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.
XXI. GOVERNING LAW.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AND EACH GUARANTOR, IF ANY, AGREE
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE OR THIS NOTE.
THE ISSUER WILL FURNISH TO ANY HOLDER OF THIS NOTE UPON WRITTEN
REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
PIERCE LEAHY COMMAND COMPANY, c/o PIERCE LEAHY CORP., 631 PARK AVENUE, KING OF
PRUSSIA, PENNSYLVANIA 19406, ATTENTION: CHIEF FINANCIAL OFFICER.
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XXII. AUTHENTICATION.
This Note shall not be valid until the Trustee manually signs the
Certificate of Authentication on the other side of this Note.
14
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _______________ agent to transfer this Note on the books
of the Issuer. The agent may substitute another to act for him.
Date:_____________________
Your Signature:_________________________
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:_____________________________
(Signature must be guaranteed)
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the second anniversary of the issuance of the Note (or any
predecessor Note), the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer:
[Check one]
-----------
(1) [_] to the Issuer, Pierce Leahy Corp. or a subsidiary thereof; or
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(2) [_] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) [_] outside the United States to a "foreign person" in
compliance with Rule 904 of Regulation S under the Securities
Act of 1933, as amended; or
(4) [_] pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933, as amended; or
(5) [_] pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(6) [_] pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[_] The transferee is an Affiliate of the Issuer.
Unless one of the items is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if item
-------- -------
(3), (4), or (6) is checked, the Issuer or the Trustee may require, prior to
registering any such transfer of the Notes, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3)) and other information as the Trustee or the Issuer has
reasonably requested to confirm that such transfer is being made pursuant to an
16
<PAGE>
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar shall
not be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Article 2 of the Indenture shall have been
satisfied.
Dated:______________________
Signed:_____________________
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee:______________________
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TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:________________ _________________________________________________
NOTICE: To be executed by an executive officer
18
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Issuer pursuant to Section 4.10 or Section 4.19 of the Indenture, check the
appropriate box:
[_] Section 4.10 [_] Section 4.19
If you want to have only part of the Note purchased by the Issuer
pursuant to Section 4.10 or Section 4.19 of the Indenture, state the amount you
elect to have purchased:
$___________________
(multiple of $1,000)
Date:_______________
Your Signature:________________________________________________
(Sign exactly as your name appears on the face of
this Note)
- --------------------
Signature Guaranteed
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<PAGE>
FACE OF NOTE
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 ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR 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, A NEW YORK CORPORATION ("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
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE 2 OF THE INDENTURE.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS NOTE,
AGREES FOR THE BENEFIT OF THE ISSUER AND THE INITIAL PURCHASERS OF THIS NOTE
THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO
THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY
HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE ISSUER AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE,
OTHER THAN (1) TO THE ISSUER, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A PURCHASING FOR ITS OWN
<PAGE>
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS NOTE), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, AND, IF SUCH TRANSFER IS
BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE PRIOR TO THE
EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE ISSUER OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
ISSUER AND THE TRUSTEE, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE ISSUER AND THE INITIAL PURCHASERS THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT. ANY TRANSFEREE OF THIS NOTE SHALL BE DEEMED TO HAVE REPRESENTED
EITHER (X) THAT IT IS NOT USING THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT ("ERISA") OR THE INTERNAL REVENUE
CODE (THE "CODE") TO PURCHASE THIS NOTE OR (Y) THAT ITS PURCHASE AND CONTINUED
HOLDING OF THE NOTE WILL BE COVERED BY A U.S. DEPARTMENT OF LABOR CLASS
EXEMPTION (WITH RESPECT TO PROHIBITED TRANSACTIONS UNDER SECTION 406(a) OF
ERISA).
2
<PAGE>
CUSIP:720721 AA7
Number: A-1
PIERCE LEAHY COMMAND COMPANY
8-1/8% SENIOR NOTE DUE 2008
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Issuer", which term includes any successor corporation), for value
received promises to pay to Cede & Co. or registered assigns the principal sum
of ONE HUNDRED THIRTY FIVE MILLION DOLLARS (US $135,000,000), on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing November 15,
1998
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
PIERCE LEAHY COMMAND COMPANY
By: /s/ Joseph Linaugh
------------------------
By: /s/ Lisa Goldschmidt
-------------------------
[SEAL]
CERTIFICATE OF AUTHENTICATION:
This is one of the
8-1/8% Senior Notes due 2008
referred to in the within
mentioned Indenture
Dated: April 7, 1998
The Bank of New York,
as Trustee
By: /s/ Lucille Firnncieli
-------------------------
Authorized Signatory
4
<PAGE>
(REVERSE SIDE)
PIERCE LEAHY COMMAND COMPANY
8-1/8% SENIOR NOTE DUE 2008
I. INTEREST.
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Issuer"), promises to pay interest on the principal amount of this
Note semiannually on May 15 and November 15 of each year (each an "Interest
Payment Date"), commencing on November 15, 1998, at the rate of 8-1/8% per
annum. Interest will be computed on the basis of a 360-day year of twelve 30-
day months. 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
the original issuance of the Notes.
The Issuer shall pay interest on overdue principal, and on overdue
premium, if any, and overdue interest, to the extent lawful, at the rate equal
to 1% per annum in excess of the rate borne by the Notes. Interest on the Notes
is subject to increase as provided herein in Paragraph VIII.
II. METHOD OF PAYMENT.
The Issuer will pay interest on this Note provided for in Paragraph I
above (except defaulted interest) to the person who is the registered Holder of
this Note at the close of business on May 1 or November 1 preceding the Interest
Payment Date (whether or not such day is a Business Day). The Holder must
surrender this Note to a Paying Agent to collect principal payments. The Issuer
will pay principal, premium, if any, and interest in money of the United States
that at the time of payment is legal tender for payment of public and private
debts; provided, however, that the Issuer may pay principal, premium, if any,
-------- -------
and interest by check payable in such money. It may mail an interest check to
the Holder's registered address.
5
<PAGE>
III. PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Issuer may change any
Paying Agent or Registrar without notice to the Holders of the Notes. Neither
the Issuer, Pierce Leahy Corp., a Pennsylvania corporation ("Pierce Leahy"),
nor any of their Subsidiaries or Affiliates may act as Paying Agent but may act
as registrar or co-registrar.
IV. INDENTURE; RESTRICTIVE COVENANTS.
The Issuer issued this Note under an Indenture dated as of April 7,
1998 (the "Indenture") by and among the Issuer, Pierce Leahy and the Trustee.
The terms of this Note include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. This Note is
subject to all such terms, and the Holder of this Note is referred to the
Indenture and said Trust Indenture Act for a statement of them. All capitalized
terms in this Note, unless otherwise defined, have the meanings assigned to
them by the Indenture.
The Notes are general unsecured obligations of the Issuer limited to
$135,000,000 aggregate principal amount. The Indenture imposes certain
restrictions on, among other things, the incurrence of indebtedness, the
incurrence of liens and the issuance of preferred stock by the Issuer, Pierce
Leahy and their subsidiaries, mergers and sale of assets, the payments of
dividends on, or the repurchase of, capital stock of the Issuer, Pierce Leahy
and their subsidiaries, certain other restricted payments by the Issuer, Pierce
Leahy and their subsidiaries, certain transactions with, and investments in,
their affiliates, certain sale and lease-back transactions and a provision
regarding change-of-control of Pierce Leahy transactions. The restrictions are
subject to a number of important qualifications and exceptions.
6
<PAGE>
V. OPTIONAL REDEMPTION.
The Issuer, at its option, may redeem the Notes, in whole or in part,
at any time on or after May 15, 2003 at the redemption prices set forth in
Section 3.7 of the Indenture, together, in each case, with accrued and unpaid
interest to the redemption date.
In addition, the Issuer, at its option, may redeem Notes out of the
Net Proceeds of one or more Public Equity Offerings at the redemption price, in
the amount and under the terms set forth in the Indenture.
In addition, the Issuer, at its option, may redeem the Notes as a
whole, but not in part, in the event the Issuer has become or would become
obligated to pay any Additional Amounts under the terms set forth in the
Indenture.
VI. NOTICE OF REDEMPTION.
Notice of redemption will be mailed via first class mail at least 30
days but not more than 60 days prior to the redemption date to each Holder of
Notes to be redeemed at its registered address as it shall appear on the
register of the Notes maintained by the Registrar. On and after any Redemption
Date, interest will cease to accrue on the Notes or portions thereof called for
redemption unless the Issuer shall fail to redeem any such Note or portion
thereof.
VII. OFFERS TO PURCHASE.
The Indenture requires that certain proceeds from Asset Sales be used,
subject to further limitations contained therein, to make an offer to purchase
certain amounts of Notes in accordance with the procedures set forth in the
Indenture. The Issuer is also required to make an offer to purchase Notes upon
occurrence of a Change of Control of Pierce Leahy in accordance with procedures
set forth in the Indenture.
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VIII. THE REGISTRATION AGREEMENT.
The Holder of this Note is entitled to the benefits of a Registration
Agreement, dated as of April 2, 1998 among the Issuer, Pierce Leahy and Salomon
Brothers Inc (as such may be amended from time to time, the "Registration
Agreement"). Capitalized terms used in this subsection but not defined herein
have the meanings assigned to them in the Registration Agreement.
In the event that (i) neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been filed with the
Commission within 90 days after the Issue Date, (ii) within 180 days after the
Issue Date, neither the Exchange Offer Registration Statement nor the Shelf
Registration Statement has been declared effective, (iii) within 210 days of the
Issue Date, neither the Registered Exchange Offer has been consummated with
respect to all Notes validly tendered in accordance with the terms of the
Registered Exchange Offer nor the Shelf Registration Statement has been declared
effective, or (iv) after either the Exchange Offer Registration Statement or the
Shelf Registration Statement has been declared effective, such Registration
Statement thereafter ceases to be effective or usable in connection with resales
of the Notes or the Exchange Notes at any time that the Issuer is obligated to
maintain the effectiveness thereof pursuant to the Registration Agreement
(each such event referred to in clauses (i) through (iv) above being referred to
herein as a "Registration Default"), the sole remedy available to holders of
Registrable Securities is that interest ("Special Interest") will accrue on
such Notes and Exchange Notes during the time that they constitute Registrable
Securities (in addition to the interest described above) from and including the
date on which any Registration Default shall occur to but excluding the date on
which all such Registration Defaults have been cured or with respect to any Note
or Exchange Note, it ceases to be a Registrable Security. Special Interest
shall accrue at a rate of 0.25% per annum during the 90-day period immediately
following the occurrence of any Registration Default and shall increase by
0.25% per annum at the end of each subsequent 90-day period, but in no event
shall such
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<PAGE>
Special Interest exceed 1.00% per annum in the aggregate above the
interest rate stated on the face of the Notes regardless of the number or
duration of Registrable Defaults.
There shall not be deemed to exist a Registration Default (a) with
respect to any delay in meeting the time periods set forth in clauses (i) -
(iii) above or keeping a Registration Statement continuously effective under
clause (iv) above during any period when the reason for such delay or lack of
continuous effectiveness is that a holder of Registrable Securities has failed
to provide the Issuer the information required to be provided to the Issuer by
such holder in the Registration Agreement following a request by the Issuer to
each such holder of Registrable Securities for such required information or
(b) with respect to clause (iv) above, during any period the Issuer has not kept
the Registration Statement continuously effective because it has determined in
good faith and for valid business reasons (not including avoidance of the
Issuer's obligations under the Registration Agreement), including without
limitation the acquisition or divestiture of assets, to take action which would
cause the continuous effectiveness of such Registration Statement not to be
maintained, provided the Issuer promptly thereafter complies with the
requirements of Section 4(k) of the Registration Agreement, if applicable.
IX. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. A Holder may register the transfer or
exchange of Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Note
selected for redemption for a period of 15 days before the day of mailing of the
notice of redemption of any such Notes to be redeemed or any Note after it is
called for redemption in whole or in
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<PAGE>
part, except the unredeemed portion of any Note being redeemed in part.
X. PERSONS DEEMED OWNERS.
The registered Holder of this Note may be treated as the owner of it
for all purposes.
XI. UNCLAIMED MONEY.
If money for the payment of principal, premium or interest on any Note
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Issuer at its request. After that, Holders entitled to money must
look only to the Issuer for payment as general creditors unless an "abandoned
property" law designates another person.
XII. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
modified, amended or supplemented by the Issuer, Pierce Leahy, any other
Guarantors, and the Trustee with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding and any existing
default or compliance with any provision may be waived in a particular instance
with the consent of the Holders of a majority in principal amount of the Notes
then outstanding. Without the consent of Holders, the Issuer, Pierce Leahy, any
other Guarantors and the Trustee may amend the Indenture or the Notes or
supplement the Indenture for certain specified purposes including providing for
uncertificated Notes in addition to certificated Notes, and curing any
ambiguity, defect or inconsistency, or making any other change that does not
materially and adversely affect the rights of any Holder.
XIII. SUCCESSOR ENTITY.
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture and immediately before and
thereafter no Default exists and certain other conditions are satisfied,
10
<PAGE>
the predecessor corporation will be released from those obligations.
XIV. DEFAULTS AND REMEDIES.
Events of Default are set forth in the Indenture. If an Event of
Default (other than an Event of Default pursuant to Section 6.1(6) or (7) of the
Indenture with respect to the Issuer or Pierce Leahy) occurs and is
continuing, the Trustee by notice to Pierce Leahy or the Issuer, or the Holders
of not less than 25% in aggregate principal amount of the Notes then outstanding
by written notice to the Issuer, Pierce Leahy and the Trustee, may declare to be
immediately due and payable the entire principal amount of all the Notes then
outstanding plus accrued but unpaid interest to the date of acceleration and
(i) such amounts shall become immediately due and payable or (ii) if there are
any amounts outstanding under or in respect of the Credit Facility, such amounts
shall become due and payable upon the first to occur of an acceleration of
amounts outstanding under or in respect of the Credit Facility or five Business
Days after receipt by the Issuer or Pierce Leahy and the Representative of
notice of the acceleration of the Notes; provided, however, that after such
-------- -------
acceleration but before judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium or interest that has become due solely because of the
acceleration, have been cured or waived and if the rescission would not conflict
with any judgment or decree. No such rescission shall affect any subsequent
Default or impair any right consequent thereto. In case an Event of Default
specified in Section 6.1(6) or (7) of the Indenture with respect to the Issuer
or Pierce Leahy occurs, such principal amount, together with premium, if any,
and interest with respect to all of the Notes, shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders of the Notes. The Trustee may withhold from Holders notice of any
continuing default (except a default in payment of principal, premium, if
11
<PAGE>
any, or interest) if it determines that withholding notice is in their
interests.
XV. TRUSTEE DEALINGS WITH THE ISSUER.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuer, any Guarantor or their Affiliates, and may otherwise deal with the
Issuer, any Guarantor or their Affiliates, as if it were not Trustee.
XVI. NO RECOURSE AGAINST OTHERS.
As more fully described in the Indenture, a director, officer,
employee, partner, affiliate, beneficiary or shareholder, as such, of the
Issuer, Pierce Leahy or any other Guarantor shall not have any liability for any
obligations of the Issuer or any Guarantor under the Notes or the Indenture or
for any claim based on, in respect or by reason of, such obligations or their
creation. The Holder of this Note by accepting this Note waives and releases
all such liability. The waiver and release are part of the consideration or the
issuance of this Note.
XVII. GUARANTEES.
This Note will be entitled to the benefits of certain Guarantees, if
any, made for the benefit of the Holders. Reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and obligations thereunder of the Domestic Guarantors and the Canadian
Guarantors, the Trustee and the Holders.
XVIII. DEFEASANCE AND COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance of the entire
indebtedness on this Note and for defeasance of certain covenants in the
Indenture upon compliance by the Issuer with certain conditions set forth in the
Indenture.
12
<PAGE>
XIX. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder of a Note
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).
XX. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures, the Issuer has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders of the Notes. 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.
XXI. GOVERNING LAW.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AND EACH GUARANTOR, IF ANY, AGREE
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE OR THIS NOTE.
THE ISSUER WILL FURNISH TO ANY HOLDER OF THIS NOTE UPON WRITTEN
REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
PIERCE LEAHY COMMAND COMPANY, c/o PIERCE LEAHY CORP., 631 PARK AVENUE, KING OF
PRUSSIA, PENNSYLVANIA 19406, ATTENTION: CHIEF FINANCIAL OFFICER.
13
<PAGE>
XXII. AUTHENTICATION.
This Note shall not be valid until the Trustee manually signs the
Certificate of Authentication on the other side of this Note.
14
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _______________ agent to transfer this Note on the books
of the Issuer. The agent may substitute another to act for him.
Date:_____________________
Your Signature:_________________________
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:_____________________________
(Signature must be guaranteed)
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the second anniversary of the issuance of the Note (or any
predecessor Note), the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer:
[Check one]
-----------
(1) [_] to the Issuer, Pierce Leahy Corp. or a subsidiary thereof; or
15
<PAGE>
(2) [_] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) [_] outside the United States to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act of 1933,
as amended; or
(4) [_] pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933, as amended; or
(5) [_] pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(6) [_] pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[_] The transferee is an Affiliate of the Issuer.
Unless one of the items is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if item
-------- -------
(3), (4), or (6) is checked, the Issuer or the Trustee may require, prior to
registering any such transfer of the Notes, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3)) and other information as the Trustee or the Issuer has
reasonably requested to confirm that such transfer is being made pursuant to an
16
<PAGE>
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar shall
not be obligated to register this Note in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Article 2 of the Indenture shall have been
satisfied.
Dated:______________________
Signed:_____________________
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee:______________________
17
<PAGE>
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:________________ ______________________________________________
NOTICE: To be executed by an executive officer
18
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Issuer pursuant to Section 4.10 or Section 4.19 of the Indenture, check the
appropriate box:
[_] Section 4.10 [_] Section 4.19
If you want to have only part of the Note purchased by the Issuer
pursuant to Section 4.10 or Section 4.19 of the Indenture, state the amount you
elect to have purchased:
$___________________
(multiple of $1,000)
Date:_______________
Your Signature:________________________________________________
(Sign exactly as your name appears on the face of
this Note)
- --------------------
Signature Guaranteed
19
<PAGE>
EXHIBIT 4.4
PIERCE LEAHY COMMAND COMPANY
8.125% Senior Notes Due 2008
Guaranteed on an Unsecured Senior Subordinated basis by
PIERCE LEAHY CORP.
REGISTRATION AGREEMENT
New York, New York
April 2, 1998
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Company"), proposes to issue and sell ("the "Initial Placement")
to certain purchasers (the "Purchasers"), upon the terms set forth in a purchase
agreement of even date herewith (the "Purchase Agreement"), $135,000,000
aggregate principal amount of its 8.125% Senior Notes due 2008 (the
"Securities") which will be guaranteed on an unsecured senior subordinated basis
by Pierce Leahy Corp., a Pennsylvania corporation ("Pierce Leahy Corp."). The
Company is a Wholly Owned Subsidiary (as defined in the Indenture) of Pierce
Leahy Corp. As an inducement to the Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to your obligations thereunder, the
Company agrees with you, (i) for your benefit and the benefit of the other
Purchasers and (ii) for the benefit of the holders from time to time of
Registrable Securities (including you and the other Purchasers) (each of the
foregoing a "Holder" and together the "Holders"), as follows:
<PAGE>
1. Definitions. Capitalized terms used herein without definition
-----------
which are defined in the Purchase Agreement shall have their respective meanings
set forth in the Purchase Agreement. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
---
regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person which,
---------
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Closing Date" has the meaning set forth in the Purchase Agreement.
------------
"Commission" means the Securities and Exchange Commission.
----------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Registration Period" means the six month period
----------------------------------
following the consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement
-------------------------------------
of the Company on an appropriate form under the Act with respect to the
Registered Exchange Offer, all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may include the
-----------------
Purchasers) which is a broker-dealer, electing to exchange Securities acquired
for its own account as a result of market-making activities or other trading
activities, for New Securities.
2
<PAGE>
"Final Memorandum" has the meaning set forth in the Purchase
----------------
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
------
Indenture" means the Indenture relating to the Securities dated as of
---------
April 7, 1998, between the Company, Pierce Leahy Corp. and The Bank of New York,
as trustee, as the same may be amended from time to time in accordance with the
terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
-----------------
"Majority Holders" means the Holders of a majority of the aggregate
----------------
principal amount of securities registered under a Registration Statement.
"Managing Underwriters" means the investment banker or investment
---------------------
bankers and manager or managers that shall administer an underwritten offering.
"New Securities" means debt securities of the Company identical in all
--------------
material respects to the Securities (except that the cash interest and interest
rate step-up provisions and the transfer restrictions will be modified or
eliminated, as appropriate), to be issued under the Indenture or the New
Securities Indenture.
"New Securities Indenture" means an indenture between the Company and
------------------------
the New Securities Trustee, identical in all material respects with the
Indenture (except that the cash interest and interest rate step-up provisions
and the transfer restrictions will be modified or eliminated, as appropriate,
and other than such changes as are required to comply with any requirements of
the Commission).
"New Securities Trustee" means a bank or trust company reasonably
----------------------
satisfactory to the Purchasers, as trustee with respect to the New Securities
under the New Securities Indenture, it being agreed, without limiting the
foregoing, that The Bank of New York is satisfactory to serve as such trustee.
"Pierce Leahy Corp." has the meaning set forth in the preamble hereto.
------------------
"Prospectus" means the prospectus included in any Registration
----------
Statement (including, without limitation, a prospectus that discloses
information
3
<PAGE>
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Securities or the New Securities, covered by such Registration
Statement, and all amendments and supplements to the Prospectus, including post-
effective amendments.
"Registered Exchange Offer" means the proposed offer to the Holders to
-------------------------
issue and deliver to such Holders, in exchange for the Securities, a like
principal amount of the New Securities.
"Registrable Securities" means (a) the Securities upon original
-----------------------
issuance thereof and at all times subsequent thereto until, (i) a Registration
Statement covering such Securities has been declared effective by the Commission
and such Securities have been disposed of in accordance with such Registration
Statement, (ii) such Securities are sold in compliance with Rule 144, (iii) the
Registered Exchange Offer has been consummated with respect to all Securities
validly tendered in accordance with the Registered Exchange Offer, (iv) such
Securities cease to be outstanding or (v) two years have passed from the Issue
Date or (b) New Securities held by a Purchaser under the circumstances set forth
in clause (v) of the first paragraph of Section 3 until (i) a Registration
Statement covering such New Securities has been declared effective by the
Commission and such New Securities have been disposed of in accordance with such
Registration Statement, (ii) such New Securities are sold in compliance with
Rule 144, (iii) such New Securities cease to be outstanding or (iv) two years
have passed from the Issue Date.
"Registration Statement" means any Exchange Offer Registration
----------------------
Statement or Shelf Registration Statement that covers any of the Securities or
the New Securities pursuant to the provisions of this Agreement, amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Securities" has the meaning set forth in the preamble hereto.
----------
"Shelf Registration" means a registration effected pursuant to Section
------------------
3 hereof.
4
<PAGE>
"Shelf Registration Period" has the meaning set forth in Section 3(b)
-------------------------
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
----------------------------
of the Company pursuant to the provisions of Section 3 hereof which covers some
or all of the Securities or New Securities, as applicable, on an appropriate
form under Rule 415 under the Act, or any similar rule that may be adopted by
the Commission, amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Trustee" means the trustee with respect to the Securities under the
-------
Indenture.
"underwriter" means any underwriter of Securities in connection with
-----------
an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by
-------------------------------------------------------
Exchanging Dealers; Private Exchange.
- ------------------------------------
(a) The Company shall prepare and, not later than 90 days following
the Closing Date, shall file with the Commission the Exchange Offer
Registration Statement with respect to the Registered Exchange Offer.
The Company shall use its best efforts to cause the Exchange Offer
Registration Statement to become effective under the Act within 180 days of
the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange
Offer, it being the objective of such Registered Exchange Offer to enable
each Holder electing to exchange Securities for New Securities (assuming
that such Holder is not an affiliate of the Company within the meaning of
the Act, acquires the New Securities in the ordinary course of such
Holder's business and has no arrangements with any person to participate in
the distribution of the New Securities) to trade such New Securities from
and after their receipt without any limitations or restrictions under the
Act and without material restrictions under the securities laws of a
substantial proportion of the several states of the United States.
5
<PAGE>
(c) In connection with the Registered Exchange Offer, the Company
shall use its best efforts to :
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than
30 days and not more than 45 days after the date notice thereof is
mailed to the Holders (or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City
of New York; and
(iv) comply in all material respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange
Offer, the Company shall:
(i) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(iii) cause the Trustee or the New Securities Trustee, as the
case may be, promptly to authenticate and deliver to each Holder whose
Securities have been accepted for exchange New Securities equal in
principal amount to the Securities of such Holder so accepted for
exchange.
(e) The Purchasers and the Company acknowledge that, pursuant to
interpretations by the Commission's staff of Section 5 of the Act, and in
the absence of an applicable exemption therefrom, each Exchanging Dealer is
required to deliver a Prospectus in connection with a sale of any New
Securities received by such Exchanging Dealer pursuant to the Registered
Exchange Offer in exchange for Securities acquired for its own account as a
result of
6
<PAGE>
market-making activities or other trading activities. Accordingly, the
Company shall:
(i) include information of the type set forth (A) in Annex A
hereto on the cover of the Exchange Offer Registration Statement, (B)
in Annex B hereto in the forepart of the Exchange Offer Registration
Statement in a section setting forth details of the Exchange Offer,
(C) in Annex C hereto in the underwriting or plan of distribution
section of the Prospectus forming a part of the Exchange Offer
Registration Statement and (D) in Annex D hereto in the Letter of
Transmittal delivered pursuant to the Registered Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act during the
Exchange Offer Registration Period for delivery by Exchanging Dealers
in connection with sales of New Securities received pursuant to the
Registered Exchange Offer, as contemplated by Section 4(h) below.
(f) In the event that any Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to
the exchange of Securities constituting any portion of an unsold allotment,
at the request of such Purchaser, the Company shall issue and deliver to
such Purchaser in exchange for such Securities, a like principal amount of
New Securities. The Company shall seek to cause the CUSIP Service Bureau
to issue the same CUSIP number for such New Securities as for New
Securities issued pursuant to the Registered Exchange Offer.
3. Shelf Registration. If (i) because of any change in law or
------------------
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 2 hereof, or (ii) if
for any other reason the Registered Exchange Offer is not consummated within 210
days of the Closing Date, or (iii) any Purchaser so requests with respect to
Securities held by it following consummation of the Registered Exchange Offer in
which it was not eligible to participate in such Registered Exchange Offer,
provided that any Purchaser or group of Purchasers may not request under this
- --------
clause (iii) an underwritten Shelf Registration unless such Purchaser or group
of Purchasers hold in the aggregate at least $5 million principal amount of the
Securities to be covered by such Shelf Registration Statement, or (iv) any
Holder (other than a Purchaser) is not
7
<PAGE>
eligible to participate in the Registered Exchange Offer and so requests or (v)
in the case of any Purchaser that participates in the Registered Exchange Offer
or acquires New Securities pursuant to Section 2(f) hereof, such Purchaser does
not receive freely tradeable New Securities in exchange of Securities
constituting any portion of an unsold allotment (it being understood that, for
purposes of this Section 3, (x) the requirement that a Purchaser deliver a
Prospectus containing the information required by Items 507 and/or 508 of
Regulation S-K under the Act in connection with sales of New Securities acquired
in exchange for such Securities shall result in such New Securities being not
"freely tradeable" but (y) the requirement that an Exchanging Dealer deliver a
Prospectus in connection with sales of New Securities acquired in the Registered
Exchange Offer in exchange for Securities acquired as a result of market-making
activities or other trading activities shall not result in such New Securities
being not "freely tradeable") so requests with respect to such New Securities,
provided that any Purchaser or group of Purchasers may not request under
- --------
this clause (v) an underwritten Shelf Registration unless such Purchaser or
group of Purchasers hold in the aggregate at least $5 million principal amount
of the Securities to be covered by such Shelf Registration Statement, the
following provisions shall apply:
(a) The Company shall as promptly as practicable (and shall use its
best efforts to so file no more than 30 days after so required or requested
pursuant to this Section 3), file with the Commission and thereafter shall
use its best efforts to cause to be declared effective under the Act a
Shelf Registration Statement relating to the offer and sale of the
Securities or the New Securities, as applicable, by the Holders in whose
behalf such Shelf Registration Statement is being filed from time to time
in accordance with the methods of distribution elected by the Majority
Holders and set forth in such Shelf Registration Statement; provided, that
--------
with respect to New Securities received by a Purchaser in exchange for
Securities constituting any portion of an unsold allotment, the Company
may, if permitted by current interpretations by the Commission's staff,
file a post-effective amendment to the Exchange Offer Registration
Statement containing the information required by Regulation S-K Items 507
and/or 508, as applicable, in satisfaction of its obligations under this
paragraph (a) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration
Statement.
8
<PAGE>
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of two
years from the Closing Date or such shorter period that will terminate when
(x) all the Securities or New Securities, as applicable, covered by the
Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or, (y) if the Shelf Registration Statement is being
filed pursuant to clause (ii) of the first paragraph of Section 3, when the
Registered Exchange Offer is consummated (in any such case, such period
being called the "Shelf Registration Period"). The Company shall be deemed
not to have used its best efforts to keep the Shelf Registration Statement
effective during the requisite period if it voluntarily takes any action
that would result in Holders of Securities covered thereby not being able
to offer and sell such Securities during that period, unless (i) such
action is required by applicable law, or (ii) such action is taken by the
Company in good faith and for valid business reasons (not including
avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of assets, so long as the Company promptly
thereafter complies with the requirements of Section 4(k) hereof, if
applicable.
4. Registration Procedures. In connection with any Shelf
-----------------------
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to you, prior to the filing thereof
with the Commission, a copy of any Shelf Registration Statement and any
Exchange Offer Registration Statement, and each amendment thereof and each
amendment or supplement, if any, to the Prospectus included therein and
shall use reasonable efforts to reflect in each such document, when so
filed with the Commission, such comments as you reasonably may propose.
(b) The Company shall use its best efforts to ensure that (i) any
Registration Statement and any amendment thereto and any Prospectus forming
part thereof and any amendment or supplement thereto complies in all
material respects with the Act and the rules and regulations thereunder,
(ii) any Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (iii) any Prospectus forming part
of any Registration Statement, and any amendment or supplement to such
Prospec-
9
<PAGE>
tus, does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements, in
the light of the circumstances under which they were made, not misleading,
except, in each case, with respect to any information required to be
included therein regarding a Holder or underwriter and, with respect to a
Shelf Registration Statement, the plan of distribution.
(c) (1) The Company shall advise you and, in the case of a Shelf
Registration Statement, the Holders of securities covered thereby, and, if
requested by you or any such Holder, confirm such advice in writing:
(i) when such Registration Statement and any amendment thereto
has been filed with the Commission and when such Registration
Statement or any post-effective amendment thereto has become
effective; and
(ii) of any request by the Commission for amendments or
supplements to such Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company shall advise you and, in the case of a Shelf Regis
tration Statement, the Holders of securities covered thereby, and, in the
case of an Exchange Offer Registration Statement, any Exchanging Dealer
which has provided in writing to the Company a telephone or facsimile
number and address for notices, and, if requested by you or any such Holder
or Exchanging Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of such Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(ii) of the happening of any event that requires the making of
any changes in such Registration Statement or the Prospectus so that,
as of such date, the statements therein are not misleading and do not
10
<PAGE>
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have
been made).
(d) The Company shall use its best efforts to obtain the withdrawal
of any order suspending the effectiveness of any Registration Statement
during the Exchange Offer Registration Period or Shelf Registration Period,
as applicable, at the earliest possible time.
(e) The Company shall furnish to each Holder of securities included
within the coverage of any Shelf Registration Statement who so requests,
without charge, at least one copy of such Shelf Registration Statement and
any post-effective amendment thereto, including financial statements and
schedules, and, if the Holder so requests in writing, all exhibits
(including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may
reasonably request; and the Company consents to the use of the Prospectus
or any amendment or supplement thereto by each of the selling Holders of
securities in connection with the offering and sale of the securities
covered by the Prospectus or any amendment or supplement thereto, except
when it has provided written notice pursuant to paragraph (c)(2)(iii) above
or otherwise not to use such Prospectus or any amendment or supplement
thereto.
(g) The Company shall furnish to each Exchanging Dealer which so
requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, any documents incorporated by reference
therein, and, if the Exchanging Dealer so requests in writing, all exhibits
(including those incorporated by reference).
(h) The Company shall, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer, without charge, as many
11
<PAGE>
copies of the Prospectus included in such Exchange Offer Registration
Statement and any amendment or supplement thereto as such Exchanging Dealer
may reasonably request for delivery by such Exchanging Dealer in connection
with a sale of New Securities received by it pursuant to the Registered
Exchange Offer; and the Company consents to the use of the Prospectus or
any amendment or supplement thereto by any such Exchanging Dealer, as
aforesaid, except when it has provided written notice pursuant to paragraph
(c)(2)(iii) above or otherwise not to use such Prospectus or any amendment
or supplement thereto.
(i) Prior to the Registered Exchange Offer or any other offering of
securities pursuant to any Registration Statement, the Company shall
register or qualify or cooperate with the Holders of securities included
therein and their respective counsel in connection with the registration or
qualification of such securities for offer and sale under the securities or
blue sky laws of such states as any such Holders reasonably request in
writing and do any and all other acts or things necessary or advisable to
enable the offer and sale in such states of the securities covered by such
Registration Statement; provided, however, that the Company will not be
-------- -------
required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to
general service of process or to taxation in any such jurisdiction where it
is not then so subject.
(j) The Company shall cooperate with the Holders of Securities
included in a Registration Statement to facilitate the timely preparation
and delivery of certificates representing Securities to be sold pursuant to
such Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may reasonably
request prior to sales of Securities pursuant to such Registration
Statement.
(k) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company shall as soon as reasonably practicable
prepare a post-effective amendment to any Registration Statement or an
amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
12
<PAGE>
(l) Not later than the effective date of any such Registration
Statement hereunder, the Company shall provide a CUSIP number for the
Securities or New Securities, as the case may be, registered under such
Registration Statement, and provide the applicable trustee with printed
certificates for such Securities or New Securities, in a form eligible for
deposit with The Depository Trust Company ("DTC"), if DTC accepts at such
time securities similar to the Securities or New Securities, as the case
may be.
(m) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the
effective date of the applicable Registration Statement an earnings
statement satisfying the provisions of Section 11(a) of the Act.
(n) The Company shall cause the Indenture or the New Securities
Indenture, as the case may be, to be qualified under the Trust Indenture
Act in a timely manner.
(o) The Company may require each Holder of securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding such Holder and the distribution of such securities
as the Company may from time to time reasonably require for inclusion in
such Registration Statement, and shall not be required to include in such
Registration Statement securities of a Holder who has not timely provided
such information.
(p) With respect to a Shelf Registration Statement, the Company
shall, if requested, promptly incorporate in a Prospectus supplement or
post-effective amendment to a Shelf Registration Statement, such
information as the Managing Underwriters and Majority Holders reasonably
request should be included therein and shall make all required filings of
such Prospectus supplement or post-effective amendment as soon as notified
of such matters reasonably requested to be incorporated in such Prospectus
supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Company
shall enter into such agreements (including underwriting agreements) and
take all other appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities, and in connection
therewith, if an
13
<PAGE>
underwriting agreement is entered into, use reasonable efforts to cause the
same to contain indemnification provisions and procedures no less favorable
than those set forth in Section 6 (or such other provisions and procedures
reasonably acceptable to the Majority Holders and the Managing
Underwriters, if any, with respect to all parties to be indemnified
pursuant to Section 6).
(r) In the case of any Shelf Registration Statement, the Company
shall (i) make reasonably available for inspection by the Holders of
securities to be registered thereunder, any underwriter participating in
any disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by the Majority Holders or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries; (ii) supply
all relevant information reasonably requested by the Holders or any such
underwriter, attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence
examinations; (iii) with respect to an underwritten offering, make such
representations and warranties to the Holders of securities registered
thereunder and the underwriters, in form, substance and scope as are
customarily made by issuers to underwriters in primary underwritten
offerings; (iv) with respect to an underwritten offering, obtain opinions
of counsel to the Company and updates thereof (which counsel and opinions
(in form, scope and substance) shall be reasonably satisfactory to the
Managing Underwriters,) addressed to each selling Holder and the
underwriters, covering such matters as are customarily covered in opinions
requested in underwritten offerings; (v) with respect to an underwritten
offering, obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company and Pierce Leahy
Corp. (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or Pierce Leahy Corp. or of
any business acquired by the Company or Pierce Leahy Corp. for which
financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each selling Holder
of securities registered thereunder and the underwriters, if any, in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with primary underwritten offerings;
and (vi) with respect to an underwritten offering, deliver such documents
and certificates as may be reasonably requested by the Managing
Underwriters, including those to evidence compliance with Section 4(k) and
with any customary conditions contained in the underwriting agreement or
other agreement entered into by
14
<PAGE>
the Company. The foregoing actions set forth in clauses (iii), (iv), (v)
and (vi) of this Section 4(r) shall be performed at (A) the effectiveness
of such Registration Statement and each post-effective amendment thereto
and (B) each closing under any underwriting or similar agreement as and to
the extent required thereunder.
Prior to receiving any information from the Company pursuant to clause
(ii) in the previous paragraph, each person receiving such information will be
required to agree that any information designated by the Company in good faith
as confidential at the time of delivery or subsequent to its dissemination by
the recipient shall be kept confidential by the recipient and its employees and
agents unless such disclosure is ordered by a court of competent jurisdiction or
required by law or such information becomes generally available to the public
other than through a breach of an obligation of confidentiality. In addition,
any information provided by the Company as a result of such section shall not be
used for any purpose other than discharging due diligence responsibilities.
Such information shall not be used as the basis for any market transactions in
the securities of the Company or Pierce Leahy Corp. Each recipient of
information will be required to further agree that he or she will, upon learning
that disclosure of such information is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company to undertake
appropriate action to prevent disclosure of such information at the Company's
expense.
(s) (1) The Company may require each Holder of Registrable
Securities who desires to participate in a Shelf Registration Statement (or a
Purchaser or an Exchanging Dealer who is entitled to utilize the Exchange
Registration Statement to fulfill its prospectus delivery requirement) to
furnish the Company such information regarding such Holder and the distribution
of such Registrable Securities as the Company may, from time to time, reasonably
request. The Company may exclude from such registration the Registrable
Securities of any Holder who unreasonably fails to furnish such information
within a reasonable time after receiving such request.
(2) Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4(c)(2)(iii), such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by such Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 4(k), or until
it is advised in writing
15
<PAGE>
by the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto.
(3) No Holder of Registrable Securities may participate in any
underwritten Registration Statement unless such Holder (i) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Majority Holders and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such underwriting
arrangements. No Holder of Registrable Securities may participate in a non-
underwritten Registration Statement unless such Holder agrees to be bound by
the provisions of Section 6 hereof.
5. Registration Expenses. The Company shall bear all expenses
---------------------
incurred in connection with the performance of its obligations under Sections 2,
3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of one firm or
counsel designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration
Statement, will reimburse the Purchasers for the reasonable fees and
disbursements of one firm or counsel acting in connection therewith.
6. Indemnification and Contribution. (a) In connection with any
--------------------------------
Registration Statement, the Company and Pierce Leahy Corp. agree to indemnify
and hold harmless each Holder of securities covered thereby (including each
Purchaser and, with respect to any Prospectus delivery as contemplated in
Section 4(h) hereof, each Exchanging Dealer), the directors, officers, employees
and agents of each such Holder and each person who controls any such Holder
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement as originally filed or in
any amendment thereof, or in any preliminary Prospectus or Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agree to reimburse each such indemnified party, as incurred, for any legal or
other
16
<PAGE>
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that the Company and Pierce Leahy Corp. will not be liable in any case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder or any
underwriter specifically for inclusion therein; provided, that the foregoing
indemnity with respect to any preliminary Prospectus shall not inure to the
benefit of any Holder or underwriter (or to the benefit of any person
controlling such Holder or underwriter) from whom the person asserting any such
losses, claims, damages or liabilities purchased Registrable Securities if a
copy of the related Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Holder or underwriter to such person, if required
by law so to have been delivered, at or prior to confirmation of the sale of
such Registrable Securities to such person, and if such related Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities (unless such failure to provide such
related Prospectus is the result of non-compliance by the Company with its
obligations to provide such Holder or underwriter with a Prospectus) or at a
time the Company had notified persons under Section 4(s) hereof to cease using
such Registration Statement or Prospectus. This indemnity agreement will be in
addition to any liability which the Company and Pierce Leahy Corp. may otherwise
have.
The Company and Pierce Leahy Corp. also agree to indemnify or
contribute to Losses of, as provided in Section 6(d), any underwriters of
Securities registered under a Shelf Registration Statement, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Purchaser and the selling
Holders provided in this Section 6(a) and shall, if requested by the Majority
Holders, enter into an underwriting agreement reflecting such agreement, as
provided in Section 4(q) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including each Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer) severally
agrees to indemnify and hold harmless (i) the Company, (ii) Pierce Leahy
Corp. and any other affiliate of Pierce Leahy Corp. who may be deemed to
have securities registered thereunder, (iii) each of their respective
directors, (iv) each of their respective officers who signs such
Registration Statement
17
<PAGE>
and (v) each person who controls the Company, Pierce Leahy or any such
other affiliates within the meaning of either the Act or the Exchange Act
to the same extent as the foregoing indemnity from the Company to each such
Holder, but only with reference to written information relating to such
Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any such
Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party (i)
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
will not relieve it from liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses or otherwise materially prejudices the indemnifying
party and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above (except to the extent
failure to give notice limited the right to indemnification). The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); provided,
--------
however, that such counsel shall be reasonably satisfactory to the
-------
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of one such separate counsel (and one
local counsel in any jurisdiction) in connection with a proceeding or
related proceedings if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties
18
<PAGE>
which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the
indemnifying party. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its consent which consent
will not be unreasonably withheld, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment to the extent provided herein. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason (other than because of the failure to
give timely notice), then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is
appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from
the Initial Placement and the Registration Statement which resulted in such
Losses. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the indemnifying party and the indemnified
party shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the
other hand, in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total
net pro-
19
<PAGE>
ceeds from the Initial Placement (before deducting expenses) as
set forth on the cover page of the Final Memorandum with respect to the
Securities sold under such Registration Statement. Benefits received by
the Purchasers (other than as set forth below) shall be deemed to be equal
to the total purchase discounts and commissions as set forth on the cover
page of the Final Memorandum, and benefits received by any Holders
(including Purchasers who are selling securities pursuant to a Registration
Statement) shall be deemed to be equal to the value of receiving Securities
or New Securities, as applicable, registered under the Act. Benefits
received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of
the Prospectus forming a part of the Registration Statement which resulted
in such Losses or as otherwise agreed by the Company and such underwriters.
Relative fault shall be determined by reference to, among other things,
whether any alleged untrue statement or omission relates to information
provided by the indemnifying party, on the one hand, or by the indemnified
party, on the other hand. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 6, each person who controls a Holder within
the meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of such Holder shall have the same rights to
contribution as such Holder, and each person who controls the Company,
Pierce Leahy Corp. or any other named issuer of securities under such
Registration Statement within the meaning of either the Act or the Exchange
Act, each officer of the Company, Pierce Leahy Corp. or any other named
issuer of securities under such Registration Statement who shall have
signed the Registration Statement and each director of the Company, Pierce
Leahy Corp. or any other named issuer of securities under such Registration
Statement shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this
paragraph (d).
(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder
or the Company, Pierce Leahy Corp. or any other named issuer of securities
under such Registration Statement or any of the officers, directors or
control-
20
<PAGE>
ling persons referred to in Section 6 hereof, and will survive the
sale by a Holder of securities covered by a Registration Statement.
7. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not, as of the date
--------------------------
hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders herein or otherwise conflicts with
the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the
written consent of the Holders of at least a majority of the then
outstanding aggregate principal amount of Registrable Securities; provided
--------
that, with respect to any matter that directly or indirectly affects the
rights of any Purchaser hereunder, the Company shall obtain the written
consent of each such Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding the
foregoing (except the foregoing proviso), a waiver or consent to departure
from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose securities are being sold
pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of securities being sold rather than
registered under such Registration Statement.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such holder
to the Company in accordance with the provisions of this Section 7(c),
which address initially is, with respect to each Holder, the address
of such Holder maintained by the Registrar under the Indenture, with
a copy in like manner to Salomon Brothers Inc;
21
<PAGE>
(2) if to you, initially at the respective addresses set forth in the
Purchase Agreement; and
(3) if to the Company or Pierce Leahy Corp., initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchasers, the Company or Pierce Leahy Corp. by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any
consent by the Company thereto, subsequent Holders of Registrable
Securities. The Company hereby agrees to extend the benefits of this
Agreement to any Holder of Registrable Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an original
party hereto.
(e) Counterparts. This agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This agreement shall be governed by and construed
-------------
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State.
(h) Severability. In the event that any one of more of the
------------
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be
in any way impaired or affected
22
<PAGE>
thereby, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
-----------------------------------
approval of Holders of a specified percentage of principal amount of
Registrable Securities is required hereunder, Securities or New Securities,
as applicable, held by the Company or its Affiliates (other than subsequent
Holders of Securities or New Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such
Securities or New Securities) shall not be counted in determining whether
such consent or approval was given by the Holders of such required
percentage.
23
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
PIERCE LEAHY COMMAND COMPANY
By: /s/ Joseph P. Linaugh
---------------------------
Name: Joseph P. Linaugh
Title: V.P.
PIERCE LEAHY CORP.
By: /s/ Joseph P. Linaugh
----------------------------
Name: Joseph P. Linaugh
Title: V.P.
Accepted in New York, New York
SALOMON BROTHERS INC
By: SALOMON BROTHERS INC
By:
--------------------------
Name:
Title:
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
PIERCE LEAHY COMMAND COMPANY
By:
---------------------------
Name:
Title:
PIERCE LEAHY CORP.
By:
----------------------------
Name:
Title:
Accepted in New York, New York
SALOMON BROTHERS INC
By: SALOMON BROTHERS INC
By: /s/ Lee J. Tawil
--------------------------
Name: Lee J. Tawil
Title: Director
<PAGE>
ANNEX A
Annex A
-------
Each broker-dealer that receives New Securities for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Securities. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Securities received in exchange for Securities where such New Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Company has agreed that, starting on the Expiration
Date (as defined herein) and ending on the close of business six months from the
Expiration Date, it will make this Prospectus available to any broker-dealer for
use in connection with any such resale. See "Plan of Distribution."
<PAGE>
ANNEX B
Annex B
-------
Each broker-dealer that receives New Securities for its own account in exchange
for Securities, where such Securities were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Securities. See "Plan of Distribution."
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
--------------------
Each broker-dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business six
months from the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until _______, 199_, all dealers effecting transactions in
the New Securities may be required to deliver a prospectus.*
The Company will not receive any proceeds from any sale of New
Securities by broker-dealers. New Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such New
Securities. Any broker-dealer that resells New Securities that were received
by it for its own account pursuant to the Exchange Offer and any broker or
dealer that participates in a distribution of such New Securities may be deemed
to be an "underwriter" within the meaning of the Securities Act and any profit
of any such resale of New Securities and any commissions or concessions received
by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will
- -------------------
* If this sentence is included, the legend required by Item 502(e) of
Regulation S-K would appear on the back cover page of the Exchange Offer
Prospectus.
<PAGE>
deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of six months after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all of its expenses
incident to the Exchange Offer (including the reasonable expenses of one counsel
for the holders of the Securities) other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the Securities (including
any broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation S-K Items 507
and/or 508.]
<PAGE>
ANNEX D
Rider A
-------
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND
10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ________________________________
Address: _____________________________
_____________________________
Rider B
-------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for Securities, it represents that
the Securities to be exchanged for New Securities were acquired by it as a
result of market-making activities or other trading activities and acknowledges
that it will deliver a prospectus in connection with any resale of such New
Securities; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
<PAGE>
EXHIBIT 10(b)
PIERCE LEAHY COMMAND COMPANY
$135,000,000
8.125% SENIOR NOTES DUE 2008
GUARANTEED ON AN UNSECURED SENIOR SUBORDINATED BASIS
BY
PIERCE LEAHY CORP.
PURCHASE AGREEMENT
New York, New York
April 2, 1998
Salomon Brothers Inc
CIBC Oppenheimer Corp.
PaineWebber Incorporated
As Representatives of the Initial Purchasers
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Pierce Leahy Command Company, a Nova Scotia unlimited liability
company (the "Company"), proposes to issue and sell to the parties named in
Schedule I hereto (the "Initial Purchasers"), for whom you are acting as
representatives (the "Representatives"), $135,000,000 principal amount of its
8.125% Senior Notes Due 2008 (the "Securities") which will be guaranteed on an
unsecured senior subordinated basis by Pierce Leahy Corp., a Pennsylvania
corporation (the "Parent"). The Securities are to be issued under an indenture
(the "Indenture") dated as of April 7, 1998 among the Company, the Parent and
The Bank of New York, as trustee. If you are the only Initial Purchasers, all
references herein to the Representatives shall be deemed to be to the Initial
Purchasers. The Company is a Wholly Owned Subsidiary (as defined in the
Indenture) of the Parent.
<PAGE>
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the
Company that the Initial Purchasers will offer and sell the Securities
purchased by them hereunder in accordance with Section 4 hereof as soon as you
deem advisable.
In connection with the sale of the Securities, the Company and the
Parent have prepared a preliminary offering memorandum, dated March 26, 1998
(the "Preliminary Memorandum"), and a final offering memorandum, dated April 2,
1998 (the "Final Memorandum" and together with the Preliminary Memorandum, the
"Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum
sets forth certain information concerning the Company, the Parent and the
Securities. Each of the Company and the Parent hereby confirms that it has
authorized the use of the Preliminary Memorandum and the Final Memorandum, and
any amendment or supplement thereto, in connection with the offer and sale of
the Securities by the Initial Purchasers. Unless stated to the contrary, all
references herein to the Final Memorandum are to the Final Memorandum at the
Execution Time (as defined below) and are not meant to include any amendment or
supplement subsequent to the Execution Time.
1. Representations and Warranties. Each of the Company and the
------------------------------
Parent represents and warrants to each Initial Purchaser as set forth below in
this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Final
Memorandum, at the date hereof, does not, and at the Closing Date (as
defined below) will not, taking into account any amendment or supplement
thereto (and any amendment or supplement thereto, at the date thereof and
at the Closing Date, will not), contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company and the Parent make no
-------- -------
representation or warranty as to the information contained in or omitted
from the Preliminary Memorandum or the Final Memorandum, or any amendment
or supplement thereto, in reliance upon and in conformity with information
furnished in
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<PAGE>
writing to the Company by or on behalf of the Initial Purchasers through
the Representatives specifically for inclusion therein.
(b) Neither the Company, the Parent, nor any of their Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), nor any person acting on its or their behalf has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Securities under the Securities Act.
(c) Neither the Company, the Parent, nor any of their Affiliates nor
any person acting on its or their behalf (other than the Initial Purchasers
as to which no representation is made) has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(e) Neither the Company, the Parent, nor any of their Affiliates, nor
any person acting on its or their behalf (other than the Initial Purchasers
as to which no representation is made) has engaged in any directed selling
efforts with respect to the Securities, and each of them has complied with
the offering restrictions requirement of Regulation S ("Regulation S")
under the Securities Act. Terms used in this paragraph have the meanings
given to them by Regulation S.
(f) Each of the Company and the Parent is not and, upon sale of the
Securities to be issued and sold in accordance herewith and upon
application of the net proceeds from such sale as described in the
Memorandum under the caption "Use of Proceeds," will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act"), without taking account of any exemption arising
out of the number of holders of the Company's or the Parent's securities.
(g) The Parent is subject to and in compliance in all material
respects with the reporting requirements of Section 13 or Section 15(d) of
the Exchange Act.
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<PAGE>
(h) Neither the Company nor the Parent has paid or agreed to pay to
any person any compensation for soliciting another to purchase any of the
Securities (except as contemplated by this Agreement).
(i) The information provided by the Company and the Parent pursuant to
Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(j) Assuming the representations of the Initial Purchasers set for in
Section 4 hereof are true and correct, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial
Purchasers in the manner contemplated by this Agreement to register the
Securities under the Securities Act or to qualify the Indenture under the
Trust Indenture Act of 1939, as amended.
(k) The Indenture has been duly and validly authorized and, upon its
execution and delivery by the Company and the Parent and assuming due
execution and delivery by the Trustee, will be a valid and binding
agreement of the Company and the Parent, enforceable in accordance with its
terms, except (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) the remedy of specific performance and other forms of
equitable relief may be subject to certain equitable defenses and to the
discretion of the court before which the proceedings may be brought and
(iii) rights to indemnity and contribution hereunder or thereunder may be
limited by federal or state or provincial or foreign securities laws or the
public policy underlying such laws and the Indenture conforms to the
description thereof in the Memorandum.
(l) The Securities when executed by the Company and authenticated by
the Trustee in accordance with the Indenture and delivered to you against
payment therefor in accordance with the terms hereof, will have been
validly issued and delivered, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms, except (i) the enforceability
hereof or thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter
in effect relating to
4
<PAGE>
creditors' rights generally, (ii) the remedy of specific performance and
other forms of equitable relief may be subject to certain equitable
defenses and to the discretion of the court before which the proceedings
may be brought and (iii) rights to indemnity and contribution hereunder or
thereunder may be limited by federal or state or provincial or foreign
securities laws or the public policy underlying such laws and the
Securities will conform to the description thereof in the Memorandum.
(m) The Registration Agreement (as defined in the Final Memorandum)
has been duly and validly authorized and, upon its execution and delivery
by the Company and the Parent and assuming due execution and delivery by
the Initial Purchasers, will be a valid and binding agreement of each of
the Company and the Parent, enforceable in accordance with its terms,
except (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) the remedy of specific performance and other forms of
equitable relief may be subject to certain equitable defenses and to the
discretion of the court before which the proceedings may be brought and
(iii) rights to indemnity and contribution hereunder or thereunder may be
limited by federal or state or provincial or foreign securities laws or the
public policy underlying such laws.
(n) The authorized and outstanding capital stock of the Parent as of
March 20, 1998 is as set forth under the caption "Description of Capital
Stock of Pierce Leahy" in the Memorandum.
(o) The Parent is a corporation duly organized and validly subsisting
under the laws of the Commonwealth of Pennsylvania with full corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Memorandum. The Parent is duly registered
and qualified to conduct its business and in good standing in each
jurisdiction where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the
failure so to register or qualify would not be reasonably likely to (1)
have a material adverse effect on the condition (financial or other),
business, properties, shareholders' equity or results of operations of the
Parent and the Subsidiaries (as hereinafter defined), taken as a whole,
or (2) materially adversely affect the consummation
5
<PAGE>
of any of the transactions contemplated by this Agreement (each of (1), and
(2) above, a "Parent Material Adverse Effect").
(p) The Company is an unlimited liability company duly organized and
validly subsisting under the laws of the Province of Nova Scotia with full
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Memorandum. The Company is
duly registered and qualified to conduct its business and in good standing
in each jurisdiction where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify would not be reasonably likely to (1)
have a material adverse effect on the condition (financial or other),
business, properties, shareholders' equity or results of operations of
the Company, or (2) materially adversely affect the consummation of any of
the transactions contemplated by this Agreement (each of (1), and (2)
above, a "Company Material Adverse Effect").
(q) All the Parent's subsidiaries (as defined in Rule 1-02(x) of
Regulation S-X and as required to be identified by Item 601(b)(21) of
Regulation S-K) are listed in an exhibit to the Parent's Form 10-K for the
fiscal year ended December 31, 1997 filed with the Securities and Exchange
Commission on March 31, 1998 (collectively, with Archivex Limited, the
"Subsidiaries"). Each Subsidiary is either (i) a corporation duly
organized, validly existing and in good standing in the jurisdiction of its
incorporation, or (ii) a partnership duly organized and validly existing
under the applicable laws of the Commonwealth of Pennsylvania. Each
Subsidiary has the requisite corporate or partnership, as the case may be,
power and authority to own, lease and operate its properties and to conduct
its business as described in the Memorandum, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify would not be reasonably likely to
individually or in the aggregate have a Parent Material Adverse Effect or a
Company Material Adverse Effect. All the outstanding shares of capital
stock of each of the corporate Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, and are 99% or greater
owned by the Parent directly, or indirectly through one or more of the
other Subsidiaries, free and clear of any material lien, adverse claim,
security interest, equity or other encumbrance, other than the pledge of
such
6
<PAGE>
shares pursuant to the Amended and Restated Pledge and Intercreditor
Agreement, dated as of July 7, 1997 by and among PLC Command Company I,
L.P., PLC Command Company II, L.P., Canadian Imperial Bank of Commerce,
New York Agency, United States Trust Company of New York and The Bank of
New York, and the Credit Facility (as defined in the Final Memorandum).
(r) There are no legal or governmental proceedings pending or, to the
knowledge of the Company or the Parent, threatened, against the Parent or
any of its Subsidiaries which are reasonably likely to be materially
adverse to the Company, the Parent and its Subsidiaries, taken as a whole,
or to which any of their respective properties is subject which are
reasonably likely to be material to the Company, the Parent and its
Subsidiaries, taken as a whole, that are required to be described in the
Memorandum but are not described therein.
(s) Neither the Parent nor any of its Subsidiaries is (i) in violation
of its certificate or articles of incorporation, memorandum of association,
articles of association, or by-laws, or other similar organizational and
governance documents, (ii) in violation of any statute, law, ordinance,
administrative or governmental rule or regulation applicable to the
Parent or any of its Subsidiaries or of any ruling, judgment, injunction,
order or decree of any court or governmental agency or body having
jurisdiction over the Parent or any of its Subsidiaries (except where any
such violation or violations in the aggregate would not be reasonably
likely to have a Parent Material Adverse Effect or a Company Material
Adverse Effect), or (iii) in default in any material respect in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Parent or any of its Subsidiaries is a party or by which any of them or any
of their respective properties may be bound (except where any such default
or defaults in the aggregate would not be reasonably likely to have a
Parent Material Adverse Effect or a Company Material Adverse Effect).
(t) Assuming the closing of the Archivex Acquisition (as defined in
the Final Memorandum) with respect to clause (iii) of this paragraph (t),
other than as will be obtained, waived or otherwise corrected prior to the
Closing Date, neither the issuance and sale of the Securities, the
execution, delivery or performance of this Agreement, the Indenture or the
Registration
7
<PAGE>
Agreement by the Company and the Parent, as the case may be, nor the
consummation by the Company or the Parent, as the case may be, of the
transactions contemplated hereby and thereby (i) requires any consent,
approval, authorization or other order of or registration or filing with,
any court, regulatory body, administrative agency or other governmental
body, agency or official (except as may be required under any state
securities or foreign laws) or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws, or other
organizational documents, of the Company, the Parent or any of the
Subsidiaries or (iii) conflicts or will conflict with or constitutes or
will constitute a material breach of, or a default under, any agreement,
indenture, lease or other instrument to which the Company, the Parent or
any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate any
statute, law, regulation or filing (except as may be required under any
state securities or foreign laws) or judgment, injunction, order or decree
applicable to the Company, the Parent or any of the Subsidiaries or any of
their respective properties, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company, the Parent or any of the Subsidiaries pursuant to the terms of any
agreement or instrument to which any of them is a party or by which any of
them may be bound or to which any of the property or assets of any of them
is subject other than security interests granted pursuant to the Credit
Agreement, the 1996 Notes (as defined in the Memorandum), the 1997 Notes
(as defined in the Memorandum) and the Securities.
(u) The accountants, Arthur Andersen LLP and Friedman & Friedman, who
have certified or shall certify the financial statements set forth in the
Memorandum (or any amendment or supplement thereto) are independent
public accountants.
(v) The historical consolidated financial statements of the Parent,
together with related notes, forming part of the Memorandum (and any
amendment or supplement thereto), and, to the knowledge of the Company and
the Parent, the historical financial statements of Archivex Inc., together
with related notes, forming part of the Memorandum (and any amendment or
supplement thereto), comply with the requirements of the Act and, present
fairly the consolidated financial position, results of operations, cash
flows and changes in financial position of the Parent and its consolidated
subsidiaries,
8
<PAGE>
and Archivex Inc., as the case may be, on the basis stated in
the Memorandum at the respective dates or for the respective periods to
which they apply; the statements and related notes of the Parent and its
consolidated subsidiaries and, to the knowledge of the Company and the
Parent, the statements and related notes of Archivex Inc., have been
prepared in accordance with generally accepted accounting principles
(U.S. or Canadian, as applicable) consistently applied throughout the
periods involved, except as disclosed therein; the pro forma financial
information, and the related notes thereto, included in the Memorandum (and
any amendment or supplement thereto) have been prepared in accordance with
the applicable requirements of the Act and the assumptions used in
preparing such information are reasonable; and the other historical and pro
forma financial and statistical information and data set forth in the
Memorandum (and any amendment or supplement thereto) are accurately
presented in all material respects and prepared on a basis consistent with
the books and records of the Parent and its Subsidiaries, as applicable.
(w) The execution and delivery of, and the performance by each of the
Company and the Parent of their respective obligations under this Agreement
have been duly and validly authorized by the Company and the Parent, as the
case may be, and this Agreement has been duly executed and delivered by
each of the Company and the Parent and constitutes the valid and legally
binding agreement of each of the Company and the Parent, enforceable
against such parties in accordance with its terms, except (i) the
enforceability hereof or thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, (ii) the
remedy of specific performance and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the court
before which the proceedings may be brought and (iii) rights to indemnity
and contribution hereunder or thereunder may be limited by federal or state
or provincial or foreign securities laws or the public policy underlying
such laws.
(x) Except as disclosed or contemplated in the Memorandum (or any
amendment or supplement thereto), subsequent to the respective dates as of
which such information is given in the Memorandum (or any amendment or
supplement thereto), neither the Company, the Parent nor any of the
Subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company, the Parent and the Subsidiaries
taken as a whole,
9
<PAGE>
and there has not been any change in the capital stock of the Company and
the Parent, or material increase in the short-term debt or long-term debt,
of either the Company, the Parent or any of the Subsidiaries, or any
development having or which may reasonably be expected to result in a
Parent Material Adverse Effect or a Company Material Adverse Effect.
(y) Each of the Company, the Parent and the Subsidiaries has good and
valid title to all property (real and personal) described in the Memorandum
as being owned by it which is material to the business of the Parent and
its Subsidiaries taken as a whole, free and clear of all liens, claims,
security interests or other encumbrances except such as are described in
the Memorandum (including without limitation the liens related to long-term
debt set forth in Note 6 of the Parent's consolidated financial statement
contained in the Final Memorandum) and all the property described in the
Memorandum as being held under lease by each of the Company, the Parent and
the Subsidiaries which is material to the business of the Company, the
Parent and the Subsidiaries taken as a whole is held by such entity under
valid, subsisting and enforceable leases, with only such exceptions to all
the foregoing as in the aggregate do not interfere in any material respect
with the conduct of the business of the Company, the Parent and the
Subsidiaries, taken as a whole or the use made or proposed to be made of
such property by the Company, the Parent or their Subsidiaries.
(z) Neither the Company, the Parent nor any affiliate of such parties
has distributed and, prior to the later to occur of (i) the Closing Date
and (ii) completion of the distribution of the Securities, will distribute
any offering material in connection with the offering and sale of the
Securities other than the Preliminary Memorandum, the Final Memorandum or
other materials, if any, permitted by the Act.
(aa) The Company, the Parent and each of the Subsidiaries have such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("Permits") as are necessary to own their respective
properties and to conduct their business in the manner described in the
Memorandum except where the failure to so possess would not, individually
or in the aggregate, be reasonably likely to have a Parent Material Adverse
Effect or a Company Material Adverse Effect and, subject to such
qualifications as may be set forth in the Memorandum, the Company, the
Parent and each of the Subsidiaries have fulfilled and performed all of
their respective
10
<PAGE>
material obligations with respect to such Permits and no event
has occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit, subject in each
case to such qualification as may be set forth in the Memorandum except
where any such revocation, termination or impairment would not be
reasonably likely to have a Parent Material Adverse Effect or a Company
Material Adverse Effect.
(ab) Each of the Company and the Parent maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(ac) To the Company's and the Parent's knowledge, neither the Company,
the Parent nor any of their Subsidiaries nor any employee or agent of the
Company, the Parent or any Subsidiary has made any payment of funds of the
Company, the Parent or any Subsidiary or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Memorandum.
(ad) The Company, the Parent and, to the Company's and the Parent's
knowledge, each of the Subsidiaries have filed all tax returns required
to be filed or obtained extensions therefor, which returns are true and
correct in all material respects, and neither the Company, the Parent nor
any Subsidiary is in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto except
where the failure to file such returns or to pay such taxes would not be
reasonably likely to have a Parent Material Adverse Effect or a Company
Material Adverse Effect.
(ae) Except as described in the Memorandum, no holder of any security
of the Company or the Parent has any right to require registration of
11
<PAGE>
any securities of the Company or the Parent because of the consummation of
the transactions contemplated by this Agreement or the filing of the
Exchange Offer (as defined in the Memorandum) or Shelf Registration
Statement (as defined in the Memorandum). Except as described in or
contemplated by the Memorandum, there are no outstanding options, warrants
or other rights calling for the issuance of, and there are no commitments,
plans or arrangements to issue, any shares of capital stock of the Company
or the Parent or any security convertible into or exchangeable or
exercisable for the capital stock of the Company or the Parent, as the case
may be, except under the Parent's stock option or other benefit plans.
(af) The Parent and its Subsidiaries own or possess all patents,
trademarks, trademark registration, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Memorandum as being owned by them or any of
them or necessary for the conduct of their respective businesses except
where the lack of such ownership or possession would not, individually or
in the aggregate, be reasonably likely to have a Parent Material Adverse
Effect or a Company Material Adverse Effect, and neither the Company nor
the Parent is aware of any claim to the contrary or any challenge by any
other person to the rights of the Company, the Parent and the Subsidiaries
with respect to the foregoing.
(ag) The Company and the Parent and, to the Company's and the
Parent's knowledge, each of their Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as the Company and the Parent deem prudent and customary to
cover replacement costs of real and personal property; subject to certain
limitations and deductibles, such policies also cover extraordinary
expenses associated with business interruption and damage or loss from
fire, flood or earthquakes (in certain geographic areas), and losses at the
Company's and the Parent's facilities of up to approximately $400 million;
neither the Company, the Parent nor, to the knowledge of the Company or
the Parent, any such Subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company, the Parent nor, to the
knowledge of the Company or the Parent, any such Subsidiary has any reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not have a Parent
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<PAGE>
Material Adverse Effect or a Company Material Adverse Effect, except as
described in or contemplated by the Memorandum.
(ah) No Subsidiary of the Parent is currently prohibited, directly or
indirectly, from paying any dividends to the Parent from making any other
distribution on such Subsidiary's capital stock, from repaying to the
Company or the Parent, as the case may be, any loans or advances to such
Subsidiary from the Company or the Parent or from transferring any of such
Subsidiary's property or assets to the Company or the Parent or any other
Subsidiary of the Company or the Parent, except as described in or
contemplated by the Memorandum.
(ai) Except for the shares of capital stock or partnership interests
of each of the Subsidiaries owned by the Parent and such Subsidiaries,
neither the Parent nor any such Subsidiary owns any shares of stock or any
other equity securities of any corporation or has any equity interest in
any firm, partnership, association or other entity, except as described in
or contemplated by the Memorandum, except for certain interests which are
not material to the Parent and its Subsidiaries taken as a whole.
(aj) There are no labor disputes with the Company's, the Parent's or
the Subsidiaries' employees that exist or, to the Company's or the Parent's
knowledge, are imminent that are reasonably likely to materially adversely
affect the Company, the Parent and the Subsidiaries taken as a whole, and
each of the Company and the Parent is not aware of any existing or imminent
labor disturbance by any of their or the Subsidiaries' principal suppliers,
contractors or customers that are reasonably likely to have a Parent
Material Adverse Effect or a Company Material Adverse Effect.
(ak) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), maintained or contributed to by the Company,
the Parent or the Subsidiaries, or with respect to which the Company, the
Parent or the Subsidiaries could incur any liability under ERISA
(collectively, the "Benefit Plans"), no Reportable Event (as defined in
Section 4043 of ERISA) has occurred during the five year period to the date
on which this representation is made or deemed to be made and there exists
no condition or set of circumstances in connection with which the Company,
the Parent or the
13
<PAGE>
Subsidiaries could be reasonably likely to be subject to any liability
under the terms of such Benefit Plan or applicable law (including, without
limitation, ERISA and the Internal Revenue Code of 1986, as amended (the
"Code")) that would be reasonably likely to have a Parent Material Adverse
Effect or a Company Material Adverse Effect.
(al) Except as described in the Final Memorandum, the Company, the
Parent and, to the Company's and the Parent's knowledge, the Subsidiaries
are (i) (A) in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (B) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, and
(C) and are in compliance with all terms and conditions of any such permit,
license or approval, except, in each case, where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not be reasonably likely, singly or in
the aggregate, to have a Parent Material Adverse Effect or a Company
Material Adverse Effect; (ii) except as disclosed in the Memorandum,
there is no civil, criminal or administrative action, suit, demand,
hearing, notice of violation or deficiency, investigation, proceeding or
notice of potential responsibility or liability or demand letter or request
for information pending, or to the knowledge of the Company or the Parent,
threatened against the Company, the Parent or any of their Subsidiaries
under any Environmental Laws which, if determined adversely to any of the
Company or the Parent or any such Subsidiary, would, individually or in the
aggregate, be reasonably likely to result in a Parent Material Adverse
Effect or a Company Material Adverse Effect. Neither the Company, the
Parent nor, to the Company's or the Parent's knowledge, any of the
Subsidiaries has been named as a "potentially responsible party" under
the Comprehensive Environmental Response Compensation and Liability Act
of 1980, as amended.
(am) Each of the Guarantees (as defined in the Indenture) has been
duly and validly authorized and, upon its execution and delivery by each
Guarantor (as defined in the Indenture) will be a valid and binding
agreement of such Guarantor, enforceable in accordance with its terms,
except (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganiza-
14
<PAGE>
tion, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (ii) the
remedy of specific performance and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the court
before which the proceedings may be brought and (iii) rights to indemnity
and contribution hereunder or thereunder may be limited by federal or state
or provincial or foreign securities laws or the public policy underlying
such laws and the Guarantees conform to the description thereof in the
Memorandum.
2. Purchase and Sale. Subject to the terms and conditions and in
-----------------
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
99.641% of the principal amount thereof, plus accrued interest, if any, from
April 7, 1998 to the Closing Date, the principal amount of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto. In connection with
the purchase and sale of the Securities pursuant to this Agreement, the Company
agrees to pay the Initial Purchasers an aggregate fee of $2,025,000 (the "Fee").
3. Delivery and Payment. Delivery of and payment for the Securities
--------------------
shall be made at 10:00 A.M., New York City time, on April 7, 1998 , or such
later date (not later than April 9, 1998 ) as the Representatives and the
Company shall designate, which date and time may be postponed by agreement
between the Representatives and the Company or as provided in Section 10
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). The Fee shall be paid to the Initial
Purchasers by the Company on the Closing Date in immediately available funds to
or upon the order of the Initial Purchasers or such other manner of payment as
may be agreed by the Company and the Representatives. Delivery of the Securities
shall be made to the Representatives for the respective accounts of the Initial
Purchasers against payment of the purchase price thereof in immediately
available funds to or upon the order of the Company or such other manner of
payment as may be agreed by the Company and the Representatives. Delivery of the
Securities shall be made at such location as the Representatives shall
reasonably designate at least one business day in advance of the Closing Date
and payment for the Securities and the Fee shall be made at the office of
Skadden, Arps, Slate, Meagher & Flom LLP ("Counsel for the Initial Purchasers"),
919 Third Avenue, New York, New York. Certificates for the Securities shall be
registered in such names and in such denominations as the Representatives may
request not less than two business days in advance of the Closing Date.
15
<PAGE>
The Company agrees to have the Securities available for inspection,
checking by the Representatives in New York, New York, not later than 1:00 P.M.
on the business day prior to the Closing Date.
4. Offering of Securities. Each Initial Purchaser, severally and not
----------------------
jointly, represents and warrants to and agrees, with the Company and the Parent
that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A, or (ii) in
accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D) in the United States or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
(c) All offers and sales of securities outside the United States will
comply with all applicable securities laws thereto, including without
limitation, Canadian federal and provincial laws.
5. Agreements. Each of the Company and the Parent agrees with each
----------
Initial Purchaser that:
(a) The Company and the Parent will furnish to each Initial Purchaser
and to counsel for the Initial Purchasers, without charge (subject to the
following sentence), during the period referred to in paragraph (c) below,
as many copies of the Final Memorandum and any amendments and supplements
thereto as it may reasonably request. The Initial Purchasers will pay the
expenses of printing, distribution or other production of all documents
relating to the offering.
(b) The Company and the Parent will not amend or supplement the Final
Memorandum without the prior written consent of the Representatives which
consent will not be unreasonably withheld.
16
<PAGE>
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it should be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Company and the Parent will promptly notify the Representatives of the same
(who thereafter will not use such Final Memorandum until so amended or
supplemented) and, subject to the requirements of paragraph (b) of this
Section 5, will prepare and provide to the Representatives pursuant to
paragraph (a) of this Section 5 an amendment or supplement which will
correct such statement or omission or effect such compliance, provided,
however, that the Company's and the Parent's obligations under this
paragraph (c) shall not be applicable to the extent resale by the Initial
Purchasers may be accomplished pursuant to an effective Registration
Statement (as defined in the Registration Agreement) prepared by the
Company and the Parent pursuant to such effective Registration Agreement.
(d) The Company and the Parent will cooperate with the Initial
Purchasers in arranging for qualification of the Securities for offering
and sale under the securities or "Blue Sky" laws of such jurisdictions as
the Initial Purchasers may reasonably designate and will continue such
qualifications in effect for as long as may be reasonably necessary to
complete the sale of the Securities; provided, however, that the Company
will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which
would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject.
(e) The Company and the Parent will not, and will not permit any of
its Affiliates to, resell any Securities that have been acquired by any of
them.
(f) Neither the Company, the Parent, nor any of their Affiliates, nor
any person acting on its or their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the Securities
under the Securities Act.
17
<PAGE>
(g) Neither the Company, the Parent nor any of their Affiliates, nor
any person acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company
will, during any period in which the Company or, if applicable, the Parent,
is not subject to and in material compliance with Section 13 or l5(d) of
the Exchange Act, provide to each holder of such restricted securities and
to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under
the Securities Act. This covenant is intended to be for the benefit of the
holders and the prospective purchasers designated by such holders, from
time to time of such restricted securities.
(i) Neither the Company, the Parent, nor any of their Affiliates, nor
any person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirement of Regulation S. Terms
used in this paragraph have the meanings given to them by Regulation S.
(j) The Company and the Parent will cooperate with the Representatives
and use their best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(k) The Company will apply the net proceeds from the sale of the
Securities substantially in accordance with the description set forth in
the Memorandum.
6. Conditions to the Obligations of the Initial Purchasers. The
-------------------------------------------------------
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Parent contained herein at the date and time that this Agreement
is executed and delivered by the parties hereto (the "Execution Time") , and the
Closing Date, to the accuracy of the statements of the Company and the Parent
made in any certificates pursuant to the provisions hereof, to the performance
in all material respects by the
18
<PAGE>
Company and the Parent of their obligations hereunder and to the following
additional conditions:
(a) The Parent shall have furnished to the Representatives the opinion
of Cozen and O'Connor, counsel for the Parent and the Company (with respect
to certain non-Canadian matters), dated the Closing Date, to the effect
that:
(i) The Parent is a corporation duly incorporated and validly
subsisting under the laws of the Commonwealth of Pennsylvania with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of the
jurisdictions listed on an exhibit thereto;
(ii) Each of the Subsidiaries organized under the laws of the
United States or any State thereof (the "U.S. Subsidiaries") is either
(A) a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, or
(B) a limited partnership duly organized under the laws of the
Commonwealth of Pennsylvania, in each case with full corporate or
partnership, as the case may be, power and authority to own, lease and
operate its properties and to conduct its business as described in the
Final Memorandum;
(iii) The authorized capital stock of the Parent is as set forth
under the caption "Description of Capital Stock of Pierce Leahy" in
the Final Memorandum; and the authorized capital stock of the Parent
conforms in all material respects as to legal matters to the
description thereof contained in the Final Memorandum under the
caption "Description of Capital Stock of Pierce Leahy";
(iv) The Parent has the requisite corporate power and authority
to enter into this Agreement and this Agreement has been duly
authorized, executed and delivered by the Parent;
(v) The Indenture has been duly and validly authorized, executed
and delivered by the Parent and, assuming due execution and
19
<PAGE>
delivery by the Company and the Trustee, constitutes a valid and
binding agreement of the Company and the Parent, enforceable in
accordance with its terms, subject to customary exceptions reasonably
acceptable to counsel for the Initial Purchasers;
(vi) The Registration Agreement (as defined in the Final
Memorandum) has been duly and validly authorized, executed and
delivered by the Parent and, assuming due execution and delivery by
the Company and the Initial Purchasers, is a valid and binding
agreement of the Company and the Parent, enforceable in accordance
with its terms, subject to customary exceptions reasonably acceptable
to counsel for the Initial Purchasers;
(vii) Each of the Domestic Guarantees (as defined in the
Indenture) has been duly and validly authorized, executed and
delivered by each such Domestic Guarantor (as defined in Indenture)
and, constitutes a valid and binding agreement of such Domestic
Guarantor, enforceable in accordance with its terms, subject to
customary exceptions reasonably acceptable to counsel for the Initial
Purchasers;
(viii) Assuming the due authorization, execution and delivery of
the Canadian Guarantee (as defined in the Indenture) by the Canadian
Subsidiary (as hereinafter defined), the Canadian Guarantee
constitutes a valid and binding agreement of the Canadian Subsidiary,
enforceable in accordance with its terms, subject to customary
exceptions reasonably acceptable to counsel for the Initial
Purchasers;
(ix) Assuming the Securities have been duly and validly
authorized and executed by the Company and, assuming due
authentication of the Securities by the Trustee, upon delivery to the
Initial Purchasers against payment therefor in accordance with the
terms hereof, assuming the Securities will have been validly issued
and delivered, the Securities will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture
and the statements set forth under the heading "Description of the
Notes" in the Final Memorandum insofar as such statements purport to
summarize certain provisions of the Securities and the Indenture,
provide a fair summary of such provisions;
20
<PAGE>
(x) Neither the Parent nor, to the knowledge of such counsel, any
of the U.S. Subsidiaries (for the purposes of clause (A) of this
paragraph) and the U.S. Subsidiaries and the Canadian Subsidiary
(for purposes of clause (B) of this paragraph) is (A) in violation of
its respective certificate of incorporation or bylaws, or other
organizational documents, or (B) to the knowledge of such counsel, in
default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness, except as may be disclosed in the Final Memorandum or
where any such default or defaults in the aggregate would not be
reasonably likely, singularly or in the aggregate, to have a Parent
Material Adverse Effect or a Company Material Adverse Effect;
(xi) None of the offer, issuance, sale or delivery of the
Securities, the execution, delivery or performance by the Company or
the Parent of this Agreement, the Indenture and the Registration
Agreement, compliance by the Company or the Parent with the provisions
hereof and thereof, or consummation by the Company or the Parent of
the transactions contemplated hereby and thereby, conflicts or will
conflict with or constitutes or will constitute a breach of, or a
default under, the certificate of incorporation or bylaws, or other
organizational documents, of the Parent or any of the U.S.
Subsidiaries or, to such counsel's knowledge, any material agreement,
indenture, lease or other instrument to which the Parent or the
Subsidiaries is a party or by which it or any of their properties is
bound or, except as disclosed in the Final Memorandum, will, to such
counsel's knowledge, result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Parent or any
of the U.S. Subsidiaries under any such agreement, indenture, lease or
other instrument, or, to such counsel's knowledge, will any such
action result in any violation of any existing law or regulation
(assuming compliance with all applicable state securities or Blue Sky
and foreign laws), or any ruling, judgment, injunction, order or
decree of any court or governmental entity or instrumentality known to
such counsel and applicable to the Parent, the U.S. Subsidiaries or
any of their respective properties;
(xii) Except as set forth in the Final Memorandum, and assuming
the Securities are sold by the Initial Purchasers and as
21
<PAGE>
contemplated in the Final Memorandum under the section "Plan of
Distribution and assuming the accuracy of the representations and
warranties contained herein, no consent, approval, authorization or
other order of, or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency, or
official is required on the part of the Parent or any U.S. Subsidiary
for the valid issuance and sale of the Securities to the Initial
Purchasers as contemplated by this Agreement; except (a) as may be
required under state securities or "Blue Sky" laws or the laws of any
foreign jurisdiction in connection with the offer and sale of the
Notes (b) for any required filing required pursuant to Regulation D of
the Securities Act or (c) as would not reasonably be likely to
individually or in the aggregate have a Parent Material Adverse Effect
or Company Material Adverse Effect;
(xiii) To the knowledge of such counsel, (A) other than as
described or contemplated in the Final Memorandum, there are no legal
or governmental proceedings pending or threatened against the Parent
or any of the U.S. Subsidiaries, or to which the Parent or any of the
U.S. Subsidiaries, or any of their property, is subject, which are
required to be described in the Final Memorandum (or any amendment
or supplement thereto) and (B) there are no agreements, contracts,
indentures, leases or other instruments relating to the Parent or any
of the U.S. Subsidiaries, of a character, that are required to be
described in the Final Memorandum (or any amendment or supplement
thereto) that are not described as required;
(xiv) Assuming the accuracy of the representations and warranties
and compliance with the agreements contained herein, no registration
of the Securities under the Securities Act is required, and no
qualification of the Indenture under the Trust Indenture Act of 1939,
as amended, is necessary, for the offer and sale by the Initial
Purchasers of the Securities in the manner contemplated by this
Agreement; and
(xv) Each of the Company and the Parent is not and, upon sale of
the Securities to be issued and sold in accordance with the Purchase
Agreement and upon application of the net proceeds from such sale as
described in the Final Memorandum under the caption
22
<PAGE>
"Use of Proceeds," will not be an "investment company" within the
meaning of the 1940 Act.
In addition, such counsel shall state that although counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Final Memorandum, such counsel
has participated in the preparation of the Final Memorandum, including general
review and discussion of the contents thereof, and nothing has come to the
attention of such counsel that would lead them to believe that the Final
Memorandum, as of its date and as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the case of the
Final Memorandum, in the light of the circumstances under which they were made,
not misleading or that any amendment or supplement to the Final Memorandum, as
of its respective date, and as of the Closing Date, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated in the Final Memorandum or necessary in order to make the statements
therein, in the case of the Final Memorandum, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no statement with respect to the financial statements,
financial schedules, pro forma financial statements and the notes thereto and
other financial and statistical data included in the Final Memorandum).
In rendering such opinion, such counsel may, as to factual matters,
rely, to the extent counsel deems proper, upon written certificates or
statements of officers of the Company, the Parent and public officials. The
foregoing opinion may be limited to the federal laws of the United States of
America and the Commonwealth of Pennsylvania and the General Corporation Law
of the State of Delaware.
All references to this Section 6(a) to the Final Memorandum shall be deemed
to include any amendment or supplement thereto at the Closing Date.
(b) You shall have received on the Closing Date an opinion of
Stewart, McKelvey, Stirling, Scales, Canadian counsel for the Company and
the Parent, dated the Closing Date and addressed to you, as Representatives
of the several Initial Purchasers, to the effect that:
(i) The Company is an unlimited liability company duly organized
and validly existing under the laws of the jurisdiction of its
23
<PAGE>
organization with full corporate power and authority to own, lease,
and operate its properties and to conduct its business as described in
the Final Memorandum (and any amendment or supplement thereto); and
all of the issued and outstanding shares of capital stock of the
Company are registered in the name of PLC Command I, L.P. as to 659
common shares and PLC Command II, L.P. as to 659 further common
shares, each of which are outstanding and fully paid and
nonassessable.
(ii) Archivex Limited (the "Canadian Subsidiary") is a
corporation duly organized and validly existing under the laws of
the jurisdiction of its organization with full corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Final Memorandum;
(iii) The Company has the requisite corporate power and authority
to enter into this Agreement and to issue, sell and deliver the
Securities to the Initial Purchasers as provided herein, and this
Agreement has been duly authorized, executed and delivered by the
Company, and this Agreement and the obligations of Company
thereunder, is not contrary to and does not violate any applicable
laws of the province of Nova Scotia or the federal laws of Canada;
(iv) The Company has the requisite corporate power and authority
to enter into the Indenture and the Indenture has been duly and
validly authorized, executed and delivered by the Company, and the
Indenture and the obligations of parties thereunder, is not contrary
to and does not violate any applicable laws of the province of Nova
Scotia or the federal laws of Canada;
(v) The Company has the requisite corporate power and authority
to enter into the Registration Agreement (as defined in the Final
Memorandum) and the Registration Agreement has been duly and validly
authorized, executed and delivered by the Company, and Registration
Agreement and the obligations of the Company thereunder, is not
contrary to and does not violate any applicable laws of the province
of Nova Scotia or the federal laws of Canada;
24
<PAGE>
(vi) The Canadian Subsidiary has the requisite corporate power
and authority to enter into the Canadian Guarantee and the Canadian
Guarantee has been duly and validly authorized, executed and delivered
by the Canadian Subsidiary, and the Canadian Guarantee and the
obligations of the Canadian Subsidiary thereunder, is not contrary to
and does not violate any applicable laws of the province of Nova
Scotia or the federal laws of Canada;
(vii) The Company has the requisite corporate power and
authority to issue the Securities and the Securities have been duly
and validly authorized and executed by the Company and, assuming due
authentication of the Securities by the Trustee, upon delivery to the
Initial Purchasers against payment therefor in accordance with the
terms hereof, will have been validly issued and delivered, and the
Notes and the obligations of the Company thereunder, is not contrary
to and does not violate any applicable laws of the province of Nova
Scotia or the federal laws of Canada;
(viii) Neither the Company nor, to the knowledge of such counsel,
the Canadian Subsidiary is in violation of its respective certificate
of incorporation or bylaws, or other organizational documents,
(ix) None of the offer, issuance, sale or delivery of the
Securities, the execution, delivery or performance by the Company of
this Agreement, the Indenture and the Registration Rights Agreement,
compliance by the Company with the provisions hereof and thereof, or
consummation by the Company of the transactions contemplated hereby
and thereby, conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate of
incorporation, memorandum of association, articles of association or
bylaws, or other organizational documents, of the Company or the
Canadian Subsidiary, or, to such counsel's knowledge, will any such
action result in any violation of any existing law or regulation
(assuming compliance with all applicable provincial securities
laws), or any ruling, judgment, injunction, order or decree of any
court or governmental entity or instrumentality known to such
counsel and applicable to the Company, the Canadian Subsidiary or any
of their respective properties;
25
<PAGE>
(x) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official,
in each case in the province of Nova Scotia, is required on the part
of the Company or the Canadian Subsidiary for the valid issuance and
sale of the Securities to the Initial Purchasers as contemplated by
this Agreement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the Province of
Nova Scotia or the federal laws of Canada applicable therein, to the extent they
deem proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Initial Purchasers and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Parent, the
Company and public officials.
All reference to this Section 6(b) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(c) The Representatives shall have received from counsel for the
Initial Purchasers such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the Final Memorandum
(as amended or supplemented at the Closing Date) and other related matters
as the Representatives may reasonably require, and the Company and the
Parent shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(d) Each of the Company and the Parent shall have furnished to the
Representatives a certificate of the Company and the Parent, as the case
may be, signed on behalf of the Company or the Parent, as applicable, by
the Chairman of the Board or the President and the principal financial or
accounting officer of each of the Company and the Parent (or such other
officers as are reasonably acceptable to you), dated the Closing Date, to
the effect that the signers of such certificate have carefully examined the
Final Memorandum, any amendment or supplement to the Final Memorandum and
this Agreement and that:
26
<PAGE>
(i) the representations and warranties of the Company and the
Parent in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made
on the Closing Date, and the Company and the Parent have complied in
all material respects with all the agreements and satisfied all the
conditions on their respective parts to be performed or satisfied
hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no material adverse
change in the condition (financial or other), earnings, business or
properties of the Parent and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date, Arthur Andersen LLP
shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Securities Act and the
Exchange Act and the applicable rules and regulations thereunder and Rule
101 of the Code of Professional Conduct of the American Institute of
Certified Public Accountants (the "AICPA") and stating in effect, among
other things, that:
(i) in their opinion the audited consolidated financial
statements of the Parent included or incorporated in the Final
Memorandum and reported on by them comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations thereunder;
(ii) on the basis of a reading of the minutes of the meetings of
the shareholders, directors and executive, finance and audit
committees of the Parent and its Subsidiaries; and inquiries of
certain officials of the Parent who have responsibility for financial
and accounting matters of the Parent and the Company and their
subsidiaries as to transactions and events subsequent to December 31,
1997, nothing came to their attention which caused them to believe
that with
27
<PAGE>
respect to the period subsequent to December 31, 1997, there
were any changes, at a specified date not more than five business days
prior to the date of the letter, in the long-term debt of the Parent
and its subsidiaries or capital stock of the Parent or any decrease in
net current assets of the Parent in each case as compared with the
amounts shown on the December 31, 1997 consolidated balance sheet
included or incorporated in the Final Memorandum, or for the period
from January 1, 1998 to such specified date there were any decreases,
as compared with the corresponding period in the preceding year in net
revenues or income before income taxes or in total or per share
amounts of net income of the Parent and its subsidiaries, total
operating revenues, income from operations or net income, except in
all instances for changes or decreases set forth in such letters, in
which case the letter shall be accompanied by an explanation by the
Parent and the Company as to the significance thereof unless said
explanation is not deemed necessary by the Representatives;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Parent and it subsidiaries) set
forth in the Final Memorandum, including the information set forth
under the captions "Selected Historical and Pro Forma Consolidated
Statement of Operations, Other Data and Balance Sheet of Pierce Leahy
Corp.", "Management's Discussion and Analysis of Financial Condition
and Results of Operations", "Executive Compensation of Pierce Leahy",
"Stock Option Grants of Pierce Leahy", and "Stock Option Exercises and
Holdings of Pierce Leahy" in the Final Memorandum; and
(iv) They have read the unaudited pro forma financial statements
(the "pro forma financial statements") included or incorporated in
the Financial Memorandum; carried out certain specified procedures;
inquired of certain officials of the Parent and the Company who have
responsibility for financial and accounting matters regarding the
basis for determination of the pro forma adjustment and proved the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma financial statements.
28
<PAGE>
All references in this Section 6(e) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the date of the
letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letter or letters referred
to in paragraph (e) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the business
or properties of the Parent, the Company and their subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to market the Securities as contemplated by the
Final Memorandum.
(g) Each of the Company and the Parent shall not have failed at or
prior to the Closing Date to have performed or complied in all material
respects with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the Closing Date.
(h) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Parent debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any notice given of
any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(i) Prior to the Closing Date, the Company and the Parent shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(j) Prior to the Closing Date, the Company, the Parent and the Initial
Purchasers shall have entered into the Registration Agreement
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the
29
<PAGE>
Representatives and counsel for the Initial Purchasers, this Agreement and all
obligations of the Initial Purchasers hereunder may be canceled at, or at any
time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company or the Parent in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchasers, at 919 Third
Avenue, New York, New York, on the Closing Date.
7. Conditions to the Obligations of the Parent and the Company. The
-----------------------------------------------------------
obligations of the Parent and the Company to sell the Securities hereby shall be
subject to the consummation by the Company of the Archivex Acquisition (as
defined in the Final Memorandum).
8. Reimbursement of Expenses. If the sale of the Securities provided
-------------------------
for herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 (except for Section 6(c)) hereof is
not satisfied, because any condition to the obligations of the Company and the
Parent set forth in Section 7 hereof is not satisfied, because of any
termination pursuant to Section 11 hereof or because of any refusal, inability
or failure on the part of the Company or the Parent to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any of the Initial Purchasers in payment for the Securities on the Closing Date,
the Company and the Parent will reimburse the Initial Purchasers severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
9. Indemnification and Contribution. (a) The Company and the Parent
--------------------------------
agree to indemnify and hold harmless each Initial Purchaser, the directors,
officers, employees and agents of each Initial Purchaser and each person who
controls any Initial Purchaser within the meaning of either the Securities Act
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Memorandum, the Final Memorandum, or in any amendment thereof or
supplement thereto, or any informa-
30
<PAGE>
tion provided by the Company or the Parent to any holder or prospective
purchaser of Securities pursuant to Section 5(h), or arise out of or based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agree to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
-------- -------
Company and the Parent will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made in the Preliminary Memorandum or the Final Memorandum, or in any
amendment thereof or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company and the Parent by or on behalf of
any Initial Purchasers through the Representatives specifically for inclusion
therein; provided, further, that the foregoing indemnity with respect to the
-------- -------
Preliminary Memorandum shall not inure to the benefit of any Initial Purchaser
(or to the benefit of any person controlling such Initial Purchaser) from whom
the person asserting any such losses, claims, damages or liabilities purchased
Securities, if a copy of the Final Memorandum (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) was
not sent or given by or on behalf of such Initial Purchaser to such person at or
prior to the written confirmation of the sale of the Securities to such person,
and if the Final Memorandum (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities, unless
such failure to provide such Final Memorandum is the result of noncompliance by
the Company and the Parent with Sections 5(a) or (c) hereof. This indemnity
agreement will be in addition to any liability which the Company and the Parent
may otherwise have.
(b) Each Initial Purchaser severally agrees to indemnify and hold harmless
the Company and the Parent, their directors, their officers, and each person who
controls the Company or the Parent within the meaning of either the Securities
Act or the Exchange Act, to the same extent as the foregoing indemnity from the
Company and the Parent to each Initial Purchaser, but only with reference to
written information relating to such Initial Purchaser furnished to the
Company and the Parent by or on behalf of such Initial Purchaser through the
Representatives specifically for inclusion in the Preliminary Memorandum or the
Final Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which any Initial Purchaser may
otherwise have. The Company and the Parent acknowledge that the statements set
forth in the last paragraph on the bottom
31
<PAGE>
of the inside front cover and under the heading "Plan of Distribution" in the
Preliminary Memorandum and the Final Memorandum constitute the only information
furnished in writing by or on behalf of the Initial Purchasers for inclusion in
the Preliminary Memorandum or the Final Memorandum.
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses or otherwise materially
prejudices the indemnifying party and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of one such separate counsel (and one local counsel in any
jurisdiction) in connection with a proceeding or related proceedings if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent which consent will not be unreasonably
withheld, but if settled with
32
<PAGE>
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment to the extent provided
herein. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgement with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason (other than failure to provide the requisite notice
required herein), the Company and the Parent on the one hand and the Initial
Purchasers on the other hand agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigation or defending the same) (collectively
"Losses") to which the Company and the Parent on the one hand and one or more of
the Initial Purchasers on the other hand may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Parent on the one hand and by the Initial Purchasers on the other hand from the
offering of the Securities. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Parent on
the one hand and the Initial Purchasers on the other hand shall contribute in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Parent on the one hand and of
the Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Parent shall be deemed
to be equal to the total net proceeds from the offering (before deducting
expenses), and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions received by the Initial
Purchasers from the Company and the Parent in connection with the purchase of
the Securities hereunder. Relative fault shall be determined by reference,
among other things, to whether any alleged untrue statement or omission relates
to information provided by the Company and the Parent on the one hand or the
Initial Purchasers on the other hand. The Company, the Parent and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
33
<PAGE>
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 9,
each person who controls an Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company or the Parent within
the meaning of either the Securities Act or the Exchange Act and each officer
and director of the Company or the Parent shall have the same rights to
contribution as the Company and the Parent, subject in each case to the
applicable terms and conditions of this paragraph (d).
10. Default by an Initial Purchaser. If any one or more Initial
-------------------------------
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to
take up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
--------
however, that in the event that the aggregate principal amount of Securities
- -------
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such non-defaulting Initial Purchasers do not purchase
all the Securities, this Agreement will terminate without liability to any non-
defaulting Initial Purchaser or the Company or the Parent. In the event of a
default by any Initial Purchaser as set forth in this Section 10, the Closing
Date shall be postponed for such period, not exceeding seven days, as the
Representatives and the Company shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company, the Parent or any
non-defaulting Initial Purchaser for damages occasioned by its default
hereunder.
11. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representatives, by notice given to the Company
prior
34
<PAGE>
to delivery of and payment for the Securities, if prior to such time (i)
trading in any of the Parent's securities shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a general commercial
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity, crisis or change the effect of which on financial markets is
such as to make it, in the judgment of the Representatives, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Memorandum.
12. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company, the Parent or their officers and of the Initial Purchasers set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Initial Purchasers,
the Company, the Parent or any of the officers, directors or controlling persons
referred to in Section 9 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 8 and 9 hereof shall survive the
termination or cancellation of this Agreement.
13. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telecopied and confirmed to them, care of Salomon Brothers Inc, at
Seven World Trade Center, New York, New York, 10048; or, if sent to the Company
and the Parent, will be mailed, delivered or telecopied and confirmed to it at
631 Park Avenue, King of Prussia, PA 19406, attention: President.
14. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other person will have
any right or obligation hereunder. Neither the term "successor" nor the term
"successors and assigns" as used in this Agreement shall include a purchaser of
the Securities from an Initial Purchaser in its status as such a purchaser.
15. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York.
35
<PAGE>
16. Business Day. For purposes of this Agreement, "business day"
------------
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
36
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement among the
Company, the Parent and the Initial Purchasers.
Very truly yours,
PIERCE LEAHY COMMAND COMPANY
By /s/ Joseph P. Linaugh
-----------------------------
Name: Joseph P. Linaugh
Title: VP
PIERCE LEAHY CORP.
By /s/ Joseph P. Linaugh
-----------------------------
Name: Joseph P. Linaugh
Title: VP
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CIBC OPPENHEIMER CORP.
PAINEWEBBER INCORPORATED
By: Salomon Brothers Inc
By_______________________
Name:
Title:
For themselves and the other
Initial Purchasers named in
Schedule I to the foregoing Agreement
37
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement among the
Company, the Parent and the Initial Purchasers.
Very truly yours,
PIERCE LEAHY COMMAND COMPANY
By
-----------------------------
Name:
Title:
PIERCE LEAHY CORP.
By
-----------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CIBC OPPENHEIMER CORP.
PAINEWEBBER INCORPORATED
By: Salomon Brothers Inc
By /s/ Lee J. Tawil
--------------------------
Name: Lee J. Tawil
Title: Director
For themselves and the other
Initial Purchasers named in
Schedule I to the foregoing Agreement
38
<PAGE>
SCHEDULE I
Principal Amount
of Securities
Initial Purchasers to be Purchased
- -------------------------- ----------------
Salomon Brothers Inc ............. $ 91,800,000
CIBC Oppenheimer Corp. ........... $ 29,700,000
PaineWebber Incorporated.......... $ 13,500,000
------------
Total................... $135,000,000
39
<PAGE>
EXHIBIT A
Selling Restrictions for Offers and
-----------------------------------
Sales outside the United States
-------------------------------
(1)(a) The Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Each Initial Purchaser
represents and agrees that, except as otherwise permitted by Section 4(a)(i) of
the Agreement to which this is an exhibit, it has offered and sold the
Securities, and will offer and sell the Securities, (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S under the Securities Act. Accordingly, each Initial
Purchaser represents and agrees that neither it, nor any of its affiliates nor
any person acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and that it and they
have complied and will comply with the offering restrictions requirement of
Regulation S. Each Initial Purchaser agrees that, at or prior to the
confirmation of sale of Securities (other than a sale of Securities pursuant to
Section 4(a)(i) of the Agreement to which this is an exhibit), it shall have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the restricted
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act") and may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
offering and April 7, 1998, except in either case in accordance with
Regulation S or Rule 144A under the Securities Act. Terms used above have
the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with
A-1
<PAGE>
respect to the distribution of the Securities, except with its affiliates
or with the prior written consent of the Company and the Parent.
(c) Terms used in this Section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold, and will not offer or sell, in the United Kingdom, by means of
any document, any Securities other than to persons whose ordinary business it is
to buy or sell shares or debentures, whether as principal or as agent (except in
circumstances which do not constitute an offer to the public within the meaning
of the Companies Act 1985 of Great Britain), (ii) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 of the
United Kingdom with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (iii) it has only issued
or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to a person who is
of a kind described in Article 9(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1988 or is a person to whom the
document may otherwise lawfully be issued or passed on.
A-2
<PAGE>
EXHIBIT 10(c)
DOMESTIC GUARANTEE
The undersigned (the "Domestic Guarantor") hereby unconditionally
guarantees, on a senior subordinated basis, jointly and severally with all other
domestic guarantors under the Indenture dated as of April 7, 1998 by and among
Pierce Leahy Command Company, a Nova Scotia unlimited liability company (the
"Issuer"), Pierce Leahy Corp., a Pennsylvania corporation, for itself and as a
Domestic Guarantor, and The Bank of New York, as trustee (as amended, restated
or supplemented from time to time, the "Indenture"), to the extent set forth in
the Indenture and subject to the provisions of the Indenture, (a) the due and
punctual payment of the principal of, and premium, if any, and interest on the
Notes, when and as the same shall become due and payable, whether at maturity,
by acceleration or otherwise, the due and punctual payment of interest on
overdue principal, and, premium, if any, and, to the extent permitted by law,
interest, and the due and punctual performance of all other obligations of the
Issuer to the Noteholders or the Trustee, all in accordance with the terms set
forth in Article 10 of the Indenture, and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of the Domestic Guarantor to the Noteholders and to
the Trustee pursuant to this Domestic Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to the
Indenture for the precise terms and limitations of this Domestic Guarantee.
IN WITNESS WHEREOF, the undersigned has caused this Domestic Guarantee
to be duly executed as of the date written below.
MONARCH BOX, INC.
Dated: April 7, 1998 By: /s/ Lisa G. Goldschmidt
------------------------------------
Lisa G. Goldschmidt, President
<PAGE>
EXHIBIT 10(d)
DOMESTIC GUARANTEE
The undersigned (the "Domestic Guarantor") hereby unconditionally
guarantees, on a senior subordinated basis, jointly and severally with all other
domestic guarantors under the Indenture dated as of April 7, 1998 by and among
Pierce Leahy Command Company, a Nova Scotia unlimited liability company (the
"Issuer"), Pierce Leahy Corp., a Pennsylvania corporation, for itself and as a
Domestic Guarantor, and The Bank of New York, as trustee (as amended, restated
or supplemented from time to time, the "Indenture"), to the extent set forth in
the Indenture and subject to the provisions of the Indenture, (a) the due and
punctual payment of the principal of, and premium, if any, and interest on the
Notes, when and as the same shall become due and payable, whether at maturity,
by acceleration or otherwise, the due and punctual payment of interest on
overdue principal, and, premium, if any, and, to the extent permitted by law,
interest, and the due and punctual performance of all other obligations of the
Issuer to the Noteholders or the Trustee, all in accordance with the terms set
forth in Article 10 of the Indenture, and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of the Domestic Guarantor to the Noteholders and to
the Trustee pursuant to this Domestic Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to the
Indenture for the precise terms and limitations of this Domestic Guarantee.
IN WITNESS WHEREOF, the undersigned has caused this Domestic Guarantee
to be duly executed as of the date written below.
ADVANCED BOX, INC.
Dated: April 7, 1998 By: /s/ Lisa G. Goldschmidt
------------------------------------
Lisa G. Goldschmidt, President
<PAGE>
EXHIBIT 10 (e)
CANADIAN GUARANTEE
The undersigned (the "Canadian Guarantor") hereby unconditionally
guarantees, on a senior basis, jointly and severally with all other Canadian
guarantors under the Indenture dated as of April 7, 1998 by and among Pierce
Leahy Command Company, a Nova Scotia unlimited liability company (the "Issuer"),
Pierce Leahy Corp., a Pennsylvania corporation, for itself and as a Domestic
Guarantor, and The Bank of New York, as trustee (as amended, restated or
supplemented from time to time, the "Indenture"), to the extent set forth in the
Indenture and subject to the provisions of the Indenture, (a) the due and
punctual payment of the principal of, and premium, if any, and interest on the
Notes, when and as the same shall become due and payable, whether at maturity,
by acceleration or otherwise, the due and punctual payment of interest on
overdue principal, and premium, if any, and, to the extent permitted by law,
interest, and the due and punctual performance of all other obligations of the
Issuer to the Noteholders or the Trustee, all in accordance with the terms set
forth in Article 10 of the Indenture, and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of the Canadian Guarantor to the Noteholders and to
the Trustee pursuant to this Canadian Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to the
Indenture for the precise terms and limitations of this Canadian Guarantee.
IN WITNESS WHEREOF, the undersigned has caused this Canadian Guarantee
to be duly executed as of the date written below.
ARCHIVEX LIMITED
Dated: April 7, 1998 By: /s/ Joseph Linaugh
------------------------------------
Joseph Linaugh,
Vice President
<PAGE>
EXHIBIT 10(h)(ii)
SECOND AMENDMENT AND CONSENT, dated as of April 3, 1998 (this "Amendment
---------
and Consent"), to the Amended and Restated Credit Agreement, dated as of August
- -----------
12, 1997 (as the same may be amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among PIERCE LEAHY CORP., a Pennsylvania
----------------
corporation (the "Company"), PIERCE LEAHY COMMAND COMPANY, a company organized
-------
and existing under the laws of the Province of Nova Scotia (the "Canadian
--------
Borrower" and, together with the Company, the "Borrowers"), the several banks
- -------- ---------
and other financial institutions from time to time parties thereto (the
"Lenders"), Canadian Imperial Bank of Commerce, New York Agency, as US
-------
Administrative Agent for the US$ Lenders thereunder, and Canadian Imperial Bank
of Commerce, as Canadian Administrative Agent for the C$ Lenders thereunder.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make
certain loans and other extensions of credit to the Borrowers; and
WHEREAS, the Borrowers have requested, and, upon this Amendment and Consent
becoming effective, the Lenders have agreed, that certain provisions of the
Credit Agreement be modified in the manner provided for in this Amendment and
Consent;
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. Defined Terms. Terms defined in the Credit Agreement and used herein
-------------
shall have the meanings given to them in the Credit Agreement.
II. Amendments to Credit Agreement.
------------------------------
1. Amendments to Subsection 1.1 of the Credit Agreement. Subsection 1.1
----------------------------------------------------
of the Credit Agreement is hereby amended by adding thereto the following
definitions in their appropriate alphabetical order:
"1998 Senior Notes": the Senior Notes due 2008 of the Canadian
-----------------
Borrower in an aggregate original principal amount of US$135,000,000 to be
issued pursuant to the 1998 Senior Notes Indenture, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with subsection 8.11(b) or (c).
"1998 Senior Notes Indenture": the Senior Notes Indenture, proposed
---------------------------
to be entered into between the Canadian Borrower, the Company and The Bank
of New York, as trustee, during April 1998 substantially on the terms and
conditions described in the Preliminary Offering Memorandum for the 1998
Senior Notes dated March 26,
<PAGE>
1998, copies of which have been delivered to the Lenders, as such Indenture
may be amended, supplemented or otherwise modified in accordance with
subsection 8.11(b) or (c).
2. Amendment to Subsection 8.4 of the Credit Agreement. Subsection 8.4
---------------------------------------------------
of the Credit Agreement is hereby amended (1) by deleting the word "and" at the
end of paragraph (e) thereof, (2) by deleting the period at the end of paragraph
(f) thereof and substituting in lieu thereof "; and" and (3) by adding thereto
the following paragraph:
(g) Indebtedness evidenced by the 1998 Senior Notes and guarantees
thereof and subordinated guarantees relating to Indebtedness evidenced by the
1996 Senior Subordinated Notes and the 1997 Senior Subordinated Notes, which
guarantees shall be in the forms provided in the 1996 Senior Subordinated Notes
Indenture and the 1997 Senior Subordinated Notes Indenture, respectively.
3. Amendment to Subsection 8.11(c) of the Credit Agreement. Subsection
-------------------------------------------------------
8.11(c) of the Credit Agreement is hereby amended by deleting said subsection in
its entirety and substituting in lieu thereof the following:
"(c) amend or modify, or permit the amendment or modification of, any
of the terms and conditions of the 1996 Senior Subordinated Notes
Indenture, the 1997 Senior Subordinated Notes Indenture, the 1998 Senior
Notes Indenture, the 1996 Senior Subordinated Notes, the 1997 Senior
Subordinated Notes or the 1998 Senior Notes (other than (i) as permitted by
clause (b) above and (ii) those that would relax any restriction on the
Company or the Canadian Borrower, as the case may be, imposed thereby and
would not have an adverse effect upon the Lenders); or"
4. Amendment to Subsection 8.14 of the Credit Agreement. Subsection 8.14
----------------------------------------------------
of the Credit Agreement is hereby amended (1) by deleting the period at the end
thereof and (2) by adding thereto the following:
", and the Canadian Borrower will not, without the prior written
consent of the Required Lenders, designate any Indebtedness as "Designated
Senior Indebtedness" within the meaning of such term as used in the 1998
Senior Notes Indenture."
III. Consents.
--------
1. Consent to Archivex Acquisition. The Required Lenders hereby consent,
-------------------------------
in accordance with paragraph (d) of the proviso contained in the definition of
"Permitted Acquisition" in subsection 1.1 of the Credit Agreement, to the
acquisition (the "Archivex Acquisition") of substantially all of the assets of
--------------------
Archivex Inc., a Canadian records storage company pursuant to the Asset Purchase
Agreement made as of February 4, 1998 between Archivex, Inc., the Canadian
Borrower and the other parties thereto, and substantially on the terms and
conditions described in the Preliminary Offering Memorandum for the 1998 Senior
Notes dated March 26, 1998, copies of which have been delivered to the Lenders,
and such Lenders further agree that the Archivex Acquisition, as so described,
constitutes a "Permitted
<PAGE>
Acquisition" under the Credit Agreement; provided, however, that in connection
-------- -------
therewith, each Subsidiary of the Company or the Canadian Borrower, as the case
may be, to which shall be transferred any of the assets acquired pursuant to the
Archivex Acquisition, shall execute and deliver, as soon as practicable
following the consummation of the Archivex Acquisition, any and all documents
(including, without limitation, resolutions, incumbency certificates and legal
opinions) as the relevant Administrative Agent shall reasonably request, and
shall take such other action as shall be reasonably necessary or as the relevant
Administrative Agent shall reasonably request (including, without limitation,
the filing of any necessary Uniform Commercial Code or PPSA financing
statements) so that each such Subsidiary shall: (1) guarantee the obligations of
the Canadian Borrower under the Credit Agreement and the Loan Documents and (2)
create in favor of the Canadian Administrative Agent, for the ratable benefit of
the Canadian Lenders, a Lien on substantially all of its assets to secure its
obligations under the guarantee referred to in (1) above.
2. Consent to Re-Set 1998 Acquisition Basket. The Required Lenders
-----------------------------------------
hereby consent that, in connection with all calculations of the $85,00,000
limitation contained in paragraph (e)(y) of the proviso of the definition of
"Permitted Acquisition" in subsection 1.1 of the Credit Agreement in connection
with acquisitions proposed to be made during the period from the date hereof to
and including December 31, 1998, the Archivex Acquisition and all other
acquisitions completed during the period from January 1, 1998 through the date
hereof shall be disregarded.
IV. Conditions to Effectiveness. This Amendment and Consent shall
--- ---------------------------
become effective on the date (the "Amendment and Consent Effective Date") on
------------------------------------
which the Borrowers, each of the Guarantors, the US Administrative Agent, the
Canadian Administrative Agent and each of the Required Lenders shall have
executed and delivered to the US Administrative Agent this Amendment and
Consent.
V. General.
-------
1. Representation and Warranties. To induce the Administrative Agents
-----------------------------
and the Lenders to enter into this Amendment and Consent, the Company hereby
represents and warrants to the Administrative Agents and each of the Lenders as
of the Amendment and Consent Effective Date that:
(a) Corporate Power; Authorization; Enforceable Obligations.
-------------------------------------------------------
(i) Each Borrower has the corporate power and authority, and the legal
right, to make and deliver this Amendment and Consent and to perform
the Loan Documents, as amended by this Amendment and Consent, and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Amendment and Consent and the
performance of the Loan Documents, as so amended.
(ii) No consent or authorization of, approval by, notice to, filing
with or other act by or in respect of, any Governmental Authority or
any other Person
<PAGE>
is required in connection with the execution and delivery of this
Amendment and Consent or with the performance, validity or
enforceability of the Loan Documents, as amended by this Amendment and
Consent.
(iii) This Amendment and Consent has been duly executed and delivered
on behalf of each Borrower.
(iv) Each of this Amendment and Consent and each Loan Document, as
amended by this Amendment and Consent, constitutes a legal, valid and
binding obligation of each Borrower enforceable against such Borrower
in accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting the enforcement of
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(b) No Legal Bar. The execution, delivery and performance of this
------------
Amendment and Consent and the performance of the Loan Documents, as amended
by this Amendment and Consent, will not violate any Requirement of Law or
Contractual Obligation of each Borrower or of any of its Subsidiaries and
will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.
(c) Representations and Warranties. The representations and warranties
------------------------------
made by the Company in the Loan Documents are true and correct in all
material respects on and as of the Amendment and Consent Effective Date,
before and after giving effect to the effectiveness of this Amendment and
Consent, as if made on and as of the Amendment and Consent Effective Date
(other than any representations and warranties made as of a specific date,
which continue to be true and correct in all material respects as of such
date).
2. Payment of Expenses. The Company agrees to pay or reimburse the
-------------------
Administrative Agents for all of their reasonable out-of-pocket costs and
expenses incurred in connection with this Amendment and Consent, any other
documents prepared in connection herewith and the transactions contemplated
hereby, including, without limitation, the reasonable fees and disbursements of
counsel to the US Administrative Agent and the Canadian Administrative Agent.
3. No Other Amendment and Consents; Confirmation. Except as expressly
---------------------------------------------
amended, modified and supplemented hereby, the provisions of the Credit
Agreement and the other Loan Documents are and shall remain in full force and
effect.
<PAGE>
4. Governing Law; Counterparts.
---------------------------
(a) This Amendment and Consent and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
(b) This Amendment and Consent may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this Amendment and Consent
signed by all the parties shall be lodged with each of the Company and the
US Administrative Agent. This Amendment and Consent may be delivered by
facsimile transmission of the relevant signature pages hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Consent to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
PIERCE LEAHY CORP.
By: /s/ Joseph P. Linaugh
-----------------------
Title: Vice President
PIERCE LEAHY COMMAND COMPANY
By: /s/ Joseph P. Linaugh
-----------------------
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY,
as US Administrative Agent and as a US$ Lender
By: /s/ Tefta Ghilaga
-------------------
Title: Executive Director, CIBC Oppenheimer
Corp., AS AGENT
CANADIAN IMPERIAL BANK OF COMMERCE
as Canadian Administrative Agent and as a C$ Lender
By: /s/ Tefta Ghilaga
------------------
Title: Executive Director, CIBC Oppenheimer
Corp., AS AGENT
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
as a Lender
By: /s/ Terrence A. Walsh
-----------------------
Title: Vice President
<PAGE>
BANK OF AMERICA CANADA
as a Lender
By: /s/ Richard J. Hall
---------------------
Title: Vice President
CORESTATES BANK, N.A.
as a Lender
By:/s/ Karl F Schultz
--------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
as a Lender
By: /s/ Vladimir Labun
--------------------
Title: First Vice President - Manager
FLEET NATIONAL BANK
as Documentation Agent and as Lender
By: /s/ Eugenie M. Sullivan
----------------------------
Title: Senior Vice President
THE FIRST NATIONAL BANK OF MARYLAND
as a Lender
By: /s/ John C. Acker
-------------------
Title: Vice President
HELLER FINANCIAL
as a Lender
By: /s/ Patrick Hayes
-------------------
Title: Vice President
<PAGE>
ROYAL BANK OF CANADA
as a Lender
By: /s/ Catherine M. Ouellette
----------------------------
Title: Senior Account Manager
STATE STREET BANK AND TRUST COMPANY
as a Lender
By: /s/ Hamilton H. Wood, Jr.
---------------------------
Title: Vice President
THE BANK OF NEW YORK
as a Lender
By: /s/ Peter H. Abdill
---------------------
Title: Vice President
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned, as a Guarantor under that certain Amended and
Restated US Global Guarantee and Security Agreement, dated as of August 12,
1997, made by each of such Guarantors in favor of the US Administrative Agent,
hereby acknowledges and consents to the execution and delivery of this Amendment
and Consent to which this Acknowledgement and Consent is attached and hereby
reaffirms its obligations as a Guarantor under said US Global Guarantee and
Security Agreement.
PIERCE LEAHY CORP.
PIERCE MARYLAND, LLC
By: /s/ Joseph P. Linaugh
---------------------
Title: Vice President
PLC COMMAND I, INC.
PLC COMMAND II, INC.
By: /s/ Joseph P. Linaugh
---------------------
Title: Assistant Secretary
PLC COMMAND I, L.P.
By PLC Command I, Inc., as its general partner
By: /s/ Joseph P. Linaugh
---------------------
Title: Assistant Secretary
PLC COMMAND II, L.P.
By PLC Command II, Inc., as its general partner
By: /s/ Joseph P. Linaugh
---------------------
Title: Assistant Secretary
MONARCH BOX, INC.
ADVANCED BOX, INC.
By: /s/ Lisa G. Goldschmidt
-----------------------
Title: President
<PAGE>
CONFORMED COPY
THIRD AMENDMENT, dated as of May 1, 1998 (this "Amendment"), to the Amended
---------
and Restated Credit Agreement, dated as of August 12, 1997 (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement"), among PIERCE LEAHY CORP., a Pennsylvania corporation (the
- ---------
"Company"), PIERCE LEAHY COMMAND COMPANY, a company organized and existing under
-------
the laws of the Province of Nova Scotia (the "Canadian Borrower" and, together
-----------------
with the Company, the "Borrowers"), the several banks and other financial
---------
institutions from time to time parties thereto (the "Lenders"), Canadian
-------
Imperial Bank of Commerce, New York Agency, as US Administrative Agent for the
US$ Lenders thereunder, and Canadian Imperial Bank of Commerce, as Canadian
Administrative Agent for the C$ Lenders thereunder.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make
certain loans and other extensions of credit to the Borrowers; and
WHEREAS, the Borrowers have requested, and, upon this Amendment becoming
effective, the Lenders have agreed, that certain provisions of the Credit
Agreement be modified in the manner provided for in this Amendment;
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. Defined Terms. Terms defined in the Credit Agreement and used herein
-------------
shall have the meanings given to them in the Credit Agreement.
II. Amendment to Section 11 of the Credit Agreement. Section 11 of the
-----------------------------------------------
Credit Agreement is hereby amended by adding thereto the following
subsection:
"11.19 Authorization for Quebec Security. For greater certainty, and
---------------------------------
without limiting the powers of the Canadian Administrative Agent hereunder
or under any of the Canadian Security Documents, each Canadian Subsidiary
of the Borrower hereby acknowledges that the Canadian Administrative Agent
shall, for purposes of holding any security granted by such Canadian
Subsidiary of the Borrower on its property pursuant to the laws of the
Province of Quebec, be the holder of an irrevocable power of attorney
(within the meaning of the Civil Code of Quebec) for all present and future
C$ Lenders, and in particular for all present and future holders of any
debenture executed and delivered by any Canadian Subsidiary of the
Borrower. Each of the C$ Lenders hereby irrevocably constitutes, to the
extent necessary, the Canadian Administrative Agent as the holder of an
irrevocable power of attorney (within the meaning of the Civil Code of
Quebec) in order to hold security granted by any Canadian Subsidiary of the
Borrower in the Province of Quebec. Any Assignee of C$
<PAGE>
Loans shall be deemed to have confirmed and ratified the constitution of
the Canadian Administrative Agent as the holder of such irrevocable power
of attorney by execution of the relevant Assignment and Acceptance
substantially in the form of Exhibit G. Notwithstanding the provisions of
Section 32 of the Special Corporate Powers Act (Quebec), the Canadian
Administrative Agent may acquire and be the holder of any debenture issued
by any Canadian Subsidiary of the Borrower as contemplated under any of the
Canadian Security Documents at any time and from time to time. Each
Canadian Subsidiary of the Borrower hereby acknowledges that any such
debenture constitutes a title of indebtedness, as such term is used in
Article 2692 of the Civil Code of Quebec."
III. Conditions to Effectiveness. This Amendment shall become effective
---- ---------------------------
on the date (the "Amendment Effective Date") on which the Borrowers, each of the
------------------------
Guarantors, the US Administrative Agent, the Canadian Administrative Agent and
each of the Required Lenders shall have executed and delivered to the US
Administrative Agent this Amendment.
IV. General.
-------
1. Representation and Warranties. To induce the Administrative Agents
-----------------------------
and the Lenders to enter into this Amendment, the Company hereby represents and
warrants to the Administrative Agents and each of the Lenders as of the
Amendment Effective Date that:
(a) Corporate Power; Authorization; Enforceable Obligations.
-------------------------------------------------------
(i) Each Borrower has the corporate power and authority, and the legal
right, to make and deliver this Amendment and to perform the Loan
Documents, as amended by this Amendment, and has taken all necessary
corporate action to authorize the execution, delivery and performance
of this Amendment and the performance of the Loan Documents, as so
amended.
(ii) No consent or authorization of, approval by, notice to, filing
with or other act by or in respect of, any Governmental Authority or
any other Person is required in connection with the execution and
delivery of this Amendment or with the performance, validity or
enforceability of the Loan Documents, as amended by this Amendment.
(iii) This Amendment has been duly executed and delivered on behalf
of each Borrower.
(iv) Each of this Amendment and each Loan Document, as amended by this
Amendment, constitutes a legal, valid and binding obligation of each
Borrower enforceable against such Borrower in accordance with its
terms, except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting the enforcement of creditors' rights generally,
general equitable principles (whether considered in a
<PAGE>
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
(b) No Legal Bar. The execution, delivery and performance of this
------------
Amendment and the performance of the Loan Documents, as amended by this
Amendment, will not violate any Requirement of Law or Contractual
Obligation of each Borrower or of any of its respective Subsidiaries and
will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.
(c) Representations and Warranties. The representations and warranties
------------------------------
made by the Company in the Loan Documents are true and correct in all
material respects on and as of the Amendment Effective Date, before and
after giving effect to the effectiveness of this Amendment, as if made on
and as of the Amendment Effective Date (other than any representations and
warranties made as of a specific date, which continue to be true and
correct in all material respects as of such date).
2. Payment of Expenses. The Company agrees to pay or reimburse the
-------------------
Administrative Agents for all of their reasonable out-of-pocket costs and
expenses incurred in connection with this Amendment, any other documents
prepared in connection herewith and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the US Administrative Agent and the Canadian Administrative Agent.
3. No Other Amendment; Confirmation. Except as expressly amended,
--------------------------------
modified and supplemented hereby, the provisions of the Credit Agreement and the
other Loan Documents are and shall remain in full force and effect.
4. Governing Law; Counterparts.
---------------------------
(a) This Amendment and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the
laws of the State of New York.
(b) This Amendment may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with each of the Company and the US Administrative Agent.
This Amendment may be delivered by facsimile transmission of the relevant
signature pages hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
PIERCE LEAHY CORP.
By:/s/ Joseph P. Linaugh
-----------------------
Title: Vice President
PIERCE LEAHY COMMAND COMPANY
By:/s/ Joseph P. Linaugh
-----------------------
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY,
as US Administrative Agent and as a US$ Lender
By:/s/ Tefta Ghilaga
-------------------
Title: Executive Director, CIBC Oppenheimer
Corp., AS AGENT
CANADIAN IMPERIAL BANK OF COMMERCE
as Canadian Administrative Agent and as a C$ Lender
By:/s/ Tefta Ghilaga
-------------------
Title: Executive Director, CIBC Oppenheimer
Corp., AS AGENT
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
as a US$ Lender
By:/s/ Terrence A. Walsh
------------------------
Title: Vice President
<PAGE>
BANK OF AMERICA CANADA
as a C$ Lender
By:/s/ Richard J. Hall
---------------------
Title: Vice President
CORESTATES BANK, N.A.
as a US$ Lender
By:/s/ Karl F Schultz
--------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
as a US$ Lender
By:/s/ Vladimir Labun
-------------------
Title: First Vice President - Manager
FLEET NATIONAL BANK
as Documentation Agent and as US$ Lender
By:/s/ Howard J. Diamond
------------------------
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF MARYLAND
as a US$ Lender
By:/s/ John C. Acker
-------------------
Title: Vice President
HELLER FINANCIAL
as a US$ Lender
By:/s/ Patrick Hayes
-------------------
Title: Vice President
<PAGE>
ROYAL BANK OF CANADA
as a C$ Lender
By:/s/ Catherine M. Ouellette
----------------------------
Title: Senior Account Manager
STATE STREET BANK AND TRUST COMPANY
as a US$ Lender
By:/s/ Hamilton H. Wood, Jr.
---------------------------
Title: Vice President
THE BANK OF NEW YORK
as a US$ Lender
By:/s/ Peter H. Abdill
---------------------
Title: Vice President
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned, as a Guarantor under that certain Amended and
Restated US Global Guarantee and Security Agreement, dated as of August 12,
1997, made by each of such Guarantors in favor of the US Administrative Agent,
hereby acknowledges and consents to the execution and delivery of this Amendment
to which this Acknowledgement and Consent is attached and hereby reaffirms its
obligations as a Guarantor under said US Global Guarantee and Security
Agreement.
PIERCE LEAHY CORP.
PIERCE MARYLAND, LLC
By:/s/ Joseph P. Linaugh
---------------------
Title: Vice President
PLC COMMAND I, INC.
PLC COMMAND II, INC.
By:/s/ Joseph P. Linaugh
---------------------
Title: Assistant Secretary
PLC COMMAND I, L.P.
By PLC Command I, Inc., as its general partner
By:/s/ Joseph P. Linaugh
---------------------
Title: Assistant Secretary
PLC COMMAND II, L.P.
By PLC Command II, Inc., as its general partner
By:/s/ Joseph P. Linaugh
---------------------
Title: Assistant Secretary
MONARCH BOX, INC.
ADVANCED BOX, INC.
By:/s/ Lisa G. Goldschmidt
-----------------------
Title: President
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned, as Guarantor under that certain Guarantee, dated as
of April 7, 1998, and as Assignor under that certain Security Agreement, dated
as of April 7, 1998, each made by the undersigned in favor of the Canadian
Administrative Agent and the C$ Lenders, hereby acknowledges and consents to the
execution and delivery of this Amendment to which this Acknowledgement and
Consent is attached and hereby reaffirms its obligations as Guarantor under said
Guarantee and as Assignor under said Security Agreement. The undersigned
further acknowledges and consents to the provisions of Subsection 11.19 of the
Credit Agreement, as amended by this Amendment, and agrees to be bound by the
terms thereof and to comply with such terms insofar as such terms are applicable
to the undersigned.
ARCHIVEX LIMITED
By:/s/ Joseph P. Linaugh
---------------------
Title: Vice President
<PAGE>
EXHIBIT 10 (j)
GUARANTEE
The undersigned (the "Guarantor") hereby unconditionally guarantees,
on a senior subordinated basis, jointly and severally with all other guarantors
under the Indenture dated as of July 15, 1996 between Pierce Leahy Corp., a
Pennsylvania corporation, and United States Trust Company of New York, as
trustee (as amended, restated or supplemented from time to time, the
"Indenture"), to the extent set forth in the Indenture and subject to the
provisions of the Indenture, (a) the due and punctual payment of the principal
of, and premium, if any, and interest on the Notes, when and as the same shall
become due and payable, whether at maturity, by acceleration or otherwise, the
due and punctual payment of interest on overdue principal, and premium, if any,
and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Noteholders or the
Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture, and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Capitalized terms used but not defined are as defined in the
Indenture.
The obligations of the Guarantor to the Noteholders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
10 of the Indenture and reference is hereby made to the Indenture for the
precise terms and limitations of this Guarantee.
ADVANCED BOX, INC.
Dated: April 6, 1998 By: /s/ Lisa G. Goldschmidt
-------------------------------
Lisa G. Goldschmidt, President
<PAGE>
EXHIBIT 10(K)
GUARANTEE
The undersigned (the "Guarantor") hereby unconditionally guarantees,
on a senior subordinated basis, jointly and severally with all other guarantors
under the Indenture dated as of July 7, 1997 between Pierce Leahy Corp., a
Pennsylvania corporation and The Bank of New York, as trustee (as amended,
restated or supplemented from time to time, the "Indenture"), to the extent set
forth in the Indenture and subject to the provisions of the Indenture, (a) the
due and punctual payment of the principal of, and premium, if any, and interest
on the Notes, when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on overdue principal, and premium, if any, and, to the extent permitted by law,
interest, and the due and punctual performance of all other obligations of the
Company to the Noteholders or the Trustee, all in accordance with the terms set
forth in Article 10 of the Indenture, and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
Capitalized terms used but not defined are as defined in the
Indenture.
The obligations of the Guarantor to the Noteholders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
10 of the Indenture and reference is hereby made to the Indenture for the
precise terms and limitations of this Guarantee.
ADVANCED BOX, INC.
Dated: April 6, 1998 By: /s/ Lisa G. Goldschmidt
--------------------------
Lisa G. Goldschmidt, President
<PAGE>
EXHIBIT 10 (l)
GUARANTEE
The undersigned (the "Guarantor") hereby unconditionally guarantees,
on a senior subordinated basis, jointly and severally with all other guarantors
under the Indenture dated as of July 15, 1996 between Pierce Leahy Corp., a
Pennsylvania corporation, and United States Trust Company of New York, as
trustee (as amended, restated or supplemented from time to time, the
"Indenture"), to the extent set forth in the Indenture and subject to the
provisions of the Indenture, (a) the due and punctual payment of the principal
of, and premium, if any, and interest on the Notes, when and as the same shall
become due and payable, whether at maturity, by acceleration or otherwise, the
due and punctual payment of interest on overdue principal, and premium, if any,
and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Noteholders or the
Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture, and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Capitalized terms used but not defined are as defined in the
Indenture.
The obligations of the Guarantor to the Noteholders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
10 of the Indenture and reference is hereby made to the Indenture for the
precise terms and limitations of this Guarantee.
MONARCH BOX, INC.
Dated: April 6, 1998 By:/s/ Lisa G. Goldschmidt
----------------------------------
Lisa G. Goldschmidt, President
<PAGE>
EXHIBIT 10 (m)
GUARANTEE
The undersigned (the "Guarantor") hereby unconditionally guarantees,
on a senior subordinated basis, jointly and severally with all other guarantors
under the Indenture dated as of July 15, 1996 between Pierce Leahy Corp., a
Pennsylvania corporation, and United States Trust Company of New York, as
trustee (as amended, restated or supplemented from time to time, the
"Indenture"), to the extent set forth in the Indenture and subject to the
provisions of the Indenture, (a) the due and punctual payment of the principal
of, and premium, if any, and interest on the Notes, when and as the same shall
become due and payable, whether at maturity, by acceleration or otherwise, the
due and punctual payment of interest on overdue principal, and premium, if any,
and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Noteholders or the
Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture, and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Capitalized terms used but not defined are as defined in the
Indenture.
The obligations of the Guarantor to the Noteholders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
10 of the Indenture and reference is hereby made to the Indenture for the
precise terms and limitations of this Guarantee.
MONARCH BOX, INC.
Dated: April 6, 1998 By:/s/ Lisa G. Goldschmidt
----------------------------------
Lisa G. Goldschmidt, President
<PAGE>
EXHIBIT 12
PIERCE LEAHY CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES CALCULATION
REGISTRATION STATEMENT
<TABLE>
<CAPTION>
Year ended December 31, Three months ended March 31,
------------------------------------------------------------ -------------------------------
Pro forma Pro forma
1993 1994 1995 1996 1997 1997 1997 1998 1998
-------- -------- -------- ------- ------- --------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EARNINGS:
Income (loss) before income
taxes and extraordinary items 2,972 1,200 5,347 2,523 (1,737) (16,189) 64 (856) (3,134)
Plus: Fixed Charges 9,850 11,303 14,321 22,894 36,179 53,397 8,352 10,637 13,957
-------- ------- -------- -------- -------- -------- ------- -------- --------
Adjusted Earnings 12,822 12,503 19,668 25,417 34,442 37,208 8,416 9,781 10,823
Fixed Charges:
Interest Expense 6,160 7,216 9,622 17,225 29,262 46,480 6,712 8,300 11,620
Rent Expense 3,690 4,087 4,699 5,669 6,917 6,917 1,640 2,337 2,337
-------- ------- -------- -------- -------- -------- ------- -------- --------
Total 9,850 11,303 14,321 22,894 36,179 53,397 8,352 10,637 13,957
-------- ------- -------- -------- -------- -------- ------- -------- --------
EARNINGS TO FIXED CHARGE RATIO 1.30x 1.11x 1.37x 1.11x (1,737) (1)(16,189) 1.01x (1)(856) (1)(3,134)
======== ======= ======== ======== ======== ======== ======= ======== ========
</TABLE>
- -------------------------------------
(1) Earnings were inadequate to cover fixed changes by the amount indicated.
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 27, 1998
included in Pierce Leahy Corp.'s Form 10-K for the year ended December 31, 1997
and to all references to our Firm included in this registration statement.
Arthur Andersen LLP
Philadelphia, Pa.,
July 2, 1998
<PAGE>
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
We consent to the incorporation by reference in this registration statement
(Form S-4) of Pierce Leahy Corp. of our report dated January 13, 1998 (except as
a note 11 which is as of February 4, 1998) to the shareholders of Archivex Inc.
included in Pierce Leahy Corp.'s Form 8-K dated July 2, 1998 and to all
references to our Firm included in this registration statement.
Friedman & Friedman
Chartered Accountants
Montreal, Quebec
July 2, 1998
<PAGE>
Exhibit 23(c)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated December 5, 1997
included in Pierce Leahy Corp.'s Form 8-K dated July 2, 1998 and to all
references to our Firm included in this registration statement.
James N. Howard and Associates, P.C.
Dallas, Texas
July 2, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
PIERCE LEAHY COMMAND COMPANY
(Exact name of obligor as specified in its charter)
Nova Scotia N/A
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Suite 800
1959 Upper Water Street
P.O. Box 997
Halifax, Nova Scotia
Canada B3J 2X2
(Address of principal executive offices) (Zip code)
_________________
PIERCE LEAHY CORP.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-2588479
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
631 Park Avenue
King of Prussia, Pennsylvania 19406
(Address of principal executive offices) (Zip code)
_________________
ADVANCED BOX, INC.
(Exact name of obligor as specified in its charter)
Delaware 52-2045727
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
900 Market Street
Suite 2000
Wilmington, New Castle County
Delaware 19801
(Address of principal executive offices) (Zip code)
_________________
MONARCH BOX, INC.
(Exact name of obligor as specified in its charter)
Delaware 52-2045728
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Suite 2000
900 Market Street
Wilmington, New Castle County
Delaware 19801
(Address of principal executive offices) (Zip code)
_________________
ARCHIVEX LIMITED
(Exact name of obligor as specified in its charter)
Nova Scotia N/A
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Suite 900
1959 Upper Water Street
P.O. Box 997
Halifax, Nova Scotia
Canada B3J 2X2
(Address of principal executive offices) (Zip code)
_________________
8 1/8% SENIOR NOTES DUE 2008
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
<TABLE>
<S> <C>
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington, D.C. 20429
New York Clearing House Association New York, N.Y. 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- ----------------
*Pursuant to General Instruction B, the Trustee has responded only to Items
1, 2 and 16 of this form since to the best of the knowledge of the Trustee the
obligor is not in default under any indenture under which the Trustee is a
trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 2nd day of June, 1998.
THE BANK OF NEW YORK
By: /s/ LUCILLE FIRRINCIELI
------------------------
Lucille Firrincieli
Vice President
-2-
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System,
at the close of business December 31, 1997, published in accordance with a call
made by the Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
<S> <C> <C>
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin..................... $ 5,742,986
Interest-bearing balances................... 1,342,769
Securities:
Held-to-maturity securities................. 1,099,736
Available-for-sale securities............... 3,882,686
Federal funds sold and Securities
purchased under agreements to resell...... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income.......................... 35,019,608
LESS: Allowance for loan and
lease losses.................... 627,350
LESS: Allocated transfer risk
reserve......................... 0
Loans and leases, net of unearned
income, allowance, and reserve............ 34,392,258
Assets held in trading accounts............... 2,521,451
Premises and fixed assets (including
capitalized leases)......................... 659,209
Other real estate owned....................... 11,992
Investments in unconsolidated subsid-
iaries and associated companies............. 226,263
Customers' liability to this bank on
acceptances outstanding..................... 1,187,449
Intangible assets............................. 781,684
Other assets.................................. 1,736,574
-----------
Total assets.................................. $56,153,587
===========
</TABLE>
<PAGE>
EXHIBIT 7
(Page 2 of 3)
<TABLE>
<CAPTION>
Dollar Amounts
LIABILITIES in Thousands
- ----------- --------------
<S> <C> <C>
Deposits:
In domestic offices......................... $27,031,362
Noninterest-bearing.............. 11,899,507
Interest-bearing................. 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs............ 13,794,449
Noninterest-bearing.............. 590,999
Interest-bearing................. 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase......... 2,338,881
Demand notes issued to the U.S.
Treasury.................................... 173,851
Trading liabilities........................... 1,695,216
Other borrowed money:
With remaining maturity of one year or less. 1,905,330
With remaining maturity of more than
one year through three years.............. 0
With remaining maturity of more than
three years............................... 25,664
Bank's liability on acceptances
executed and outstanding.................... 1,195,923
Subordinated notes and debentures............. 1,012,940
Other liabilities............................. 2,018,960
-----------
Total liabilities............................. 51,192,576
-----------
EQUITY CAPITAL
- --------------
Common stock.................................. 1,135,284
Surplus....................................... 731,319
Undivided profits and capital
reserves.................................... 3,093,726
Net unrealized holding gains (losses)
on available-for-sale securities............ 36,866
Cumulative foreign currency
translation adjustments..................... (36,184)
-----------
Total equity capital.......................... 4,961,011
-----------
Total liabilities and equity capital.......... $56,153,587
===========
</TABLE>
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
