IRON MOUNTAIN INC/PA, 10-K405, 2000-03-30

IRON MOUNTAIN INC/PA
10-K405, 2000-03-30
PUBLIC WAREHOUSING & STORAGE

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)

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

For the Fiscal Year Ended December 31, 1999

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

For the transition period from ______ to ______

Commission File Number 1-13045

IRON MOUNTAIN INCORPORATED

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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PENNSYLVANIA 23-2588479
(STATE OF OTHER JURISDICTION OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)

745 ATLANTIC AVENUE, BOSTON, MASSACHUSETTS 02111
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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617-535-4766
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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

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TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
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Common Stock, $.01 par value per share ("Common Stock") New York Stock Exchange
11 1/8% Senior Subordinated Notes Due 2006 New York Stock Exchange
9 1/8% Senior Subordinated Notes Due 2007 New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None

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

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

As of March 1, 2000, the aggregate market value of the Common Stock of the
registrant held by non-affiliates of the registrant was $1,127,635,777.13 based
on the closing price on the New York Stock Exchange on such date.

Number of shares of the registrant's Common Stock at March 1, 2000: 54,301,237

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IRON MOUNTAIN INCORPORATED
1999 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

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PART I

Item 1. Business.................................................... 1

Item 2. Properties.................................................. 13

Item 3. Legal Proceedings........................................... 13

Item 4. Submission of Matters to a Vote of Security Holders......... 14

PART II

Item 5. Market for the Registrant's Common Stock and Related
Shareholder Matters....................................... 15

Item 6. Selected Consolidated Financial and Operating Information... 16

Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 20

Item 7A. Quantitative and Qualitative Disclosure About Market Risk... 36

Item 8. Financial Statements and Supplementary Data................. 37

Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................. 37

PART III

Item 10. Directors and Executive Officers of the Registrant.......... 38

Item 11. Executive Compensation...................................... 41

Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................ 47

Item 13. Certain Relationships and Related Transactions.............. 49

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K....................................................... 50
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EXPLANATORY NOTE

On February 1, 2000, Iron Mountain Incorporated, a Delaware corporation
("Old Iron Mountain"), acquired Pierce Leahy Corp., a Pennsylvania corporation
("Pierce Leahy"). Because the transaction was structured as a reverse merger,
Old Iron Mountain merged with and into Pierce Leahy, and Pierce Leahy survived
the merger. Immediately after the merger, Pierce Leahy changed its name from
Pierce Leahy Corp. to Iron Mountain Incorporated ("Iron Mountain," the "Company"
or "we"). Based on the number of shares of Old Iron Mountain and Pierce Leahy
common stock outstanding, immediately after the merger former stockholders of
Old Iron Mountain owned approximately 65% of the Company's Common Stock. Because
of this share ownership, Old Iron Mountain is considered the acquiring entity
for accounting purposes, and the Company adopted Old Iron Mountain's financial
statements as its own upon the completion of the merger. In connection with the
merger, Old Iron Mountain's Board of Directors and top executive officers became
the Board of Directors and executive officers of the Company, except that J.
Peter Pierce and Howard D. Ross were also elected Directors, J. Peter Pierce
became the President of the
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Company and David S. Wendell became the Senior Vice President of the Company. In
order to provide comprehensive disclosure, items in this Annual Report on
Form 10-K containing historical information include disclosures for both Old
Iron Mountain and Pierce Leahy.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

- unanticipated costs as a result of Old Iron Mountain's acquisition of
Piercy Leahy;

- difficulties related to the integration of acquisitions generally and,
more specifically, the integration of the operations of Old Iron Mountain
and Pierce Leahy;

- our significant indebtedness and the cost and availability of financing
for contemplated growth;

- the cost and availability of appropriate storage facilities;

- changes in customer preferences and demand for our services;

- rapid and significant changes in technology;

- intense competition in the industry; and

- other general economic and business conditions.

These cautionary statements should not be construed by you to be exhaustive,
and they are made only as of the date of this report. You should read these
cautionary statements as being applicable to all forward-looking statements
wherever they appear. We assume no obligation to update or revise the
forward-looking statements or to update the reasons why actual results could
differ from those projected in the forward-looking statements.

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PART I

ITEM 1. BUSINESS.

A. DEVELOPMENT OF BUSINESS.

Iron Mountain is the leading records and information management services
("RIMS") company. The Company is an international, full-service provider of
records and information management and related services, enabling customers to
outsource these functions. Iron Mountain has a diversified customer base, which
includes more than half of the Fortune 500 and numerous commercial, legal,
banking, healthcare, accounting, insurance, entertainment and government
organizations. The Company provides storage for all major media, including
paper, which is the dominant form of records storage, magnetic media, including
computer tapes, microfilm and microfiche, master audio and video tapes, film and
optical disks, X-rays and blueprints. Iron Mountain's principal services
provided to its storage customers include courier pick-up and delivery, filing,
retrieval and destruction of records, database management, customized reporting
and disaster recovery support. The Company also sells storage materials,
including cardboard boxes and magnetic media, and provides consulting,
facilities management, fulfillment and other outsourcing services.

On February 1, 2000, Old Iron Mountain completed its acquisition of Pierce
Leahy in a stock-for-stock merger valued at approximately $1.1 billion,
including the assumption of debt and related transaction costs. Pierce Leahy was
one of Old Iron Mountain's largest competitors in the RIMS industry, with a
particular focus on business records storage and related services. The Company
is in the process of integrating the operations and headquarters functions of
Old Iron Mountain and Pierce Leahy on a "best practices" basis. During fiscal
years 2000 and 2001, the Company expects to integrate overhead and support
functions and to begin combining field operations, with the goal of full
integration within three years of the merger. Management expects the Company
will realize an estimated $15 million in annual operating cost savings within
three years after the merger.

As of March 1, 2000, the Company provided services to over 100,000 customer
accounts in 77 domestic markets in the United States and to over 15,000 customer
accounts in 30 markets outside the United States. Iron Mountain's domestic
operations employ about 7,400 people and operate nearly 500 facilities, while
outside the United States, the Company employs approximately 1,500 people and
operates approximately 90 facilities.

B. DESCRIPTION OF BUSINESS.

THE RECORDS AND INFORMATION MANAGEMENT SERVICES INDUSTRY

OVERVIEW

Companies in the RIMS industry store and manage information in a variety of
media formats, which can broadly be divided into paper and electronic records,
and provide a wide range of services related to the records stored. The Company
refers to its general paper storage and management services as "business records
management." Medical records constitute a large and growing specialty subset
within the paper records market. Paper records are defined to include paper
documents, as well as all other non-electronic media such as microfilm and
microfiche, master audio and video tapes, film, X-rays and blueprints. Based on
publicly available information, organizations in the United States generate an
estimated four trillion documents each year, many of which must be retained and
available for reference for many years. Electronic records primarily include
computer tapes and optical disks. The Company refers to its electronic records
storage and management services as "data security services."

PAPER RECORDS

Paper records may be broadly divided into two categories: active and
inactive. Active records relate to ongoing and recently completed activities or
contain information that is frequently referenced. Active

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records are usually stored and managed on-site by the organization that
originated them to ensure ready availability. Inactive paper records are the
principal focus of the RIMS industry. Inactive records consist of those records
that are not needed for immediate access but which must be retained for legal,
regulatory and compliance reasons or for occasional reference in support of
ongoing business operations. Based on industry studies, the Company believes
that inactive records make up approximately 80% of all paper records.

ELECTRONIC RECORDS

Electronic records management focuses on the storage of, and related
services for, computer media that are either archival in nature or a back-up
copy of recently processed data. Archival data is generally not needed for
access but is retained for legal, regulatory and compliance reasons or for
occasional reference in support of ongoing business operations. Back-up data
exists because of the need of many businesses to maintain back-up copies of data
in order to be able to operate in the event of a system failure, casualty loss
or other disaster. It is customary for data processing groups to rotate back-up
tapes to off-site locations on a regular basis and to require multiple copies of
such information at multiple sites.

GROWTH OF MARKET

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

Despite the growth of new "paperless" technologies, such as the Internet and
e-mail, management believes that stored information remains predominantly
paper-based and that such technologies have promoted the creation of hard copies
of such electronic information. In addition, management believes that the
proliferation of digital information technologies and distributed data networks
has led to increased demand for data security services, such as the storage and
off-site rotation of back-up copies of magnetic media, and outsourcing support
services that address the needs of data center operations and disaster recovery
programs.

HIGHLY FRAGMENTED INDUSTRY

Most RIMS companies serve a single local market, and are often either
owner-operated or ancillary to another business, such as a moving and storage
company. According to Professional Records and Information Services Management
("PRISM"), a trade group of approximately 530 members, as of December 31, 1998,
approximately 3,300 firms offered records and information management services in
the United States. The Company has made, and intends to continue to make,
acquisitions of its competitors, many of whom are small, single city operators.

INDUSTRY CONSOLIDATION

Over the past several years, there has been consolidation in the RIMS
industry. The Company believes that this trend will continue because of the
industry's capital requirements for growth, opportunities for large RIMS
providers to achieve economies of scale and customer demands for more
sophisticated technology-based solutions. In particular, the RIMS business
requires significant up-front capital investment for real estate, racking
systems and management information technology.

Management believes that the consolidation trend in the industry is also due
to, and will continue as a result of, the preference of certain large
organizations to contract with one vendor in multiple cities for

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multiple services. In particular, customers increasingly demand a single, large,
sophisticated company to handle all of their important medical, electronic and
vital records needs. Large, national companies are better able to satisfy these
demands than smaller competitors.

FINANCIAL CHARACTERISTICS OF IRON MOUNTAIN'S BUSINESS

Iron Mountain's business has the following financial characteristics:

- RECURRING REVENUES. Iron Mountain derives a majority of its consolidated
revenues from fixed periodic, usually monthly, fees charged to customers
based on the volume of records stored. Revenues from these fixed periodic
fees have grown for 44 consecutive quarters in the case of Old Iron
Mountain and 33 consecutive quarters in the case of Pierce Leahy. Once a
customer places paper records in storage with the Company and until those
records are destroyed or permanently removed, for which the Company
typically receives a service fee, the Company receives recurring payments
for storage fees without incurring additional labor or marketing expenses
or significant capital costs. Similarly, contracts for the storage of
electronic media consist primarily of fixed monthly payments. The stable
and growing storage base also provides the foundation for increases in
revenues and earnings before interest, taxes, depreciation, amortization,
extraordinary items, other income and merger-related expenses ("EBITDA")
from related service activities and sales of storage materials.
Merger-related expenses are primarily those expenses directly related to
the merger of Old Iron Mountain and Pierce Leahy that cannot be
capitalized and include costs of exiting certain facilities, certain
severance and pay-to-stay payments, certain system conversion costs and
other transaction-related costs (some of the aforementioned costs may be
reported separately as restructuring charges).

- HISTORICALLY NON-CYCLICAL BUSINESS. Iron Mountain has not experienced a
reduction of its business as a result of past general economic downturns,
although the Company can give no assurance that this would be the case in
the future. Management believes that the outsourcing of RIMS may
accelerate during economic downturns as companies focus on reducing costs
through outsourcing non-core operating functions. In addition, management
believes that companies that have outsourced RIMS are less likely during
economic downturns to incur the move-out costs and other expenses
associated with switching vendors or moving RIMS in-house.

- INHERENT GROWTH FROM EXISTING PAPER RECORDS CUSTOMERS. The Company's paper
records customers have on average generated additional Cartons(1) at a
faster rate than stored Cartons have been destroyed or permanently
removed. From January 1, 1996 through December 31, 1999, the combined Net
Carton Growth From Existing Customers(2) of each of Old Iron Mountain and
Pierce Leahy increased at an average annual rate of approximately 6%. The
Company believes the consistent growth of its paper storage revenues is
the result of a number of factors, including: (i) the trend toward
increased records retention, (ii) customer satisfaction with the Company's
services and (iii) the costs and inconvenience of moving storage
operations in-house or to another provider of RIMS.

- DIVERSIFIED AND STABLE CUSTOMER BASE. As of March 1, 2000, the Company had
over 115,000 customer accounts in a variety of industries. The Company
currently provides services to more than half of the Fortune 500 and
numerous commercial, legal, banking, healthcare, accounting, insurance,
entertainment and government organizations. No customer of either Old Iron
Mountain or Pierce

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(1) The term "Carton" is defined as a measurement of volume equal to a single
standard storage carton, approximately 1.2 cubic feet. The number of
cartons stored does not include storage volumes in the Company's vital
records services and data security services, which are described below.

(2) The term "Net Carton Growth From Existing Customers" is defined as the
increase in net Cartons attributable to existing customers without giving
effect to the loss of approximately 1.0 million Cartons in fires attributed
to arson in March 1997 in two of Old Iron Mountain's facilities in South
Brunswick Township, New Jersey. See "Item 3. Legal Proceedings."

3
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Leahy accounted for more than 2% of its consolidated revenues for the year
ended December 31, 1999. From January 1, 1996 through December 31, 1999,
average annual permanent removals of Cartons represented only
approximately 4% of total Cartons stored for each of Old Iron Mountain and
Pierce Leahy.

- CAPITAL EXPENDITURES RELATED PRIMARILY TO GROWTH. The Company's RIMS
business requires limited annual capital expenditures made in order to
maintain the Company's current revenue stream. Historically, over 90% of
each of Old Iron Mountain's and Pierce Leahy's aggregate capital
expenditures were growth-related investments, primarily in racking
systems, management information systems, new buildings and improvements to
existing facilities. These growth-related capital expenditures are
primarily discretionary and create additional capacity for increases in
revenues and EBITDA.

GROWTH STRATEGY

The Company's domestic objective is to be one of the largest RIMS providers
in each of its geographic markets and to maintain its position as the largest
national RIMS provider. The Company's international objective is to continue to
capitalize on its expertise in the RIMS industry and to make additional
acquisitions and investments in international markets. The Company seeks to
expand through: (i) increased business with existing customers, including the
provision of new services, (ii) additions of new customers and (iii) selective
acquisitions in existing and new markets.

GROWTH FROM EXISTING CUSTOMERS

Existing Iron Mountain customers storing paper records contribute to storage
and services revenues growth because on average they generate additional Cartons
at a faster rate than old Cartons are destroyed or permanently removed. In order
to maximize growth opportunities from existing customers, the Company seeks to
maintain high levels of customer retention by providing premium customer service
through its decentralized customer service approach complemented by its local
management staff.

Through its local account management staff, the Company leverages existing
business relationships with its customers by selling complementary services and
products. Services include records tracking, indexing, customized reporting,
vital records management and consulting services.

ADDITIONS OF NEW CUSTOMERS

The Company's sales force is dedicated to establishing new account
relationships and servicing existing customer accounts and draws on the
Company's national marketing organization and senior management. As a result of
acquisitions and the Company's decision to increase its sales force by
recruiting additional qualified sales professionals, from December 31, 1997
through March 1, 2000, the Company increased the size of its sales force from
approximately 150 (giving effect to the sales forces of Old Iron Mountain and
Pierce Leahy on a combined basis) to approximately 250 sales professionals.

GROWTH THROUGH DOMESTIC ACQUISITIONS

The Company's acquisition strategy includes both expanding geographically,
focusing primarily on the 100 largest U.S. markets, and increasing the Company's
presence and scale within existing markets through "fold-in" acquisitions. Both
Old Iron Mountain and Pierce Leahy have successful records of acquiring and
integrating smaller RIMS companies. See "Completed and Pending Acquisitions."
The Company intends to continue its domestic acquisition program. However, given
the small number of large acquisition prospects and the Company's increased
revenue base, future acquisitions are expected to be less significant to overall
domestic revenue growth than they have been historically. The Company's
corporate development staff is engaged in an ongoing review of acquisition
candidates.

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The Company seeks to acquire RIMS companies in markets where management
believes there is the potential for growth and where the high start-up costs of
commencing operations make acquisitions an attractive means of entering new
markets. Following a new-market acquisition, the Company seeks to increase its
business with the acquired customer base and to supplement that growth with new
customers and, potentially, with appropriate fold-in acquisitions.

The Company's goal in its existing markets is to exploit economies of scale
while maintaining high quality service. The Company has proven its ability to
successfully reduce the cost structure of its acquired operations. Certain of
these cost savings, including labor reductions and certain general and
administrative costs, are generally obtained within 12 months of an acquisition.
Other cost savings, including occupancy costs, may take longer to achieve. The
Company's goal is to achieve substantially all of the targeted cost savings
within 24 months of an acquisition.

INTERNATIONAL GROWTH STRATEGY

Iron Mountain also intends to continue to make acquisitions and investments
in RIMS businesses outside the United States. The Company has acquired and
invested in, and seeks to acquire and invest in, RIMS companies in countries,
and, more specifically, markets within such countries, where it believes there
is the potential for growth. From January 1, 1999 through March 1, 2000, Old
Iron Mountain, Pierce Leahy and the Company, directly and through joint
ventures, entered Europe and Mexico and expanded operations in Latin America and
Canada. These transactions have taken, and may continue to take, the form of
acquisitions of the entire business or controlling or minority investments, with
a long-term goal towards eventual full ownership. In addition to the criteria
the Company uses to evaluate domestic acquisition candidates, Iron Mountain also
evaluates the presence in the potential market of existing Iron Mountain clients
as well as the risks uniquely associated with an international investment,
including those risks described below.

The experience, depth and strength of local management are particularly
important in Iron Mountain's international acquisition strategy. As a result,
Iron Mountain has formed joint ventures with, or acquired significant interests
from, target businesses throughout Europe and Latin America. Iron Mountain
believes this strategy, rather than an outright acquisition, may, in certain
markets, better position the Company to expand the existing business, although
the Company's long-term goal is to eventually acquire full ownership of each
such business. The local partner will benefit from Iron Mountain's expertise in
the RIMS industry and, in certain cases, Iron Mountain's technology, and Iron
Mountain will benefit from its local partner's relationships with customers and
its presence in the community.

As Old Iron Mountain did in Europe and Pierce Leahy did in Canada, the
Company intends to continue to make fold-in acquisitions to augment its
operations in international markets. Fold-in acquisitions will be done directly
by Iron Mountain or through the local joint venture, depending in part on
whether Iron Mountain's initial investment was an acquisition or a joint
venture. As with domestic acquisitions, the Company believes that with
appropriate fold-in acquisitions it can benefit from economies of scale.

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

The amount of revenues from international operations for Old Iron Mountain
and Pierce Leahy for fiscal year 1999 is set forth in Note 12 to Notes to Iron
Mountain's Consolidated Financial Statements and Note 13 to Notes to Pierce
Leahy's Consolidated Financial Statements. During 1999, Old Iron Mountain and
Pierce Leahy derived approximately 6% and 17%, respectively, of their revenues
from outside of the United States.

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COMPLETED AND PENDING ACQUISITIONS

MERGER OF OLD IRON MOUNTAIN AND PIERCE LEAHY

On February 1, 2000, Old Iron Mountain acquired Pierce Leahy. Because the
transaction was structured as a reverse merger, Old Iron Mountain merged with
and into Pierce Leahy and Pierce Leahy survived the merger. Immediately after
the merger the Company changed its name from Pierce Leahy Corp. to Iron Mountain
Incorporated.

As a result of the merger, each share of Old Iron Mountain common stock was
converted into one share of Common Stock of the Company and each share of Pierce
Leahy common stock continued to remain outstanding. The aggregate merger
consideration was valued at approximately $1.1 billion including assumption of
debt and related transaction costs. No cash consideration was paid in the
merger. Prior to the merger, Pierce Leahy had declared a one-for-ten stock
dividend on its common stock. Based on the number of shares of Old Iron Mountain
and Pierce Leahy common stock outstanding immediately prior to the completion of
the merger, immediately after the merger former stockholders of Old Iron
Mountain owned approximately 65% of the Company's Common Stock, while Pierce
Leahy stockholders owned approximately 35%. Because of this share ownership, Old
Iron Mountain is considered the acquiring entity for accounting purposes, and
the Company adopted Old Iron Mountain's financial statements as its own upon the
completion of the merger.

Old Iron Mountain and Pierce Leahy were the two largest national providers
of RIMS services prior to the merger. Before the merger, Old Iron Mountain
operated in 70 domestic and 17 international markets, and Pierce Leahy operated
in 60 domestic and 16 international markets. As a result of the merger, the two
companies combined operations in 53 domestic markets and the Company now serves
a total of 77 domestic markets. The two companies' international markets were
largely complementary and only overlapped in three markets, so that the Company
now serves 30 international markets.

RECENT ACQUISITIONS AND DISPOSITION

As part of their growth strategies, from January 1, 1997 through
December 31, 1999, Old Iron Mountain and Pierce Leahy acquired 50 and 37 RIMS
businesses, respectively. Old Iron Mountain and the Company have acquired a
total of two additional companies (excluding the merger of Old Iron Mountain and
Pierce Leahy) through March 1, 2000, and the Company has entered into a
definitive agreement to acquire Data Storage Centers, Inc. ("DSC").

The following table presents certain information with respect to the
acquisitions completed by Old Iron Mountain and Pierce Leahy on a combined basis
between January 1, 1997 and December 31, 1999. All dollar amounts presented are
in millions.

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COMPONENTS OF PURCHASE PRICE CONSIDERATION
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TOTAL AGGREGATE FAIR VALUE OF COMMON
REVENUES CASH AND DEBT STOCK AND OPTIONS TOTAL PURCHASE
NUMBER REPRESENTED(1) ASSUMED ISSUED PRICE
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1997 Acquisitions....... 35 $136 $296 $94 $390
1998 Acquisitions....... 31 218 383(2) 81 464
1999 Acquisitions....... 21 113 257(3) 46 303
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(1) Total annual aggregate revenues were calculated in each case by reference
to the revenues of each of the acquired businesses during the year in which
they were acquired. This calculation includes an estimate of total revenues
for the portion of the year of acquisition during which any such acquired
business was included in Old Iron Mountain's or Pierce Leahy's results of
operations.

(2) Includes approximately $3 million attributable to assets that Old Iron
Mountain exchanged as part of the consideration in connection with one
acquisition.

(3) Includes approximately $2.5 million attributable to the capital stock of
Arcus Data Security Limited contributed as part of the consideration in Old
Iron Mountain's acquisition of a 50.1% interest in Iron Mountain Europe
Limited ("Iron Mountain Europe") (formerly known as Britannia Data
Management Limited).

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In addition, in November 1999, Old Iron Mountain sold substantially all of
the assets of Arcus Staffing Resources, Inc. ("Arcus Staffing"), its information
technology staffing ("IT Staffing") business. Old Iron Mountain had acquired the
IT Staffing business in January 1998 as part of its acquisition of Arcus
Group, Inc. ("Arcus Group"). Old Iron Mountain's 1998 and 1999 financial
statements have been restated to show the classification of the IT Staffing
business as a discontinued operation.

PENDING ACQUISITION

On February 18, 2000, the Company entered into an agreement with DSC and
Suddath Van Lines, Inc. to acquire substantially all of the assets of DSC. As a
result, the Company will acquire the RIMS business of DSC, and will also lease
or sublease from DSC, or assume DSC's leases with regard to, certain related
real estate. At closing, the Company will pay aggregate consideration of
approximately $54 million in cash in connection with the DSC acquisition,
including payments to certain officers as consideration for non-competition
covenants. The closing of the DSC acquisition is subject to customary conditions
and is expected to occur in the second quarter of 2000, although no assurance
can be given that it will be completed.

Management believes that DSC is a premier provider of business records
management services and data security services, serving over 2,700 customers. As
of February 18, 2000, DSC, headquartered in Jacksonville, Florida, operated in
14 markets located primarily in the southeastern United States. DSC had
annualized revenues of approximately $19 million based on its results for the
fourth quarter of 1999.

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The following table presents certain information for Old Iron Mountain's,
Pierce Leahy's and the Company's acquisitions in 1999 and 2000 and the pending
DSC acquisition, excluding the merger of Old Iron Mountain and Pierce Leahy.

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PRINCIPAL STATE(S)/
COUNTRY
ACQUISITION* OF OPERATION COMPLETION DATE
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1999 ACQUISITIONS:
Iron Mountain Europe Limited (50.1% interest) (OIM)....... United Kingdom January 1999
Allards Record Center (PL)................................ New Hampshire January 1999
Medex Systems Storage, Inc. (PL).......................... Canada January 1999
Datavault Limited (PL).................................... United Kingdom February 1999
Secure Accessible Files Environment, Inc. (OIM)........... Connecticut February 1999
Confidential Records Center, Inc. (OIM)................... Maine March 1999
Information Storage Service Center, Inc. (OIM)............ New Mexico March 1999
First American Records Management, Inc. (OIM)............. Various(1) April 1999
Data Base, Inc. (OIM)..................................... Various(2) April 1999
Datavault/United States Safe Deposit
Company (OIM)........................................... California May 1999
File Management, Inc. (OIM)............................... Alabama May 1999
MAP, S.A. (Memogarde) (IME)............................... France June 1999
Tippet-Richardson, Ltd. (PL).............................. Canada July 1999
Carter Media Management, Inc. (OIM)....................... Kentucky June 1999
Central File, Inc. (OIM).................................. Puerto Rico June 1999
A Jacksonville, Florida RIMS business (OIM)............... Florida June 1999
Sistemas de Archivo Corporativo, S. de R.L. de C.V. Mexico
(50.1% interest) (OIM).................................. August 1999
Stortext (Holdings) Ltd. (IME)............................ United Kingdom September 1999
Datavault S.A. (IME)...................................... Spain September 1999
Midtown Professional Records Centre, Inc. (OIM)........... Ohio October 1999
Secur' Archiv (IME)....................................... Germany November 1999

2000 ACQUISITIONS (THROUGH MARCH 1, 2000):
Records Disposal, Inc. (OIM).............................. Texas January 2000
Documentalia S.A. (IME)................................... Spain February 2000

PENDING ACQUISITION:
Data Storage Centers, Inc. (IM)........................... Various(3) Pending
</TABLE>

- ------------------------

* OIM = Acquisition by Old Iron Mountain; PL = Acquisition by Pierce Leahy;
IME = Acquisition by Iron Mountain Europe, a 50.1% owned subsidiary of the
Company; and IM = Acquisition by the Company after the merger of Old Iron
Mountain and Pierce Leahy.

(1) California, Colorado, Oregon and Washington.

(2) Illinois, Maryland, North Carolina, Ohio, Pennsylvania, Texas, Virginia,
Washington and Wisconsin.

(3) California, Florida, Georgia, Massachusetts, North Carolina, Texas, Virginia
and District of Columbia.

8
<PAGE>
DESCRIPTION OF IRON MOUNTAIN'S BUSINESS

BUSINESS RECORDS MANAGEMENT

The business records stored by the Company's customers with the Company by
their nature are not very active. These types of records are stored in cartons,
which are packed by the customer. The Company uses bar-coded tracking systems
known as SAFEKEEPER-TM- and PIERCE LEAHY USER SOLUTION-Registered Trademark-
(PLUS-Registered Trademark-) and other procedures to ensure the integrity of the
contents of a customer's cartons and to efficiently store and later retrieve a
customer's cartons. Storage charges are generally billed monthly on a per
storage unit basis, usually either per carton or per cubic foot of records, and
include the provision of space, racking, computerized inventory and activity
tracking and physical security.

DATA SECURITY SERVICES

Data security services consist of the storage and rotation of back-up and
archival computer media as part of corporate disaster and business recovery
plans. Computer tapes, cartridges and disk packs are transported off-site by the
Company's courier operations on a scheduled basis to secure, climate-controlled
facilities, where they are available to customers 24 hours a day, 365 days a
year, to facilitate data recovery in the event of a disaster. Iron Mountain's
MEDIALINK-TM- software manages this process. Iron Mountain also manages tape
library relocation and supports disaster recovery testing and execution.

HEALTHCARE INFORMATION SERVICES

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

VITAL RECORDS SERVICES

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

SERVICE AND COURIER OPERATIONS

Service and courier operations include adding records to storage, temporary
removal of records from storage, refiling of removed records, permanent
withdrawals from storage and destruction of records. Service charges are
generally assessed for each procedure on a per unit basis. The SAFEKEEPER and
PLUS systems control the service processes from order entry through
transportation and invoicing.

Courier operations consist primarily of the pickup and delivery of records
upon customer request. Charges for courier services are based on urgency of
delivery, volume and location and are billed monthly. As of March 1, 2000, Iron
Mountain was utilizing a fleet of more than 1,600 owned or leased delivery
vehicles.

9
<PAGE>
ADDITIONAL SERVICES AND PRODUCTS

Iron Mountain offers a variety of additional services, which customers may
request or contract for on an individual basis. These services include
inventorying records, packing records into cartons or other containers, and
creating computerized indexes of files and individual documents. The Company
also provides services for the management of active records programs. The
Company can provide these services, which generally include document and file
processing and storage, both off-site at its own facilities and by supplying its
own personnel to perform management functions on-site at the customer's
premises.

Other complementary lines of business operated by the Company include
fulfillment services and confidential document destruction. Fulfillment services
are performed by the Company's COMAC division. The division stores customer
marketing literature and delivers this material to sales offices, trade shows
and prospective customers' sites based on current and prospective customer
orders. COMAC also assembles custom marketing packages and orders, manages and
provides detailed reporting on customer marketing literature inventories.

Confidential document destruction involves the shredding of sensitive
documents for corporate customers that, in many cases, also use the Company's
services for management of less sensitive archival records. These services
typically include the scheduled pick-up of loose office records accumulated by
customers in specially designed containers provided by Iron Mountain. The
Company currently performs these services in five of its markets and seeks to
expand its presence in this business through acquisitions and internal
start-ups.

In addition, the Company provides professional consulting services to large
customers, enabling them to develop and implement comprehensive records and
information management programs. Iron Mountain's consulting business draws on
the Company's experience in RIMS to analyze the practices of such companies and
assist them in creating more effective programs of records and information
management. The Company's consultants work with these customers to develop
policies for document review, analysis and evaluation and for scheduling of
document retention and destruction.

The Company also sells a full line of specially designed corrugated
cardboard, metal and plastic storage containers and magnetic media products.

Iron Mountain is exploring opportunities to leverage its customer
relationships, geographic presence and brand image to provide additional
information management systems for digital records. The growth rate of mission
critical digital information is accelerating, driven in part by the use of the
Internet as a distribution and transaction medium. The rising cost and
increasing importance of digital information management, coupled with the
increasing availability of telecommunications bandwidth at lower costs, may
create meaningful opportunities for Iron Mountain. The Company is evaluating
opportunities to partner with technology providers to develop a number of
applications.

CUSTOMERS

The Company's customer base is diversified in terms of revenues and industry
concentration. Iron Mountain tracks customer accounts, which are based on
invoices. Accordingly, depending upon how many invoices have been arranged at
the request of a customer, one organization may represent multiple customer
accounts. As of March 1, 2000, the Company had over 100,000 domestic and over
15,000 international customer accounts in a variety of industries. The Company
currently provides services to more than half of the Fortune 500 and numerous
commercial, legal, banking, healthcare, accounting, insurance, entertainment and
government organizations. No customer accounted for more than 2% of either Old
Iron Mountain's or Pierce Leahy's consolidated revenues for the year ended
December 31, 1999.

10
<PAGE>
COMPETITION; ALTERNATIVE TECHNOLOGY

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

The Company competes with multiple RIMS providers in all geographic areas
where it operates. Iron Mountain believes that competition for customers is
based on price, reputation for reliability, quality of service and scope and
scale of technology and that it generally competes effectively based on these
factors.

Iron Mountain also competes with other RIMS providers for companies to
acquire. Some of the Company's competitors possess greater financial and other
resources than Iron Mountain. If any such competitor were to devote additional
resources to the RIMS business and such acquisition candidates or focus its
strategy on Iron Mountain's markets, Iron Mountain's results of operations could
be adversely affected.

Iron Mountain derives most of its revenues from the storage of paper
documents and related services. This storage requires significant physical
space. Alternative storage technologies exist, many of which require
significantly less space than paper. These technologies include computer media,
microform, CD-ROM and optical disk. To date, none of these technologies has
replaced paper as the principal means for storing information. However, the
Company can provide no assurance that its customers will continue to store most
of their records in paper format. A significant shift by Iron Mountain's
customers to storage of data through non-paper based technologies, whether now
existing or developed in the future, would adversely affect the Company's
business.

EMPLOYEES

A key feature of the Company's operating strategy is its decentralized
management structure and empowerment of local management operating in local
business environments. The Company is divided into geographic Areas, Regions and
Districts. Generally, Areas are managed by Executive Vice Presidents, Regions
are managed by Vice Presidents and Districts are managed by General Managers.
The Company's international operations are managed by operating personnel
located in the particular country. The Company's headquarters staff performs a
variety of central administrative and support functions in order to maximize the
time and resources that local personnel can devote to customer service and
client development.

The Company's selling organization, which includes approximately 250 sales
professionals, consists of telemarketing, direct sales and account management,
all supported by a corporate marketing group. Telemarketing sales people use
advanced database telemarketing techniques to identify and source account leads.
Leads are pursued by the direct sales force, which is comprised of local sales
representatives and regional and national account managers. Once an account is
established, it is assigned to an account manager, who focuses on serving the
needs of new and existing customers and selling additional services to this
customer base. The corporate marketing organization provides training and
marketing communications as sales support functions.

As of March 1, 2000, the Company domestically employed about 7,400 full-time
employees. Directly and through majority-owned joint ventures, as of March 1,
2000, the Company employed approximately 1,500 full-time employees outside of
the United States.

A small percentage of the Company's employees are represented by unions.
These unionized employees are located in California, one city in Canada and in
the United Kingdom. As of March 1, 2000, the aggregate number of unionized
employees was less than 300.

11
<PAGE>
All domestic non-union employees are eligible to participate in the
Company's benefit programs, which include medical, dental, life, short and
long-term disability and accidental death and dismemberment plans. Unionized
employees receive these types of benefits through their unions. In addition to
base compensation and other usual benefits, all full-time domestic employees
participate in some form of incentive-based compensation program that provides
payments based on profits, collections or attainment of specified objectives for
the unit in which they work. Management believes that the Company has good
relationships with its employees and unions. International employees participate
in separate benefit and incentive-based compensation programs.

INSURANCE

For strategic risk transfer purposes, the Company maintains a comprehensive
insurance program with insurers that it believes to be reputable and in amounts
that it believes to be appropriate. Property insurance is purchased on an
all-risk basis, including flood and earthquake, subject to certain sublimits and
deductibles, and inclusive of the replacement cost of real and personal
property, including leasehold improvements, business income loss and extra
expense. Separate policies for California earthquake exposures are maintained at
what the Company believes to be appropriate limits and deductibles for that
exposure. Included among other types of insurance carried by Iron Mountain are:
Workers Compensation, General, Umbrella, Automobile, and Directors and Officers
policies.

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

ENVIRONMENTAL MATTERS

Some of the Company's current and formerly owned or operated properties were
previously used for industrial or other purposes that involved the use or
storage of hazardous substances or petroleum products or the generation and
disposal of hazardous wastes. In some instances these properties included the
operation of underground storage tanks or the presence of asbestos-containing
materials. The Company may be potentially liable for environmental costs or for
the failure to clean up contaminated properties, if any.

The Company currently transfers a portion of its risk of financial loss due
to environmental matters by purchasing a Pollution Liability Insurance Policy,
which covers all owned and leased locations. Coverage is provided for both
liability and remediation exposures.

In addition, at one of the Company's New Jersey facilities, 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
remediation, is completing remediation of the property under a consent order
with the New Jersey Department of Environmental Protection. The Company has
purchased an environmental liability insurance policy covering the cleanup costs
to the Company, if any, which it believes to be appropriate.

The Company has from time to time conducted limited environmental
investigations and remedial activities at some of its former and current
facilities, but it has not undertaken an in-depth environmental review of all of
the Company's properties.

12
<PAGE>
Environmental conditions for which Iron Mountain might be liable may exist
at its properties or at properties that it may acquire in the future. In
addition, future regulatory action and environmental laws may impose costs for
environmental compliance that do not exist today.

ITEM 2. PROPERTIES.

As of March 1, 2000, Iron Mountain conducted operations through 479 leased
and 117 owned facilities containing a total of 36.8 million square feet of
space. The leased facilities typically have initial lease terms of ten years
with options to renew for an additional ten years. In addition, many of the
leases contain either a purchase option or a right of first refusal upon the
sale of the property. The Company's facilities are located throughout North
America, Latin America and Europe, with the largest numbers of facilities in
California, Florida, Massachusetts, Michigan, New Jersey, New York, Ohio, Texas,
Canada and the United Kingdom. The Company believes that the space available in
its facilities is adequate to meet its current needs. See Note 13 of Notes to
Old Iron Mountain's Consolidated Financial Statements and Note 7 of Notes to
Pierce Leahy's Consolidated Financial Statements for information regarding the
minimum annual rental commitments of Old Iron Mountain and Pierce Leahy,
respectively.

ITEM 3. LEGAL PROCEEDINGS.

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

Sixty-one of Old Iron Mountain's customers or their insurance carriers have
asserted claims as a consequence of the destruction of, or damage to, their
records as a result of the fires, including claims with specific requests for
compensation and allegations of negligence or other culpability on the part of
Old Iron Mountain. The Company and its insurers have denied any liability on the
part of Old Iron Mountain as to all of these claims.

The Company is presently aware of six lawsuits that have been filed against
Old Iron Mountain by certain of its customers and/or their insurers, and of two
lawsuits filed by the insurers of abutters of the South Brunswick facility, all
alleging damages in unspecified amounts arising out of the fires. These lawsuits
were filed in the U.S. District Court for the District of New Jersey; the New
Jersey Superior Court, Middlesex County, Law Division; and the Supreme Court for
New York County, New York.

Old Iron Mountain has denied liability, asserted affirmative defenses and,
in certain of the cases, moved for dismissal and asserted counterclaims for
indemnification against the plaintiffs. In February 2000, following a trial, the
United States District Court of New Jersey entered judgment in favor of Old Iron
Mountain on all counts in one of the customer lawsuits. Discovery is ongoing in
all remaining cases. The Company denies any liability as a result of the
destruction of, or damage to, customer records as a result of the fires, which
were beyond its control, and intends to vigorously defend itself against these
and any other lawsuits that may arise. The Company is also pursuing coverage of
these claims and proceedings with its various insurers.

Old Iron Mountain was paid by its general liability and property insurance
carrier for costs incurred as a result of business interruption and property
damage due to the fires. However, Old Iron Mountain's errors and omissions
carrier made an initial determination denying coverage as to these claims. In
November 1998, Old Iron Mountain filed an action in the United States District
Court for the District of Massachusetts seeking a declaration of coverage and
other relief. The parties, together with the general liability and property
carrier, have reached a partial settlement for pre-June 30, 1999 defense costs
and continue to be in active negotiations to resolve all remaining coverage
issues.

The outcome of these proceedings cannot be predicted. Based on its present
assessment of the situation, after consultation with legal counsel, management
does not believe that the outcome of these

13
<PAGE>
proceedings will have a material adverse effect on the Company's financial
condition or results of operations, although there can be no assurance in this
regard.

In addition to the matters discussed above, the Company is involved in
litigation from time to time in the ordinary course of business. In the opinion
of management, no other material legal proceedings are pending to which the
Company, or any of its properties, is subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no matters submitted to a vote of security holders of either Old
Iron Mountain or Pierce Leahy during the fourth quarter of the fiscal year ended
December 31, 1999.

14
<PAGE>
PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS.

The Common Stock of the Company is traded on the New York Stock Exchange
("NYSE") under the symbol "IRM." Prior to the merger, the common stock of each
of Pierce Leahy and Old Iron Mountain were listed on the NYSE under the symbols
"PLH" and "IRM," respectively. Pierce Leahy first issued its common stock to the
public in July 1997, while Old Iron Mountain first issued its common stock to
the public in February 1996. Prior to April 26, 1999, the common stock of Old
Iron Mountain was traded on the Nasdaq National Market ("Nasdaq") under the
symbol "IMTN."

The following table sets forth the high and low sale prices for Old Iron
Mountain's common stock on the NYSE and the Nasdaq, for the years 1998 and 1999,
giving effect to a three-for-two split effected in the form of a dividend on Old
Iron Mountain's common stock declared and paid in July 1998:

<TABLE>
<CAPTION>
SALE PRICES
-------------------
HIGH LOW
-------- --------
<S> <C> <C>
1998
First Quarter............................................. $25.08 $20.92
Second Quarter............................................ 30.67 24.58
Third Quarter............................................. 30.50 22.50
Fourth Quarter............................................ 36.25 23.00
1999
First Quarter............................................. $36.25 $27.38
Second Quarter............................................ 33.13 25.38
Third Quarter............................................. 34.38 27.88
Fourth Quarter............................................ 39.50 25.13
</TABLE>

The following table sets forth the high and low sale prices on the NYSE for
Pierce Leahy's common stock, for the years 1998 and 1999, giving effect to a
one-for-ten stock split effected in the form of a dividend declared and paid by
Pierce Leahy in January 2000:

<TABLE>
<CAPTION>
SALE PRICES
-------------------
HIGH LOW
-------- --------
<S> <C> <C>
1998
First Quarter............................................. $24.55 $18.52
Second Quarter............................................ 26.25 21.14
Third Quarter............................................. 23.52 15.23
Fourth Quarter............................................ 23.64 16.02
1999
First Quarter............................................. $24.55 $21.82
Second Quarter............................................ 24.32 20.57
Third Quarter............................................. 23.64 18.24
Fourth Quarter............................................ 39.32 21.31
</TABLE>

The closing price of the Company's Common Stock on the NYSE on March 1, 2000
was $30.44. As of March 1, 2000, there were 826 holders of record of the
Company's Common Stock. The Company believes that there are more than 5,800
beneficial owners of the Company's Common Stock.

The Company's Board of Directors (the "Company Board") currently intends to
retain future earnings, if any, for the development of the Company's businesses
and does not anticipate paying cash dividends on the Company's Common Stock in
the foreseeable future. Future determinations by the Company Board to pay
dividends on the Common Stock would be based primarily upon the financial
condition, results of operations and business requirements of the Company.
Dividends, if any, would be payable at the sole discretion of the Company Board
out of the funds legally available for that purpose. Some of the Company's
agreements pursuant to which the Company has borrowed funds contain provisions
that limit the amount of dividends and stock repurchases that the Company may
make.

Neither Old Iron Mountain nor Pierce Leahy has paid dividends on its shares
of common stock, other than stock dividends, during the last two years.

15
<PAGE>
ITEM 6. SELECTED CONSOLIDATED FINANCIAL AND OPERATING INFORMATION.

A. OLD IRON MOUNTAIN

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1995 1996 1997 1998 1999
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Revenues:
Storage............................................. $ 64,165 $ 85,826 $ 125,968 $ 230,702 $ 317,387
Service and Storage Material Sales.................. 40,271 52,892 82,797 153,259 202,162
---------- ---------- ---------- ---------- ----------
Total Revenues.................................... 104,436 138,718 208,765 383,961 519,549
Operating Expenses:
Cost of Sales (excluding depreciation).............. 52,277 70,747 106,879 192,113 260,930
Selling, General and Administrative................. 26,035 34,342 51,668 95,867 128,948
Depreciation and Amortization....................... 12,341 16,936 27,107 48,301 65,422
---------- ---------- ---------- ---------- ----------
Total Operating Expenses.......................... 90,653 122,025 185,654 336,281 455,300
---------- ---------- ---------- ---------- ----------
Operating Income...................................... 13,783 16,693 23,111 47,680 64,249
Interest Expense, Net................................. 11,838 14,901 27,712 45,673 54,425
Other Income, Net..................................... -- -- -- 1,384 17
---------- ---------- ---------- ---------- ----------
Income (Loss) from Continuing Operations Before
Provision (Benefit) for Income Taxes and Minority
Interest Expense.................................... 1,945 1,792 (4,601) 3,391 9,841
Provision (Benefit) for Income Taxes.................. 1,697 1,435 (80) 6,558 10,579
Minority Interest Expense............................. -- -- -- -- 322
---------- ---------- ---------- ---------- ----------
Income (Loss) from Continuing Operations.............. 248 357 (4,521) (3,167) (1,060)
Income from Discontinued Operations................... -- -- -- 201 241
Loss on Sale of Discontinued Operations............... -- -- -- -- (13,400)
---------- ---------- ---------- ---------- ----------
Income (Loss) Before Extraordinary Charge............. 248 357 (4,521) (2,966) (14,219)
Extraordinary Charge (net of tax benefit)............. -- 2,126 -- -- --
---------- ---------- ---------- ---------- ----------
Net Income (Loss) Before Warrant Accretion............ 248 (1,769) (4,521) (2,966) (14,219)
Accretion of Redeemable Put Warrant................... 2,107 280 -- -- --
---------- ---------- ---------- ---------- ----------
Net Loss Applicable to Common Stockholders............ $ (1,859) $ (2,049) $ (4,521) $ (2,966) $ (14,219)
========== ========== ========== ========== ==========
Net Loss per Common Share--Basic and Diluted:
Income (Loss) from Continuing Operations............ $ (32.61) $ 0.00 $ (0.26) $ (0.12) $ (0.03)
Income from Discontinued Operations................. -- -- -- 0.01 0.01
Loss on Sale of Discontinued Operations............. -- -- -- -- (0.41)
---------- ---------- ---------- ---------- ----------
Income (Loss) Before Extraordinary Charge............. (32.61) 0.00 (0.26) (0.11) (0.43)
Extraordinary Charge (net of tax benefit)........... -- (0.15) -- -- --
---------- ---------- ---------- ---------- ----------
Net Loss Applicable to Common Stockholders.......... $ (32.61) $ (0.15) $ (0.26) $ (0.11) $ (0.43)
========== ========== ========== ========== ==========
Weighted Average Common Shares
Outstanding--Basic and Diluted.................... 57 13,911 17,172 27,470 33,345
========== ========== ========== ========== ==========
Pro Forma(1):
Net Loss Applicable to Common Stockholders.......... $ (0.16) $ (0.13) $ (0.26) $ (0.11) $ (0.43)
========== ========== ========== ========== ==========
Weighted Average Common Shares Outstanding.......... 11,676 15,206 17,172 27,470 33,345
========== ========== ========== ========== ==========
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------------------
1995 1996 1997 1998 1999
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and Cash Equivalents............................. $ 1,585 $ 3,453 $ 24,510 $ 1,715 $ 3,830
Total Assets.......................................... 186,881 281,799 636,786 967,385 1,317,212
Total Debt............................................ 121,874 184,733 428,018 456,178 612,947
Stockholders' Equity.................................. 21,011 52,384 137,733 338,882 488,754
</TABLE>

- ------------------------------

(1) Represents pro forma earnings per share as if the preferred stock that was
converted into Old Iron Mountain common stock in connection with Old Iron
Mountain's initial public offering had been converted for all periods
presented.

(2) Based on Old Iron Mountain's experience in the RIMS industry, management
believes that EBITDA is an important tool for measuring the performance of
RIMS companies (including potential acquisition targets) in several areas,
such as liquidity, operating performance and leverage. In addition, lenders
use EBITDA-based calculations as a criterion in evaluating RIMS companies,
and substantially all of Old Iron Mountain's and the Company's financing
agreements contain covenants in which EBITDA-based calculations are 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 Old
Iron Mountain's performance or to cash flow from operations (as determined
in accordance with GAAP) as a measure of liquidity. See "Management's
Discussion and Analysis of Financial Condition and Results of Operation--Old
Iron Mountain--Overview" and "--Liquidity and Capital Resources" for
discussions of other measures of performance determined in accordance with
GAAP and Old Iron Mountain's sources and applications of cash flow.

17
<PAGE>
B. PIERCE LEAHY

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

All share and per share data have been restated to reflect the stock
dividend of one-tenth of a share of common stock for each share of common stock
outstanding that was paid on January 14, 2000.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1995 1996 1997 1998 1999
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues:
Storage................................................... $ 55,501 $ 75,900 $107,879 $153,533 $190,095
Service and Storage Material Sales........................ 39,895 53,848 75,638 116,767 152,167
-------- -------- -------- -------- --------
Total Revenues.......................................... 95,396 129,748 183,517 270,300 342,262
Operating Expenses:
Cost of Sales (excluding depreciation and amortization)... 55,616 73,870 101,940 154,435 191,510
Selling, General and Administrative....................... 16,148 20,007 30,070 36,994 45,856
Merger-Related Expenses(1)................................ -- -- -- -- 2,361
Depreciation and Amortization............................. 8,163 12,869 21,528 35,772 43,655
Special Compensation Charge............................... -- -- 1,752 -- --
Foreign Currency Exchange................................. -- -- 702 7,907 (7,473)
Consulting Payments to Related Parties.................... 500 -- -- -- --
Non-Recurring Charge...................................... -- 3,254 -- -- --
-------- -------- -------- -------- --------
Total Operating Expenses................................ 80,427 110,000 155,992 235,108 275,909
Operating Income............................................ 14,969 19,748 27,525 35,192 66,353
Interest Expense, Net....................................... 9,622 17,225 29,262 42,864 52,363
-------- -------- -------- -------- --------
Income (Loss) Before Income Taxes and Extraordinary
Charge.................................................... 5,347 2,523 (1,737) (7,672) 13,990
Income Taxes................................................ -- -- 7,424 3,318 6,290
Extraordinary Charge........................................ 3,279 2,015 6,036 -- --
-------- -------- -------- -------- --------
Net Income (Loss)........................................... 2,068 508 (15,197) (10,990) 7,700
Accretion of Redeemable Warrants............................ 889 1,561 -- -- --
Preferred Stock Dividend and Accretion...................... -- -- -- -- 774
-------- -------- -------- -------- --------
Net Income (Loss) Applicable to Common Shareholders......... $ 1,179 $ (1,053) $(15,197) $(10,990) $ 6,926
======== ======== ======== ======== ========
Net Income (Loss) per Common Share--Basic and Diluted:
Income (Loss) Before Extraordinary Charge................. $ 0.37 $ 0.08 $ (0.62) $ (0.59) $ 0.37
Extraordinary Charge...................................... (0.27) (0.17) (0.41) -- --
-------- -------- -------- -------- --------
Basic Net Income (Loss) per Common Share.................. $ 0.10 $ (0.09) $ (1.03) $ (0.59) $ 0.37
======== ======== ======== ======== ========
Diluted Net Income (Loss) per Common Share................ $ 0.10 $ (0.09) $ (1.03) $ (0.59) $ 0.35
======== ======== ======== ======== ========
Shares Used in Computing Basic Net Income (Loss) per
Common Share............................................ 11,650 11,602 14,724 18,486 18,766
======== ======== ======== ======== ========
Shares Used in Computing Diluted Net Income (Loss) per
Common Share............................................ 11,979 11,694 14,724 18,486 19,525
======== ======== ======== ======== ========
Pro Forma Data (unaudited):(2)
Net Loss Applicable to Common Shareholders................ $ (9,225)
========
Basic and Diluted Net Loss per Common Share:
Loss Before Extraordinary Charge.......................... $ (0.22)
Extraordinary Charge...................................... (0.41)
--------
Pro Forma Basic and Diluted Net Loss per Common Share..... $ (0.63)
========
Shares Used in Computing Pro Forma Basic and Diluted Net
Loss per Common Share................................... 14,724
========
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1995 1996 1997 1998 1999
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OTHER DATA:
EBITDA(3)................................................... $ 23,632 $ 35,871 $ 51,507 $ 78,871 $104,896
EBITDA as a Percentage of Total Revenues.................... 24.8% 27.6% 28.1% 29.2% 30.6%
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------------------------------
1995 1996 1997 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and Cash Equivalents................................... $ 722 $ 1,254 $ 1,782 $ 2,312 $ 2,265
Total Assets................................................ 131,328 234,820 394,713 666,458 760,466
Total Debt (including Redeemable Warrants).................. 120,071 217,423 279,197 518,111 586,797
Shareholders' Equity (Deficit).............................. (18,201) (25,438) 59,323 63,095 69,808
</TABLE>

- ------------------------------

(1) Merger-related expenses in 1999 are primarily those expenses directly
related to the merger of Old Iron Mountain and Pierce Leahy that cannot be
capitalized and consist primarily of financial advisor, legal, accounting
and consulting fees, SEC registration fees and other transaction-related
costs.

(2) Until July 1, 1997, Pierce Leahy was taxed as a subchapter S corporation.
Such status was terminated in connection with Pierce Leahy's 1997 initial
public offering. The pro forma data indicates the basic and diluted net loss
per common share as if Pierce Leahy had provided for income taxes for the
entire 1997 period.

(3) Based on Pierce Leahy's experience in the RIMS industry, management believes
that EBITDA (which was defined by Pierce Leahy as earnings before interest,
taxes, depreciation and amortization, extraordinary charge, non-recurring
charges, special compensation charge, consulting payments to related
parties, merger-related expenses and foreign currency exchange) is an
important tool for measuring the performance of RIMS companies (including
potential acquisition targets) in several areas, such as liquidity,
operating performance and leverage. In addition, lenders use EBITDA-based
calculations as a criterion in evaluating RIMS companies, and substantially
all of Pierce Leahy's financing agreements contained covenants in which
EBITDA-based calculations were 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 GAAP) as an indicator of Pierce
Leahy's performance or to cash flow from operations (as determined in
accordance with GAAP) as a measure of liquidity. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operation--Pierce Leahy--Overview" and "--Liquidity and Capital Resources"
for discussions of other measures of performance determined in accordance
with GAAP and Pierce Leahy's sources and applications of cash flow.

19
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH "ITEM 6.
SELECTED CONSOLIDATED FINANCIAL AND OPERATING INFORMATION" AND THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE NOTES THERETO OF EACH OF OLD IRON MOUNTAIN AND
PIERCE LEAHY AND THE OTHER FINANCIAL AND OPERATING INFORMATION INCLUDED
ELSEWHERE IN THIS FILING.

This discussion contains "forward-looking statements" as that term is
defined in the federal securities laws. Such forward-looking statements concern
the operations, economic performance and financial condition of Iron Mountain.
The forward-looking statements are subject to various known and unknown risks,
uncertainties and other factors.

- unanticipated costs as a result Old Iron Mountain's acquisition of Pierce
Leahy;

- difficulties related to the integration of acquisitions generally and,
more specifically, the integration of the operations of Old Iron Mountain
and Pierce Leahy;

- our significant indebtedness and the cost and availability of financing
for contemplated growth;

- the cost and availability of appropriate storage facilities;

- changes in customer preferences and demand for our services;

- rapid and significant changes in technology;

- intense competition in the industry; and

- other general economic and business conditions.

A. OLD IRON MOUNTAIN

OVERVIEW

Old Iron Mountain's primary financial objective has been to increase
consolidated EBITDA, which is a source of funds for investment in continued
internal growth and growth through acquisitions and to service indebtedness. Old
Iron Mountain has benefited from growth in consolidated EBITDA from continuing
operations, which has increased from $50.2 million for 1997 to $129.7 million
for 1999 (a compound annual growth rate of 60.7%). However, the pursuit of this
objective has negatively affected other measures of Old Iron Mountain's
financial performance, such as consolidated net income.

For the years ended December 31, 1997 through 1999, Old Iron Mountain
experienced consolidated net losses. Old Iron Mountain attributes such losses in
part to significant charges associated with the pursuit of its growth strategy,
namely:

- increases in depreciation expense associated with expansion of storage
capacity;

- increases in goodwill amortization associated with acquisitions accounted
for under the purchase method; and

- increases in interest expense associated with the borrowings used to fund
acquisitions.

In June 1999, in order to focus on its RIMS business, Old Iron Mountain
decided to sell its IT Staffing business, Arcus Staffing. Old Iron Mountain
acquired Arcus Staffing in January 1998 as part of its acquisition of Arcus
Group. Old Iron Mountain has accounted for the sale of Arcus Staffing as a loss
from discontinued operations. Accordingly, the results of operations of Arcus
Staffing have been segregated from continuing operations and reported as a
separate line item on the consolidated statements of operations discussed in
Note 9 of Old Iron Mountain's Notes to Consolidated Financial Statements. The

20
<PAGE>
net loss on the sale of Arcus Staffing ($13.4 million) consists primarily of the
write-off of nondeductible goodwill.

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

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

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

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

EBITDA is an important financial performance measure in the RIMS industry,
both for determining the value of companies within the industry and for defining
standards for borrowing from institutional lenders. Old Iron Mountain's EBITDA
margins from continuing operations were 24.1% for 1997, 25.0% for 1998 and 25.0%
for 1999. The adoption in 1999 of newly-issued Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use" ("SOP 98-1"), negatively impacted Old Iron Mountain's 1999 EBITDA
margin. Excluding the impact of SOP 98-1, Old Iron Mountain's EBITDA margin for
1999 would have been 25.6%. SOP 98-1 requires certain computer software costs
associated with internal use software (primarily data conversion costs), which
were previously capitalizable, to be expensed as incurred. Further, Old Iron
Mountain acquired 18 RIMS businesses in 1997, 15 in 1998 and 17 in 1999, most of
which had lower EBITDA margins than the rest of its business. Old Iron Mountain
generally did not realize anticipated synergies relating to such acquisitions
immediately. Nonetheless, Old Iron Mountain was able to increase its recent
EBITDA margins through improved overall operating efficiencies, economies of
scale and the realization of synergies in connection with earlier acquisitions.

On February 1, 2000, Old Iron Mountain completed its acquisition of Pierce
Leahy in a stock-for-stock merger valued at approximately $1.1 billion,
including the assumption of debt and related transaction costs as discussed in
Note 17 of Notes to Old Iron Mountain's Consolidated Financial Statements.
Pierce Leahy's financial statements for the years ended December 31, 1997, 1998
and 1999 are included elsewhere in this report.

21
<PAGE>
RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Storage................................................... 60.3% 60.1% 61.1%
Service and Storage Material Sales........................ 39.7 39.9 38.9
----- ----- -----
Total Revenues.......................................... 100.0 100.0 100.0
Operating Expenses:
Cost of Sales (Excluding Depreciation).................... 51.2 50.0 50.2
Selling, General and Administrative....................... 24.7 25.0 24.8
Depreciation and Amortization............................. 13.0 12.6 12.6
----- ----- -----
Total Operating Expenses................................ 88.9 87.6 87.6
----- ----- -----
Operating Income............................................ 11.1 12.4 12.4
Interest Expense............................................ 13.3 11.9 10.5
Other Income, Net........................................... -- 0.4 0.0
----- ----- -----
Income (Loss) from Continuing Operations Before Provision
for
Income Taxes and Minority Interest Expense................ (2.2) 0.9 1.9
Provision for Income Taxes.................................. -- 1.7 2.0
Minority Interest Expense................................... -- -- 0.1
----- ----- -----
Loss from Continuing Operations............................. (2.2) (0.8) (0.2)
Income from Discontinued Operations......................... -- 0.1 0.1
Loss on Sale of Discontinued Operations..................... -- -- (2.6)
----- ----- -----
Net Loss Applicable to Common Stockholders.................. (2.2)% (0.7)% (2.7)%
===== ===== =====
EBITDA from Continuing Operations........................... 24.1% 25.0% 25.0%
===== ===== =====
</TABLE>

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Consolidated storage revenues increased $86.7 million, or 37.6%, to
$317.4 million for the year ended December 31, 1999 from $230.7 million for the
year ended December 31, 1998, primarily due to the completion of 32 acquisitions
during 1999 and 1998. Consolidated internal revenue growth was 10.9% and
resulted primarily from net increases in records and other media stored by
existing customers and from sales to new customers.

Consolidated service and storage material sales revenues increased
$48.9 million, or 31.9%, to $202.2 million for the year ended December 31, 1999
from $153.3 million for the year ended December 31, 1998, primarily due to
acquisitions. Internal revenue growth was 16.7% and resulted from increases in
service and storage material sales to existing customers and the addition of new
customer accounts.

For the reasons discussed above, total consolidated revenues increased
$135.6 million, or 35.3%, to $519.5 million for the year ended December 31, 1999
from $384.0 million for the year ended December 31, 1998. Total internal revenue
growth was 13.2%.

Consolidated cost of sales (excluding depreciation) increased
$68.8 million, or 35.8%, to $260.9 million (50.2% of consolidated revenues) for
the year ended December 31, 1999 from $192.1 million (50.0% of consolidated
revenues) for the year ended December 31, 1998. The dollar increase was
primarily attributable to the additional facility and personnel costs needed to
service the increase in records and other media stored.

22
<PAGE>
Consolidated selling, general and administrative expenses increased
$33.1 million, or 34.5%, to $128.9 million (24.8% of consolidated revenues) for
the year ended December 31, 1999 from $95.9 million (25.0% of consolidated
revenues) for the year ended December 31, 1998. The dollar increase is primarily
attributable to:

- the adoption, effective January 1, 1999, of SOP 98-1, which requires
certain computer software costs associated with internal use software
(primarily data conversion costs) that were previously capitalizable to be
expensed as incurred ($3.3 million in 1999);

- the addition of personnel and other overhead costs related primarily to
the acquisitions of First American Records Management, Inc. and Data
Base, Inc. ("Data Base");

- increased investment in sales and marketing to drive internal growth; and

- increased personnel, office and overhead costs to support growth.

Consolidated depreciation and amortization expense increased $17.1 million,
or 35.4%, to $65.4 million (12.6% of consolidated revenues) for the year ended
December 31, 1999 from $48.3 million (12.6% of consolidated revenues) for the
year ended December 31, 1998. The dollar increase is primarily attributable to
the additional depreciation and amortization expense related to acquisitions and
capital expenditures, including racking systems, information systems and
expansion of storage capacity in existing facilities.

As a result of the foregoing factors, consolidated operating income
increased $16.6 million, or 34.8%, to $64.2 million (12.4% of consolidated
revenues) for the year ended December 31, 1999 from $47.7 million (12.4% of
consolidated revenues) for the year ended December 31, 1998.

Consolidated interest expense increased $8.8 million, or 19.2%, to
$54.4 million for the year ended December 31, 1999 from $45.7 million for the
year ended December 31, 1998. The increase was primarily attributable to
increased indebtedness related to the financing of acquisitions and capital
expenditures. Such increase was partially offset by lower effective interest
rates for the year ended December 31, 1999 compared to the same period in 1998.

As a result of the foregoing factors, consolidated income from continuing
operations before the provision for income taxes and minority interest expense
increased $6.5 million to income of $9.8 million (1.9% of consolidated revenues)
for the year ended December 31, 1999 from income of $3.4 million (0.9% of
consolidated revenues) for the year ended December 31, 1998. The provision for
income taxes was $10.6 million for the year ended December 31, 1999 compared to
$6.6 million for the year ended December 31, 1998. Old Iron Mountain's effective
tax rate is higher than statutory rates primarily due to the amortization of the
nondeductible portion of goodwill associated with particular acquisitions (the
tax laws generally permit deduction of goodwill amortization for asset
purchases, but not for acquisitions of stock). In connection with its 1999
acquisitions, Old Iron Mountain recorded approximately $148.5 million in
nondeductible goodwill.

Consolidated net loss increased $11.3 million to a net loss of
$14.2 million (2.7% of consolidated revenues) for the year ended December 31,
1999 from a consolidated net loss of $3.0 million (0.7% of consolidated
revenues) for the year ended December 31, 1998. The increase in net loss is
primarily due to the loss on sale of discontinued operations of $13.4 million.

As a result of the foregoing factors, consolidated EBITDA from continuing
operations increased $33.7 million, or 35.1%, to $129.7 million (25.0% of
consolidated revenues) for the year ended December 31, 1999 from $96.0 million
(25.0% of consolidated revenues) for the year ended December 31, 1998.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

Consolidated storage revenues increased $104.7 million, or 83.1%, to
$230.7 million for the year ended December 31, 1998 from $126.0 million for the
year ended December 31, 1997, primarily due to the completion of 33 acquisitions
during 1998 and 1997. Internal revenue growth was 10.2% and resulted

23
<PAGE>
primarily from net increases in records and other media stored by existing
customers and from sales to new customers.

Consolidated service and storage material sales revenues increased
$70.5 million, or 85.1%, to $153.3 million for the year ended December 31, 1998
from $82.8 million for the year ended December 31, 1997, primarily due to
acquisitions. Internal revenue growth was 14.6% and resulted from increases in
service and storage material sales to existing customers and the addition of new
customer accounts.

For the reasons discussed above, total consolidated revenues increased
$175.2 million, or 83.9%, to $384.0 million for the year ended December 31, 1998
from $208.8 million for the year ended December 31, 1997. Total internal revenue
growth was 11.9%.

Consolidated cost of sales (excluding depreciation) increased
$85.2 million, or 79.7%, to $192.1 million (50.0% of consolidated revenues) for
the year ended December 31, 1998 from $106.9 million (51.2% of consolidated
revenues) for the year ended December 31, 1997. The dollar increase is primarily
attributable to the increase in records and other media stored and expenses
related to facility relocations. The decrease as a percentage of revenues is
primarily attributable to:

- particular data security acquisitions, including the Arcus Group
acquisition and the acquisition of a software escrow business, acquired in
the third quarter of 1997, with a higher gross margin than the rest of Old
Iron Mountain; and

- the closing of redundant facilities associated with particular
acquisitions.

Consolidated selling, general and administrative expenses increased
$44.2 million, or 85.5%, to $95.9 million (25.0% of consolidated revenues) for
the year ended December 31, 1998 from $51.7 million (24.7% of consolidated
revenues) for the year ended December 31, 1997. The dollar increase is primarily
attributable to:

- the addition of overhead attributable to the Arcus Group acquisition;

- additional salespeople, primarily related to the acquisitions of Arcus
Group and Safesite Records Management Corporation and its decision to
significantly increase its selling resources;

- increased personnel, office and overhead costs to support growth; and

- recruiting, relocation and training expenses associated with acquisition
integration.

Consolidated depreciation and amortization expense increased $21.2 million,
or 78.2%, to $48.3 million (12.6% of consolidated revenues) for the year ended
December 31, 1998 from $27.1 million (13.0% of consolidated revenues) for the
year ended December 31, 1997. The dollar increase is primarily attributable to
the additional depreciation and amortization expense related to acquisitions and
capital expenditures, including racking systems, information systems and
expansion of storage capacity in existing facilities.

As a result of the foregoing factors, consolidated operating income
increased $24.6 million, or 106.3%, to $47.7 million (12.4% of consolidated
revenues) for the year ended December 31, 1998 from $23.1 million (11.1% of
consolidated revenues) for the year ended December 31, 1997.

Consolidated interest expense increased $18.0 million, or 64.8%, to
$45.7 million for the year ended December 31, 1998 from $27.7 million for the
year ended December 31, 1997. The increase is primarily attributable to
increased indebtedness related to the financing of acquisitions and capital
expenditures. Such increase was partially offset by lower effective interest
rates for the year ended December 31, 1998 compared to the same period in 1997.

Consolidated other income for the year ended December 31, 1998 is comprised
of a $1.7 million gain resulting from the settlement of several insurance
claims, including a significant claim under Old Iron Mountain's business
interruption insurance policy, related to the March 1997 fires at Old Iron
Mountain's South Brunswick Township, New Jersey facilities. A $0.3 million loss
on a foreign currency transaction in connection with the acquisition of Iron
Mountain Europe partially offset such gain.

24
<PAGE>
As a result of the foregoing factors, consolidated income (loss) from
continuing operations before the provision (benefit) for income taxes increased
$8.0 million to income of $3.4 million (0.9% of consolidated revenues) for the
year ended December 31, 1998 from a loss of $4.6 million (2.2% of consolidated
revenues) for the year ended December 31, 1997. The provision for income taxes
was $6.6 million for the year ended December 31, 1998 compared to a benefit of
$0.1 million for the year ended December 31, 1997. Old Iron Mountain's effective
tax rate is higher than statutory rates primarily due to the amortization of the
nondeductible portion of goodwill associated with particular acquisitions (the
tax laws generally permit deduction of goodwill amortization for asset
purchases, but not for acquisitions of stock). In connection with its 1998
acquisitions, Old Iron Mountain recorded approximately $128.1 million in
nondeductible goodwill.

Consolidated net loss decreased $1.5 million to a net loss of $3.0 million
(0.7% of consolidated revenues) for the year ended December 31, 1998 from a
consolidated net loss of $4.5 million (2.2% of consolidated revenues) for the
year ended December 31, 1997.

As a result of the foregoing factors, consolidated EBITDA from continuing
operations increased $45.8 million, or 91.1%, to $96.0 million (25.0% of
consolidated revenues) for the year ended December 31, 1998 from $50.2 million
(24.1% of consolidated revenues) for the year ended December 31, 1997.

RECENT CONSOLIDATED QUARTERLY FINANCIAL DATA

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

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------------------------------------------------------------
1998 1999
----------------------------------------- -----------------------------------------
MAR. 31 JUNE 30 SEPT. 30 DEC. 31 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
-------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Storage............. $ 52,948 $ 55,592 $ 59,506 $ 62,656 $ 67,722 $ 79,928 $ 82,339 $ 87,398
Service and Storage
Material Sales.... 36,108 37,872 39,038 40,241 41,649 51,837 54,568 54,108
-------- -------- -------- -------- -------- -------- -------- --------
Total Revenues.... 89,056 93,464 98,544 102,897 109,371 131,765 136,907 141,506
Operating Expenses:
Cost of Sales
(Excluding
Depreciation)..... 44,917 46,756 49,506 50,934 54,435 66,167 69,226 71,102
Selling, General and
Administrative...... 22,360 23,638 24,069 25,800 27,875 32,938 33,381 34,754
Depreciation and
Amortization........ 11,058 11,903 12,630 12,710 13,595 16,281 16,338 19,208
-------- -------- -------- -------- -------- -------- -------- --------
Total Operating
Expenses........ 78,335 82,297 86,205 89,444 95,905 115,386 118,945 125,064
-------- -------- -------- -------- -------- -------- -------- --------
Operating Income...... $ 10,721 $ 11,167 $ 12,339 $ 13,453 $ 13,466 $ 16,379 $ 17,962 $ 16,442
======== ======== ======== ======== ======== ======== ======== ========
EBITDA from Continuing
Operations.......... $ 21,779 $ 23,070 $ 24,969 $ 26,163 $ 27,061 $ 32,660 $ 34,300 $ 35,650
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>

25
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

RECENT FINANCINGS AND SOURCES OF FUNDS

In May 1999, Old Iron Mountain issued and sold an aggregate of 5,750,000
shares (including 750,000 to cover over-allotments) of its common stock in an
underwritten public offering (the "1999 Equity Offering"). Net proceeds after
deducting underwriters' discounts were $153.8 million and were used to repay
outstanding bank debt, to repurchase all of Old Iron Mountain's common stock
issued in connection with the Data Base acquisition and for general corporate
purposes.

Old Iron Mountain's net cash provided by financing activities was
$257.9 million for the year ended December 31, 1999, consisting primarily of the
net proceeds of $153.8 million from the 1999 Equity Offering, the net proceeds
of $149.5 million from the sale of Old Iron Mountain's 8 1/4% Senior
Subordinated Notes due 2011 (the "1999 Notes") and $11.6 million of proceeds
from Iron Mountain Europe's minority shareholder to fund Iron Mountain Europe's
acquisitions, offset by $14.5 million of net repayment of indebtedness and a
payment of $39.5 million in connection with the repurchase of Old Iron
Mountain's common stock issued in connection with the Data Base acquisition. As
of December 31, 1999, outstanding borrowings under Old Iron Mountain's
$250 million credit facility (the "Credit Agreement") amounted to $5.0 million.

As of December 31, 1999, the annual maturities of Old Iron Mountain's
indebtedness for the years ending December 31, 2000, 2001, 2002, 2003 and 2004
were $9.9 million, $18.5 million, $8.3 million, $3.4 million and $3.3 million,
respectively. See Note 4 of Notes to Old Iron Mountain's Consolidated Financial
Statements. None of Old Iron Mountain's public debt is subject to scheduled
mandatory redemption before 2006.

Net cash provided by continuing operations was $56.3 million for the year
ended December 31, 1999, compared to $67.1 million for the same period in 1998.
The decrease was primarily attributable to the increase in accounts receivable
and other current assets, offset by the increase in EBITDA and accrued expenses.

At December 31, 1999, Old Iron Mountain had estimated net operating loss
carryforwards of approximately $59 million for federal income tax purposes. As a
result of such loss carryforwards, cash paid for income taxes has historically
been substantially lower than the provision for income taxes. The preceding net
operating loss carryforwards do not include additional preacquisition net
operating loss carryforwards of Arcus Group. Any tax benefit realized will be
recorded as a reduction of goodwill when, and if, realized. The Arcus Group
carryforwards expire in nine years.

CAPITAL INVESTMENTS

As Old Iron Mountain has sought to increase its EBITDA, it has made
significant capital investments, consisting primarily of: (i) acquisitions,
(ii) the purchase and construction of real estate, (iii) other capital
expenditures and (iv) customer acquisition costs. These investments have been
primarily funded through cash flows from operations, borrowings under the Credit
Agreement, a portion of the net proceeds from the sale of the 1999 Notes and the
net proceeds from the 1999 Equity Offering.

Cash paid for acquisitions was $212.2 million in 1999. In connection with
the acquisition of Data Base, Old Iron Mountain issued common stock with an
aggregate fair value of $46.0 million. During 1999, Old Iron Mountain received
net proceeds of $8.2 million in connection with the sale of Arcus Staffing as
discussed in Note 9 of Notes to Old Iron Mountain's Consolidated Financial
Statements.

In connection with its acquisition of Data Base, Old Iron Mountain issued
1,476,577 shares of its common stock with a fair value of $46.0 million.
Subsequently, all 1,476,577 shares were repurchased for $39.5 million.

During 1999, total capital expenditures were $98.7 million, of which
$23.0 million related to the purchase and construction of real estate. A
significant portion of Old Iron Mountain's capital expenditures are related to
growth and consist primarily of racking systems, management information systems,
new buildings and expansion of storage capacity in existing facilities. Less
than 10% of the capital expenditures were expended in order to maintain Old Iron
Mountain's then current revenue stream.

26
<PAGE>
In addition, Old Iron Mountain incurred costs (net of revenues received for
the initial transfer of records) related to the acquisition of large volume
accounts. In 1999, Old Iron Mountain's additions to customer acquisition costs
were $8.1 million.

ACQUISITIONS

Old Iron Mountain's liquidity and capital resources have been significantly
impacted by acquisitions made by Old Iron Mountain.

Old Iron Mountain has historically financed the cash portion of its
acquisitions with borrowings under its credit agreements in conjunction with
cash flows provided by operations and with the net proceeds of issuances of debt
securities and common stock.

In connection with its acquisition program, Old Iron Mountain has undertaken
certain restructurings of the acquired businesses. Formalized restructuring
plans for acquisitions are completed within one year of the date of acquisition.
The restructuring activities include reductions in staffing levels, elimination
of duplicate facilities and other costs associated with exiting certain
activities of the acquired businesses. In connection with these restructuring
activities, Old Iron Mountain established reserves of $4.2 million in 1999 as
part of the purchase accounting for its acquisitions. During 1999, Old Iron
Mountain expended $4.8 million for restructuring costs. In addition, Old Iron
Mountain made $0.5 million of adjustments, which reduced goodwill, as a result
of management's finalizing restructuring plans within one year of acquisition.
These expenditures consisted primarily of severance costs and costs related to
exiting facilities. At December 31, 1999, Old Iron Mountain had a total of
$9.3 million accrued for restructuring costs for all of its then completed
acquisitions. See Note 6 to Notes to Old Iron Mountain's Consolidated Financial
Statements.

B. PIERCE LEAHY

OVERVIEW

As with Old Iron Mountain, Pierce Leahy's primary financial objective has
been to increase consolidated EBITDA. Pierce Leahy defined EBITDA as earnings
before interest, taxes, depreciation and amortization, extraordinary charge,
non-recurring charge, special compensation charge, merger-related expenses and
foreign currency exchange. Pierce Leahy has benefited from growth in
consolidated EBITDA, which has increased from $51.5 million for 1997 to
$104.9 million for 1999 (a compound annual growth rate of 42.7%). As with Old
Iron Mountain, pursuit of this objective has negatively affected other measures
of Pierce Leahy's financial performance, such as consolidated net income and
consolidated net income applicable to common shareholders.

Although Pierce Leahy's operating income has increased over the last three
years, net income (loss) has fluctuated as a result of increases in interest
expense, goodwill amortization from purchase accounting, income taxes related to
the termination of Pierce Leahy's status as a Subchapter S corporation, foreign
currency exchange gains and losses and an extraordinary charge related to the
early extinguishment of debt due to a refinancing in 1997.

Pierce Leahy's revenues consist of storage revenues and related service and
storage material sales revenues. Storage revenues consist of periodic charges
related to the storage of materials (either on a per unit or per cubic foot of
records basis) and accounted for approximately 56% of total revenues for 1999.
Service and storage material sales revenues are comprised of charges for related
service activities, the sale of storage materials and courier operations.
Courier operations primarily consist of the pickup and delivery of records upon
customer request. Related service revenues arise from additions of new records,
temporary removal of records from storage, refiling of removed records,
destructions of records, permanent withdrawals from storage and sales of
specially designed storage containers and related supplies. Customers are
generally billed on a monthly basis on contractually agreed-upon terms. Included
in Pierce Leahy's service and storage material sales revenues for 1998 and 1999
are approximately $9 million and $18 million, respectively, of revenues from the
marketing literature storage and fulfillment business acquired in May 1998.

27
<PAGE>
Cost of sales (excluding depreciation and amortization) is comprised mainly
of wages and benefits, facility occupancy costs, vehicle and other equipment
costs and supplies.

Selling, general and administrative expenses primarily consist of wages and
benefit for management, administrative, marketing and data processing personnel
and also include expenses related to travel, communications, data processing
expenses, professional fees and office expenses.

Merger-related expenses in 1999 primarily represent expenses directly
related to Pierce Leahy's merger with Old Iron Mountain. These expenses
primarily consisted of financial advisor, legal, accounting and consulting fees,
SEC filing fees and other transaction costs.

Pierce Leahy's depreciation and amortization charges result primarily from
the capital-intensive nature of its business and its completed acquisitions. The
principal components of depreciation relate to racking, buildings and
improvements and data processing equipment. Amortization primarily relates to
the amortization of intangible assets associated with acquisitions, including
goodwill and the amortization of customer acquisition costs. Pierce Leahy has
accounted for all of its acquisitions under the purchase method except for two
small acquisitions in 1997, which were accounted for under the pooling of
interests method. Since the purchase price for records management companies is
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).

EBITDA is an important financial performance measure in the RIMS industry,
both for determining the value of companies within the industry and for defining
standards for borrowing from institutional lenders. Pierce Leahy's EBITDA
margins were 28.1% for 1997, 29.2% for 1998 and 30.6% for 1999. Pierce Leahy has
been able to increase its EBITDA margins through improved overall operating
efficiencies and economies of scale and the realization of synergies in
connection with its acquisitions. The Company has adopted Old Iron Mountain's
accounting policies as its own upon completion of Iron Mountain's merger with
Pierce Leahy. If Pierce Leahy had been using Old Iron Mountain's accounting
policies, its 1999 EBITDA margin would have been 28.6%.

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1997 1998 1999
Revenues: -------- -------- --------
<S> <C> <C> <C>
Storage................................................... 58.8% 56.8% 55.5%
Service and Storage Material Sales........................ 41.2 43.2 44.5
----- ----- -----
Total Revenues.......................................... 100.0 100.0 100.0
Operating Expenses:
Cost of Sales (Excluding Depreciation and
Amortization)......................................... 55.5 57.1 56.0
Selling, General and Administrative..................... 16.4 13.7 13.4
Merger-Related Expenses................................. -- -- 0.7
Depreciation and Amortization........................... 11.7 13.2 12.8
Special Compensation Charge............................. 1.0 -- --
Foreign Currency Exchange............................... 0.4 2.9 (2.2)
----- ----- -----
Total Operating Expenses.............................. 85.0 86.9 80.7
----- ----- -----
Operating Income............................................ 15.0 13.1 19.3
Interest Expense............................................ 15.9 15.9 15.3
----- ----- -----
Income (Loss) before Income Taxes and Extraordinary Item.... (0.9) (2.8) 4.0
Provision for Income Taxes.................................. 4.1 1.2 1.8
----- ----- -----
Income (Loss) before Extraordinary Item..................... (5.0) (4.0) 2.2
Extraordinary Item--Loss on Early Extinguishment of Debt.... 3.3 -- --
Preferred Stock Dividend and Accretion...................... -- -- 0.2
----- ----- -----
Net Income (Loss)........................................... (8.3)% (4.0)% 2.0%
===== ===== =====
EBITDA...................................................... 28.1% 29.2% 30.6%
===== ===== =====
</TABLE>

28
<PAGE>
YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Storage revenues increased from $153.5 million in 1998 to $190.1 million in
1999, an increase of $36.6 million or 23.8%. Service and storage material sales
revenues increased from $116.8 million in 1998 to $152.2 million in 1999, an
increase of $35.4 million, or 30.3%, due in part to a $6.4 million increase in
service revenues derived from the marketing literature storage and fulfillment
business acquired in May 1998.

Total revenues increased from $270.3 million in 1998 to $342.3 million in
1999, an increase of $72.0 million or 26.6%. Revenues from acquisitions
accounted for $34.4 million, or 12.7%, of such increase. The balance of the
revenue growth ($37.6 million) resulted from sales to new customers and from net
increases in cubic feet stored from existing customers. This represents a base
business revenue growth of 13.9% for the year ended December 31, 1999 as
compared to the year ended December 31, 1998.

Cost of sales (excluding depreciation and amortization) increased from
$154.4 million in 1998 to $191.5 million in 1999, an increase of $37.1 million
or 24.0%, but decreased as a percentage of total revenues from 57.1% in 1998 to
56.0% in 1999. The increase in dollars resulted primarily from an additional
number of employees and an increase in facility occupancy costs resulting from
the growth in cubic feet stored from existing customers and acquisitions. The
decrease as a percentage of total revenues resulted primarily from increased
operating efficiencies from the conversion of previously acquired operations
into Pierce Leahy's PLUS system.

Selling, general and administrative expenses increased from $37.0 million in
1998 to $45.9 million in 1999, an increase of $8.9 million or 24.0%, but
decreased as a percentage of total revenues from 13.7% in 1998 to 13.4% in 1999.
The dollar increase was primarily attributable to increases in staffing,
including increases in sales personnel and administrative staff and related
training expenses. The decrease as a percentage of total revenues was
attributable to economies realized from administrative efficiencies associated
with operating in a centralized manner.

Merger-related expenses of $2.4 million (0.7% of total revenues) were
incurred in 1999.

Depreciation and amortization expenses increased from $35.8 million in 1998
to $43.7 million in 1999, an increase of $7.9 million or 22.0% and decreased as
a percentage of total revenues from 13.2% in 1998 to 12.8% in 1999. The dollar
increase was primarily attributable to the additional depreciation and
amortization expense related to a full year of depreciation and amortization on
the 1998 acquisitions and the four acquisitions completed during 1999, to
capital expenditures for racking, buildings, improvements to records management
facilities and information systems and to customer acquisition costs. The
decrease as a percentage of total revenues was attributable to an increase in
revenue growth from existing and new customers and from a decrease in
acquisitions, which generally have a higher component of depreciation and
amortization expense.

Pierce Leahy had a foreign currency exchange gain for the year ended
December 31, 1999 of $7.5 million (2.2% of total revenues) as compared to a loss
of $7.9 million (2.9% of total revenues) for the year ended December 31, 1998.
The change in the foreign currency exchange is primarily due to a change in the
value of the Canadian dollar as compared to the U.S. dollar, as it relates to
Pierce Leahy Canada Company's $135.0 million of senior notes due 2008 (the
"Pierce Leahy 1998 Notes").

Interest expense increased from $42.9 million in 1998 to $52.4 million in
1999, an increase of $9.5 million or 22.2%. The increase was primarily
attributable to increased indebtedness incurred to finance acquisitions and
capital expenditures.

As a result of the foregoing factors, Pierce Leahy had income before income
taxes of $14.0 million (4.1% of revenues) for 1999, as compared to a loss before
income taxes of $7.7 million (2.8% of revenues) for 1998.

29
<PAGE>
Pierce Leahy recorded a provision for income taxes of $6.3 million (or 1.8%
of revenues) for 1999 as compared to a provision for income taxes of
$3.3 million (or 1.2% of revenues) for 1998.

Pierce Leahy issued $5 million of the pay-in-kind ("PIK") redeemable
preferred stock in March 1999. On November 1, 1999 Pierce Leahy redeemed all of
the outstanding redeemable PIK preferred stock. Preferred stock dividends and
accretion of $0.8 million relating to the PIK preferred stock were recognized in
1999.

As a result of the foregoing items, Pierce Leahy had net income applicable
to common shareholders of $6.9 million for 1999 as compared to a net loss of
$11.0 million for 1998.

EBITDA increased from $78.9 million in 1998 to $104.9 million in 1999, an
increase of $26.0 million or 33.0%, and increased as a percentage of total
revenues from 29.2% in 1998 to 30.6% in 1999. The increase as a percentage of
total revenues reflected growth in Pierce Leahy's business, economies of scale
and increased operating efficiencies.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

Storage revenues increased from $107.9 million in 1997 to $153.5 million in
1998, an increase of $45.6 million or 42.3%. Service and storage material sales
revenues increased from $75.6 million in 1997 to $116.8 million in 1998, an
increase of $41.2 million or 54.4%, in part due to $8.0 million of service
revenues derived from the marketing literature storage and fulfillment business
acquired during 1998.

Total revenues increased from $183.5 million in 1997 to $270.3 million in
1998, an increase of $86.8 million or 47.3%. Revenues from acquisitions
represented $60.4 million of this increase. The balance of total revenue growth
(approximately $26.4 million) resulted from sales to new customers and increases
in cubic feet stored from existing customers, a base business revenue growth of
approximately 14.4% compared to 1997.

Cost of sales (excluding depreciation and amortization) increased from
$101.9 million in 1997 to $154.4 million in 1998, an increase of $52.5 million
or 51.5%, and increased as a percentage of total revenues from 55.5% in 1997 to
57.1% in 1998. The increase in dollars resulted primarily from an additional
number of employees and an increase in facility occupancy costs resulting from
the growth in cubic feet stored from existing customers and acquisitions. The
increase as a percentage of total revenues resulted primarily from increased
cost of sales from acquisitions not yet integrated into Pierce Leahy's PLUS
system.

Selling, general and administrative expenses increased from $30.1 million in
1997 to $37.0 million in 1998, an increase of $6.9 million or 23.0%, but
decreased as a percentage of total revenues from 16.4% in 1997 to 13.7% in 1998.
The dollar increase was primarily attributable to increases in staffing,
including increases in sales personnel and administrative staff. The decrease as
a percentage of total revenues was attributable to economies realized from
administrative efficiencies associated with operating in a centralized manner.

Depreciation and amortization expenses increased from $21.5 million in 1997
to $35.8 million in 1998, an increase of $14.3 million or 66.2%, and increased
as a percentage of total revenues from 11.7% in 1997 to 13.2% in 1998. This
increase in both dollars and percentage of total revenues was primarily
attributable to the additional depreciation and amortization expense related to
the 16 acquisitions completed during 1998, to capital expenditures for racking,
buildings, improvements to record management facilities and information systems,
and to customer acquisition costs.

A special compensation charge of $1.8 million was recorded during 1997. This
charge relates to the write-off of unamortized compensation expense due to the
acceleration of the vesting of stock options granted on January 1, 1997 in
conjunction with Pierce Leahy's initial public offering of common stock.

30
<PAGE>
Pierce Leahy had a foreign currency exchange loss for the year ended
December 31, 1998 of $7.9 million (2.9% of total revenues) as compared to a loss
of $0.7 million (0.4% of total revenues) for the year ended December 31, 1997.
The change in the foreign currency exchange is primarily due to a change in the
value of the Canadian dollar as compared to the U.S. dollar, as it relates to
the Pierce Leahy 1998 Notes.

Interest expense increased from $29.3 million in 1997 to $42.9 million in
1998, an increase of $13.6 million or 46.5%. The increase was primarily
attributable to increased indebtedness related to financing acquisitions and
capital expenditures.

As a result of the foregoing factors, Pierce Leahy had a loss before income
taxes and extraordinary charge of $7.7 million (2.8% of revenues) for 1998, as
compared to a loss before income taxes and extraordinary charge of $1.7 million
(0.9% of revenues) for 1997.

Pierce Leahy recorded an extraordinary charge of $6.0 million (3.3% of total
revenues) in 1997 which related to the early extinguishment of debt as a result
of refinancing and expanding its existing credit agreement in 1997. The
$6.0 million extraordinary charge is net of a tax benefit of $4.0 million.

Pierce Leahy recorded a provision for income taxes of $7.4 million (or 4.1%
of revenues) for 1997 and a provision for income taxes of $3.3 million (or 1.2%
of revenues) for 1998. For 1997, these taxes were comprised of the tax effect
from the termination of Pierce Leahy's Subchapter S corporation 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).

As a result of the foregoing items, Pierce Leahy had a net loss of
$11.0 million for 1998, as compared to a net loss of $15.2 million for 1997.

EBITDA increased from $51.5 million in 1997 to $78.9 million in 1998, an
increase of $27.4 million or 53.1% and increased as a percentage of total
revenues from 28.1% in 1997 to 29.2% in 1998. The increase as a percentage of
the total revenues reflected growth in Pierce Leahy's business, economies of
scale and increased operating efficiencies.

RECENT CONSOLIDATED QUARTERLY FINANCIAL DATA

The following table sets forth, for the quarterly periods indicated,
information derived from Pierce Leahy's consolidated statements of operations.
The unaudited quarterly information has been prepared on the same basis as the
annual financial information and, in management's opinion, includes all
adjustments (consisting of normal recurring accruals) necessary to present
fairly the information for the quarters

31
<PAGE>
presented. The operating results for any quarter are not necessarily indicative
of results for the year or for any future period.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------------------------------------------------------------
1998 1999
----------------------------------------- -----------------------------------------
MAR. 31 JUNE 30 SEPT. 30 DEC. 31 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
-------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Storage.............................. $33,214 $37,183 $40,820 $42,316 $44,174 $46,921 $48,761 $50,239
Service and, Storage Material
Sales.............................. 23,076 26,963 33,777 32,951 36,020 38,608 39,275 38,264
------- ------- ------- ------- ------- ------- ------- -------
Total Revenues....................... 56,290 64,146 74,597 75,267 80,194 85,529 88,036 88,503
Operating Expenses:
Cost of Sales (Excluding Depreciation
and Amortization).................. 32,915 36,279 41,961 43,280 45,595 48,261 49,573 48,081
Selling, General and Administrative.... 8,774 8,856 9,882 9,482 10,578 11,562 11,423 12,293
Depreciation and Amortization.......... 7,219 8,577 9,385 10,591 9,943 11,253 10,888 11,571
Merger-Related Expenses................ -- -- -- -- -- -- -- 2,361
Foreign Currency Exchange.............. (62) 3,724 4,246 (1) (1,815) (3,150) (540) (1,968)
------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses............. 48,846 57,436 65,474 63,352 64,301 67,926 71,344 72,338
------- ------- ------- ------- ------- ------- ------- -------
Operating Income....................... $ 7,444 $ 6,710 $ 9,123 $11,915 $15,893 $17,603 $16,692 $16,165
======= ======= ======= ======= ======= ======= ======= =======
EBITDA................................. $14,601 $19,011 $22,754 $22,505 $24,021 $25,706 $27,040 $28,129
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF FUNDS

Net cash provided by financing activities was $47.6 million for the year
ended December 31, 1999, consisting primarily of $112.3 million of borrowings
under Pierce Leahy's credit facility, $6.9 million of proceeds from the issuance
of long-term debt and $4.6 million of proceeds from the issuance of the
redeemable PIK preferred stock, offset by payments of $64.6 million on
borrowings under the credit facility, payments of $5.3 million on long-term
debt, payments of $5.0 million on the redeemable PIK preferred stock and
payments of $1.2 million for debt financing costs.

In December 1999, Pierce Leahy amended the U.S. portion of its credit
facility to provide an increase in the amount available for borrowing from
$175 million to $195 million; all other material terms and conditions remained
the same.

Pierce Leahy's credit facility contained a number of financial and other
covenants restricting its ability to incur additional indebtedness and make
certain types of expenditures. Covenants in the indentures governing Pierce
Leahy's and Pierce Leahy Canada Company's notes also restrict borrowings under
its credit facility. As of December 31, 1999, $165.7 million was outstanding
under its credit facility and an additional $17.3 million of the credit facility
was reserved to secure the issuance of letters of credit to guarantee the seller
notes issued in conjunction with the Datavault Limited acquisition. The
effective interest rate on the credit facility, as of December 31, 1999, was
approximately 9.1%. Pierce Leahy's credit facility was terminated and paid in
full upon the acquisition of Pierce Leahy by Old Iron Mountain on February 1,
2000.

As of December 31, 1999, the annual maturities of Pierce Leahy's
indebtedness for the years ending December 31, 2000, 2001, 2002, 2003 and 2004
were $22.8 million, $3.2 million, $33.6 million, $63.4 million and $75.0,
respectively. See Note 3 of Pierce Leahy's Notes to Consolidated Financial
Statements.

Net cash provided by operating activities was $38.5 million and
$51.2 million for 1998 and 1999, respectively. The $12.7 million increase from
1998 to 1999 primarily resulted from the $26.0 million

32
<PAGE>
increase in EBITDA and an increase in working capital of $2.1 million, offset by
an increase in cash paid for interest of $12.7 million, unfavorable foreign
currency cash translations of $2.3 million and the payment of merger-related
expenses of $2.4 million.

At December 31, 1999, Pierce Leahy had estimated net operating loss
carryforwards of approximately $20.4 million for federal and state income tax
purposes. In addition, Pierce Leahy had an additional $8.3 million of foreign
net operating loss carryforwards. As a result of such loss carryforwards, cash
paid for income taxes has historically been substantially lower than the
provision for income taxes. See Note 5 of Notes to Pierce Leahy's Consolidated
Financial Statements.

CAPITAL INVESTMENTS

As Pierce Leahy has sought to increase its EBITDA, it has made significant
capital investments, consisting primarily of: (i) acquisitions, (ii) the
purchase and construction of real estate, (iii) other capital expenditures and
(iv) customer acquisition costs. These investments were primarily funded through
cash flows from operations and borrowings under Pierce Leahy's credit facility.

In 1999, Pierce Leahy completed four acquisitions for an aggregate purchase
price of approximately $42.2 million, consisting of $23.3 million in net cash
and $18.9 million in seller notes. The most significant of these acquisitions
was Datavault Limited, a U.K. based RIMS company with operations in seven
markets throughout England and Scotland. This acquisition was financed by
borrowings under Pierce Leahy's credit facility and the issuance of seller
notes.

Total 1999 capital expenditures were $57.5 million, of which $7.7 million
related to the purchase and construction of real estate. A significant portion
of Pierce Leahy's capital expenditures are related to growth and consist
primarily of racking systems, management information systems, new buildings and
expansion of storage capacity in existing facilities. Pierce Leahy's data
processing capital expenditures are also largely related to growth. Less than
10% of the capital expenditures were expended in order to maintain Pierce
Leahy's then current revenue stream.

Additions to customer acquisition costs in 1999 were $17.4 million. Customer
acquisition costs consist primarily of sales commissions and move-in costs.
Customer acquisition costs are capitalized and amortized over six years, which
is the average initial contract term of new customer accounts.

ACQUISITIONS

In connection with its acquisition program, Pierce Leahy has undertaken
certain restructurings of the acquired businesses. Formalized restructuring
plans for acquisitions are completed within one year of the date of acquisition.
The restructuring activities include reductions in staffing levels, elimination
of duplicate facilities and other costs associated with exiting certain
activities of the acquired businesses. In connection with these restructuring
activities, Pierce Leahy established reserves of $1.5 million in 1999, as part
of the purchase accounting for its 1999 acquisitions. During 1999, Pierce Leahy
expended $0.9 million for restructuring costs. These expenditures consisted
primarily of severance costs and costs related to exiting facilities. At
December 31, 1999, Pierce Leahy had a total of $2.4 million accrued for
restructuring costs for all of its then completed acquisitions. See Note 12 to
Notes to Pierce Leahy's Consolidated Financial Statements.

33
<PAGE>
C. THE COMPANY

LIQUIDITY AND CAPITAL RESOURCES

RECENT FINANCINGS AND SOURCES OF FUNDS

Effective February 1, 2000, Old Iron Mountain amended and restated the
Credit Agreement (the "Amended Credit Agreement") to repay Pierce Leahy's credit
facility, to increase the aggregate principal amount available to
$400.0 million and to include the ability to borrow in certain foreign
currencies. The facility matures on January 27, 2005. Interest on borrowings
under the Amended Credit Agreement will be paid at the Company's choice of four
different variable interest rates. Restrictive covenants under the Amended
Credit Agreement are similar to those contained in the Credit Agreement. See
Note 4 of Notes to Old Iron Mountain's Consolidated Financial Statements.

As of March 1, 2000, the Company had outstanding borrowings of approximately
$201 million under the Amended Credit Agreement, which were used to fund, among
other things, the repayment of Pierce Leahy's revolving credit facility, the
purchase price of recent acquisitions, general corporate expenses and merger
costs.

As of March 1, 2000, the Company had approximately $1.2 billion of total
debt, of which $1.0 billion had fixed interest rates and $0.2 billion had
variable interest rates.

CAPITAL INVESTMENTS

Given its acquisition strategy, the Company's liquidity and capital
resources may be significantly impacted for the foreseeable future. The
Company's future interest expense may increase significantly as a result of the
additional indebtedness it may incur to finance possible future acquisitions. To
the extent that future acquisitions are financed by additional borrowings under
the Amended Credit Agreement or other credit facilities, or the future issuance
of debt securities, the resulting increase in debt and interest expense could
have a negative effect on such measures of liquidity as debt to equity, EBITDA
to debt and EBITDA to interest expense.

From January 1, 2000 through the date of its merger with Pierce Leahy, Old
Iron Mountain acquired one additional business (excluding the acquisition of
Pierce Leahy), and from February 1, 2000 through March 1, 2000, the Company
acquired one additional business. The total cost of these two acquisitions was
$11.7 million in cash.

The Company expects to record reserves for the acquisitions completed
between January 1, 2000 and March 1, 2000 and is currently evaluating its
restructuring plans. The Company will continue to re-evaluate its restructuring
plans regarding these acquisitions, as well as those made by Old Iron Mountain
and Pierce Leahy during 1999, during the year following their consummation.

On February 1, 2000, Old Iron Mountain completed the acquisition of Pierce
Leahy in a stock-for-stock merger valued at approximately $1.1 billion. Because
immediately after the merger Old Iron Mountain stockholders owned approximately
65% of the Company's outstanding Common Stock, the acquisition will be accounted
for as a reverse acquisition, with Old Iron Mountain treated as the acquirer.
The total consideration for this transaction was comprised of:
(i) 18.8 million shares of the Company's Common Stock with a fair value of
approximately $444 million; (ii) options to acquire approximately 1.5 million
shares of the Company's Common Stock with a fair value of approximately
$25 million; (iii) assumed Pierce Leahy debt with a fair value of approximately
$579 million; and (iv) approximately $4 million of capitalized transaction
costs. The acquisition will be accounted for under the purchase method.

On February 18, 2000, the Company entered into an agreement with DSC and
Suddath Van Lines, Inc. to acquire substantially all of the assets of DSC, as a
result of which the Company will acquire the RIMS business of DSC, and will also
lease or sublease from DSC, or assume DSC's leases with regard to,

34
<PAGE>
certain related real estate. At closing, the Company will pay aggregate
consideration of approximately $54 million in cash in connection with the DSC
acquisition, including payments to certain officers as consideration for
non-competition covenants. The closing of the DSC acquisition is subject to
customary conditions and is expected to occur in the second quarter of 2000,
although no assurance can be given that it will be completed. The acquisition
will be funded with borrowings under the Amended Credit Agreement.

The Company currently estimates that its capital expenditures (other than
capital expenditures related to future acquisitions, which cannot be presently
estimated) for 2000 will be approximately $160 million. The Company expects to
fund these expenditures with cash flows from operations and borrowings under the
Amended Credit Agreement.

The Company has begun to assess opportunities in the digital storage
business driven by e-commerce and facilitated by the Internet. Services
associated with this business would expand the Company's range of services into
the use of the Internet to facilitate the backup and storage of customer data.
The Company is in the early stages of exploring these new business
opportunities, and anticipates investing approximately $10 million to
$20 million over the next two years to further develop these opportunities. The
Company intends to fund this effort with cash flows from operations and
borrowings under the Amended Credit Agreement.

PIERCE LEAHY/OLD IRON MOUNTAIN INTEGRATION

The Company is currently in the process of integrating the operations and
headquarters functions of Old Iron Mountain and Pierce Leahy on a "best
practices" basis. This process includes the planning, development and execution
of an integration plan. During fiscal years 2000 and 2001, the Company expects
to integrate overhead and support functions and to begin combining field
operations, with the goal of full integration within three years after the
merger. Management's current estimate is that the expenditures to integrate the
two companies, the majority of which will be incurred over the next two years,
will total approximately $15 million. These costs will consist primarily of
severance and relocation of employees, transition bonuses, consultants' fees,
reimaging expenses and system conversion costs. The accounting treatment will
vary based on the nature of the expenses and will be finalized as the
integration plans are completed. The Company expects to take a restructuring
charge of not more than $5 million during fiscal year 2000 related to the
merger. As a result of the integration effort, management expects that the
Company will realize an estimated $15 million in annual operating cost savings
within three years after the merger. These cost savings will primarily result
from the elimination of redundant corporate expenses and more efficient
operations and utilization of real estate. The Company intends to fund the
integration effort with cash flows from operations and borrowings under the
Amended Credit Agreement.

FUTURE CAPITAL NEEDS

The Company's primary financial objective continues to be to increase
consolidated EBITDA, which is a source of funds for investment in continued
internal growth and growth through acquisitions and to service indebtedness. The
Company's ability to generate sufficient cash to fund its needs depends
generally on the results of its operations and the availability of financing.
Management believes that cash flows from operations in conjunction with
borrowings from existing and possible future debt financings will be sufficient
for the foreseeable future to meet debt service requirements and to make
possible future acquisitions and capital expenditures. However, there can be no
assurance in this regard or that the terms available for any future financing,
if required, would be favorable to the Company.

35
<PAGE>
SEASONALITY

Historically, the Company's businesses have not been subject to seasonality
in any material respect.

INFLATION

Certain of the Company's expenses, such as wages and benefits, occupancy
costs and equipment repair and replacement, are subject to normal inflationary
pressures. Although the Company to date has been able to offset inflationary
cost increases through increased operating efficiencies and the negotiation of
favorable long-term real estate leases, the Company cannot assure that it will
be able to offset any future inflationary cost increases through similar
efficiencies, leases or increased storage or service charges.

FOREIGN CURRENCY EXCHANGE RATES

The Company generally views its investment in foreign businesses with a
functional currency other than the Company's reporting currency as long-term.
These investments are sensitive to fluctuations in foreign currency exchange
rates. The functional currencies of the Company's foreign subsidiaries are
principally denominated in Canadian dollars, British pounds sterling, French
francs, Spanish pesetas and Mexican pesos. The effect of a change in foreign
exchange rates on the Company's net investment in foreign subsidiaries is
reflected in the "Accumulated other comprehensive items" component of
shareholders' equity. A 10% depreciation in year-end 1999 functional currencies,
relative to the U.S. dollar, would result in a $4.2 million reduction in
stockholders' equity of Old Iron Mountain, and a $1.3 million reduction in
shareholders' equity of Pierce Leahy.

YEAR 2000 IMPACT

As of the date of this report, the Company has completed its year 2000
initiatives which included: (i) testing and upgrading its operational systems
and facilities; (ii) assessing the year 2000 readiness of its key suppliers,
vendors and customers; and (iii) developing contingency plans.

As a result of completing these initiatives, the Company believes that all
of its operational systems and critical non-information technology systems are
year 2000 compliant. In addition, the Company is not aware of any significant
supplier or vendor that has experienced material disruption due to year 2000
issues. The Company has also developed a contingency plan to allow its primary
business operations to continue despite disruptions due to year 2000 problems,
if any, that might yet arise in the future.

While to date the Company has not experienced any negative consequences
arising from year 2000 issues, there can be no assurance that in the future the
Company's business operations or financial condition may not be impacted by year
2000 problems.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

The Company does not hold any derivative financial instruments or derivative
commodity instruments. Old Iron Mountain's investment in Iron Mountain Europe,
which was financed with British pounds, as described in Note 2 to Old Iron
Mountain's Notes to Consolidated Financial Statements, and other international
investments may be subject to risks and uncertainties relating to fluctuations
in currency valuation.

One of the Company's Canadian subsidiaries, Pierce Leahy Canada Company, has
U.S. dollar denominated debt. Gains and losses due to exchange rate fluctuations
related to this debt are recognized in Pierce Leahy's consolidated statements of
operations.

The Company engages neither in speculative nor derivative trading
activities. As of December 31, 1999, Old Iron Mountain had approximately
$43 million of debt outstanding with a weighted average variable interest rate
of 5.69% and approximately $570 million of fixed rate debt outstanding, while
Pierce

36
<PAGE>
Leahy had approximately $166 million of debt outstanding with a weighted average
variable interest rate of 7.99% and approximately $421 million of fixed rate
debt outstanding. If the weighted average variable interest rate had increased
by 1%, such increase would have had a negative impact on Old Iron Mountain's net
income for the year ended December 31, 1999 of approximately $683,000 and on
Pierce Leahy's net income for the year ended December 31, 1999 of approximately
$1.5 million. See Note 4 to Notes to Old Iron Mountain's Consolidated Financial
Statements for a discussion of Old Iron Mountain's long-term indebtedness,
including the fair values of such indebtedness as of December 31, 1999 and
Note 3 to Notes to Pierce Leahy's Consolidated Financial Statements for a
discussion of Pierce Leahy's long-term indebtedness, including the fair values
of such indebtedness as of December 31, 1999.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See Item 14(a).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

37
<PAGE>
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The Directors and executive officers of the Company are as follows (all
information is as of March 30, 2000):

<TABLE>
<CAPTION>
NAMES OF DIRECTORS AND
EXECUTIVE OFFICERS AGE POSITION
- ------------------------------------------ -------- ------------------------------------------
<S> <C> <C>
C. Richard Reese(1)....................... 54 Chairman of the Board of Directors and
Chief Executive Officer
J. Peter Pierce(1)........................ 54 President and Director
David S. Wendell.......................... 46 Senior Vice President
John F. Kenny, Jr......................... 42 Executive Vice President, Chief Financial
Officer and Director
Harold E. Ebbighausen..................... 45 President of Arcus Data Security, Inc.
Clarke H. Bailey(1)(3).................... 45 Director
Constantin R. Boden(2)(3)................. 63 Director
Kent P. Dauten(2)......................... 44 Director
Eugene B. Doggett......................... 63 Director
B. Thomas Golisano........................ 58 Director
Arthur D. Little(2)(3).................... 56 Director
Howard D. Ross............................ 48 Director
Vincent J. Ryan(1)(3)..................... 64 Director
</TABLE>

- ------------------------------

(1) Member of the Executive Committee; Mr. Ryan is the Chairman of the Executive
Committee.

(2) Member of the Audit Committee; Mr. Boden is the Chairman of the Audit
Committee.

(3) Member of the Compensation Committee; Mr. Little is the Chairman of the
Compensation Committee.

The Company Board currently consists of 11 Directors. There are three
classes of Directors who serve for three year terms and are elected on a
staggered basis, one class of Directors standing for election each year.
Directors of each class hold office until the third annual meeting of the
shareholders of the Company following their election or until their successors
are elected and qualified. Mr. Wendell was elected a Director of the Company
upon the closing of the merger of Old Iron Mountain and Pierce Leahy. He
subsequently resigned, and Mr. Kenny was elected a Director by the Company Board
to serve out Mr. Wendell's term.

The executive officers were elected following the merger of Old Iron
Mountain and Pierce Leahy as of February 1, 2000. All executive officers hold
office at the discretion of the Company Board until the first meeting of the
Company Board following the next annual meeting of shareholders and until their
successors are chosen and qualified.

DIRECTORS AND EXECUTIVE OFFICERS

C. RICHARD REESE is the Chairman of the Company Board and Chief Executive
Officer of the Company, positions he has held since February 2000. Prior to the
merger with Pierce Leahy, Mr. Reese had been the Chairman of the Old Iron
Mountain Board of Directors since November 1995, a Director of Old Iron Mountain
since 1990 and the Chief Executive Officer of Old Iron Mountain since 1981.
Mr. Reese was also the President of Old Iron Mountain from 1981 until
November 1985. Mr. Reese is a member of the investment committee of Schooner
Capital LLC ("Schooner"), a shareholder of the Company. Prior to joining Old
Iron Mountain, Mr. Reese lectured at Harvard Business School in
"Entrepreneurship" and provided consulting services to small- and medium-sized
emerging enterprises. Mr. Reese has also served as the President and a Director
of PRISM. He holds a Master of Business Administration degree from Harvard
Business School.

38
<PAGE>
J. PETER PIERCE is the President and a Director of the Company, positions he
has held since February 2000. Prior to the merger, Mr. Pierce had been the
President and Chief Executive Officer of Pierce Leahy since 1995, and a Director
of Pierce Leahy since the early 1970s. From 1984 to 1995, Mr. Pierce was the
President and the Chief Operating Officer of Pierce Leahy. Prior to 1984, he
served in various other capacities with Pierce Leahy, 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.

DAVID S. WENDELL is a Senior Vice President of the Company, a position he
has held since February 2000. He was also a Director of the Company from the
date of the merger until his resignation on February 28, 2000. Prior to the
merger, he had been the President and Chief Operating Officer and a Director of
Old Iron Mountain since November 1995. After practicing law with Brown & Wood,
Mr. Wendell joined Old Iron Mountain in 1984, where he served in a variety of
positions. Prior to November 1995, he was Executive Vice President, Atlantic
Area, and prior to 1991, he was Vice President, New England Region. Mr. Wendell
holds a Master of Business Administration degree from Harvard Business School
and a Juris Doctor degree from the University of Virginia.

JOHN F. KENNY, JR. is the Executive Vice President and the Chief Financial
Officer of the Company, positions he has held since February 2000. He was also
recently appointed as a Director of the Company to fill the vacancy created by
the resignation of Mr. Wendell. Prior to the merger, he had been the Executive
Vice President and the Chief Financial Officer of Old Iron Mountain since
May 1997. Mr. Kenny joined Old Iron Mountain in 1991 and held a number of
operating positions before assuming the position of Vice President of Corporate
Development in 1995. Prior to 1991, Mr. Kenny was a Vice President of CS First
Boston Merchant Bank, New York, with responsibility for risk capital
investments. Mr. Kenny has also served as a Director and the Treasurer of PRISM.
He holds a Master of Business Administration degree from Harvard Business
School.

HAROLD E. EBBIGHAUSEN is the President of Arcus Data Security, Inc., a
subsidiary of the Company, a position he has held since July 1998.
Mr. Ebbighausen was an Executive Vice President of Old Iron Mountain from
July 1997 until July 1998 and a Vice President of Data Security Services of Old
Iron Mountain from September 1996 through June 1997. Prior to joining Old Iron
Mountain, Mr. Ebbighausen was Vice President of Data Management Services with
INSCI Corporation, a software provider for computer output and data storage
solutions to optical and CD technology. Previously, he held a number of field
management positions with Anacomp, Inc., a service bureau provider in the
micrographics industry.

CLARKE H. BAILEY is a Director of the Company, a position he has held since
February 2000. Prior to the merger, he had been a Director of Old Iron Mountain
since January 1998. He is Co-Chairman and a Director of Hudson River Capital
LLC, a private equity firm, and Chairman, Chief Executive Officer and a Director
of National Fulfillment, Inc., a private company. Mr. Bailey was the Chairman
and Chief Executive Officer of each of Arcus Group, United Acquisition Company
and Arcus Technology Services, Inc. from 1995 until their acquisition by Old
Iron Mountain in January 1998. He is a Director of Connectivity
Technologies Inc., Swiss Army Brands, Inc. and SWWT, Inc. (formerly known as
Sweetwater, Inc.). Mr. Bailey also serves as Chairman and a Director of Glenayre
Technologies, Inc. (formerly N-W Group, Inc.), a manufacturing company in the
telecommunications industry. He holds a Master of Business Administration degree
from The Wharton School, University of Pennsylvania.

CONSTANTIN R. BODEN is a Director of the Company, a position he has held
since February 2000. Prior to the merger, he had been a Director of Old Iron
Mountain since December 1990. Mr. Boden is the principal of Boden Partners LLC
and chairman of the advisory board of Boston Capital Ventures, a risk capital
concern. For 34 years, until January 1995, Mr. Boden was employed by The First
National Bank of Boston, most recently as Executive Vice President,
International Banking. He holds a Master of Business Administration degree from
Harvard Business School.

KENT P. DAUTEN is a Director of the Company, a position he has held since
February 2000. Prior to the merger, he had been a Director of Old Iron Mountain
since November 1997. He also serves as President of

39
<PAGE>
Keystone Capital, Inc., a management and consulting advisory service firm, a
position he has held since March 1994. In February 1995, Mr. Dauten founded
HIMSCORP, Inc. (d/b/a Records Masters) and served as its President until its
acquisition by Old Iron Mountain in November 1997. Mr. Dauten currently serves
as a Director of Health Management Associates, Inc., a hospital management firm,
and is a Trustee of ElderTrust, a healthcare real estate investment trust.
Mr. Dauten holds a Master of Business Administration degree from Harvard
Business School.

EUGENE B. DOGGETT is a Director of the Company, a position he has held since
February 2000. Prior to the merger, he had been a Director of Old Iron Mountain
since 1990. From 1987 until May 1997, Mr. Doggett was the Chief Financial
Officer of Old Iron Mountain, and from 1990 until May 1998, Mr. Doggett was an
Executive Vice President of Old Iron Mountain. Mr. Doggett is also a Director of
Mac-Gray Corporation, a publicly held supplier of card and coin-operated laundry
services in multiple housing facilities. Prior to joining Old Iron Mountain, he
had extensive experience in commercial and investment banking, as well as
financial and general management experience at senior levels. He holds a Master
of Business Administration degree from Harvard Business School.

B. THOMAS GOLISANO is a Director of the Company, a position he has held
since February 2000. Prior to the merger, he had been a Director of Old Iron
Mountain since June 1997. Mr. Golisano was Chairman of Safesite Records
Management Corporation until its acquisition by Old Iron Mountain in June 1997.
He founded Paychex Inc., a publicly held, national payroll service company, in
1971 and serves as its Chairman, President and Chief Executive Officer.
Mr. Golisano serves on the Board of Trustees of Rochester Institute of
Technology and on the boards of several privately held companies. He has also
served on the boards of numerous non-profit organizations and is the founder of
the B. Thomas Golisano Foundation.

ARTHUR D. LITTLE is a Director of the Company, a position he has held since
February 2000. Prior to the merger, he had been a Director of Old Iron Mountain
since November 1995. Mr. Little is a principal of The Little Investment Company,
which he founded in 1992. Prior to that, he was Managing Director of and also a
partner in Narragansett Capital, Inc., a private investment firm. He holds a
Bachelor of Arts degree in history from Stanford University.

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

VINCENT J. RYAN is a Director of the Company, a position he has held since
February 2000. Prior to the merger, Mr. Ryan had been a Director of Old Iron
Mountain for over ten years. Mr. Ryan is the founder of Schooner and has served
as the Chairman and Chief Executive Officer of Schooner since 1971. Prior to
November 1995, Mr. Ryan served as Chairman of the Old Iron Mountain Board of
Directors.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's executive officers and Directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, must file
reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the
Securities and Exchange Commission (the "Commission"). Such executive officers,
Directors and ten percent shareholders are also required by Commission rules to
furnish to the Company copies of all Section 16(a) reports that they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons that they were not required to
file a Form 5, the Company believes that, during the fiscal year ended
December 31, 1999, the executive officers, Directors and ten percent
shareholders of both Old Iron Mountain and Pierce Leahy complied with all
Section 16(a) filing requirements applicable to such persons.

40
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.

A. OLD IRON MOUNTAIN

The following table provides certain information concerning compensation
earned by the Chief Executive Officer and the other four most highly compensated
executive officers of Old Iron Mountain measured as of December 31, 1999 (the
"Old Iron Mountain Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
NUMBER OF
ANNUAL COMPENSATION SHARES
------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
- --------------------------- -------- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
C. Richard Reese....................... 1999 $358,000 $250,000 0 $3,200
Chairman of the Board and 1998 $308,538 $190,000 0 $4,000
Chief Executive Officer 1997 $298,381 $200,000 0 $4,000

David S. Wendell(2).................... 1999 $243,800 $171,000 0 $3,200
President and Chief 1998 $224,981 $138,588 0 $4,000
Operating Officer 1997 $221,723 $150,000 47,244 $4,000

John F. Kenny, Jr...................... 1999 $218,300 $153,000 26,765 $3,200
Executive Vice President and 1998 $192,788 $135,000 0 $2,400
Chief Financial Officer 1997 $166,723 $150,000 158,268 $2,400

Harold E. Ebbighausen.................. 1999 $193,300 $ 80,000 35,690 $3,200
President of Arcus Data 1998 $148,269 $110,000 0 $2,400
Security, Inc. 1997 $128,213 $ 49,365 16,536 $ 0

Robert P. Swift(3)..................... 1999 $160,268 $ 64,107 11,895 $2,870
Executive Vice President 1998 $150,750 $ 30,150 0 $5,000
1997 $145,542 $ 54,991 0 $4,000
</TABLE>

- ------------------------------

(1) Reflects Old Iron Mountain's matching contribution to The Iron Mountain
Companies 401(k) Plan for each individual. Amounts shown for 1999 are
estimated maximum contributions; the actual contributions have not yet been
calculated.

(2) Mr. Wendell is currently the Senior Vice President of the Company.

(3) Following the merger of Old Iron Mountain and Pierce Leahy, Mr. Swift is no
longer classified as an executive officer of the Company.

41
<PAGE>
The following table sets forth certain information concerning the grant of
options to purchase Old Iron Mountain common stock to the Old Iron Mountain
Named Executive Officers during the year ended December 31, 1999.

OPTION GRANTS IN 1999

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT ANNUAL RATES OF STOCK
OF TOTAL APPRECIATION
NUMBER OF OPTIONS FOR
SECURITIES GRANTED TO EXERCISE OPTION TERM(1)
NAME AND UNDERLYING OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
PRINCIPAL POSITION GRANTED FISCAL YEAR 1999 ($/SH) DATE 5% 10%
- ------------------------------ ------------------ ---------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
John F. Kenny, Jr............. 26,765 6.18% $33.625 9/12/2009 $565,988 $1,434,325
Executive Vice President and
Chief Financial Officer
Harold E. Ebbighausen......... 35,690 8.24% $33.625 9/12/2009 $754,722 $1,912,612
President of Arcus
Data Security, Inc.
Robert P. Swift(2)............ 11,895 2.75% $33.625 9/12/2009 $251,539 $ 637,448
Executive Vice President
</TABLE>

- --------------------------

(1) Potential Realizable Value is based on the assumed growth rates for an
assumed ten-year option term. Five percent annual growth results in a common
stock price per share of $54.77, and ten percent annual growth results in a
common stock price per share of $87.21, respectively, for such term. The
actual value, if any, an executive may realize will depend on the excess of
the market price of the common stock over the exercise price on the date the
option is exercised. There is no assurance that the value realized by an
executive will be at or near the amounts reflected in this table.

(2) Following the merger of Old Iron Mountain and Pierce Leahy, Mr. Swift is no
longer classified as an executive officer of the Company.

The following table sets forth certain information with respect to stock
options during the year ended December 31, 1999 exercised by, and the
unexercised options to purchase common stock held by, the Old Iron Mountain
Named Executive Officers.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED IN-
NUMBER OF UNEXERCISED THE-MONEY-
OPTIONS AT OPTIONS AT
DECEMBER 31, 1999(1) DECEMBER 31, 1999
NAME AND PRINCIPAL SHARES ACQUIRED VALUE --------------------------- ---------------------------
POSITION ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David S. Wendell(2)............. 1,200 $24,825 211,444 73,631 $6,536,461 $1,766,883
President and Chief
Operating Officer
John F. Kenny, Jr............... 0 $0 155,453 155,693 $3,885,510 $2,766,105
Executive Vice President,
Chief Financial Officer
Harold E. Ebbighausen........... 0 $0 18,764 53,712 $ 338,139 $ 498,831
President of Arcus
Data Security Inc.
Robert P. Swift(3).............. 0 $0 49,700 25,753 $1,576,424 $ 449,462
Executive Vice President
</TABLE>

- ------------------------------

(1) Based on a year-end value of $38.59375 per share, less the exercise price.

(2) Mr. Wendell is currently the Senior Vice President of the Company.

(3) Following the merger of Old Iron Mountain and Pierce Leahy, Mr. Swift is no
longer classified as an executive officer of the Company.

42
<PAGE>
B. PIERCE LEAHY

The following table provides certain information concerning compensation
earned by the Chief Executive Officer and the other five most highly compensated
executive officers of Pierce Leahy measured as of December 31, 1999 (the "Pierce
Leahy Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------------
------------------- NUMBER OF SHARES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING OPTIONS COMPENSATION(1)
- --------------------------- -------- -------- -------- ------------------ ---------------
<S> <C> <C> <C> <C> <C>
J. Peter Pierce................. 1999 $267,981 $192,500 0 $2,587(1)
President and Chief 1998 $250,000 $110,000 0 $5,744(1)
Executive Officer 1997 $250,000 $ 87,760 0 $7,122(1)

Ross M. Engelman................ 1999 $144,385 $ 82,500 5,500 $2,074(2)
Vice President 1998 $130,000 $ 60,000 0 $4,149(2)
Operations-South 1997 $130,000 $ 45,635 34,750 $5,212(2)

J. Michael Gold................. 1999 $144,385 $ 82,500 5,500 $2,086(3)
Vice President 1998 $130,000 $ 60,000 0 $4,153(3)
Operations-Northeast 1997 $130,000 $ 45,635 34,750 $3,890(3)

Douglas B. Huntley.............. 1999 $144,385 $ 82,500 5,500 $2,074(4)
Vice President and 1998 $130,000 $ 60,000 0 $4,153(4)
Chief Financial Officer 1997 $130,000 $ 45,635 34,750 $5,442(4)

Joseph A. Nezi.................. 1999 $144,385 $134,500(5) 5,500 $2,529(6)
Vice President 1998 $130,000 $112,000(5) 24,750 $3,667(6)
Sales & Marketing 1997 $130,000 $ 97,635(5) 0 $6,385(6)

Christopher J. Williams......... 1999 $144,385 $ 82,500 5,500 $2,086(7)
Vice President 1998 $130,000 $ 60,000 0 $4,244(7)
Operations-West 1997 $130,000 $ 45,635 34,750 $5,442(7)
</TABLE>

- ------------------------------

(1) Included in such amounts for 1999, 1998 and 1997, respectively, are $1,966,
$2,400 and $2,250 representing an employer match under the Pierce Leahy
Corp. Profit Sharing/401(k) Plan (the "Pierce Leahy 401(k) Plan"), and $621,
$1,659 and $1,872 in net premiums for a guaranteed term life insurance
policy on behalf of Mr. Pierce. In addition, included in such amounts for
1998 and 1997, respectively, are $1,685 and $3,000 representing profit
sharing contributions made by Pierce Leahy to the Pierce Leahy 401(k) Plan.
The Company anticipates that it will make a profit sharing contribution to
the Pierce Leahy 401(k) Plan with respect to 1999, but the amount of such
contribution has not yet been determined.

(2) Included in such amounts for 1999, 1998 and 1997, respectively, are $1,966,
$2,296 and $2,245 representing an employer match under the Pierce Leahy
401(k) Plan, and $108, $168 and $158 in net premiums for a guaranteed term
life insurance policy on behalf of Mr. Engelman. In addition, included in
such amounts for 1998 and 1997, respectively, are $1,685 and $2,809
representing profit sharing contributions made by Pierce Leahy to the Pierce
Leahy 401(k) Plan. The Company anticipates that it will make a profit
sharing contribution with respect to 1999, but the amount of such
contribution has not yet been determined.

(3) Included in such amounts for 1999, 1998 and 1997, respectively, are $1,966,
$2,302 and $900 representing an employer match under the Pierce Leahy 401(k)
Plan, and $120, $166 and $192 in net premiums for a guaranteed term life
insurance policy on behalf of Mr. Gold. In addition, included in such
amounts for 1998 and 1997, respectively, are $1,685 and $2,798 representing
profit sharing contributions made by Pierce Leahy to the Pierce Leahy 401(k)
Plan. The Company anticipates that it will make a profit sharing
contribution with respect to 1999, but the amount of such contribution has
not yet been determined.

(4) Included in such amounts for 1999, 1998 and 1997, respectively, are $1,966,
$2,302 and $2,250 representing an employer match under the Pierce Leahy
401(k) Plan, and $108, $166 and $192 in net premiums for a guaranteed term
life insurance policy on behalf of Mr. Huntley. In addition, included in
such amounts for 1998 and 1997, respectively, are $1,685 and $3,000
representing profit sharing contributions made by Pierce Leahy to the Pierce
Leahy 401(k) Plan. The Company anticipates that it will make a profit
sharing contribution with respect to 1999, but the amount of such
contribution has not yet been determined.

(5) Includes $52,000, $52,000 and $52,000 paid as commissions in 1999, 1998 and
1997, respectively.

(6) Included in such amounts for 1999, 1998 and 1997, respectively, are $1,966,
$957 and $2,250 representing an employer match under the Pierce Leahy 401(k)
Plan, and $563, $1,025 and $1,135 in net premiums for a guaranteed term life
insurance policy on

43
<PAGE>
behalf of Mr. Nezi. In addition, included in such amounts for 1998 and 1997,
respectively, are $1,685 and $3,000 representing profit sharing
contributions made by Pierce Leahy to the Pierce Leahy 401(k) Plan. The
Company anticipates that it will make a profit sharing contribution with
respect to 1999, but the amount of such contribution has not yet been
determined.

(7) Included in such amounts for 1999, 1998 and 1997, respectively, are $1,966,
$2,302 and $2,250 representing an employer match under the Pierce Leahy
401(k) Plan, and $120, $257 and $192 in net premiums for a guaranteed term
life insurance policy on behalf of Mr. Williams. In addition, included in
such amounts for 1998 and 1997, respectively, are $1,685 and $3,000
representing profit sharing contributions made by Pierce Leahy to the Pierce
Leahy 401(k) Plan. The Company anticipates that it will make a profit
sharing contribution with respect to 1999, but the amount of such
contribution has not yet been determined.

The following table sets forth certain information concerning the grant of
options to purchase Pierce Leahy common stock to the Pierce Leahy Named
Executive Officers during the year ended December 31, 1999.

OPTION GRANTS IN 1999

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT ANNUAL RATES OF
OF TOTAL STOCK APPRECIATION
NUMBER OF OPTIONS FOR
SECURITIES GRANTED TO EXERCISE OPTION TERM(2)
NAME AND UNDERLYING OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
PRINCIPAL POSITION GRANTED(1) FISCAL YEAR 1999 ($/SH) DATE 5% 10%
- -------------------------------- ------------------ ---------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ross M. Engelman................ 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President
Operations-South
J. Michael Gold................. 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President
Operations-Northeast
Douglas B. Huntley.............. 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President and
Chief Financial Officer
Joseph A. Nezi.................. 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President
Sales & Marketing
Christopher J. Williams......... 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President
Operations-West
</TABLE>

- ------------------------------

(1) The options were granted under the Pierce Leahy Corp. 1997 Stock Option Plan
and vest in five equal annual installments beginning on the first
anniversary of the date of grant.

(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 the Pierce
Leahy common stock when the options were granted. Assumed rates of
appreciation are not necessarily indicative of future stock performance.

44
<PAGE>
The following table sets forth certain information with respect to the
exercise of stock options during the year ended December 31, 1999 by, and the
unexercised options to purchase Pierce Leahy common stock of, the Pierce Leahy
Named Executive Officers.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999(1)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME AND PRINCIPAL POSITIONS ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ross M. Engelman............. 0 $ 0 149,821 49,071 $5,171,587 $1,583,567
Vice President
Operations-South
J. Michael Gold.............. 0 $ 0 149,821 49,071 $5,171,587 $1,583,567
Vice President
Operations-Northeast
Douglas B. Huntley........... 5,500 $101,700 144,321 49,071 $4,980,823 $1,583,567
Vice President and
Chief Financial Officer
Joseph A. Nezi............... 0 $ 0 108,636 61,415 $3,681,343 $1,739,489
Vice President
Sales & Marketing
Christopher J. Williams...... 0 $ 0 149,821 49,071 $5,171,587 $1,583,567
Vice President
Operations-West
</TABLE>

- ------------------------------

(1) The value of unexercised in-the-money options is based on the difference
between the last sale price of a share of Pierce Leahy common stock as
reported by the NYSE on December 31, 1999 ($39.32, as adjusted for the
one-for-ten stock dividend paid on January 14, 2000) and the exercise price
of the options, multiplied by the number of options.

In connection with the merger of Old Iron Mountain and Pierce Leahy, all
options granted to Messrs. Engelman, Gold, Huntley, Nezi and Williams under the
Pierce Leahy Corp. 1997 Stock Option Plan that had not vested prior to the
merger vested upon the completion of the merger. The numbers of shares subject
to the options accelerated were 10,803, 10,803, 10,803, 7,414 and 10,803,
respectively.

45
<PAGE>
DIRECTOR COMPENSATION

Directors who are employees of the Company do not receive additional
compensation for serving as Directors. Each Director who is not an employee of
the Company receives an annual retainer fee of $5,000 as compensation for his or
her services as a member of the Company Board and $500 for attendance at
committee meetings. In addition, the Company has a program by which it grants
its nonemployee Directors options to purchase $100,000 of the Company's Common
Stock every three years. Each option is granted under the Iron Mountain
Incorporated 1995 Stock Incentive Plan (the "Old Iron Mountain Stock Incentive
Plan"), has an exercise price equal to fair market value (as defined in the Old
Iron Mountain Stock Incentive Plan), vests in equal amounts over a period of
three years and has a ten year term. All Directors are reimbursed for
out-of-pocket expenses incurred in attending meetings of the Company Board or
committees thereof, and for other expenses incurred in their capacities as
Directors.

Old Iron Mountain paid a total of $34,000 in cash for Directors fees in
respect of services for 1999; and Pierce Leahy paid a total of $80,000 in cash
for Directors fees in respect of services for 1999.

CHANGE OF CONTROL ARRANGEMENT

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

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Company Board consists of Mr. Little, who
is the Chairman, and Messrs. Boden, Ryan and Bailey. Mr. Reese is a member of
the investment committee of Schooner and a Trustee of Schooner Capital Trust,
the sole member of Schooner. Mr. Ryan is the Chairman of the Board and principal
shareholder of Schooner Capital Trust. See "Item 13. Certain Relationships and
Related Transactions."

46
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information known to the Company with
respect to beneficial ownership of the Company's Common Stock by (i) each
Director; (ii) the Chief Executive Officer and the other four most highly
compensated executive officers in the Company; (iii) all executive officers and
Directors of the Company as a group; and (iv) each shareholder known by the
Company to be the beneficial owner of more than five percent of the Company's
Common Stock. Such information is presented as of March 1, 2000, except as
otherwise indicated.

<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL
OWNERSHIP(1)
---------------------------
NAME(1) SHARES PERCENT OWNED
- ------- ----------- -------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
C. Richard Reese(2)......................................... 1,690,729 3.1%
J. Peter Pierce(3).......................................... 7,283,894 13.4%
John F. Kenny, Jr.(4)....................................... 191,667 *
David S. Wendell(5)......................................... 242,041
Harold E. Ebbighausen(6).................................... 19,399 *
Clarke H. Bailey(7)......................................... 56,926 *
Constantin R. Boden(8)...................................... 33,775 *
Kent P. Dauten(9)........................................... 1,411,682 2.6%
Eugene B. Doggett(10)....................................... 14,955 *
B. Thomas Golisano(11)...................................... 1,523,095 2.8%
Arthur D. Little(12)........................................ 41,220 *
Howard D. Ross(13).......................................... 0 *
Vincent J. Ryan(14)......................................... 5,043,080 9.3%
All Directors and executive officers as a group (13
persons)(15).............................................. 17,552,463 32.1%

FIVE PERCENT SHAREHOLDERS
Leo W. Pierce, Sr.(16)...................................... 7,422,756 13.7%
Schooner Capital LLC(17).................................... 2,736,076 5.0%
Thomas W. Smith(18)......................................... 3,850,130 7.1%
Thomas N. Tryforos(19)...................................... 3,107,393 5.7%
Wellington Management Company, LLP(20)...................... 3,557,400 6.6%
</TABLE>

- ------------------------------

* Less than 1%

(1) Except as otherwise indicated, the persons named in the table above have
sole voting and investment power with respect to all shares of Company
Common Stock shown as beneficially owned by them.

(2) Mr. Reese is a Director, Chairman of the Board and Chief Executive Officer
of the Company. Includes 22,825 shares of Common Stock held in trusts for
the benefit of Mr. Reese's children, as to which Mr. Reese disclaims
beneficial ownership. Also includes 874,249 shares of Common Stock as to
which Mr. Reese shares beneficial ownership with Schooner as a result of a
1988 deferred compensation arrangement, as amended, between Schooner and
Mr. Reese relating to Mr. Reese's former services as President of the
predecessor corporation to Schooner. Pursuant to such arrangement, upon the
earlier to occur of (i) Schooner's sale or exchange of substantially all of
the shares of Common Stock held by Schooner or (ii) the cessation of
Mr. Reese's employment with the Company, Schooner is required to transfer
such shares of Common Stock to Mr. Reese or remit to Mr. Reese cash in an
amount equal to the then current fair market value of such shares of Common
Stock. Schooner has agreed to vote the shares of Common Stock subject to
such arrangement at the direction of Mr. Reese.

(3) Mr. Pierce is a Director and President of the Company. Includes 7,265,744
shares held in a voting trust pursuant to a Voting Trust Agreement dated
June 24, 1997 (as amended or restated from time to time, the "Voting
Trust"), some of which are also subject to proxies (the "Proxies") granted
under such Voting Trust Agreement. Mr. Pierce and Leo W. Pierce, Sr., as
co-trustees of the Voting Trust (the "Trustees") and the persons granted
voting rights under the Proxies, share power to vote the shares held in the
Voting Trust or subject to the Proxies. In the event that the two Trustees
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 and/or
Proxies will be voted at the direction of each

47
<PAGE>
Trustee. The beneficial owners of the interests in the Voting Trust and/or
subject to the Proxies have the right to dispose of the shares to which they
have beneficial interests.

(4) Mr. Kenny is the Executive Vice President and Chief Financial Officer and a
Director of the Company. Includes 179,520 shares that Mr. Kenny has the
right to acquire pursuant to currently exercisable options.

(5) Mr. Wendell is a Senior Vice President of the Company. Includes 234,924
shares that Mr. Wendell has the right to acquire pursuant to currently
exercisable options.

(6) Mr. Ebbighausen is the President of Arcus Data Security, Inc., a subsidiary
of Iron Mountain. Includes 18,764 shares that Mr. Ebbighausen has the right
to acquire pursuant to currently exercisable options.

(7) Mr. Bailey is a Director of the Company. Includes 2,455 shares that
Mr. Bailey has the right to acquire pursuant to currently exercisable
options.

(8) Mr. Boden is a Director of the Company. Includes 2,455 shares that
Mr. Boden has the right to acquire pursuant to currently exercisable
options.

(9) Mr. Dauten is a Director of Company. Includes 2,455 shares that Mr. Dauten
has the right to acquire pursuant to currently exercisable options.

(10) Mr. Doggett is a Director of the Company. Includes 2,455 shares that
Mr. Doggett has the right to acquire pursuant to currently exercisable
options.

(11) Mr. Golisano is a Director of the Company. Includes 7,882 shares that
Mr. Golisano has the right to acquire pursuant to currently exercisable
options.

(12) Mr. Little is a Director of the Company. Includes 37,500 shares held by The
Little Family Trust, as to which Mr. Little disclaims beneficial ownership,
as well as 2,455 shares that Mr. Little has the right to acquire pursuant to
currently exercisable options.

(13) Mr. Ross is a Director of the Company.

(14) Mr. Ryan is a Director of the Company. Includes 2,455 shares that Mr. Ryan
has the right to acquire pursuant to currently exercisable options. Also
includes 2,736,076 shares of Common Stock held by Schooner, as to which
Mr. Ryan has sole voting power and investment power as the Chairman of the
Board of Schooner and the principal shareholder of Schooner Capital Trust,
the sole member of Schooner. Mr. Ryan's address is c/o Schooner Capital LLC,
745 Atlantic Avenue, Boston, Massachusetts 02111. See footnote
(17) regarding shares held by Schooner.

(15) Includes 455,820 shares that Directors and executive officers have the
right to acquire pursuant to currently exercisable options.

(16) Includes 153,712 shares held in the Pierce Family Foundation, of which
Mr. Pierce is a co-trustee, and 7,265,744 shares held in the Voting Trust
described in footnote (3). Mr. Pierce's address is 443 Silver Moss Drive,
John's Island, Vero Beach, Florida 32963.

(17) Mr. Ryan is the Chairman of the Board of Schooner and the principal
shareholder of Schooner Capital Trust, the sole member of Schooner, and,
accordingly, has sole voting and investment power with respect to the shares
of Common Stock held by Schooner. Includes 874,249 shares of Common Stock as
to which Schooner shares beneficial ownership with Mr. Reese as described in
footnote (2). Schooner has agreed to vote the shares of Common Stock subject
to such arrangement at the direction of Mr. Reese. The address of Schooner
Capital LLC is 745 Atlantic Avenue, Boston, Massachusetts 02111.

(18) This information is presented as of December 31, 1999, and is based solely
on a Schedule 13G filed with the Commission on March 15, 2000. Mr. Smith has
sole voting and dispositive power over 766,490 shares and has shared voting
and dispositive power over 3,083,640 shares with Mr. Tryforos. The address
of Mr. Smith is 323 Railroad Avenue, Greenwich, Connecticut 06830.

(19) This information is presented as of December 31, 1999, and is based solely
on a Schedule 13G filed with the Commission on March 15, 2000. Mr. Tryforos
has sole voting and dispositive power over 23,753 shares and has shared
voting and dispositive over 3,083,640 shares with Mr. Smith. The address of
Mr. Tryforos is 323 Railroad Avenue, Greenwich, Connecticut 06830.

(20) This information is presented as of December 31, 1999, and is based solely
on a Schedule 13G/A filed with the Commission on February 11, 2000.
Wellington Management Company, LLP has shared voting power over 2,538,600
shares and shared dispositive power over 3,557,400 shares. The address of
Wellington Management Company, LLP is 75 State Street, Boston, Massachusetts
02109.

48
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

REAL ESTATE TRANSACTIONS

Iron Mountain Records Management, Inc., a subsidiary of the Company
("IMRM"), was the tenant under a lease dated January 1, 1991 for a 31,500
square-foot building in Houston, Texas. The owner of the building was IM Houston
(CR) Limited Partnership, a Texas limited partnership, of which Mountain
Realty, Inc., a Massachusetts corporation whose sole shareholder is Mr. Ryan,
was the sole general partner, and the limited partners of which were
Messrs. Reese and Doggett. IMRM paid annual rent of approximately $99,326 for
the year ended December 31, 1998. As tenant, IMRM was responsible for taxes,
insurance and maintenance. Iron Mountain Statutory Trust--1998 ("IMST"), a
non-affiliated entity formed to acquire and lease records storage properties to
IMRM, purchased the property from IM Houston (CR) Limited Partnership in
January 1999 for a purchase price of approximately $930,000. The purchase price
was determined through an independent appraisal of the property. IMRM leases the
space from IMST and will continue to use the space as a records management
facility. The prior lease and the acquisition of the property by IMST were, in
the opinion of management, on commercially reasonable terms and no less
favorable to IMRM than could have been obtained from an unaffiliated party at
the time of the transactions.

Schooner leases space from the Company at the Company's corporate
headquarters. Such lease is a tenancy-at-will and may be terminated by either
the Company or by Schooner at any time. As consideration for such lease,
Schooner pays rent to the Company based on its pro rata share of all expenses
related to the use and occupancy of the premises. The rent paid by Schooner to
Old Iron Mountain under such lease was approximately $93,930 in the year ended
December 31, 1999, and Schooner currently pays annual rent of approximately
$98,182. The Company believes that the terms of this lease are no less favorable
to it than would have been negotiated with an unrelated third party.

The Company leases from four separate limited partnerships the headquarters
of its paper records storage operations in King of Prussia, Pennsylvania and its
facilities in Suffield, Connecticut, Orlando, Florida and Charlotte, North
Carolina. J. Peter Pierce, the Company's President, is the general partner of
three of the limited partnerships and members of the Pierce family and their
affiliates own substantial limited partnership interests in each of the four
limited partnerships. The lease for the headquarters of the Company's paper
records storage operations 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 Pierce Leahy for such properties during 1999 was $902,000. The
Company believes that the terms of these leases are no less favorable to the
Company than would have been negotiated with unrelated third parties.

OTHER TRANSACTIONS

Old Iron Mountain paid compensation of approximately $186,110 for the year
ended December 31, 1999 to Mr. T. Anthony Ryan. Mr. Ryan is Vice President, Real
Estate, of the Company and is the brother of Mr. Vincent J. Ryan, a Director of
the Company. The Company believes that the terms of Mr. Ryan's employment are no
less favorable to it than would be negotiable with an unrelated third party.

Pierce Leahy provided an annual pension in the amount of $96,000 to Leo W.
Pierce, Sr., the Chairman Emeritus of the Company Board and the beneficial owner
of approximately 13.7% of the Company's Common Stock, for the year ended
December 31, 1999. The Company will continue to provide a pension to
Mr. Pierce, or his spouse, if she survives him, in 2000.

49
<PAGE>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K.

(a)(1) and (2) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES FILED
AS PART OF THIS REPORT:

A. OLD IRON MOUNTAIN

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Report of Independent Public Accountants.................... 52
Consolidated Balance Sheets, December 31, 1998 and 1999..... 53
Consolidated Statements of Operations, Years ended December
31, 1997, 1998 and 1999................................... 54
Consolidated Statements of Stockholders' Equity and
Comprehensive Loss, Years ended December 31, 1997, 1998
and 1999.................................................. 55
Consolidated Statements of Cash Flows, Years ended December
31, 1997, 1998 and 1999................................... 56
Notes to Consolidated Financial Statements.................. 57
Financial Statement Schedule:
Report of Independent Public Accountants.................. 81
Schedule II--Valuation and Qualifying Accounts............ 82
</TABLE>

B. PIERCE LEAHY

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Report of Independent Public Accountants.................... 83
Consolidated Balance Sheets, December 31, 1998 and 1999..... 84
Consolidated Statements of Operations, Years ended December
31, 1997, 1998 and 1999................................... 85
Consolidated Statements of Shareholders' Equity, Years ended
December 31, 1997, 1998 and 1999.......................... 86
Consolidated Statements of Cash Flows, Years ended December
31, 1997, 1998 and 1999................................... 87
Notes to Consolidated Financial Statements.................. 88
Financial Statement Schedule:
Report of Independent Public Accountants.................. 112
Schedule II--Valuation and Qualifying Accounts............ 113
</TABLE>

C. IRON MOUNTAIN EUROPE

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Report of the Independent Auditors.......................... 114
Consolidated Balance Sheet, October 31, 1999................ 115
Consolidated Statement of Operations, Ten Months ended
October 31, 1999.......................................... 116
Consolidated Statement of Stockholders' Equity and
Comprehensive Loss, Ten Months ended October 31, 1999..... 117
Consolidated Statement of Cash Flows, Ten Months ended
October 31, 1999.......................................... 118
Notes to Consolidated Financial Statements.................. 119
Financial Statement Schedule:
Report of the Independent Auditors........................ 128
Schedule II--Valuation and Qualifying Accounts............ 129
</TABLE>

(a)(3) EXHIBITS FILED AS PART OF THIS REPORT:

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

50
<PAGE>
(b) REPORTS ON FORM 8-K:

On October 21, 1999 and October 22, 1999, Old Iron Mountain and Pierce
Leahy, respectively, filed Current Reports on Form 8-K under Item 5 announcing
the execution of the definitive agreement relating to the merger of Old Iron
Mountain and Pierce Leahy.

On November 24, 1999, Old Iron Mountain filed a Current Report on Form 8-K
under Items 5 and 7 containing certain pro forma financial information relating
to the merger of Old Iron Mountain and Pierce Leahy and the financial statements
of Old Iron Mountain's acquisitions of Central File, Inc., Sistemas de Archivo
Corporativo, S. de R.L. de C.V., Stortext (Holdings) Limited and Midtown
Professional Records Centre, Inc., completed by Old Iron Mountain in 1999.

51
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Iron Mountain Incorporated:

We have audited the accompanying consolidated balance sheets of Iron
Mountain Incorporated (a Delaware corporation) and its subsidiaries as of
December 31, 1998 and 1999, and the related consolidated statements of
operations, stockholders' equity and comprehensive loss and cash flows for each
of the three years in the period ended December 31, 1999. These financial
statements are the responsibility of Iron Mountain Incorporated's management.
Our responsibility is to express an opinion on these financial statements based
on our audits. We did not audit the financial statements of Iron Mountain Europe
Limited as of October 31, 1999, which statements reflect total assets and total
revenues of 12 percent and 6 percent in 1999, of the related consolidated
totals. Those statements were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to the amounts included
for this entity, is based solely on the report of the other auditors.

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

In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Iron Mountain Incorporated and its subsidiaries as of
December 31, 1998 and 1999 and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
February 28, 2000

52
<PAGE>
IRON MOUNTAIN INCORPORATED

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1998 1999
-------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 1,715 $ 3,830
Accounts receivable (less allowances of $3,316 and $5,740
as of 1998 and 1999, respectively)...................... 75,565 104,074
Foreign currency transaction receivable................... 45,885 --
Deferred income taxes..................................... 10,474 12,475
Prepaid expenses and other................................ 10,298 23,285
-------- ----------
Total Current Assets.................................... 143,937 143,664
Property, Plant and Equipment:
Property, plant and equipment............................. 354,101 497,369
Less--Accumulated depreciation............................ (87,358) (93,630)
-------- ----------
Net Property, Plant and Equipment....................... 266,743 403,739
Other Assets:
Goodwill, net............................................. 527,235 729,213
Customer acquisition costs, net........................... 9,574 16,742
Deferred financing costs, net............................. 13,392 16,549
Other..................................................... 6,504 7,305
-------- ----------
Total Other Assets...................................... 556,705 769,809
-------- ----------
Total Assets............................................ $967,385 $1,317,212
======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt......................... $ 1,731 $ 9,890
Accounts payable.......................................... 20,620 25,770
Accrued expenses.......................................... 48,539 68,519
Foreign currency transaction payable...................... 46,200 --
Deferred income........................................... 26,043 32,981
Other current liabilities................................. 339 13,188
-------- ----------
Total Current Liabilities............................... 143,472 150,348
Long-term Debt, net of current portion...................... 454,447 603,057
Other Long-Term Liabilities................................. 8,925 5,749
Deferred Rent............................................... 9,616 10,819
Deferred Income Taxes....................................... 12,043 16,207

Commitments and Contingencies (see Note 13)

Minority Interest........................................... -- 42,278

Stockholders' Equity:
Common stock.............................................. 294 369
Additional paid-in capital................................ 355,927 560,620
Accumulated deficit....................................... (17,339) (31,558)
Accumulated other comprehensive items..................... -- (1,193)
Treasury stock............................................ -- (39,484)
-------- ----------
Total Stockholders' Equity.............................. 338,882 488,754
-------- ----------
Total Liabilities and Stockholders' Equity.............. $967,385 $1,317,212
======== ==========
</TABLE>

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

53
<PAGE>
IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Storage................................................... $125,968 $230,702 $317,387
Service and storage material sales........................ 82,797 153,259 202,162
-------- -------- --------
Total Revenues.......................................... 208,765 383,961 519,549
Operating Expenses:
Cost of sales (excluding depreciation).................... 106,879 192,113 260,930
Selling, general and administrative....................... 51,668 95,867 128,948
Depreciation and amortization............................. 27,107 48,301 65,422
-------- -------- --------
Total Operating Expenses................................ 185,654 336,281 455,300
-------- -------- --------
Operating Income............................................ 23,111 47,680 64,249
Interest Expense............................................ 27,712 45,673 54,425
Other Income, net........................................... -- 1,384 17
-------- -------- --------
Income (Loss) from Continuing Operations Before
Provision (Benefit) for Income Taxes and Minority
Interest Expense...................................... (4,601) 3,391 9,841
Provision (Benefit) for Income Taxes........................ (80) 6,558 10,579
Minority Interest Expense................................... -- -- 322
-------- -------- --------
Loss from Continuing Operations......................... (4,521) (3,167) (1,060)
Income from Discontinued Operations......................... -- 201 241
Loss on Sale of Discontinued Operations..................... -- -- (13,400)
-------- -------- --------
Net Loss Applicable to Common Stockholders.............. $ (4,521) $ (2,966) $(14,219)
======== ======== ========
Net Loss per Common Share--Basic and Diluted:
Loss from Continuing Operations........................... $ (0.26) $ (0.12) $ (0.03)
Income (Loss) from Discontinued Operations................ -- 0.01 (0.40)
-------- -------- --------
Net Loss per Common Share............................... $ (0.26) $ (0.11) $ (0.43)
======== ======== ========
Weighted Average Common Shares Outstanding--
Basic and Diluted......................................... 17,172 27,470 33,345
======== ======== ========
</TABLE>

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

54
<PAGE>
IRON MOUNTAIN INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE LOSS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK ACCUMULATED
VOTING NON-VOTING ADDITIONAL OTHER
--------------------- ------------------- PAID-IN ACCUMULATED COMPREHENSIVE
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT ITEMS
STOCKHOLDERS' EQUITY: ---------- -------- -------- -------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996......... 14,486,486 $145 715,942 $ 7 $ 62,084 $ (9,852) $ --
Exercise of stock options,
including tax benefit............ 123,657 1 -- -- 1,532 -- --
Issuance of shares for services.... 2,751 -- -- -- 52 -- --
Shares and options issued in
connection with acquisitions, net
of issuance costs................ 4,851,341 49 -- -- 88,236 -- --
Conversion of common
stock--nonvoting to common
stock--voting.................... 715,942 7 (715,942) (7) -- -- --
Net loss........................... -- -- -- -- -- (4,521) --
---------- ---- -------- ---- -------- -------- -------
Balance, December 31, 1997......... 20,180,177 202 -- -- 151,904 (14,373) --
Shares and options issued in
connection with acquisitions, net
of issuance costs................ 2,645,913 26 -- -- 66,888 -- --
Issuance of shares in secondary
public offering, net of issuance
costs............................ 6,037,500 60 -- -- 131,961 -- --
Exercise of stock options,
including tax benefit............ 566,615 6 -- -- 5,174 -- --
Net loss........................... -- -- -- -- -- (2,966) --
---------- ---- -------- ---- -------- -------- -------
Balance, December 31, 1998......... 29,430,205 294 -- -- 355,927 (17,339) --
Shares and options issued in
connection with acquisitions, net
of issuance costs................ 1,476,577 15 -- -- 45,745 -- --
Issuance of shares in secondary
public offering, net of issuance
costs............................ 5,750,000 57 -- -- 152,486 -- --
Issuance of shares under employee
stock purchase plan and option
plans, including tax benefit..... 286,830 3 -- -- 6,179 -- --
Acceleration of option vesting in
connection with sale of
business......................... -- -- -- -- 283 -- --
Currency translation adjustment.... -- -- -- -- -- -- (1,193)
Purchase of treasury shares........ -- -- -- -- -- -- --
Net loss........................... -- -- -- -- -- (14,219) --
---------- ---- -------- ---- -------- -------- -------
Balance, December 31, 1999......... 36,943,612 $369 -- $ -- $560,620 $(31,558) $(1,193)
========== ==== ======== ==== ======== ======== =======

TOTAL
TREASURY STOCKHOLDERS'
STOCK EQUITY
STOCKHOLDERS' EQUITY: -------- -------------
<S> <C> <C>
Balance, December 31, 1996......... $ -- $ 52,384
Exercise of stock options,
including tax benefit............ -- 1,533
Issuance of shares for services.... -- 52
Shares and options issued in
connection with acquisitions, net
of issuance costs................ -- 88,285
Conversion of common
stock--nonvoting to common
stock--voting.................... -- --
Net loss........................... -- (4,521)
-------- --------
Balance, December 31, 1997......... -- 137,733
Shares and options issued in
connection with acquisitions, net
of issuance costs................ -- 66,914
Issuance of shares in secondary
public offering, net of issuance
costs............................ -- 132,021
Exercise of stock options,
including tax benefit............ -- 5,180
Net loss........................... -- (2,966)
-------- --------
Balance, December 31, 1998......... -- 338,882
Shares and options issued in
connection with acquisitions, net
of issuance costs................ -- 45,760
Issuance of shares in secondary
public offering, net of issuance
costs............................ -- 152,543
Issuance of shares under employee
stock purchase plan and option
plans, including tax benefit..... -- 6,182
Acceleration of option vesting in
connection with sale of
business......................... -- 283
Currency translation adjustment.... -- (1,193)
Purchase of treasury shares........ (39,484) (39,484)
Net loss........................... -- (14,219)
-------- --------
Balance, December 31, 1999......... $(39,484) $488,754
======== ========
</TABLE>

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
COMPREHENSIVE LOSS:

Net loss.................................................... $(4,521) $(2,966) $(14,219)

Foreign currency translation adjustment..................... -- -- (1,193)
------- ------- --------
Comprehensive loss.......................................... $(4,521) $(2,966) $(15,412)
======= ======= ========
</TABLE>

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

55
<PAGE>
IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss.................................................. $ (4,521) $ (2,966) $(14,219)
Adjustments to reconcile net loss to loss from continuing
operations:
Income from discontinued operations....................... -- (201) (241)
Loss on sale of discontinued operations................... -- -- 13,400
-------- -------- --------
Loss from Continuing Operations............................. (4,521) (3,167) (1,060)
Adjustments to reconcile loss from continuing operations
to cash flows provided by operating activities:
Minority interest expense................................. -- -- 322
Depreciation and amortization............................. 27,107 48,301 65,422
Amortization of financing costs........................... 1,095 1,801 1,981
Provision for doubtful accounts........................... 874 1,730 2,733
Other, net................................................ 52 316 238
Changes in Assets and Liabilities (exclusive of
acquisitions):
Accounts receivable....................................... (4,433) (12,924) (22,996)
Prepaid expenses and other current assets................. (2,949) 4,410 (9,691)
Deferred income taxes..................................... 1,190 9,058 8,989
Other assets.............................................. -- 13 663
Accounts payable.......................................... 4,653 5,282 2,009
Accrued expenses.......................................... (1,115) (127) 5,934
Other current liabilities................................. 485 -- 372
Deferred rent............................................. 551 1,414 1,203
Deferred income........................................... 671 7,369 3,331
Other long-term liabilities............................... (1,240) 3,587 (3,176)
-------- -------- --------
Cash Flows Provided by Continuing Operations................ 22,420 67,063 56,274
Cash Flows Provided by (Used in) Discontinued Operations.... -- 67 (836)
-------- -------- --------
Cash Flows Provided by Operating Activities................. 22,420 67,130 55,438
Cash Flows from Investing Activities:
Cash paid for acquisitions, net of cash acquired.......... (192,230) (189,729) (212,160)
Capital expenditures...................................... (38,320) (55,927) (98,657)
Additions to customer acquisition costs................... (1,635) (3,024) (8,122)
Other, net................................................ (333) -- --
-------- -------- --------
Cash Flows Used in Continuing Operations.................... (232,518) (248,680) (318,939)
Cash Flows Provided by (Used in) Discontinued Operations.... -- (527) 7,814
-------- -------- --------
Cash Flows Used in Investing Activities..................... (232,518) (249,207) (311,125)
-------- -------- --------
Cash Flows from Financing Activities:
Repayment of debt......................................... (178,181) (171,080) (249,654)
Proceeds from borrowings.................................. 167,850 194,811 235,141
Debt financing from minority shareholder.................. -- -- 11,636
Net proceeds from sale of senior subordinated notes....... 242,640 -- 149,460
Proceeds from secondary equity offering, net of
underwriting discount................................... -- 132,905 153,755
Repurchase of common stock................................ -- -- (39,484)
Exercise of stock options................................. 786 4,482 3,589
Financing costs........................................... (1,291) (764) (5,138)
Stock issuance costs...................................... (649) (1,072) (1,452)
-------- -------- --------
Cash Flows Provided by Continuing Operations................ 231,155 159,282 257,853
Cash Flows Provided by Discontinued Operations.............. -- -- --
-------- -------- --------
Cash Flows Provided by Financing Activities................. 231,155 159,282 257,853
Effect of exchange rates on cash and cash equivalents....... -- -- (51)
-------- -------- --------
Increase (Decrease) in Cash and Cash Equivalents............ 21,057 (22,795) 2,115
Cash and Cash Equivalents, Beginning of Year................ 3,453 24,510 1,715
-------- -------- --------
Cash and Cash Equivalents, End of Year...................... $ 24,510 $ 1,715 $ 3,830
======== ======== ========
Supplemental Information:
Cash Paid for Interest...................................... $ 22,440 $ 42,407 $ 46,555
======== ======== ========
Cash Paid for Income Taxes.................................. $ 1,306 $ 1,700 $ 1,916
======== ======== ========
</TABLE>

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

56
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT SHARE DATA)

1. NATURE OF BUSINESS

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation

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

b. Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

c. Cash and Cash Equivalents

Old Iron Mountain defines cash and cash equivalents to include cash on hand
and cash invested in short-term securities which have original maturities of
less than 90 days. Cash and cash equivalents are carried at cost, which
approximates fair market value.

d. Foreign Currency Transaction

On December 31, 1998, Old Iron Mountain had a receivable denominated in
British pounds from, and a payable in U.S. dollars to, a bank as a result of
exercising a foreign exchange agreement on December 30, 1998. Included in
other income, net, for the year ended December 31, 1998 is a $316 loss on
the remeasurement of the receivable based on the applicable exchange rate on
December 31, 1998. The British pounds were being acquired to finance the
acquisition of Iron Mountain Europe Limited ("IM Europe") on January 4,
1999. As of December 31, 1999, Old Iron Mountain did not have any such
foreign exchange agreement.

All assets and liabilities of Old Iron Mountain's foreign subsidiaries are
translated at year-end exchange rates, and revenues and expenses are
translated at average exchange rates for the year, in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign
Currency

57
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Translation." Resulting translation adjustments are reflected in the
"Accumulated Other Comprehensive Items" component of stockholders' equity.
Foreign currency transaction gains and losses in fiscal 1999 are included in
the accompanying statements of operations and are not material.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133"). This statement establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities and is effective for
all fiscal years beginning after June 15, 2000, as amended by SFAS 137,
"Accounting for Derivative Instruments and Hedging Activities." Management
has not yet completed its assessment of the effects of SFAS 133.

e. Property, Plant and Equipment

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

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

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Land and buildings...................................... $ 99,678 $158,648
Leasehold improvements.................................. 27,509 35,011
Racking................................................. 127,287 180,876
Warehouse equipment/vehicles............................ 23,239 28,954
Furniture and fixtures.................................. 9,241 11,886
Computer hardware and software.......................... 47,400 60,998
Construction in progress................................ 19,747 20,996
-------- --------
$354,101 $497,369
======== ========
</TABLE>

Minor maintenance costs are expensed as incurred. Major improvements to the
leased buildings are capitalized as leasehold improvements and depreciated.

Old Iron Mountain develops various software applications for internal use.
Payroll and related costs for employees who are directly associated with and
who devote time to the development of internal-use computer software
projects (to the extent of the time spent directly on the project) are
capitalized and amortized over the useful life of the software.
Capitalization begins when the design stage of the application has been
completed, it is probable that the project will be completed and the

58
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
application will be used to perform the function intended. Amortization
begins when the software is placed in service.

Effective January 1, 1999, Old Iron Mountain adopted the provisions of
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 requires
computer software costs associated with internal use software to be expensed
as incurred until certain capitalization criteria are met. SOP 98-1 also
defines which types of costs should be capitalized and which should be
expensed. The new accounting pronouncement resulted in certain costs being
expensed starting in 1999 that would have been capitalized under the
previous policy.

f. Goodwill

Goodwill reflects the cost in excess of fair value of the net assets of
companies acquired in purchase transactions. Goodwill is amortized using the
straight-line method from the date of acquisition over the expected period
to be benefited, currently estimated at 25 to 30 years. Old Iron Mountain
assesses the recoverability of goodwill, as well as other long-lived assets,
based upon expectations of future undiscounted cash flows in accordance with
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." Accumulated amortization of goodwill
was $46,333 and $76,865 as of December 31, 1998 and 1999, respectively.

g. Customer Acquisition Costs

Costs related to the acquisition of large volume accounts, net of revenues
received for the initial transfer of the records, are capitalized and
amortized for an appropriate period not to exceed 12 years. If the customer
terminates its relationship with Old Iron Mountain, the unamortized cost is
charged to expense. However, in the event of such termination, Old Iron
Mountain collects, and records as income, permanent removal fees that
generally equal or exceed the amount of the unamortized costs. As of
December 31, 1998 and 1999, those costs were $12,793 and $20,746,
respectively, and accumulated amortization of those costs were $3,219 and
$4,004, respectively.

h. Deferred Financing Costs

Deferred financing costs are amortized over the life of the related debt
using the effective interest rate method. If debt is retired early,
unamortized deferred financing costs are written off as an extraordinary
charge in the period the debt is retired. As of December 31, 1998 and 1999,
deferred financing costs were $16,928 and $22,066, respectively, and
accumulated amortization of those costs was $3,536 and $5,517, respectively.

i. Other Assets

Effective January 1, 1999, Old Iron Mountain adopted the provisions of
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). SOP 98-5 requires the costs of start-up activities, including
organization costs, to be expensed as incurred. The adoption of SOP 98-5 did
not have a material impact on Old Iron Mountain's financial statements.

59
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
j. Accrued Expenses

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Incentive compensation.................................... $ 5,934 $ 6,492
Interest.................................................. 9,975 15,950
Workers' compensation..................................... 2,948 4,712
Payroll and vacation...................................... 7,451 10,149
Restructuring costs....................................... 10,482 9,340
Other..................................................... 11,749 21,876
------- -------
$48,539 $68,519
======= =======
</TABLE>

k. Revenues

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

Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to
the customer. Amounts related to future storage for customers where storage
fees are billed in advance are accounted for as deferred income and
amortized over the applicable period.

l. Deferred Rent

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

m. Stock-Based Compensation

Effective January 1, 1996, Old Iron Mountain adopted the provisions of SFAS
No. 123, "Accounting for Stock-Based Compensation." Old Iron Mountain has
elected to continue to account for stock

60
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
options at their intrinsic value with disclosure of the effects of fair
value accounting on net income (loss) and earnings (loss) per share on a pro
forma basis.

n. Reclassifications

Certain reclassifications have been made to the 1997 and 1998 financial
statements to conform to the 1999 presentation.

3. COMMON STOCK SPLIT

On June 30, 1998, Old Iron Mountain's Board of Directors authorized and
approved a three-for-two stock split effected in the form of a dividend on Old
Iron Mountain's common stock. Such additional shares of common stock were issued
on July 31, 1998 to all stockholders of record as of the close of business on
July 17, 1998. All issued and outstanding share and per share amounts in the
accompanying consolidated financial statements and Notes thereto have been
restated to reflect the stock split.

4. DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Revolving Credit Facility............................... $ 35,300 $ 5,000
10 1/8% Senior Subordinated Notes due 2006 (the "1996
Notes")............................................... 165,000 165,000
8 3/4% Senior Subordinated Notes due 2009 (the "1997
Notes")............................................... 249,566 249,606
8 1/4% Senior Subordinated Notes due 2011 (the "1999
Notes")............................................... -- 149,490
Real Estate Mortgage.................................... 2,349 2,048
Other................................................... 3,963 41,803
-------- --------
Long-term debt.......................................... 456,178 612,947
Less current portion.................................... (1,731) (9,890)
-------- --------
Long-term debt, net of current portion.................. $454,447 $603,057
======== ========
</TABLE>

61
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. DEBT (CONTINUED)

a. Revolving Credit Facility

As of December 31, 1999, Old Iron Mountain had a $250 million revolving
credit facility, as amended (the "Credit Agreement"), which was scheduled to
mature on September 30, 2002.

The Credit Agreement specified certain minimum or maximum relationships
between EBITDA (as defined therein) and interest, total debt and fixed
charges. There were restrictions on dividends declared by Old Iron Mountain,
sales or pledging of assets, investments and changes in business and
ownership; cash dividends were effectively prohibited. Old Iron Mountain was
in compliance with all debt covenants as of December 31, 1999. Loans under
the Credit Agreement were secured by pledges of the capital stock of all of
Old Iron Mountain's domestic subsidiaries.

The interest rate on loans under the Credit Agreement varied depending on
Old Iron Mountain's choice of base rates, plus an applicable margin. The
applicable margin varied depending on the base rate selected and certain
debt ratios. The timing of interest payments also varied with the base rate
selected. At December 31, 1999, the effective interest rate was 7.71%.

Effective February 1, 2000, Old Iron Mountain amended and restated its
revolving credit facility (the "Amended Credit Agreement") to increase the
aggregate principal amount available to $400 million and to include the
ability to borrow in certain foreign currencies. The Amended Credit
Agreement matures on January 31, 2005. The interest rate on borrowings under
this Amended Credit Agreement varies depending on Old Iron Mountain's choice
of base rates, plus an applicable margin. Restrictive covenants under this
agreement are similar to those under the Credit Agreement.

b. 1996 Notes

On October 1, 1996, Old Iron Mountain issued $165 million of 10 1/8% Senior
Subordinated Notes due 2006. Interest on the 1996 Notes is payable
semiannually on April 1 and October 1 and commenced on April 1, 1997. The
net proceeds of $160.1 million after underwriting discounts and commissions
were used to repay outstanding indebtedness under Old Iron Mountain's
revolving credit facility, to fund the purchase price of acquisitions and
for general corporate purposes.

The 1996 Notes contain covenants and restrictions similar to, or less
restrictive than, the Amended Credit Agreement. After September 30, 2001,
and subject to certain restrictions, Old Iron Mountain may, at its option,
redeem any or all of the 1996 Notes at face value, plus a premium ranging
from approximately 2% to 5% through September 30, 2004. Thereafter, the 1996
Notes may be redeemed at face value. Additionally, under certain
circumstances, including a change of control or following certain asset
sales, the holders of the 1996 Notes may require Old Iron Mountain to
repurchase the 1996 Notes.

c. 1997 Notes

On October 24, 1997, Old Iron Mountain issued $250 million of 8 3/4% Senior
Subordinated Notes due 2009. Interest on the 1997 Notes is payable
semiannually on March 31 and September 30 and commenced on March 31, 1998.
The net proceeds of $242.6 million after an original issue discount of $485
and underwriting discounts and commissions were used to repay outstanding
indebtedness under

62
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. DEBT (CONTINUED)
Old Iron Mountain's revolving credit facility, to fund the purchase price of
acquisitions and for general corporate purposes.

The 1997 Notes contain covenants and restrictions similar to, or less
restrictive than, the Amended Credit Agreement. Prior to September 30, 2002,
and subject to certain restrictions, Old Iron Mountain may, at its option,
redeem any or all of the 1997 Notes at a make-whole price, as defined in the
related indenture. On or after September 30, 2002, and subject to certain
restrictions, Old Iron Mountain may, at its option, redeem any or all of the
1997 Notes at face value, plus a premium of up to approximately 4% through
September 30, 2005. Thereafter, the 1997 Notes may be redeemed at face
value. Also, any time through October 23, 2000, Old Iron Mountain may redeem
a portion of the 1997 Notes, subject to restrictions, with the net proceeds
of one or more Qualified Equity Offerings, as defined, at a redemption price
of 108.75% of the principal amount of such 1997 Notes. Additionally, under
certain circumstances, including a change of control or following certain
asset sales, the holders of the 1997 Notes may require Old Iron Mountain to
repurchase the 1997 Notes.

d. 1999 Notes

On April 26, 1999, Old Iron Mountain issued $150 million of 8 1/4% Senior
Subordinated Notes due 2011. Interest on the 1999 Notes is payable
semiannually on January 1 and July 1 and commenced on July 1, 1999. The net
proceeds of $149.5 million after an original issue discount of $540 and
underwriting discounts and commissions were used to repay outstanding
indebtedness under the Credit Agreeement.

The 1999 Notes contain covenants and restrictions similar to, or less
restrictive than, the Amended Credit Agreement. Prior to July 1, 2004, and
subject to certain restrictions, Old Iron Mountain may, at its option,
redeem any or all of the 1999 Notes at a make-whole price, as defined in the
related indenture. On or after July 1, 2004, and subject to certain
restrictions, Old Iron Mountain may, at its option, redeem any or all of the
1999 Notes at a redemption price of 104.125%, 102.750% and 101.375% of the
principal amount of such 1999 Notes through July 1, 2005, 2006 and 2007,
respectively. Thereafter, the 1999 Notes may be redeemed at face value.
Also, any time through July 1, 2002, Old Iron Mountain may redeem a portion
of the 1999 Notes, subject to restrictions, with the net proceeds of one or
more Qualified Equity Offerings, as defined in the related indenture, at a
redemption price of 108.25% of the principal amount of such 1999 Notes.
Additionally, under certain circumstances, including a change of control or
following certain asset sales, the holders of the 1999 Notes may require Old
Iron Mountain to repurchase the 1999 Notes.

e. Real Estate Mortgage

The real estate mortgage consists of a $3 million, 8% note that is payable
in various installments commencing in 1997 and maturing in November 2006.

f. Other

Other long-term debt includes various notes and obligations assumed by Old
Iron Mountain as a result of certain acquisitions completed by Old Iron
Mountain during 1998 and 1999. At December 31, 1999, Old Iron Mountain's
50.1% owned subsidiary, IM Europe, had various agreements with

63
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. DEBT (CONTINUED)
its local banks that provide for $44.8 million of credit and carried an
average effective interest rate of 5.41%.

Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
- ---- --------
<S> <C>
2000........................................................ $ 9,890
2001........................................................ 18,527
2002........................................................ 8,284
2003........................................................ 3,375
2004........................................................ 3,263
Thereafter.................................................. 569,608
--------
$612,947
========
</TABLE>

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

<TABLE>
<CAPTION>
1998 1999
------------------- -------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revolving Credit Facility........................... $ 35,300 $ 35,300 $ 5,000 $ 5,000
1996 Notes.......................................... 165,000 178,200 165,000 167,900
1997 Notes.......................................... 249,566 257,500 249,606 237,500
1999 Notes.......................................... -- -- 149,490 136,100
Real estate mortgage................................ 2,349 2,349 2,048 2,048
Other............................................... 3,963 3,963 41,803 41,803
</TABLE>

5. SELECTED CONSOLIDATED FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND
NON-GUARANTORS

As of December 31, 1999, the 1996, 1997 and 1999 Notes were fully and
unconditionally guaranteed, on a joint and several basis, and on a senior
subordinated basis, by most, but not all, of Old Iron Mountain's direct and
indirect domestic subsidiaries (the "Subsidiary Guarantors"). At December 31,
1999, IM Europe and its subsidiaries, Sistemas de Archivo Corporativo, S. de
R.L. de C.V. and its subsidiaries, Iron Mountain Records Management (Puerto
Rico), Inc. and certain parent holding companies (the "Non-Guarantors") are the
only subsidiaries that do not guarantee the 1996 Notes, the 1997 Notes or the
1999 Notes.

Prior to the acquisition of a 50.1% interest in IM Europe in January 1999,
substantially all of Old Iron Mountain's operations were conducted by its direct
and indirect wholly owned subsidiaries, all of which, other than Arcus Data
Security Limited ("ADS"), were guarantors of the 1996 Notes and 1997 Notes. ADS
represented less than 1% of Old Iron Mountain's consolidated revenues and was
not material to its results of operations. Old Iron Mountain's management does
not believe that separate financial statements of, and other disclosures with
respect to, the Guarantors for periods prior to 1999 are meaningful or material
to investors. Accordingly, no such financial statements were provided for fiscal
1997 and 1998.

64
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. SELECTED CONSOLIDATED FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND
NON-GUARANTORS (CONTINUED)

The following financial data summarizes the consolidating Old Iron Mountain
on the equity method of accounting as of and for the year ended December 31,
1999:

<TABLE>
<CAPTION>
DECEMBER 31, 1999
------------------------------------------------------------------
NON-
PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED
---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents............... $ -- $ 2,260 $ 1,570 $ -- $ 3,830
Accounts Receivable..................... -- 93,076 10,998 -- 104,074
Other Current Assets.................... -- 42,312 6,718 (13,270) 35,760
---------- ---------- -------- ----------- ----------
Total Current Assets.................. -- 137,648 19,286 (13,270) 143,664
Property, Plant and Equipment, net........ -- 352,784 50,955 -- 403,739
Other Assets:
Due From Affiliates..................... 224,826 -- -- (224,826) --
Long-term Notes Receivable from
Affiliates............................ 557,123 -- -- (557,123) --
Investment in Subsidiaries.............. 276,291 52,971 -- (329,262) --
Goodwill, net........................... -- 623,285 105,928 -- 729,213
Other................................... 15,908 24,036 652 -- 40,596
---------- ---------- -------- ----------- ----------
Total Other Assets.................... 1,074,148 700,292 106,580 (1,111,211) 769,809
---------- ---------- -------- ----------- ----------
Total Assets.......................... $1,074,148 $1,190,724 $176,821 $(1,124,481) $1,317,212
========== ========== ======== =========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities............... $ 15,398 $ 100,630 $ 47,590 $ (13,270) $ 150,348
Long-Term Debt, Net of Current
Portion............................... 569,996 2,942 30,119 -- 603,057
Due to Affiliates....................... -- 224,793 33 (224,826) --
Long-Term Notes Payable to Affiliates... -- 557,123 -- (557,123) --
Other Long-Term Liabilities............. -- 31,497 1,278 -- 32,775
Minority Interest....................... -- -- 42,278 -- 42,278
Stockholders' Equity.................... 488,754 273,739 55,523 (329,262) 488,754
---------- ---------- -------- ----------- ----------
Total Liabilities and Stockholders'
Equity.............................. $1,074,148 $1,190,724 $176,821 $(1,124,481) $1,317,212
========== ========== ======== =========== ==========
</TABLE>

65
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. SELECTED CONSOLIDATED FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND
NON-GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
------------------------------------------------------------------
NON-
PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED
---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Storage................................. $ -- $ 297,988 $ 19,399 $ -- $ 317,387
Service and Storage Material Sales...... -- 189,127 13,035 -- 202,162
---------- ---------- -------- ----------- ----------
Total Revenues........................ -- 487,115 32,434 -- 519,549

Operating Expenses:
Cost of Sales (Excluding
Depreciation)......................... -- 242,537 18,393 -- 260,930
Selling, General and Administrative..... 258 122,276 6,414 -- 128,948
Depreciation and Amortization........... -- 61,248 4,174 -- 65,422
---------- ---------- -------- ----------- ----------
Total Operating Expenses.............. 258 426,061 28,981 -- 455,300
---------- ---------- -------- ----------- ----------

Operating Income (Loss)................... (258) 61,054 3,453 -- 64,249

Interest Income........................... (51,420) -- -- 51,420 --
Interest Expense.......................... 52,877 51,655 1,313 (51,420) 54,425
Equity in the (Earnings) Losses of
Subsidiaries............................ 12,504 (43) -- (12,461) --
Other Expense (Income).................... -- (50) 33 -- (17)
---------- ---------- -------- ----------- ----------
Income (Loss) from Continuing
Operations Before Provision for
Income Taxes and Minority Interest
Expense............................. (14,219) 9,492 2,107 12,461 9,841
Provision for Income Taxes................ -- 8,990 1,589 -- 10,579
Minority Interest in Net Income of
Consolidated Subsidiaries............... -- -- 322 -- 322
---------- ---------- -------- ----------- ----------
Income (Loss) from Continuing
Operations.......................... (14,219) 502 196 12,461 (1,060)
Income from Discontinued Operations....... -- 241 -- -- 241
Loss on Sale of Discontinued Operations... -- (13,400) -- -- (13,400)
---------- ---------- -------- ----------- ----------
Net Income (Loss)..................... $ (14,219) $ (12,657) $ 196 $ 12,461 $ (14,219)
========== ========== ======== =========== ==========
</TABLE>

66
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. SELECTED CONSOLIDATED FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND
NON-GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
-------------------------------------------------------------------
NON-
PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED
--------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Flows Provided by (Used in) Continuing
Operations................................... $ (17,837) $ 73,389 $ 722 -- $ 56,274
Cash Flows Used in Discontinued Operations..... -- (836) -- -- (836)
--------- --------- -------- --------- ---------
Cash Flows Provided by (Used in) Operating
Activities................................. (17,837) 72,553 722 -- 55,438

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Paid for Acquisitions, net of cash
acquired..................................... (2,398) (132,078) (77,684) -- (212,160)
Capital Expenditures........................... -- (85,079) (13,578) -- (98,657)
Intercompany Loans to Subsidiaries............. (158,657) -- -- 158,657 --
Investment in Subsidiaries..................... (51,550) (51,550) -- 103,100 --
Additions to Customer Acquisition Costs........ -- (8,122) -- -- (8,122)
--------- --------- -------- --------- ---------
Cash Flows Used in Continuing Operations..... (212,605) (276,829) (91,262) 261,757 (318,939)
Cash Flows Provided by Discontinued
Operations................................. -- 7,814 -- -- 7,814
--------- --------- -------- --------- ---------
Cash Flows Used in Investing Activities...... (212,605) (269,015) (91,262) 261,757 (311,125)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Debt.............................. (246,400) (916) (2,338) -- (249,654)
Proceeds from Borrowings....................... 216,100 -- 19,041 -- 235,141
Debt Financing from Minority Shareholder....... -- -- 11,636 -- 11,636
Net Proceeds from Sale of Senior Subordinated
Notes........................................ 149,460 -- -- -- 149,460
Net Proceeds from Equity Offering.............. 153,755 -- -- -- 153,755
Repurchase of Common Stock..................... (39,484) -- -- -- (39,484)
Intercompany Loans from Parent................. -- 146,385 12,272 (158,657) --
Equity Contribution from Parent................ -- 51,550 51,550 (103,100) --
Proceeds from Exercise of Stock Options........ 3,589 -- -- -- 3,589
Debt Financing and Stock Issuance Costs........ (6,590) -- -- -- (6,590)
--------- --------- -------- --------- ---------
Cash Flows Provided by Continuing
Operations................................. 230,430 197,019 92,161 (261,757) 257,853
Cash Flows Provided by Discontinued
Operations................................. -- -- -- -- --
--------- --------- -------- --------- ---------
Cash Flows Provided by Financing
Activities................................. 230,430 197,019 92,161 (261,757) 257,853

EFFECT OF EXCHANGE RATES ON CASH AND CASH
EQUIVALENTS.................................... -- -- (51) -- (51)
--------- --------- -------- --------- ---------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.................................... (12) 557 1,570 -- 2,115

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD... 12 1,703 -- -- 1,715
--------- --------- -------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD......... $ -- $ 2,260 $ 1,570 $ -- $ 3,830
========= ========= ======== ========= =========
</TABLE>

6. ACQUISITIONS

Old Iron Mountain purchased substantially all of the assets and assumed
certain liabilities of 18, 15 and 17 records management businesses during 1997,
1998 and 1999, respectively. Each of these acquisitions was accounted for using
the purchase method of accounting, and accordingly, the results of operations
for each acquisition have been included in the consolidated results of Old Iron
Mountain from their respective acquisition dates. The excess of the purchase
price over the underlying fair value of the assets and

67
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. ACQUISITIONS (CONTINUED)
liabilities of each acquisition has been assigned to goodwill and is being
amortized over the estimated benefit period of 25 to 30 years. Consideration for
the various acquisitions included: (i) cash, which was provided through Old Iron
Mountain's credit facilities, Old Iron Mountain's 1998 and 1999 equity offerings
and the issuance of the 1996, 1997 and 1999 Notes; (ii) issuances of Old Iron
Mountain's common stock and options to purchase Old Iron Mountain's common
stock; and (iii) certain net assets of businesses previously acquired.

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

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Cash Paid................................................... $192,230 $189,729 $212,160
Fair Value of Common Stock Issued........................... 85,863 51,448 46,000
Fair Value of Options Issued................................ 3,071 15,655 --
Fair Value of Certain Net Assets of Businesses Previously
Acquired.................................................. -- 3,000 2,489
-------- -------- --------
Total Consideration..................................... 281,164 259,832 260,649
-------- -------- --------
Fair Value of Assets Acquired............................... 68,774 89,053 110,206
Liabilities Assumed......................................... (26,932) (38,165) (92,044)
-------- -------- --------
Fair Value of Net Assets Acquired....................... 41,842 50,888 18,162
-------- -------- --------
Recorded Goodwill........................................... $239,322 $208,944 $242,487
======== ======== ========
</TABLE>

Allocation of the purchase price for these acquisitions was based on
estimates of the fair value of net assets acquired and, for acquisitions
completed in 1999, is subject to adjustment upon finalization of the purchase
price allocation. Old Iron Mountain is not aware of any information that would
indicate that the final purchase price allocations will differ significantly
from preliminary estimates.

The following unaudited pro forma combined information shows the results of
Old Iron Mountain's operations for the years ended December 31, 1998 and 1999 as
though each of the significant acquisitions completed during 1998 and 1999 had
occurred on January 1, 1998:

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Revenues................................................ $488,587 $547,209
Net Loss from Continuing Operations..................... (10,353) (1,980)
Loss from Continuing Operations per Common Share--Basic
and Diluted........................................... (0.36) (0.06)
</TABLE>

The pro forma results have been prepared for comparative purposes only and
are not necessarily indicative of the actual results of operations had the
acquisitions taken place as of January 1, 1998 or the results that may occur in
the future. Furthermore, the pro forma results do not give effect to all cost
savings or incremental costs which may occur as a result of the integration and
consolidation of the acquired businesses. Certain acquisitions completed in 1998
and 1999 are not included in the pro forma results as their effect was
immaterial.

In connection with the acquisitions completed in 1997, 1998 and 1999, Old
Iron Mountain has undertaken certain restructurings of the acquired businesses.
The restructuring activities include certain

68
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. ACQUISITIONS (CONTINUED)
reductions in staffing levels, elimination of duplicate facilities and other
costs associated with exiting certain activities of the acquired businesses.
These restructuring activities were recorded as costs of the acquisitions and
were provided in accordance with Emerging Issues Task Force Issue No. 95-3,
"Recognition of Liabilities in Connection with a Purchase Business Combination."
Old Iron Mountain finalizes its restructuring plans for each business no later
than one year from the date of acquisition. Unresolved matters at December 31,
1999 primarily include completion of planned abandonments of facilities and
severances for certain acquisitions completed during 1998 and 1999.

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

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Reserves, beginning of the year.................. $ 1,340 $ 5,443 $10,482
Reserves established............................. 6,574 11,368 4,234
Expenditures..................................... (2,163) (4,690) (4,843)
Adjustments to goodwill.......................... (308) (1,639) (533)
------- ------- -------
Reserves, end of the year........................ $ 5,443 $10,482 $ 9,340
======= ======= =======
</TABLE>

At December 31, 1998 the restructuring reserves related to acquisitions
consisted of lease losses on abandoned facilities ($4.4 million), severance
costs for approximately 12 people ($1.8 million) and other exit costs
($4.3 million). These accruals are expected to be used within one year of the
finalization of the restructuring plan except for lease losses of $4.0 million,
which are based on contracts that extend through 2005 and long-term severance
contracts of approximately $1.2 million that extend through 2013.

At December 31, 1999 the restructuring reserves related to acquisitions
consisted of lease losses on abandoned facilities ($4.8 million), severance
costs for approximately 12 people ($1.5 million) and other exit costs
($3.0 million). These accruals are expected to be used within one year of the
finalization of the restructuring plan except for lease losses of $4.6 million,
which are based on contracts that extend through 2005 and long-term severance
contracts of approximately $1.1 million that extend through 2013.

69
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. CAPITAL STOCK AND STOCK OPTIONS

a. Capital Stock

On April 3, 1998, Old Iron Mountain issued and sold an aggregate of
6,037,500 shares (including 787,500 shares to cover over-allotments) of its
common stock in an underwritten public offering. Net proceeds to Old Iron
Mountain after deducting underwriters' discounts and commissions were
$132.9 million.

On May 17, 1999, Old Iron Mountain issued and sold an aggregate of 5,750,000
shares (including 750,000 shares to cover over-allotments) of its common stock
in an underwritten public offering. Net proceeds to Old Iron Mountain after
deducting underwriters' discounts and commissions were $153.8 million and were
used to repay outstanding bank debt, to repurchase all of Old Iron Mountain's
common stock issued in connection with the acquisition of Data Base, Inc.
completed in 1999 and for general corporate purposes.

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

<TABLE>
<CAPTION>
NUMBER OF SHARES
-----------------------------------------------------------------------------
AUTHORIZED ISSUED OUTSTANDING
PAR ------------------------- ----------------------- -----------------------
EQUITY TYPE VALUE 1998 1999 1998 1999 1998 1999
- ----------- -------- ----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Preferred stock........................ $.01 2,000,000 2,000,000 -- -- -- --
Common stock--voting................... .01 100,000,000 100,000,000 29,430,205 36,943,612 29,430,205 35,467,035
Common stock--nonvoting................ .01 1,000,000 1,000,000 -- -- -- --
</TABLE>

b. Stock Options

A total of 3,000,000 shares of common stock had been reserved for future
grants of options and other rights under the Iron Mountain Incorporated 1995
Stock Incentive Plan (the "Stock Incentive Plan").

During 1997, Old Iron Mountain issued options to employees of two acquired
companies to purchase 218,879 shares of Old Iron Mountain's common stock. The
options replaced options held by the employees for the acquired companies'
common stock. The options were accounted for as additional purchase price based
on the fair value of the options when issued.

During 1998, Old Iron Mountain assumed two existing stock option plans from
an acquired company and options under the existing plans were converted into
options to purchase 885,944 shares of Old Iron Mountain's common stock under
such plans. No new options may be issued under these plans. The options were
accounted for as additional purchase price based on the fair value of the
options when issued.

70
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. CAPITAL STOCK AND STOCK OPTIONS (CONTINUED)
The following is a summary of stock option transactions, including those
issued to employees of acquired companies, during the applicable periods:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Options outstanding, December 31, 1996...................... 1,144,292 $ 8.68
Granted..................................................... 703,670 17.01
Exercised................................................... (125,711) 6.59
Canceled.................................................... (46,203) 14.73
---------

Options outstanding, December 31, 1997...................... 1,676,048 12.17
Granted..................................................... 1,173,018 12.02
Exercised................................................... (566,615) 7.88
Canceled.................................................... (116,132) 12.36
---------

Options outstanding, December 31, 1998...................... 2,166,319 13.21
Granted..................................................... 442,043 32.07
Exercised................................................... (263,281) 10.86
Canceled.................................................... (90,276) 20.27
---------

Options outstanding, December 31, 1999...................... 2,254,805 16.91
========= ======
</TABLE>

Except for the options granted in connection with acquisitions, the stock
options were granted with exercise prices equal to the market price of the stock
at the date of grant. The majority of options become exercisable ratably over a
period of five years unless the holder terminates employment. The number of
shares available for grant at December 31, 1999 was 552,896.

Effective January 1, 1996, Old Iron Mountain adopted the provisions of SFAS
No. 123, "Accounting for Stock-Based Compensation." Old Iron Mountain has
elected to continue to account for stock options issued to employees at their
intrinsic value with disclosure of fair value accounting on net income (loss)
and earnings (loss) per share on a pro forma basis. Had Old Iron Mountain
elected to recognize compensation cost based on the fair value of the options
granted at grant date as prescribed by SFAS No. 123, net loss applicable to
common stockholders and net loss per common share would have been increased to
the pro forma amounts indicated in the table below:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Loss from continuing operations, as reported................ $(4,521) $(3,167) $ (1,060)
Loss from continuing operations, pro forma.................. (5,411) (4,071) (2,486)

Net loss applicable to common stockholders, as reported..... (4,521) (2,966) (14,219)
Net loss applicable to common stockholders, pro forma....... (5,411) (3,870) (15,645)

Loss from continuing operations--basic and diluted, as
reported.................................................. (0.26) (0.12) (0.03)
Loss from continuing operations--basic and diluted, pro
forma..................................................... (0.31) (0.15) (0.07)

Net loss per common share--basic and diluted, as reported... (0.26) (0.11) (0.43)
Net loss per common share--basic and diluted, pro forma..... (0.31) (0.14) (0.47)
</TABLE>

71
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. CAPITAL STOCK AND STOCK OPTIONS (CONTINUED)
The weighted average fair value of options granted in 1997, 1998 and 1999
was $11.06, $8.92 and $12.31 per share, respectively. The values were estimated
on the date of grant using the Black-Scholes option pricing model. The following
table summarizes the weighted average assumptions used for grants in the year
ended December 31:

<TABLE>
<CAPTION>
ASSUMPTION 1997 1998 1999
- ---------- --------- --------- ---------
<S> <C> <C> <C>
Expected volatility......................................... 29.2% 28.4% 31.5%
Risk-free interest rate..................................... 5.91 5.11 5.69
Expected dividend yield..................................... None None None
Expected life of the option................................. 7.0 years 5.0 years 5.0 years
</TABLE>

The following table summarizes additional information regarding options
outstanding and exercisable at December 31, 1999:

<TABLE>
<CAPTION>
OUTSTANDING EXERCISABLE
--------------------------------------- --------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
RANGE OF CONTRACTUAL LIFE EXERCISE EXERCISE
EXERCISE PRICES NUMBER (IN YEARS) PRICE NUMBER PRICE
- --------------------------------------- --------- ---------------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
$0.75 to $0.87......................... 24,230 7.0 $ 0.87 24,230 $ 0.87
$4.32 to $5.77......................... 395,144 2.9 4.68 394,354 4.68
$6.63 to $9.10......................... 140,979 4.9 8.25 111,492 8.23
$10.25 to $10.94....................... 600,547 5.4 10.42 382,987 10.47
$17.17 to $25.03....................... 564,559 7.6 21.67 205,086 21.45
$26.79 to $33.63....................... 529,346 9.4 31.37 27,005 27.77
--------- --- ------ --------- ------
2,254,805 6.4 $16.91 1,145,154 $10.43
========= === ====== ========= ======
</TABLE>

8. INCOME (LOSS) PER COMMON SHARE--BASIC AND DILUTED

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

72
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. INCOME (LOSS) PER COMMON SHARE--BASIC AND DILUTED (CONTINUED)
Income (loss) per common share--basic and diluted has been calculated as
follows:

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Loss from continuing operations............................. $(4,521) $(3,167) $ (1,060)
Income from discontinued operations......................... -- 201 241
Loss on sale of discontinued operations..................... -- -- (13,400)
------- ------- --------
Net loss applicable to common stockholders.................. $(4,521) $(2,966) $(14,219)
======= ======= ========

Income (loss) per common share--basic and diluted:
Loss from continuing operations............................. $ (0.26) $ (0.12) $ (0.03)
Income (Loss) from discontinued operations.................. -- 0.01 (0.40)
------- ------- --------
Net loss applicable to common stockholders.................. $ (0.26) $ (0.11) $ (0.43)
======= ======= ========

Weighted average common shares outstanding (in
thousands)--basic and diluted............................. 17,172 27,470 33,345
======= ======= ========
</TABLE>

Because their effect is antidilutive, 1,676,048, 2,166,319 and 2,254,805
shares of potential common stock underlying outstanding options have been
excluded from the above calculation for the years ended December 31, 1997, 1998
and 1999, respectively.

9. DISCONTINUED OPERATIONS

In June 1999, in order to focus on its records and information management
services ("RIMS") business, Old Iron Mountain decided to sell its information
technology staffing business ("IT Staffing"), Arcus Staffing Resources, Inc.
("Arcus Staffing"), which was acquired in January 1998 as part of the
acquisition of Arcus Group, Inc. ("Arcus Group"). Effective November 1, 1999,
Old Iron Mountain completed the sale of substantially all of the assets of Arcus
Staffing. The terms of the sale include contingent payments for a period of
18 months which may result in a revision of the recorded loss during 2000 or
2001. In accordance with the provisions of Accounting Principles Board Opinion
No. 30, the sale of Arcus Staffing was accounted for as a discontinued
operation. Accordingly, the Arcus Staffing operations were segregated from Old
Iron Mountain's continuing operations and reported as a separate line item on
Old Iron Mountain's consolidated statement of operations. The following table
sets forth the revenue and net income from discontinued operations for the years
ended December 31, 1998 and the ten months ended October 31, 1999:

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Revenues.................................................. $39,551 $35,455
Income from Discontinued Operations, net of tax benefit... 201 241
</TABLE>

Old Iron Mountain has recorded an estimated loss on the sale of Arcus
Staffing of $13,400. The estimated loss is comprised of a write-off of
nondeductible and deductible goodwill, a deferred tax benefit and estimated
expenses directly related to the transaction partially offset by the estimated
income from operations of Arcus Staffing through the date of disposition.

73
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. INCOME TAXES

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

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

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Domestic........................................... $(4,601) $3,391 $7,606
Foreign............................................ -- -- 2,235
------- ------ ------
$(4,601) $3,391 $9,841
======= ====== ======
</TABLE>

Old Iron Mountain has estimated federal net operating loss carryforwards of
approximately $59,000 at December 31, 1999 to reduce future federal income
taxes, if any, which begin to expire in 2005. The preceding net operating loss
carryforwards do not include preacquisition net operating loss carryforwards of
Arcus Group. Any tax benefit related to these loss carryforwards will be
recorded as a reduction of goodwill, if and when realized. Old Iron Mountain
also has estimated state net operating loss carryforwards of approximately
$25,000 to reduce future state income taxes, if any. Additionally, Old Iron
Mountain has alternative minimum tax credit carryforwards of $587, which have no
expiration date and are available to reduce future income taxes, if any.

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

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Deferred Tax Assets:
Accrued liabilities................................... $ 8,033 $ 8,812
Deferred rent......................................... 3,767 4,316
Net operating loss carryforwards...................... 16,759 21,857
AMT credit............................................ 587 587
Other................................................. 6,151 6,606
-------- --------
35,297 42,178
Valuation Allowance................................... (4,369) --
-------- --------
30,928 42,178
-------- --------
Deferred Tax Liabilities:
Other assets, principally due to differences in
amortization........................................ (6,389) (9,727)
Plant and equipment, principally due to differences in
depreciation........................................ (22,284) (29,619)
Customer acquisition costs............................ (3,824) (6,564)
-------- --------
(32,497) (45,910)
-------- --------
Net deferred tax liability............................ $ (1,569) $ (3,732)
======== ========
</TABLE>

74
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. INCOME TAXES (CONTINUED)
Old Iron Mountain receives a tax deduction upon exercise of non-qualified
stock options by employees for the difference between the exercise price and the
market price of the underlying common stock on the date of exercise, which is
included in the net operating loss carryforwards above. A valuation allowance
was recorded in 1998 for this tax asset because of the uncertainty of its
realization. The valuation allowance was reversed in 1999 and the tax benefit
credited to paid in capital or, for options granted in connection with
acquisitions, to goodwill.

Old Iron Mountain and its U.S. subsidiaries file a consolidated federal
income tax return. The provision (benefit) for income tax consists of the
following components:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Federal--current............................................ $ -- $ -- $ --
Federal--deferred........................................... (459) 4,509 6,304
State--current.............................................. 399 505 645
State--deferred............................................. (20) 1,544 2,041
Foreign..................................................... -- -- 1,589
----- ------ -------
$ (80) $6,558 $10,579
===== ====== =======
</TABLE>

A reconciliation of total income tax expense (benefit) and the amount
computed by applying the federal income tax rate of 34% to income (loss) before
income taxes is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Computed "expected" tax provision (benefit)................. $(1,564) $1,153 $ 3,346
Increase in income taxes resulting from:
State taxes (net of federal tax benefit).................. 250 1,367 1,726
Nondeductible goodwill amortization....................... 1,221 3,675 5,025
Foreign tax rate and tax law differential................. -- -- 104
Other, net................................................ 13 363 378
------- ------ -------
$ (80) $6,558 $10,579
======= ====== =======
</TABLE>

75
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31 JUNE 30 SEPT. 30 DEC. 31
- ------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
1998
Revenues............................................ $ 89,056 $ 93,464 $ 98,544 $102,897
Gross profit........................................ 44,139 46,708 49,038 51,963
Loss from continuing operations..................... (548) (395) (1,019) (1,205)
Net loss............................................ (314) (261) (1,069) (1,322)
Loss per common share from continuing
operations--basic and diluted..................... (0.02) (0.01) (0.04) (0.05)
Net loss per common share--basic and diluted........ (0.01) (0.01) (0.04) (0.05)

1999
Revenues............................................ $109,371 $131,765 $136,907 $141,506
Gross profit........................................ 54,936 65,598 67,681 70,404
Income (Loss) from continuing operations............ (248) (1,395) 999 (416)
Net loss............................................ (149) (10,653) (3,001) (416)
Income (Loss) per common share from continuing
operations--basic and diluted..................... (0.01) (0.04) 0.03 (0.01)
Net loss per common share--basic and diluted........ (0.01) (0.32) (0.08) (0.01)
</TABLE>

12. SEGMENT INFORMATION

On December 31, 1998, Old Iron Mountain adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information" ("SFAS 131"). The new
rules establish revised standards for public companies relating to the reporting
of financial and descriptive information about their operating segments in
financial statements. The adoption of SFAS 131 did not have a material effect on
Old Iron Mountain's financial statements.

During 1998, Old Iron Mountain classified its operations into two
fundamental businesses: RIMS and IT Staffing. The reportable segments were
managed separately since each business has different economic characteristics
based on the differing customer requirements and the nature of the services
provided. In June 1999, Old Iron Mountain decided to sell its IT Staffing
business, Arcus Staffing, as discussed in Note 9 of Notes to Consolidated
Financial Statements. The results of operations of Arcus Staffing have been
classified and reported as discontinued operations in Old Iron Mountain's
statements of operations. Consequently, Old Iron Mountain now operates in a
single segment, the RIMS business.

76
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. SEGMENT INFORMATION (CONTINUED)
Information as to Old Iron Mountain's operations in different geographical
areas is as follows:

<TABLE>
<CAPTION>
1998 1999
-------- ----------
<S> <C> <C>
Revenues:
United States......................................... $381,959 $ 487,931
International......................................... 2,002 31,618
-------- ----------
Total Revenues.................................... $383,961 $ 519,549
======== ==========
Long-lived Assets:
United States......................................... $822,963 $1,018,943
International......................................... 485 154,605
-------- ----------
Total Long-lived Assets........................... $823,448 $1,173,548
======== ==========
</TABLE>

Information is not provided for 1997 because Old Iron Mountain had no
international operations in that year.

13. COMMITMENTS AND CONTINGENCIES

a. Leases

Old Iron Mountain leases most of its facilities under various operating
leases. A majority of these leases have renewal options of five to ten years
and have either fixed or Consumer Price Index escalation clauses. Old Iron
Mountain also leases equipment under operating leases, primarily computers
which have an average lease life of three years. Trucks and office equipment
are also leased and have remaining lease lives ranging from one to seven
years. Rent expense was $29,332, $47,049 and $59,113 for the years ended
December 31, 1997, 1998 and 1999, respectively.

Minimum future lease payments are as follows:

<TABLE>
<CAPTION>
YEAR OPERATING
- ---- ---------
<S> <C>
2000........................................................ $ 61,179
2001........................................................ 57,407
2002........................................................ 53,824
2003........................................................ 47,796
2004........................................................ 41,738
Thereafter.................................................. 178,595
--------
Total minimum lease payments................................ $440,539
========
</TABLE>

Included in the lease commitments disclosed in the preceding paragraph are
certain five-year operating lease agreements signed in 1998 and 1999 for
specified records storage warehouses. At the end of the lease term, Old Iron
Mountain, at its option, may: (i) negotiate a renewal of the lease;
(ii) purchase the properties at a price equal to the lessor's original cost
(approximately $32.9 million); or (iii) allow the lease to expire and cause
the properties to be sold. Old Iron Mountain's ability to cause the
properties to be sold depends upon its compliance with certain terms of the
lease. Under certain conditions, Old Iron Mountain would receive any excess
of the net sales proceeds over the

77
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. COMMITMENTS AND CONTINGENCIES (CONTINUED)
properties' original cost. In the event that the net sales proceeds are less
than 85% of the properties' original cost, Old Iron Mountain would make
certain contingent rental payments to the lessor equal to that difference,
subject to a maximum amount.

b. Facility Fire

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

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

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

In June 1998, Old Iron Mountain settled several insurance claims, including
a significant claim under its business interruption policy, related to the
fires. Other income, net, for the year ended December 31, 1998 includes a
$1.7 million gain related to the settlement.

c. Other Litigation

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

14. RELATED PARTY TRANSACTIONS

Old Iron Mountain leases space to an affiliated company, Schooner Capital
LLC ("Schooner"), for its corporate headquarters located in Boston,
Massachusetts. For the years ended December 31, 1997, 1998 and 1999, Schooner
paid Old Iron Mountain rent totaling $85, $90 and $94, respectively. Prior to
1999, Old Iron Mountain leased one facility from a landlord who was a related
party. Total rental payments for the years ended December 31, 1997 and 1998 for
this facility totaled $99 each year. In the opinion of management, both of these
leases were entered into at market prices and terms.

78
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. EMPLOYEE BENEFIT PLANS

a. Profit Sharing Retirement Plan

Old Iron Mountain has a defined contribution plan, which generally covers
all non-union U.S. employees meeting certain service requirements. Eligible
employees may elect to defer from 1% to 20% of compensation per pay period
up to the amount allowed by the Internal Revenue Code. Old Iron Mountain
makes matching contributions based on the amount of an employee's
contribution, according to a schedule as described in the plan documents.
Old Iron Mountain has expensed $642, $910 and $1,890 for the years ended
December 31, 1997, 1998 and 1999, respectively.

b. Employee Stock Purchase Plan

On March 23, 1998, Old Iron Mountain introduced an employee stock purchase
plan (the "Plan"), which is available for participation by substantially all
employees who have met certain service requirements. The Plan was approved
by the shareholders of Old Iron Mountain on May 28, 1998 and commenced
operations on October 1, 1998. The Plan provides a way for eligible
employees of Old Iron Mountain to become shareholders of Old Iron Mountain
on favorable terms. The Plan provides for the purchase of up to 375,000
shares of Old Iron Mountain's common stock by eligible employees through
successive offering periods. At the start of each offering period,
participating employees are granted options to acquire Old Iron Mountain's
common stock. During each offering period, participating employees
accumulate after-tax payroll contributions, up to a maximum of 15% of their
compensation, to pay the exercise price of their options. At the end of the
offering period, outstanding options are exercised, and each employee's
accumulated contributions are used to purchase common stock of Old Iron
Mountain. The price for shares purchased under the Plan is 85% of their
market price at either the beginning or the end of the offering period,
whichever is lower.

The first offering period commenced on October 1, 1998 and expired on
September 30, 1999. The second offering period of the Plan commenced on
October 1, 1999 and will expire on March 31, 2000. With respect to the first
offering period, participants are not permitted to sell or assign any common
stock acquired under the Plan until October 2, 2000. Effective as of the
second offering period, restrictions on the transfer of common stock
acquired under the Plan have been eliminated. There were 0 and 50,907 shares
purchased under the Plan for the years ended December 31, 1998 and 1999,
respectively.

16. NONCASH TRANSACTIONS

Old Iron Mountain used the following as part of the consideration paid for
certain acquisitions:

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Fair Value of Common Stock Issued........................... $85,863 $51,448 $46,000
Fair Value of Options Issued................................ 3,071 15,655 --
Fair Value of Certain Net Assets of Businesses Previously
Acquired.................................................. -- 3,000 2,489
</TABLE>

In December 1998, Old Iron Mountain entered into a foreign currency exchange
agreement and has recorded an asset and a liability based upon the exchange
rates as of December 31, 1998. A cash settlement of the agreement occurred in
January 1999.

79
<PAGE>
IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. NONCASH TRANSACTIONS (CONTINUED)
During 1997, $3,086 of property and equipment, destroyed in a fire, was
transferred to a receivable from insurance company.

See Note 6 for liabilities assumed in acquisitions.

17. SUBSEQUENT EVENTS

a. Completed Acquisitions

On February 1, 2000, Old Iron Mountain completed the acquisition of Pierce
Leahy Corp. ("Pierce Leahy") in a stock-for-stock merger valued at
approximately $1.1 billion. The acquisition was structured as a reverse
merger with Pierce Leahy being the surviving legal entity and immediately
changing its name to Iron Mountain Incorporated (the "Company"). Based on
the number of shares of Old Iron Mountain and Pierce Leahy common stock
outstanding immediately prior to the completion of the merger, immediately
after the merger former stockholders of Old Iron Mountain owned
approximately 65% of the Company's Common Stock. Because of this share
ownership, Old Iron Mountain is considered the acquiring entity for
accounting purposes. The total consideration for this transaction was
comprised of: (i) approximately 18.8 million shares of the Company's Common
Stock with a fair value of approximately $444 million; (ii) options to
acquire approximately 1.5 million shares of the Company's Common Stock with
a fair value of approximately $25 million; (iii) assumption of Pierce Leahy
debt with a fair value of approximately $579 million; and (iv) incurrence of
approximately $4 million of capitalized transaction costs. The acquisition
will be accounted for as a purchase.

In addition, in January 2000, Old Iron Mountain acquired one, and in
February 2000, the Company acquired another, records management business for
total consideration of approximately $11.7 million in cash. The acquisitions
will be accounted for using the purchase method of accounting.

b. Pending Acquisition (Unaudited)

In February 2000, the Company entered into an agreement to acquire all of
the assets of a RIMS business for aggregate consideration of approximately
$54 million in cash. The acquisition, which is subject to customary closing
conditions, is expected to close in May 2000, though there can be no
assurances in this regard, and will be accounted for as a purchase.

80
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Iron Mountain Incorporated:

We have audited, in accordance with auditing standards generally accepted in
the United States, the consolidated financial statements of Iron Mountain
Incorporated (a Delaware corporation) for each of the three years in the period
ended December 31, 1999 and have issued our report thereon dated February 28,
2000. Our audits were made for the purpose of forming an opinion on those basic
financial statements taken as a whole. We did not audit the financial statements
of Iron Mountain Europe Limited as of October 31, 1999. Those statements were
audited by other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for this entity, is based
solely on the report of the other auditors. The supplemental schedule listed in
the accompanying index is the responsibility of the Iron Mountain Incorporated's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and regulations under the Securities Exchange Act of
1934 and is not a required part of the basic financial statements. The
supplemental schedule has been subjected to the auditing procedures applied in
our audits of the basic financial statements and, in our opinion, based on our
audit and the report of other auditors, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
February 28, 2000

81
<PAGE>
SCHEDULE II

IRON MOUNTAIN INCORPORATED

VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT
BALANCE AT END OF
BEGINNING OF CHARGED TO OTHER THE
YEAR ENDED DECEMBER 31, THE YEAR EXPENSE ADDITIONS(1) DEDUCTIONS YEAR
- ----------------------- ------------ ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts and
credit memos:
1997......................................... $1,061 $ 874 $483 $ (489) $1,929
1998......................................... 1,929 1,730 834 (1,177) 3,316
1999......................................... 3,316 2,733 336 (645) 5,740
</TABLE>

<TABLE>
<CAPTION>
BALANCE AT
BALANCE AT END OF
BEGINNING OF THE
YEAR ENDED DECEMBER 31, THE YEAR ADDITIONS DEDUCTIONS ADJUSTMENTS(2) YEAR
- ----------------------- ------------ --------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Reserve for restructuring activities:
1997........................................ $1,340 $ 6,574 $(2,163) $ (308) $ 5,443
1998........................................ 5,443 11,368 (4,690) (1,639) 10,482
1999........................................ 10,482 4,234 (4,843) (533) 9,340
</TABLE>

- ------------------------------

(1) Includes allowance of businesses acquired during the year as described in
Note 6 of Notes to Consolidated Financial Statements.

(2) The adjustments represent changes to goodwill as a result of management's
finalizing its restructuring plan within one year of each acquisition.

82
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Iron Mountain Incorporated (formerly known as Pierce Leahy Corp.):

We have audited the accompanying consolidated balance sheets of Pierce Leahy
Corp. (a Pennsylvania corporation) and Subsidiaries as of December 31, 1998 and
1999, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Pierce Leahy Corp. and
Subsidiaries as of December 31, 1998 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

ARTHUR ANDERSEN LLP

Philadelphia, Pa.
February 22, 2000

83
<PAGE>
PIERCE LEAHY CORP.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash...................................................... $ 2,312 $ 2,265
Accounts receivable (less allowance of $3,650 and $3,378
as of 1998
and 1999, respectively)................................. 43,063 54,051
Prepaid expenses and other................................ 2,185 3,537
Deferred income taxes..................................... 4,402 4,340
-------- --------

Total Current Assets.................................. 51,962 64,193
-------- --------

Property, Plant and Equipment............................. 297,216 361,401
Less-Accumulated depreciation........................... (67,522) (85,367)
-------- --------
Net Property, Plant, and Equipment.................... 229,694 276,034
-------- --------

Other Assets:
Goodwill, net........................................... 319,763 351,138
Customer acquisition costs, net......................... 23,637 33,836
Deferred financing costs, net........................... 11,311 11,017
Other................................................... 30,091 24,248
-------- --------

Total other assets.................................... 384,802 420,239
-------- --------

Total Assets.......................................... $666,458 $760,466
======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt......................... $ 3,583 $ 22,800
Accounts payable.......................................... 11,663 13,140
Accrued expenses.......................................... 40,931 47,287
Deferred income........................................... 11,932 15,162
-------- --------

Total Current Liabilities............................. 68,109 98,389

Long-Term Debt, net of current portion.................... 514,362 563,997
Deferred Rent............................................. 5,856 7,192
Deferred Income Taxes..................................... 15,036 21,080
Commitments and Contingencies (Note 7)
Shareholders' Equity:
Common stock............................................ 170 170
Additional paid-in capital.............................. 82,350 82,597
Cummulative translation adjustment...................... (10) (470)
Accumulated deficit..................................... (19,415) (12,489)
-------- --------

Total Shareholders' Equity............................ 63,095 69,808
-------- --------

Total Liabilities and Shareholders' Equity............ $666,458 $760,466
======== ========
</TABLE>

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

84
<PAGE>
PIERCE LEAHY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------
1997 1998 1999
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Storage................................................... $107,879 $153,533 $190,095
Service and storage material sales........................ 75,638 116,767 152,167
-------- -------- --------
Total revenues........................................ 183,517 270,300 342,262
-------- -------- --------
Operating Expenses:
Cost of sales, excluding depreciation and amortization.... 101,940 154,435 191,510
Selling, general and administrative....................... 30,070 36,994 45,856
Depreciation and amortization............................. 21,528 35,772 43,655
Foreign currency exchange................................. 702 7,907 (7,473)
Special compensation charge............................... 1,752 -- --
Merger-related expenses................................... -- -- 2,361
-------- -------- --------
Total operating expenses.............................. 155,992 235,108 275,909
-------- -------- --------
Operating income...................................... 27,525 35,192 66,353
Interest Expense............................................ 29,262 42,864 52,363
-------- -------- --------
Income (loss) before income taxes and extraordinary
charge.............................................. (1,737) (7,672) 13,990
Income Taxes................................................ 7,424 3,318 6,290
-------- -------- --------
Income (loss) before extraordinary charge............. (9,161) (10,990) 7,700
Extraordinary Charge--loss on early extinguishment of debt,
net of $4,014 tax benefit in 1997......................... 6,036 -- --
-------- -------- --------
Net Income (Loss)........................................... (15,197) (10,990) 7,700
Preferred Stock Dividend and Accretion...................... -- -- 774
-------- -------- --------
Net Income (Loss) Applicable to Common Shareholders......... $(15,197) $(10,990) $ 6,926
======== ======== ========
Basic and Diluted Earnings Per Common Share:
Income (loss) before extraordinary charge................. $ (0.62) $ (0.59) $ 0.37
Extraordinary charge...................................... (0.41) -- --
-------- -------- --------
Basic income (loss) per common share...................... $ (1.03) $ (0.59) $ 0.37
======== ======== ========
Diluted income (loss) per common share.................... $ (1.03) $ (0.59) $ 0.35
======== ======== ========
Shares used in computing basic income (loss) per common
share..................................................... 14,724 18,486 18,766
======== ======== ========
Shares used in computing diluted income (loss) per common
share..................................................... 14,724 18,486 19,525
======== ======== ========
Pro Forma Data (Unaudited) (Note 2):
Historical net loss before income taxes and extraordinary
charge.................................................. $ (1,737)
Pro forma provision for income taxes...................... 1,452
Extraordinary charge, net of tax.......................... 6,036
---------
Pro forma net loss applicable to common shareholders........ $ (9,225)
=========
Pro forma basic and diluted net loss per common share
Loss before extraordinary charge.......................... (0.22)
Extraordinary charge...................................... (0.41)
---------
Pro forma basic and diluted net loss per common share....... $ (0.63)
=========
Shares used in computing pro forma basic and diluted net
loss per common share..................................... 14,724
=========
</TABLE>

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

85
<PAGE>
PIERCE LEAHY CORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER
COMMON PAID-IN ACCUMULATED COMPREHENSIVE
STOCK CAPITAL DEFICIT ITEMS TOTAL
-------- ---------- ----------- ------------- --------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996................... $ -- $ 24 $(25,462) $ -- $(25,438)

Comprehensive Income--

Net loss................................. -- -- (15,197) -- (15,197)

Foreign currency translation
adjustment............................. -- -- -- (309) (309)
--------

Total Comprehensive Loss............... (15,506)

Transfer of accumulated deficit to
additional paid-in capital upon
conversion from S Corporation to C
Corporation.............................. -- (32,234) 32,234 -- --

Stock split and recapitalization........... 105 (105) -- -- --

Net proceeds from initial public offering
of common stock.......................... 57 93,551 -- -- 93,608

Accelerated vesting of stock options....... -- 1,752 -- -- 1,752

Issuance of common stock for
acquisitions............................. 3 4,904 -- -- 4,907
---- -------- -------- ----- --------

Balance, December 31, 1997................... 165 67,892 (8,425) (309) 59,323

Comprehensive Income--

Net loss................................. -- -- (10,990) -- (10,990)

Foreign currency translation
adjustment............................. -- -- -- 299 299
--------

Total Comprehensive Loss............... (10,691)

Issuance of common stock for
acquisitions............................. 5 14,404 -- -- 14,409

Stock option exercise...................... -- 54 -- -- 54
---- -------- -------- ----- --------

Balance, December 31, 1998................... 170 82,350 (19,415) (10) 63,095

Comprehensive Income--

Net income............................... -- -- 7,700 -- 7,700

Foreign currency translation
adjustment............................. -- -- -- (460) (460)
--------

Total Comprehensive Income............. 7,240

Stock option exercise...................... -- 247 -- -- 247

Accretion of redeemable preferred stock.... -- -- (774) -- (774)
---- -------- -------- ----- --------

Balance, December 31, 1999................... $170 $ 82,597 $(12,489) $(470) $ 69,808
==== ======== ======== ===== ========
</TABLE>

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

86
<PAGE>
PIERCE LEAHY CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------
1997 1998 1999
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss)......................................... $(15,197) $(10,990) $ 7,700
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Extraordinary item...................................... 6,036 -- --
Special compensation charge............................. 1,752 -- --
Depreciation and amortization........................... 21,528 35,772 43,655
Amortization of deferred financing costs................ 1,069 1,393 1,624
Gain (loss) on sale of property and equipment........... (44) 16 (222)
Deferred income tax provision........................... 7,241 3,322 6,290
Change in deferred rent................................. 1,042 1,280 1,141
Foreign currency adjustment............................. 702 7,907 (7,473)
Changes in Assets and Liabilities (exclusive of
acquisitions):
(Increase) decrease in--
Accounts receivable, net.............................. (3,870) (10,731) (7,565)
Inventory, prepaid expenses and other................. (1,291) 1,180 (717)
Other assets.......................................... 746 2,296 1,723
Increase in--
Accounts payable...................................... 185 2,545 652
Accrued expenses...................................... 1,872 4,457 3,110
Deferred income....................................... 330 25 1,326
-------- -------- --------
Net Cash Provided by Operating Activities........... 22,101 38,472 51,244
-------- -------- --------

Cash Flows from Investing Activities:
Cash paid for acquisitions, net of cash acquired.......... (102,068) (186,486) (23,326)
Capital expenditures...................................... (35,397) (48,591) (57,543)
Customer acquisition costs................................ (10,629) (10,921) (17,367)
Deposits on pending acquisitions.......................... (2,398) (214) --
Increase in intangible assets............................. (5,625) (6,659) (1,715)
Payments on noncompete agreements......................... (496) (220) --
Proceeds from sale of property and equipment.............. 64 60 1,168
-------- -------- --------
Net Cash Used in Investing Activities............... (156,549) (253,031) (98,783)
-------- -------- --------

Cash Flows from Financing Activities:
Borrowings on revolving line of credit.................... 156,983 183,925 112,282
Payments on revolving line of credit...................... (139,784) (86,771) (64,550)
Proceeds from issuance of long-term debt.................. 120,000 128,951 6,862
Proceeds from issuance of common stock.................... 93,608 -- --
Issuance of redeemable preferred stock.................... -- -- 4,615
Payments on long-term debt................................ (82,464) (10,627) (5,331)
Payment of debt financing costs........................... (5,230) (2,658) (1,185)
Proceeds from exercise of stock options................... -- 54 247
Payment of redeemable preferred stock dividend............ -- -- (389)
Redemption of redeemable preferred stock.................. -- -- (5,000)
Prepayment penalties and cancellation of warrants......... (7,000) -- --
-------- -------- --------
Net Cash Provided by Financing Activities........... 136,113 212,874 47,551
-------- -------- --------
Effect of exchange rates on cash and cash equivalents....... (1,137) 2,215 (59)
-------- -------- --------
Increase (Decrease) in Cash................................. 528 530 (47)
Cash, Beginning of Year..................................... 1,254 1,782 2,312
-------- -------- --------
Cash, End of Year........................................... $ 1,782 $ 2,312 $ 2,265
======== ======== ========

Supplemental Information:
Cash Paid for Interest.................................... $ 26,288 $ 39,013 $ 51,748
======== ======== ========
Cash Paid for Income Taxes................................ $ -- $ 75 $ 203
======== ======== ========
</TABLE>

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

87
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. NATURE OF BUSINESS

Pierce Leahy Corp. ("Pierce Leahy") stores and services business records for
customers throughout the United States, Canada and the United Kingdom. Pierce
Leahy also sells storage containers and provides records management consulting
services, imaging services and marketing literature storage and fulfillment
services.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation

The consolidated financial statements include the accounts of Pierce Leahy
Corp. and its wholly and majority-owned subsidiaries. All intercompany accounts
and transactions have been eliminated in consolidation.

b. Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

c. Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is provided
using straight-line and accelerated methods over the estimated useful lives of
the assets.

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
LIFE 1998 1999
----------- -------- --------
<S> <C> <C> <C>
Land........................................ -- $ 16,785 $ 19,883
Buildings and improvements.................. 10-40 years 107,210 122,036
Warehouse equipment (primarily shelving).... 12-20 years 131,090 158,545
Data processing equipment and software...... 7 years 24,063 29,604
Furniture and fixtures...................... 7 years 6,688 7,885
Transportation equipment.................... 5 years 9,125 9,905
Construction in progress.................... -- 2,255 13,543
-------- --------
297,216 361,401
Less-Accumulated depreciation............... (67,522) (85,367)
-------- --------
Net property, plant and equipment......... $229,694 $276,034
======== ========
</TABLE>

Depreciation expense was $9,599, $15,127 and $16,781 for the years ended
December 31, 1997, 1998 and 1999, respectively.

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Software
Developed or Obtained for Internal Use." This statement requires that certain
costs related to the development or purchase of internal-use software be

88
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
capitalized and amortized over the estimated useful life of the software and
also requires that costs related to the preliminary project stage and
post-implementation/operations stage in an internal-use computer software
development project be charged to expense as incurred. Pierce Leahy adopted SOP
98-1 effective January 1, 1999 and charged $451 of costs to expense in 1999 that
would have been capitalized under the previous policy.

d. Goodwill

Goodwill reflects the cost in excess of fair value of the net assets of
companies acquired in purchase transactions. Goodwill is amortized using the
straight-line method from the date of acquisition over the expected period to be
benefited, estimated at 30 years. Pierce Leahy assesses the recoverability of
goodwill, as well as other long-lived assets, based upon expectations of future
undiscounted cash flows in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of." At December 31, 1999, no
adjustment of the carrying values of long-lived assets was necessary. As of
December 31, 1998 and 1999, goodwill was $337,409 and $381,449, respectively,
and accumulated amortization of goodwill was $17,646 and $30,311, respectively.

e. Customer Acquisition Costs

The unreimbursed costs of moving the records of new customers into Pierce
Leahy facilities and sales commissions related to new customers contracts have
been capitalized and are included in other assets in the accompanying balance
sheets. All such costs are being amortized on a straight-line basis over six
years, which represents the average initial contract term. Pierce Leahy assesses
whether amortization using a six year average initial contract term varies
significantly from using a specific contract basis. Such difference has not been
material. As of December 31, 1998 and 1999, those costs were $37,033 and
$54,603, respectively, and accumulated amortization of those costs were $13,396
and $20,767, respectively.

f. Deferred Financing costs

Deferred financing costs are amortized over the term of the related debt
using the straight-line method. If debt is retired early, unamortized deferred
financing costs are written off as an extraordinary charge in the period the
debt is retired. As of December 31, 1998 and 1999, deferred financing costs were
$13,825 and $15,169, respectively, and accumulated amortization of those costs
were $2,514 and $4,152, respectively.

g. Deferred Rent

Certain Pierce Leahy leases for warehouse space provide for scheduled rent
increases over the lease terms. Pierce Leahy recognizes rent expense on a
straight-line basis over the lease terms, with the excess rent charged to
expense over the amount paid recorded as deferred rent in the accompanying
balance sheets.

89
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
h. Accrued Expenses

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Accrued salaries and commissions.......................... $ 4,863 $ 7,259
Accrued vacation and other absences....................... 5,646 6,549
Accrued interest.......................................... 14,312 13,538
Other..................................................... 16,110 19,941
------- -------
$40,931 $47,287
======= =======
</TABLE>

i. Health Insurance Reserve

Pierce Leahy self-insures for benefit claims under a health insurance plan
provided to employees. The self-insurance was limited to $100 in claims per
insured individual per year for both 1998 and 1999, and a liability for claims
incurred but not reported is reflected in the accompanying balance sheets.
Specific stop-loss insurance coverage is maintained to cover claims in excess of
the coverage per insured individual per year.

j. Income Taxes

Prior to July 1, 1997, Pierce Leahy was an S Corporation for federal and
state income tax purposes, and, accordingly, income and losses were passed
through to the shareholders and taxed at the individual level. On July 1, 1997,
in connection with Pierce Leahy's initial public offering, Pierce Leahy
terminated its S Corporation election and currently is subject to federal and
state income taxes.

Pierce Leahy applies SFAS No. 109, "Accounting for Income Taxes," which
requires the liability method of accounting for income taxes. Under the
liability method, deferred tax assets and liabilities are recognized for the
future tax consequences, measured by enacted tax rates, attributable to
temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards, for years in which taxes are expected to be
paid or recovered.

k. Revenue Recognition

Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to the
customer. Deferred income represents amounts invoiced for storage services in
advance of the rendering of the services. The costs of storage and service
revenues are not separately distinguishable, as the revenue producing activities
are interdependent and costs are not directly attributable or allocable in a
meaningful way to those activities.

l. Merger-Related Expenses

Merger-related expenses in 1999 represent primarily non-capitalizable
expenses directly related to Pierce Leahy's merger with Iron Mountain
Incorporated, a Delaware corporation ("Old Iron Mountain"). These expenses
consist primarily of financial advisor, legal, accounting and consulting fees,
SEC filing fees and other transaction-related costs.

90
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m. Foreign Currency

The balance sheets of Pierce Leahy Canada Company and Archivex Limited,
Pierce Leahy's Canadian subsidiaries, and the balance sheet of Pierce Leahy
Europe Limited, Pierce Leahy's U.K. subsidiary, are translated into U.S. dollars
using the rate of exchange at period end. The statements of operations for the
Canadian and U.K. subsidiaries are translated into U.S. dollars using the
average exchange rate for the period. Net unrecognized exchange gains or losses
resulting from the translation of the balance sheets are accumulated and
included as comprehensive income (loss) on the statement of shareholders'
equity. Exchange gains and losses are recognized during the period, including
those related to the U.S. dollar denominated 8 1/8% Senior Notes of Pierce Leahy
Canada Company due in 2008, and are included in Pierce Leahy's consolidated
statements of operations.

n. Comprehensive Income

In 1998, Pierce Leahy adopted SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 requires the reporting and disclosure of comprehensive
income, and the components that apply to Pierce Leahy include net income and
foreign currency translation adjustments. Pierce Leahy reports comprehensive
income in the consolidated statement of shareholders' equity. The prior year
financial statements have been restated to conform to the reporting requirements
of SFAS No. 130.

o. Pro Forma Basic and Diluted Net Loss Per Share

Prior to July 1, 1997, Pierce Leahy was an S Corporation for federal and
state income tax purposes. The pro forma income tax provision for 1997 reflects
taxes that would have been recorded on the historical loss before income taxes,
at an effective rate of 39%, had Pierce Leahy not been an S Corporation during
such period. The basic and diluted pro forma net loss per share is computed by
dividing pro forma net loss by the weighted average number of shares outstanding
during the period.

All share and per share data has been restated to reflect the stock dividend
of one-tenth of a share of common stock for each share of common stock
outstanding that was paid on January 14, 2000.

p. Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued SFAS No.133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities and is effective for all fiscal years beginning after
June 15, 2000. Management has not yet completed its assessment of the effects of
this pronouncement.

q. Reclassification

The prior year financial statements have been reclassified to conform with
the current year presentation.

91
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

3. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
11 1/8% Senior Subordinated Notes due 2006.............. $130,000 $130,000
9 1/8% Senior Subordinated Notes due 2007............... 120,000 120,000
8 1/8% Senior Notes due 2008............................ 134,537 134,574
U.S. Revolver........................................... 118,000 159,500
Canadian Revolver....................................... -- 6,232
Mortgage Notes.......................................... 7,368 11,084
Seller Notes............................................ 3,475 17,862
Other................................................... 4,565 7,545
-------- --------
517,945 586,797
Less-Current portion.................................... (3,583) (22,800)
-------- --------
$514,362 $563,997
======== ========
</TABLE>

a. 11 1/8% Senior Subordinated Notes due 2006

In July 1996, Pierce Leahy issued $200,000 of Senior Subordinated Notes in a
private offering that were later exchanged for registered notes with
substantially identical terms (the "1996 Notes"). The 1996 Notes are general
unsecured obligations of Pierce Leahy, subordinated in right of payment to
senior indebtedness of Pierce Leahy and senior in right of payment to any
current or future subordinated indebtedness. The 1996 Notes are guaranteed by
the U.S. subsidiaries of Pierce Leahy and secured by a second lien on 65% of the
stock of Pierce Leahy's Canadian subsidiaries. The 1996 Notes mature on
July 15, 2006, and bear interest at 11 1/8% per year, payable semiannually in
arrears on January 15 and July 15. The proceeds from the sale of the 1996 Notes
were used to retire certain existing indebtedness of Pierce Leahy under its
previous credit facilities, to purchase certain properties from related party
partnerships, to redeem stock from a shareholder, to fund an acquisition and for
general corporate purposes. Upon completion of Pierce Leahy's initial public
offering of its common stock in July 1997 (see Note 5), Pierce Leahy exercised
an option to redeem $70,000 principal amount of the 1996 Notes. The resulting
$7,000 prepayment penalty along with the write-off of a portion of the
unamortized deferred financing costs of $3,050, net of an income tax benefit of
$4,014, was recorded as an extraordinary charge in the accompanying consolidated
statements of operations.

b. 9 1/8% Senior Subordinated Notes due 2007

In July 1997, Pierce Leahy issued $120,000 of Senior Subordinated Notes (the
"1997 Notes") in a public offering. The 1997 Notes are general unsecured
obligations of Pierce Leahy, subordinated in right of payment to the senior
indebtedness of Pierce Leahy and senior in right of payment to any current or
future subordinated indebtedness. The 1997 Notes are guaranteed by the U.S.
subsidiaries of Pierce Leahy and secured by a third lien on 65% of the stock of
Pierce Leahy's Canadian subsidiaries. The 1997 Notes are equal in right of
payment with the 1996 Notes. The 1997 Notes mature on July 7, 2007, and bear
interest at 9 1/8% per year, payable semiannually in arrears on January 15 and
July 15. The proceeds from the sale of

92
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

3. LONG-TERM DEBT (CONTINUED)
the 1997 Notes were used to repay outstanding borrowings under a previous credit
facility and for general corporate purposes.

c. 8 1/8% Senior Notes due 2008

In April 1998, Pierce Leahy Canada Company, Pierce Leahy's principal
Canadian subsidiary, issued $135,000 of Senior Notes in a private offering that
were later exchanged for registered notes with substantially identical terms
(the "1998 Notes"). The 1998 Notes are general unsecured obligations of Pierce
Leahy Canada Company ranking PARI PASSU in right of payment to all existing and
future senior unsecured indebtedness of Pierce Leahy Canada Company. The 1998
Notes are effectively subordinated to secured indebtedness of Pierce Leahy
Canada Company to the extent of the assets securing such indebtedness. The 1998
Notes are guaranteed on a senior subordinated basis by Pierce Leahy and Pierce
Leahy's U.S. subsidiaries, which guarantees are equal in right of payment with
the 1996 Notes and 1997 Notes. The 1998 Notes mature on May 15, 2008, and bear
interest at 8 1/8% per year, payable semi-annually in arrears in U.S. dollars on
May 15 and November 15. The proceeds from the sale of the 1998 Notes were used
primarily to finance the acquisition of Archivex Inc., to repay outstanding
borrowings under the credit facility and for general corporate purposes.

d. Revolving Credit Facility

In December 1999, Pierce Leahy amended its credit facility to provide for a
revolving line of credit of U.S. $195,000 in borrowings and CDN $40,000 in
borrowings for Pierce Leahy Canada Company. The credit facility is senior to all
subordinated indebtedness of Pierce Leahy and is secured by substantially all of
the assets of Pierce Leahy, and a first lien on 65% of the stock of Pierce
Leahy's Canadian subsidiaries. Borrowings under the facility bear interest at
prime plus an applicable margin, or at LIBOR plus an applicable margin, at the
option of Pierce Leahy. In addition to interest and other customary fees, Pierce
Leahy is obligated to remit a fee of 0.375% per year on unused commitments,
payable quarterly. The aggregate available commitment under the credit facility
will be reduced on a quarterly basis beginning September 30, 2001. The credit
facility matures on June 30, 2004, unless previously terminated. Pierce Leahy's
available borrowing capacity under the credit facility is contingent upon Pierce
Leahy meeting certain financial ratios and other criteria.

The weighted average interest rate on outstanding borrowings on the U.S.
portion of the revolver at December 31, 1999 was 9.18%. The highest amount
outstanding during the year ended December 31, 1999 was $159,500, the average
amount outstanding during the year was $152,500, and the weighted average
interest rate was 7.61%. The highest amount outstanding under the U.S. revolver
during the year ended December 31, 1998 was $125,500, the average amount
outstanding during the year was $79,150, and the weighted average interest rate
was 7.95%.

The weighted average interest rate on outstanding borrowings on the Canadian
portion of the revolver at December 31, 1999 was 7.44%. The highest amounts
outstanding during the years ended December 31, 1998 and 1999, were CDN $35,000
and $33,500, respectively. The average amounts outstanding in 1998 and 1999,
respectively, were CDN $8,750 and $8,083, while the weighted average interest
rates were 8.51% and 7.18%, respectively.

93
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

3. LONG-TERM DEBT (CONTINUED)
As a result of the merger with Old Iron Mountain on February 1, 2000,
borrowings outstanding under the credit facility became due and payable. The
credit facility was terminated when the surviving Company of the merger paid in
full the outstanding balance with borrowings from the amended and restated
credit facility of the combined Company after the merger.

e. Mortgage Notes

In connection with the purchase of real estate and acquisitions during 1997
and 1998, Pierce Leahy assumed several mortgages on real property. The mortgages
bear interest at rates ranging from 8% to 10.5% and require monthly principal
and interest payments of approximately $65 per month through 2002 and $34
through 2009. During 1999, there were no mortgage notes assumed in connection
with any purchase of real estate or acquisitions.

f. Seller Notes

In connection with certain acquisitions completed in 1998 and 1999, notes
for $3,175 and $18,923, respectively, were issued to the sellers. The notes bear
interest at rates ranging from 5% to 8% per year. One of the Seller notes has an
outstanding balance of $17,462 at December 31, 1999, is due on demand through
2009 and is classified as a current portion of long-term debt. The outstanding
balances on the other notes at December 31, 1999 mature through 2000.

Future scheduled principal payments on all of Pierce Leahy's long-term debt
at December 31, 1999 are as follows:

<TABLE>
<S> <C>
2000........................................................ $ 22,800
2001........................................................ 3,162
2002........................................................ 33,647
2003........................................................ 63,408
2004........................................................ 74,982
2005 and thereafter......................................... 388,798
--------
$586,797
========
</TABLE>

Pierce Leahy is in compliance with all financial and operating covenants
required under all indentures and under its credit facility.

g. Fair Value of Financial Instruments

For certain of Pierce Leahy's financial instruments, including accounts
receivable, accounts payable, accrued expenses, mortgages, Seller notes and
credit facility, management believes that the carrying amounts approximate fair
value due to the short maturities.

94
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

3. LONG-TERM DEBT (CONTINUED)

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

4. SELECTED CONSOLIDATED FINANCIAL STATEMENTS OF PARENT, GUARANTORS, AND
NON-GUARANTORS

The 1996 Notes and the 1997 Notes are general unsecured obligations of
Pierce Leahy, subordinated in right of payment to senior indebtedness of Pierce
Leahy and senior in right of payment to any current or future subordinated
indebtedness. The 1996 Notes and the 1997 Notes are guaranteed by Pierce Leahy's
wholly-owned, domestic subsidiaries (the "Guarantors") and are secured by a
second lien on 65% of the stock of Pierce Leahy's Canadian subsidiaries. The
1998 Notes are general unsecured obligations of Pierce Leahy Canada Company
ranking PARI PASSU in right of payment to all existing and future senior
unsecured indebtedness. The 1998 Notes are guaranteed on a senior subordinated
basis by Pierce Leahy and by Pierce Leahy's U.S. subsidiaries. Pierce Leahy's
Canadian subsidiaries do not guarantee the 1996 Notes or the 1997 Notes. Pierce
Leahy's wholly-owned international subsidiary, Pierce Leahy Europe Limited, does
not guarantee the 1996 Notes, 1997 Notes or the 1998 Notes. Together, the
Canadian and international subsidiaries are termed the "Non-Guarantors" below.

95
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

4. SELECTED CONSOLIDATED FINANCIAL STATEMENTS OF PARENT, GUARANTORS, AND
NON-GUARANTORS (CONTINUED)
The following financial data summarizes Pierce Leahy's consolidating results
on the equity method of accounting as of and for the year ended December 31,
1999:

<TABLE>
<CAPTION>
DECEMBER 31, 1999
--------------------------------------------------------------------
PARENT GUARANTORS NON-GUARANTORS ELIMINATIONS CONSOLIDATED
-------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash..................................................... $ 1,584 $ 241 $ 440 $ -- $ 2,265
Accounts receivable (less allowance of $3,650 and $3,378
as of 1998 and 1999, respectively)..................... 41,392 -- 12,659 -- 54,051
Due from affiliates...................................... 6,011 25,196 23,478 (54,685) --
Prepaid expenses and other............................... 2,641 4 892 -- 3,537
Deferred income taxes.................................... 4,303 -- 37 -- 4,340
-------- -------- -------- --------- --------
Total Current Assets................................... 55,931 25,441 37,506 (54,685) 64,193
-------- -------- -------- --------- --------
Property, Plant and Equipment.............................. 290,339 8,855 62,207 -- 361,401
Less-Accumulated depreciation............................ (78,921) -- (6,446) -- (85,367)
-------- -------- -------- --------- --------
Net Property, Plant, and Equipment..................... 211,418 8,855 55,761 -- 276,034
-------- -------- -------- --------- --------
Other Assets:
Goodwill, net............................................ 246,967 -- 104,171 -- 351,138
Customer acquisition costs, net.......................... 29,514 -- 4,322 -- 33,836
Deferred financing costs, net............................ 8,661 -- 2,356 -- 11,017
Other.................................................... 33,321 (3,356) (5,717) -- 24,248
Long-Term note receivable from affiliates................ -- 124,100 -- (124,100) --
Investment in subsidiaries................................. 142,601 -- -- (142,601) --
-------- -------- -------- --------- --------
Total other assets..................................... 461,064 120,744 105,132 (266,701) 420,239
-------- -------- -------- --------- --------
Total Assets........................................... $728,413 $155,040 $198,399 $(321,386) $760,466
======== ======== ======== ========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt........................ $ 999 $ 3,996 $ 17,805 -- $ 22,800
Accounts payable......................................... 9,950 -- 3,190 -- 13,140
Due to affiliates........................................ 23,478 -- 31,207 (54,685) --
Accrued expenses......................................... 37,645 1,420 8,222 -- 47,287
Deferred income.......................................... 12,621 -- 2,541 -- 15,162
-------- -------- -------- --------- --------
Total Current Liabilities.............................. 84,693 5,416 62,965 (54,685) 98,389

Long-Term Debt, net of current portion..................... 418,481 -- 145,516 -- 563,997
Long-Term note payable to affiliates....................... 124,100 -- -- (124,100) --
Deferred Rent.............................................. 6,942 -- 250 -- 7,192
Deferred Income Taxes...................................... 24,389 -- (3,309) -- 21,080

Commitments and Contingencies (Note 7)

Shareholders' Equity:
Common stock............................................. 170 -- 1,704 (1,704) 170
Additional paid-in capital............................... 82,597 94,010 5,842 (99,852) 82,597
Cumulative translation adjustment........................ (470) -- -- -- (470)
Accumulated deficit........................................ (12,489) 55,614 (14,569) (41,045) (12,489)
-------- -------- -------- --------- --------
Total Shareholders' Equity............................... 69,808 149,624 (7,023) (142,601) 69,808
-------- -------- -------- --------- --------
Total Liabilities and Shareholders' Equity............... $728,413 $155,040 $198,399 $(321,386) $760,466
======== ======== ======== ========= ========
</TABLE>

96
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

4. SELECTED CONSOLIDATED FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND
NON-GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------
PARENT GUARANTORS NON-GUARANTORS ELIMINATIONS CONSOLIDATED
-------- ---------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Storage.......................... $161,649 $ -- $28,446 $ -- $190,095
Service and storage material
sales.......................... 125,139 -- 30,095 (3,067) 152,167
-------- -------- ------- -------- --------
Total revenues............... 286,788 -- 58,541 (3,067) 342,262
-------- -------- ------- -------- --------
Operating Expenses:
Cost of sales, excluding
depreciation and
amortization................... 167,173 12 36,539 (12,214) 191,510
Selling, general and
administrative................. 28,883 12 7,814 9,147 45,856
Depreciation and amortization.... 34,861 -- 8,794 -- 43,655
Foreign currency exchange........ 583 (33) (8,023) -- (7,473)
Merger-related expenses.......... 1,903 -- 458 -- 2,361
-------- -------- ------- -------- --------
Total operating expenses..... 233,403 (9) 45,582 (3,067) 275,909
-------- -------- ------- -------- --------
Operating income............. 53,385 9 12,959 -- 66,353
Interest Expense (Income).......... 52,873 (13,085) 12,575 -- 52,363
Royalty (Income) / Expense......... 10,527 (12,244) 1,717 -- --
Equity in the (Earnings) Losses of
Subsidiaries..................... (25,786) -- -- 25,786 --
-------- -------- ------- -------- --------
Income (loss) before income
taxes............................ 15,771 25,338 (1,333) (25,786) 13,990
Income Taxes....................... 8,071 198 (1,979) -- 6,290
-------- -------- ------- -------- --------
Net Income (Loss).................. 7,700 25,140 646 (25,786) 7,700
Preferred Stock Dividend and
Accretion........................ 774 -- -- -- 774
-------- -------- ------- -------- --------
Net Income (Loss) Applicable to
Common Shareholders.............. $ 6,926 $ 25,140 $ 646 $(25,786) $ 6,926
======== ======== ======= ======== ========
</TABLE>

97
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

4. SELECTED CONSOLIDATED FINANCIAL STATEMENTS OF PARENT, GUARANTORS AND
NON-GUARANTORS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
---------------------------------------------------------------------
PARENT GUARANTORS NON-GUARANTORS ELIMINATIONS CONSOLIDATED
-------- ----------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss).................................. $ 7,700 $ 25,140 $ 646 (25,786) $ 7,700
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Equity in earnings of subsidiaries............. (25,786) -- -- 25,786 --
Depreciation and amortization.................. 34,862 -- 8,793 -- 43,655
Amortization of deferred financing costs....... 1,310 -- 314 -- 1,624
(Gain) loss on sale of property and
equipment.................................... (255) -- 33 -- (222)
Deferred income tax provision.................. 8,071 198 (1,979) -- 6,290
Change in deferred rent........................ 1,270 -- (129) -- 1,141
Foreign currency adjustment.................... 583 (33) (8,023) -- (7,473)
Changes in Assets and Liabilities (exclusive of
acquisitions):
(Increase) decrease in--
Accounts receivable, net....................... (6,321) -- (1,244) -- (7,565)
Inventory, prepaid expenses and other.......... (759) (4) 46 -- (717)
Other assets................................... (1,544) 3,356 (89) -- 1,723
Increase (decrease) in--
Accounts payable............................... (56) -- 708 -- 652
Accrued expenses............................... 2,853 1,420 (1,163) -- 3,110
Deferred income................................ 1,505 -- (179) -- 1,326
-------- -------- -------- -------- --------
Net Cash Provided by (Used in) Operating
Activities................................. 23,433 30,077 (2,266) -- 51,244
-------- -------- -------- -------- --------
Cash Flows from Investing Activities:
Cash paid for acquisitions, net of cash acquired... (2,977) -- (20,349) -- (23,326)
Capital expenditures............................... (31,580) (8,855) (17,108) -- (57,543)
Intercompany loans to subsidiaries................. (7,751) (25,096) -- 32,847 --
Investment in subsidiaries......................... (1,615) -- -- 1,615 --
Customer acquisition costs......................... (15,002) -- (2,365) -- (17,367)
Increase in intangible assets...................... (1,333) -- (382) -- (1,715)
Proceeds from sale of property and equipment....... 1,075 -- 93 -- 1,168
-------- -------- -------- -------- --------
Net Cash Provided by (Used in) Investing
Activities................................. (59,183) (33,951) (40,111) 34,462 (98,783)
-------- -------- -------- -------- --------
Cash Flows from Financing Activities:
Borrowings on revolving line of credit............. 78,700 -- 33,582 -- 112,282
Payments on revolving line of credit............... (37,200) -- (27,350) -- (64,550)
Proceeds from issuance of long-term debt........... 431 3,996 2,435 -- 6,862
Issuance of redeemable preferred stock............. 4,615 -- -- -- 4,615
Payments on long-term debt......................... (3,639) -- (1,692) -- (5,331)
Payment of debt financing costs.................... (1,106) -- (79) -- (1,185)
Proceeds from exercise of stock options............ 247 -- -- -- 247
Payment of redeemable preferred stock dividend..... (389) -- -- -- (389)
Payment of redeemable preferred stock.............. (5,000) -- -- -- (5,000)
Intercompany loans from subsidiaries............... -- -- 32,847 (32,847) --
Investment in subsidiaries......................... -- -- 1,615 (1,615) --
-------- -------- -------- -------- --------
Net Cash Provided by (Used in) Financing
Activities................................. 36,659 3,996 41,358 (34,462) 47,551
-------- -------- -------- -------- --------
Effects of exchange rates on cash and cash
equivalents........................................ (582) (165) 688 -- (59)
-------- -------- -------- -------- --------
Increase (Decrease) in Cash.......................... 327 (43) (331) -- (47)
Cash, Beginning of Year.............................. 1,257 284 771 -- 2,312
-------- -------- -------- -------- --------
Cash, End of Year.................................... $ 1,584 $ 241 $ 440 $ -- $ 2,265
======== ======== ======== ======== ========
</TABLE>

98
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

5. INCOME TAXES

Pierce Leahy accounts for income taxes in accordance with SFAS No. 109,
which requires the recognition of deferred tax assets and liabilities for the
expected tax consequences of temporary differences between the tax and financial
reporting basis of assets and liabilities.

Pierce Leahy has estimated federal and state net operating loss
carryforwards of approximately $20,400 for the United States, $8,210 for Canada
and $129 for the United Kingdom at December 31, 1999 to reduce future income
taxes, if any. These net operating loss carryforwards will begin to expire in
2012.

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

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Deferred Tax Assets:
Deferred rent......................................... $ 2,295 $ 2,644
Net operating loss carryforwards...................... 7,464 16,295
Other................................................. 4,270 3,899
-------- --------
14,029 22,838
-------- --------
Deferred Tax Liabilities:
Other assets, principally due to differences in
amortization........................................ (8,170) (15,234)
Plant and equipment, principally due to differences in
depreciation........................................ (16,493) (24,344)
-------- --------
(24,663) (39,578)
-------- --------
Net deferred tax asset (liability)...................... $(10,634) $(16,740)
======== ========
</TABLE>

Pierce Leahy and its subsidiaries file a consolidated federal income tax
return. The provision (benefit) for income tax consists of the following
components:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Federal--current................................. $ -- $ 95 $ --
Federal--deferred................................ 8,895 5,309 7,778
State--current................................... -- 55 69
State--deferred.................................. 1,172 (144) 422
Foreign--current................................. 150 -- --
Foreign--deferred................................ 1,221 (1,997) (1,979)
------- ------- -------
$11,438 $ 3,318 $ 6,290
======= ======= =======
</TABLE>

The provision for income taxes for the years ended December 31, 1997, 1998
and 1999 consists of a current tax provision for state, and alternative minimum
taxes on domestic operations and foreign taxes due on taxable income of Pierce
Leahy's Canadian subsidiaries, and deferred federal, state and foreign

99
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

5. INCOME TAXES (CONTINUED)
income taxes. The total deferred income tax provision in 1997 includes a
one-time tax charge of $6,600 recorded upon the termination of Pierce Leahy's S
Corporation status.

The statement of operations for the year ended December 31, 1997 includes a
pro forma adjustment for the income taxes that would have been recorded if
Pierce Leahy had been a C Corporation for the entire period based on tax laws in
effect during the period. A reconciliation of total income tax expense (benefit)
and the amount computed by applying the federal statutory income tax rate and
the pro forma effective income tax rate for the year ended December 31, 1997,
and the reconciliation of the federal statutory income tax rate and the
effective income tax rate for the years ended December 31, 1998 and 1999 are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Computed "expected" tax provision (benefit)................. $(4,008) $(2,608) $4,493
Increase in income taxes resulting from:
State taxes............................................... 141 (207) 453
Foreign taxes............................................. 379 (488) 379
Non-deductible expenses................................... 926 6,621 965
Tax on extraordinary charge............................... 4,014 -- --
------- ------- ------
$ 1,452 $ 3,318 $6,290
======= ======= ======
</TABLE>

6. CAPITAL STOCK AND STOCK OPTIONS

a. Capital Stock

At December 31, 1998 and 1999, Pierce Leahy's capital stock was comprised of
the following:

<TABLE>
<CAPTION>
PREFERRED COMMON
----------- -----------
<S> <C> <C>
Par value.......................................... $ .01 $ .01
Shares authorized.................................. 10,000,000 80,000,000
Shares issued and outstanding December 31, 1998.... -- 18,740,239
Shares issued and outstanding December 31, 1999.... -- 18,783,848
</TABLE>

Certain shareholders of Pierce Leahy entered into a voting trust agreement
on June 24, 1997. The shares held in trust represent 38.6% of the outstanding
common stock at December 31, 1999. The trustees of the voting trust include the
President and Chief Executive Officer of Pierce Leahy and the Chairman of the
Board of Directors. Each of the trustees has shared power to vote the shares
held in the voting trust. The beneficial owners of interests in the voting trust
have the right to dispose of the shares as to which they have beneficial
interests.

On June 25, 1997, Pierce Leahy effected a stock split, reclassified its
Class A and Class B common stock to common stock, authorized 10,000,000 shares
of undesignated preferred stock and increased its authorized common stock to
80,000,000 shares. All references in the accompanying financial statements to

100
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

6. CAPITAL STOCK AND STOCK OPTIONS (CONTINUED)
the number of common shares and per-share amounts have been retroactively
restated to reflect the stock split.

In July 1997, Pierce Leahy completed an initial public offering of 6,230,419
shares of common stock, raising net proceeds of $93,608. The proceeds of the
offering were used to redeem a portion of Pierce Leahy's 11 1/8% Senior
Subordinated Notes and to repay outstanding borrowings under Pierce Leahy's
credit facility (see Note 3).

On January 14, 2000, Pierce Leahy paid a stock dividend of one-tenth of a
share of its common stock for each share of common stock outstanding, payable to
holders of record of the common stock as of January 7, 2000. As a result of this
stock dividend, Pierce Leahy increased common stock by $17, additional paid-in
capital by $64,213 and accumulated deficit by $64,230 in January 2000. All share
and per share amounts have been retroactively adjusted to reflect this change.

b. Stock Options

In September 1994, Pierce Leahy established a non-qualified stock option
plan which provides for the granting of options to key employees to purchase an
aggregate of 1,329,276 shares of common stock. The shares available for grant
were increased by 313,388 in December 1996. Option grants have an exercise price
equal to the fair market value of the common stock on the date of grant. Before
Pierce Leahy consummated its initial public offering of common stock in
July 1997 (see above), the fair market value of the options was determined based
upon a formula, as defined in the option plan. The options granted vest in five
equal annual installments beginning on the first anniversary of the date of
grant, except as discussed below.

Upon the consummation of Pierce Leahy's initial public offering of common
stock in July 1997, options granted during 1997 became fully vested and
exercisable as provided for under the plan. Pierce Leahy 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.

In April 1997, Pierce Leahy adopted its 1997 Stock Option Plan (the "1997
Plan") which provides for the granting of stock options to purchase up to
1,650,000 shares of common stock to employees, officers, directors, consultants
and advisors of Pierce Leahy. The 1997 Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee"). Grants may consist of
incentive stock options or nonqualified stock options. The option price of any
incentive stock option granted will not be less than the fair value of the
underlying shares of common stock on the date of grant. The option price of a
non-qualified stock option will be determined by the Committee and may be
greater than, equal to or less than the fair market value of the underlying
shares of common stock on the date of grant. The term of each option will be
determined by the Committee, provided that the exercise period may not exceed
10 years from the date of grant. The options granted may be subject to vesting
and other conditions.

101
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

6. CAPITAL STOCK AND STOCK OPTIONS (CONTINUED)
The following is a summary of stock option transactions during the
applicable periods:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Options outstanding, December 31, 1996............. 1,056,664 $ 4.89
Granted............................................ 168,927 $ 4.63
Exercised.......................................... -- --
Canceled........................................... -- --
--------- ------
Options outstanding, December 31, 1997............. 1,225,591 $ 4.85
Granted............................................ 171,875 $18.64
Exercised.......................................... (11,650) $ 4.63
Canceled........................................... (9,625) $18.64
--------- ------
Options outstanding, December 31, 1998............. 1,376,191 $ 6.48
Granted............................................ 166,100 $23.18
Exercised.......................................... (43,608) $ 5.75
Canceled........................................... (36,512) $13.01
--------- ------
Options outstanding, December 31, 1999............. 1,462,171 $ 8.24
========= ======
</TABLE>

The following table summarizes additional information regarding options
outstanding and exercisable at December 31, 1999:

<TABLE>
<CAPTION>
OUTSTANDING EXERCISABLE
--------------------------------------------- --------------------------
WEIGHTED AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
RANGE OF CONTRACTUAL LIFE EXERCISE EXERCISE
EXERCISE PRICES NUMBER (IN YEARS) PRICE NUMBER PRICE
- --------------- --------- ---------------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
$4.63 to $5.33................. 1,152,521 2.6 $ 4.84 1,084,189 $ 4.81
$18.64......................... 155,650 8.0 $18.64 62,260 $18.64
$23.18......................... 154,000 9.0 $23.18 30,800 $23.18
--------- ---- ------ ------------ ------
1,462,171.. 3.85 $ 8.24 1,177,249 $ 6.02
========= ==== ====== ============ ======
</TABLE>

Subsequent to December 31, 1999, Pierce Leahy issued 184,800 options to
employees at an exercise price of $32.88 per share.

The Pierce Leahy Board of Directors determined that it was appropriate,
prior to completion of the merger with Old Iron Mountain, to accelerate in
January 2000 the vesting of certain remaining unvested options. These included
all remaining options granted under Pierce Leahy's nonqualified stock option
plan and the unvested options granted under the 1997 Plan for four nonemployee
directors, as these directors will not continue as directors of the combined
Company after the merger. Pierce Leahy recorded in January 2000 a non-cash
compensation charge of approximately $2,021 relating to these options,
representing the difference between the exercise price and the fair market value
for accounting purposes, after the adjustment for the one-tenth of a share stock
dividend paid on January 14, 2000.

102
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

6. CAPITAL STOCK AND STOCK OPTIONS (CONTINUED)
In 1995, the Financial Accounting Standards Board issued SFAS No. 123,
"Accounting for Stock-Based Compensation." SFAS No. 123 establishes a fair value
based method of accounting for stock-based compensation plans. This statement
also applies to transactions in which an entity issues its equity instruments to
acquire goods or services from non-employees. SFAS No. 123 requires that an
employer's financial statements include certain disclosures about stock-based
employee compensation arrangements regardless of the method used to account for
the plan.

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions used for
the grants in 1997, 1998 and 1999:

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Risk free interest rates........................ 6.4% 5.5% 4.8%
Expected lives of options....................... 7 years 10 years 10 years
Expected dividend yields........................ N/A N/A N/A
Expected volatility............................. 20% 45% 32%
</TABLE>

The approximate fair value of each option granted in 1997, 1998 and 1999 is
$1.89, $10.35 and $10.30, respectively, as determined under the provisions of
SFAS No. 123. The following pro forma results would have been reported had
compensation cost been recorded for the fair value of the options granted:

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Net loss applicable to common shareholders, as reported..... $(15,197) $(10,990) $6,926
Net loss applicable to common shareholders, pro forma for
compensation cost and income taxes in 1997 (Note 2)....... $ (9,681) $(11,506) $6,155
Net loss per share applicable to common shareholders, pro
forma for compensation cost and income taxes in 1997 (Note
2)........................................................ $ (0.72) $ (0.68) $ 0.35
</TABLE>

The SFAS No. 123 method of accounting is applied only to options granted on
or after January 1, 1995. The resulting pro forma compensation cost may not be
representative of the amount to be expected in future years due to the vesting
schedule of the options.

All share and per share data has been restated to reflect the stock dividend
of one-tenth of a share of common stock for each share of common stock
outstanding that was paid on January 14, 2000.

103
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

7. COMMITMENTS AND CONTINGENCIES

a. Operating Leases At December 31, 1999, Pierce Leahy was obligated under
non-cancelable operating leases, including the related-party leases
discussed below, for warehouse and office space, office equipment and
transportation equipment. These leases expire at various times through
2024 and require minimum rentals, subject to escalation, as follows:

<TABLE>
<S> <C>
2000........................................................ $ 41,906
2001........................................................ 40,031
2002........................................................ 36,163
2003........................................................ 32,244
2004........................................................ 29,105
2005 and thereafter......................................... 127,166
--------
$306,615
========
</TABLE>

Rent expense for all leases was approximately $21,657, $31,077 and $37,481
for the years ended December 31, 1997, 1998 and 1999, respectively. Some of the
leases for warehouse space provide for purchase options on the facilities at
certain dates.

Pierce Leahy leases office and warehouse space that is owned by certain
shareholders, officers and employees of Pierce Leahy at prices which, in the
opinion of management, approximate market rates. Rent expense on these leases
was approximately $845, $901 and $901 for the years ended December 31, 1997,
1998 and 1999, respectively.

b. Other Matters

Pierce Leahy is party to various claims arising in the ordinary course of
business. Although the ultimate outcome of these matters is presently not
determinable, management, after consultation with legal counsel, does not
believe that the resolution of these matters will have a material adverse effect
on Pierce Leahy's consolidated financial position or results of operations.

In June 1997, Pierce Leahy entered into a tax indemnification agreement with
its then current shareholders that provides for: (i) the distribution to such
shareholders of cash equal to the product of Pierce Leahy's taxable income for
the period from January 1, 1997 until July 1, 1997 and the sum of the highest
effective federal and state income tax rate applicable to any current
shareholder, 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 Pierce Leahy's operations during the period in
which it was a Subchapter S Corporation.

8. EARNINGS PER SHARE

In February 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings per Share." SFAS No. 128 requires dual presentation of basic
and diluted earnings per share. According to SFAS No. 128, basic earnings per
share, which replaces primary earnings per share, is calculated by dividing net
income (loss) by the weighted average number of common shares outstanding for
the period.

104
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

8. EARNINGS PER SHARE (CONTINUED)
Diluted earnings per share, which replaces fully diluted earnings per share,
reflects the potential dilution from the exercise or conversion of securities
into common stock, such as stock options and warrants. Pierce Leahy adopted SFAS
No. 128 in 1997.

The weighted average common and common equivalent shares outstanding for
purposes of calculating net income (loss) per common share are computed as
follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Weighted average common shares outstanding used for
basic net income (loss) per common share.......... 14,724 18,486 18,766
Dilutive effect of common stock options
outstanding....................................... -- -- 759
------ ------ ------
Weighted average common and common equivalent shares
used for diluted net income (loss) per common
share............................................. 14,724 18,486 19,525
====== ====== ======
</TABLE>

For 1997 and 1998 there were no dilutive effects of stock options as Pierce
Leahy had a loss for the year. For 1999, Pierce Leahy had income which caused a
dilutive effect of stock options. Options for 553 shares for 1997 and 623 shares
for 1998 were not considered as they were anti-dilutive.

All share and per share data has been restated to reflect the stock dividend
of one-tenth of a share of common stock for each share of common stock
outstanding that was paid on January 14, 2000.

9. RELATED PARTY TRANSACTIONS

Pierce Leahy has an agreement with a shareholder of Pierce Leahy that
requires pension payments of $8 per month until the later of the death of the
shareholder or his spouse. The present value of the benefit is recorded in
accrued expenses in the accompanying consolidated balance sheets.

Pierce Leahy paid financial advisory fees to an investment banking firm of
which a director of Pierce Leahy was a managing director. The fees were
approximately $62 in 1997, $0 in 1998, and $0 in 1999. In addition, the
investment banking firm received $1,800 from the underwriters of the 1997 Notes
and Pierce Leahy's initial public offering and $310 from the placement agent for
the 1998 Notes.

Pierce Leahy paid real estate advisory fees to a firm of which a director of
Pierce Leahy is the owner. The fees were approximately $88 in 1997 and $8 in
1998.

10. EMPLOYEE BENEFIT PLANS

Pierce Leahy maintains a discretionary profit sharing plan with a 401(k)
feature for substantially all full-time employees over the age of 20 1/2 and
with more than 1,000 hours of service. Participants in the plan may elect to
defer a specified percentage of their compensation on a pretax basis. Pierce
Leahy is required to make matching contributions equal to 25% of the employee's
contribution up to a maximum of 2% of the employee's annual compensation. Pierce
Leahy may also make a discretionary profit sharing contribution to the plan. A
discretionary profit sharing contribution was made in 1997 and 1998 and is
anticipated for 1999. Participants become vested in Pierce Leahy's matching
contribution over three to seven years.

105
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
The expense relating to these plans was $892, $1,209 and $1,792 for the years
ended December 31, 1997, 1998 and 1999, respectively.

11. REDEEMABLE PAY-IN-KIND PREFERRED STOCK

In February 1999, Pierce Leahy entered into an agreement to issue up to
$15,000 of redeemable payment-in-kind ("PIK") preferred stock. This stock was
redeemable at any time during the 10 year term with an initial annual dividend
rate of 11.36%, subject to increase under certain circumstances, including
subsequent issuances of preferred stock (depending on certain interest rates at
such time) and if the preferred stock is not redeemed prior to six months from
its initial issuance. Pierce Leahy issued $5,000 of the redeemable PIK preferred
stock in March 1999 and incurred fees of approximately $385, providing net
proceeds of approximately $4,615. On November 1, 1999, Pierce Leahy redeemed all
of the outstanding redeemable PIK preferred stock and paid all remaining
dividends. For the year ended December 31, 1999, the accretion to redemption
value was $385 and dividend payments of $389 were made to the preferred
shareholders.

12. ACQUISITIONS

In 1997, Pierce Leahy completed 17 acquisitions, of which 15 were recorded
under the purchase method of accounting, while the other two acquisitions were
accounted for as poolings of interests. The 15 acquisitions accounted for under
the purchase method had an aggregate purchase price of $108,627, consisting
primarily of $102,068 in net cash, 179,593 shares of common stock with a fair
value of $4,907 and $1,652 in Seller notes. For purposes of computing the
purchase price for accounting purposes, the value of the shares issued is
determined using a discount of 10% from the market value at the day of issuance
due to certain restrictions on the sale and transferability of shares issued.
The most significant of these acquisitions was one acquisition for $9,084 in
January 1997 and another for $62,000 in April 1997; all others were individually
less than $8,000.

During 1997, Pierce Leahy also completed two mergers with records management
businesses by exchanging an aggregate of 181,891 shares of common stock for the
stock of these entities. These mergers constituted tax free reorganizations and
have been accounted for as poolings of interests under Accounting Principles
Board Opinion No. 16. Prior periods have not been restated for the acquisitions
due to the immateriality of the transactions, and the book value of net assets
acquired of $407 has been recorded as additional paid-in capital. The results of
operations for each acquisition have been included in the consolidated results
of Pierce Leahy from their respective acquisition dates.

In 1998, Pierce Leahy completed 16 acquisitions for an aggregate purchase
price of $204,070, consisting primarily of $186,486 in net cash, 603,088 shares
of common stock with a deemed value of $14,409 and $3,175 in Seller notes. The
most significant of these acquisitions was one transaction for $59,000 in
April 1998, another for $30,000 in May 1998 and a third for $52,000 in
July 1998; all others were individually less than $15,000. All of the
acquisitions in 1998 were recorded under the purchase method of accounting.

In 1999, Pierce Leahy completed four acquisitions for an aggregate purchase
price of $42,249, consisting primarily of $23,326 in net cash and $18,923 in
Seller notes. The most significant of these

106
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

12. ACQUISITIONS (CONTINUED)
acquisitions was Datavault Limited, a U.K. based records management company with
operations in seven markets throughout England and Scotland. The acquisition was
financed with borrowings under Pierce Leahy's credit facility and the issuance
of Seller notes. All of the acquisitions in 1999 were recorded under the
purchase method of accounting.

In addition to these payments, the acquisitions in 1997 and 1998 provided
for non-compete obligations of $60 and $40, respectively, payable over one year.
The non-compete obligations at December 31, 1998 and 1999 were $166 and $0,
respectively. The results of operations for each of these acquisitions have been
included in the consolidated results of Pierce Leahy from the respective
acquisition dates. For acquisitions accounted for under the purchase method, the
excess of the fair value of the assets and liabilities acquired has been
allocated to goodwill ($91,047 in 1997, $178,049 in 1998 and $39,924 in 1999)
and is being amortized over the estimated benefit period of 30 years.

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

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Cash Paid, net of cash acquired................ $102,068 $186,486 $23,326
Seller Notes Issued............................ 1,652 3,175 18,923
Fair Value of Common Stock Issued.............. 4,907 14,409 --
-------- -------- -------
Total Consideration........................ 108,627 204,070 42,249
-------- -------- -------
Fair Value of Assets Acquired.................. 27,533 53,988 8,702
Liabilities Assumed............................ (9,953) (27,967) (6,377)
-------- -------- -------
Fair Value of Net Assets Acquired.......... 17,580 26,021 2,325
-------- -------- -------
Recorded Goodwill.............................. $ 91,047 $178,049 $39,924
======== ======== =======
</TABLE>

The fair value of common stock issued and the Seller notes represent the
only non-cash consideration paid for the acquisitions.

The following unaudited pro forma information presents the results of Pierce
Leahy's operations for the years ended December 31, 1998 and 1999 as though each
of the completed acquisitions had occurred as of January 1, 1998:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Total revenues.......................................... $306,099 $344,529
Net income (loss)....................................... $(18,132) $ 7,591
Basic net income (loss) per common share................ $ (0.96) $ 0.40
Diluted net income (loss) per common share.............. $ (0.96) $ 0.39
</TABLE>

107
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

12. ACQUISITIONS (CONTINUED)
savings or incremental costs which may occur as a result of the integration and
consolidation of the acquired companies.

Allocation of the purchase price for these acquisitions was based on
estimates of the fair value of net assets acquired and, for acquisitions
completed in 1999, is subject to adjustment upon finalization of the purchase
price allocation. Pierce Leahy is not aware of any information that would
indicate that the final purchase price allocations will differ significantly
from preliminary estimates.

In connection with the acquisitions completed in 1998 and 1999, Pierce Leahy
has undertaken certain restructurings of the acquired businesses. The
restructuring activities include certain reductions in staffing levels, costs
related to the exit of duplicate facilities ("exit costs") and other costs
associated with exiting certain activities of the acquired businesses. These
restructuring activities were recorded as costs of the acquisitions in
accordance with Emerging Issues Task Force Issue No. 95-3, "Recognition of
Liabilities in Connection with a Purchase Business Combination."

Pierce Leahy finalizes its restructuring plans for each business no later
than one year from the date of acquisition. Unresolved matters at December 31,
1999 primarily include completion of planned abandonments of facilities and
severances for certain acquisitions completed during 1999.

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

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Reserves, beginning of the year............................. $ -- $1,785
Reserves established........................................ 2,370 1,525
Expenditures................................................ (585) (910)
------ ------
Reserves, end of the year................................... $1,785 $2,400
====== ======
</TABLE>

At December 31, 1998, the acquisition accruals were for other exit costs of
$1,240 and severance costs of $545. These accounts are expected to be used
within one year of the finalization of the restructuring plan.

At December 31, 1999, the acquisition accruals were for other exit costs of
$1,865 and severance costs of $535. These accruals are expected to be used
within one year of the finalization of the restructuring plan.

108
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

13. SEGMENT AND SUBSIDIARY INFORMATION (UNAUDITED)

Pierce Leahy stores and services business records for customers throughout
the United States, Canada and the United Kingdom ("U.K."). The following
unaudited information is a summary of the operating results and financial
position for Pierce Leahy's U.S., Canadian and U.K. operations:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------
1997 1998 1999
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
United States............................................. $166,337 $235,649 $283,691
Canada.................................................... $ 17,180 $ 34,651 $ 46,502
United Kingdom............................................ $ -- $ -- $ 12,039
-------- -------- --------
Total..................................................... $183,517 $270,300 $342,232

EBITDA:
United States............................................. $ 43,451 $ 70,194 $ 91,166
Canada.................................................... $ 8,056 $ 8,677 $ 11,790
United Kingdom............................................ $ -- $ -- $ 1,940
-------- -------- --------
Total..................................................... $ 51,507 $ 78,871 $104,896

Operating income (loss):
United States............................................. $ 25,238 $ 41,917 $ 55,110
Canada.................................................... $ 2,287 $ (6,725) $ 10,993
United Kingdom............................................ $ -- $ -- $ 250
-------- -------- --------
Total..................................................... $ 27,525 $ 35,192 $ 66,353

Net income (loss):
United States............................................. $(15,443) $ 2,928 $ 6,280
Canada.................................................... $ 246 $(13,918) $ 1,729
United Kingdom............................................ $ -- $ -- $ (1,083)
-------- -------- --------
Total..................................................... $(15,197) $(10,990) $ 6,926
</TABLE>

109
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

13. SEGMENT AND SUBSIDIARY INFORMATION (UNAUDITED) (CONTINUED)

<TABLE>
<CAPTION>
AT DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Current assets:
United States............................................. $ 28,602 $ 42,896 $ 50,166
Canada.................................................... $ 3,587 $ 9,066 $ 9,345
United Kingdom............................................ $ -- $ -- $ 4,682
-------- -------- --------
Total..................................................... $ 32,189 $ 51,962 $ 64,193

Total assets:
United States............................................. $361,657 $542,378 $571,260
Canada.................................................... $ 33,056 $124,080 $146,248
United Kingdom............................................ $ -- $ -- $ 42,958
-------- -------- --------
Total..................................................... $394,713 $666,458 $760,466

Current liabilities:
United States............................................. $ 43,077 $ 59,885 $ 66,632
Canada.................................................... $ 2,018 $ 8,224 $ 8,210
United Kingdom............................................ $ -- $ -- $ 23,547
-------- -------- --------
Total..................................................... $ 45,095 $ 68,109 $ 98,389

Long-term liabilities:
United States............................................. $264,643 $399,739 $449,812
Canada.................................................... $ 25,652 $135,515 $141,973
United Kingdom............................................ $ -- $ -- $ 484
-------- -------- --------
Total..................................................... $290,295 $535,254 $592,269
</TABLE>

The summarized financial information of the Canadian and U.K. subsidiaries
has been prepared from the books and records maintained by each subsidiary. The
summarized financial information may not necessarily be indicative of the
results of operations or financial position had the Canadian and U.K.
subsidiaries operated as independent entities. Certain intercompany sales and
charges, and intercompany loans among Pierce Leahy and its Canadian and U.K.
subsidiaries are included in the subsidiaries' records and are eliminated in
consolidation.

There are no restrictions on the ability of any of the subsidiaries to
transfer funds to Pierce Leahy in the form of loans, advances or dividends,
except as provided by applicable law.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure About Segments of an Enterprise and Related Information." This
statement establishes additional standards for segment reporting in the
financial statements and is effective for fiscal years beginning after
December 15, 1997. Management has determined that all of their operations have
similar economic characteristics and may be aggregated into a single segment for
disclosure under SFAS 131. Information concerning the geographic operations of
Pierce Leahy as prescribed by SFAS 131 is provided above.

110
<PAGE>
PIERCE LEAHY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

14. SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED)

SUMMARIZED QUARTERLY FINANCIAL DATA FOR 1998 AND 1999 IS AS FOLLOWS:

<TABLE>
<CAPTION>
1998 QUARTER
-----------------------------------------
FIRST SECOND THIRD FOURTH
-------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Total Revenues.......................................... $56,290 $64,146 $74,597 $75,267
Cost of sales, excluding depreciation and
amortization.......................................... $32,915 $36,279 $41,961 $43,280
Operating income........................................ $ 7,444 $ 6,710 $ 9,123 $11,915
Net loss................................................ $(1,037) $(4,457) $(4,614) $ (882)
Basic and diluted loss per common share:................ $ (0.05) $ (0.25) $ (0.25) $ (0.04)
</TABLE>

<TABLE>
<CAPTION>
1999 QUARTER
-----------------------------------------
FIRST SECOND THIRD FOURTH
-------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Total Revenues.......................................... $80,194 $85,529 $88,036 $88,503
Cost of sales, excluding depreciation and
amortization.......................................... $45,595 $48,261 $49,573 $48,081
Operating income........................................ $15,893 $17,603 $16,692 $16,165
Net income (loss)....................................... $ 2,312 $ 3,364 $ 1,505 $ (255)
Basic income (loss) per common share:................... $ 0.12 $ 0.18 $ 0.08 $ (0.01)
Diluted income (loss) per common share:................. $ 0.11 $ 0.17 $ 0.08 $ (0.01)
</TABLE>

All share and per share data has been restated to reflect the stock dividend
of one-tenth of a share of common stock for each share of common stock
outstanding that was paid on January 14, 2000.

15. SUBSEQUENT EVENTS

a. Completed Acquisitions

On February 1, 2000, Old Iron Mountain completed the acquisition of Pierce
Leahy in a stock-for-stock merger valued at approximately $1.1 billion. The
acquisition was structured as a reverse merger with Pierce Leahy being the
surviving legal entity and immediately changing its name to Iron Mountain
Incorporated (the "Company"). Based on the number of shares of Old Iron Mountain
and Pierce Leahy common stock outstanding immediately prior to the completion of
the merger, immediately after the merger former stockholders of Old Iron
Mountain owned approximately 65% of the Company's Common Stock. Because of this
share ownership, Old Iron Mountain is considered the acquiring entity for
accounting purposes. The total consideration for this transaction was comprised
of: (i) approximately 18.8 million shares of the Company's Common Stock with a
fair value of approximately $444 million; (ii) options to acquire approximately
1.5 million shares of the Company's Common Stock with a fair value of
approximately $25 million; (iii) assumption of Pierce Leahy debt with a fair
value of approximately $579 million; and (iv) incurrence of approximately
$4 million of capitalized transaction costs. The aquisition will be accounted
for using the purchase method of accounting.

111
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Iron Mountain Incorporated (formerly known as Pierce Leahy Corp.):

We have audited, in accordance with auditing standards generally accepted in
the United States, the consolidated financial statements for Pierce Leahy Corp.
and have issued our report thereon dated February 22, 2000. Our audit was made
for the purpose of forming an opinion on the basic financial statements taken as
a whole. The schedule of valuation and qualifying accounts is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

Philadelphia, Pa.
February 22, 2000

112
<PAGE>
SCHEDULE II
PIERCE LEAHY CORP.
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING OF CHARGED TO END OF
YEAR ENDED DECEMBER 31, THE YEAR EXPENSE OTHER (1) DEDUCTIONS THE YEAR
- ----------------------- ------------ ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts and
credit memos:
1997................................. $ 795 $ 947 $953 $(296) $2,399
1998................................. 2,399 1,406 -- (155) 3,650
1999................................. 3,650 1,171 (696) (747) 3,378
</TABLE>

<TABLE>
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING OF END OF
YEAR ENDED DECEMBER 31, THE YEAR ADDITIONS DEDUCTIONS THE YEAR
- ----------------------- ------------ --------- ---------- ----------
<S> <C> <C> <C> <C>
Reserve for restructuring activities:
1997........................................... $ -- $ -- $ -- $ --
1998........................................... -- 2,370 (585) 1,785
1999........................................... 1,785 1,525 (910) 2,400
</TABLE>

- ------------------------

(1) The adjustments represent changes to goodwill for reserves for companies
acquired during the year and as a result of management finalizing its
purchase price allocations.

113
<PAGE>
REPORT OF THE INDEPENDENT AUDITORS

To the Board of Directors of Iron Mountain Europe Limited:

We have audited the accompanying consolidated balance sheet of Iron Mountain
Europe Limited as of October 31, 1999 and the related consolidated statement of
operations, changes in stockholders' equity and cash flows for the ten months
ended October 31, 1999. These consolidated financial statements are the
responsibility of the management of Iron Mountain Europe Limited. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with United Kingdom auditing standards
which do not differ in any significant respect from United States generally
accepted auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Iron Mountain Europe Limited at October 31, 1999 and the consolidated results of
its operations and its consolidated cash flows for the ten months ended
October 31, 1999, in conformity with generally accepted accounting principles in
the United States.

RSM ROBSON RHODES

Chartered Accountants
Birmingham, England

February 28, 2000

114
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

CONSOLIDATED BALANCE SHEET
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
OCTOBER 31,
NOTE 1999
-------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 1,316
Accounts receivable (less allowances of $334)............. 10,773
Inventories, prepaid expenses and other................... 3,023
--------
Total Current Assets........................................ 15,112
--------
Property, Plant and Equipment:
Property, plant and equipment............................. 3e 54,652
Less--Accumulated depreciation............................ (5,459)
--------
Net property, plant and equipment......................... 49,193
Goodwill, net............................................... 90,744
--------
Total Assets................................................ $155,049
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Borrowings under line of credit........................... $ 5,270
Current portion of long-term debt......................... 5 2,169
Obligations under capital leases.......................... 9 798
Accounts payable.......................................... 3,237
Amounts owed to related parties........................... 10 26,458
Accrued expenses and other payables....................... 7 5,765
Deferred income........................................... 2,447
--------
Total Current Liabilities................................... 46,144
Long-term Debt, Net of Current Portion...................... 5 29,752
Obligations under capital leases, Net of Current Portion.... 9 367
Deferred Income Taxes....................................... 6 1,278

Commitments and Contingencies............................... 9
Stockholders' Equity
Common stock.............................................. 4,252
Additional paid-in capital................................ 75,557
Deferred compensation..................................... (838)
Retained earnings......................................... 846
Accumulated other comprehensive items..................... (2,309)
--------
Total Stockholders' Equity.................................. 77,508
--------
Total Liabilities and Stockholders' Equity.................. $155,049
========
</TABLE>

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

115
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

CONSOLIDATED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
TEN MONTHS
ENDED
OCTOBER 31,
NOTE 1999
-------- -----------
<S> <C> <C>
Revenues:
Storage................................................... $17,812
Service and storage material sales........................ 12,670
-------
Total revenues.............................................. 30,482
Operating Expenses:
Cost of sales (excluding depreciation).................... 17,293
Selling, general and administrative....................... 5,699
Depreciation and amortization............................. 3,692
-------
Total Operating Expenses.................................... 26,684
Operating Income............................................ 3,798
Interest Expense (includes $398 of related party
interest)................................................. 1,362
-------
Income Before Provision for Income Taxes.................... 2,436
Provision for Income Taxes.................................. 6 1,590
-------
Net Income.................................................. $ 846
=======
</TABLE>

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

116
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE LOSS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ACCUMULATED
COMMON ADDITIONAL OTHER TOTAL
COMMON STOCK PAID-IN DEFERRED RETAINED COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL COMPENSATION EARNINGS ITEMS EQUITY
---------- -------- ---------- ------------ -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 3, 1999.......... 25,079,751 $4,161 $65,519 $ -- $ -- $ -- $69,680
Issuance of shares to Iron
Mountain (UK) Limited........... 550,000 91 9,033 -- -- -- 9,124
Net income........................ -- -- -- -- 846 -- 846
Translation adjustment............ -- -- -- -- -- (2,309) (2,309)
Issuance of options by
stockholder..................... -- -- 1,005 (1,005) -- -- --
Amortization of deferred
compensation agreement.......... -- -- -- 167 -- -- 167
---------- ------ ------- ------- ---- ------- -------
Balance, October 31, 1999......... 25,629,751 $4,252 $75,557 $ (838) $846 $(2,309) 77,508
========== ====== ======= ======= ==== ======= =======
COMPREHENSIVE LOSS
Net income........................ $ 846
Foreign currency translation
adjustment...................... (2,309)
-------
Total comprehensive loss.......... $(1,463)
=======
</TABLE>

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

117
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
1999
--------
<S> <C>
Cash flows from operating activities:
Net income................................................ $ 846
Adjustments to reconcile net income to cash flows provided
by Operating Activities:
Depreciation............................................ 1,571
Amortization............................................ 2,121
Amortization of deferred compensation................... 167
Provision for doubtful accounts......................... 28
Changes in Assets and Liabilities:
Accounts receivable..................................... (2,489)
Inventories, prepaid expenses and other current
assets................................................. (283)
Accounts payable........................................ 325
Accrued expenses and other payables..................... 334
Amounts due to related parties (trade amounts).......... 683
--------
Cash flows provided by operating activities................. 3,303
--------
Cash flows from investing activities:
Capital expenditures...................................... (12,611)
Cash paid for acquisitions, net of cash acquired.......... (38,168)
Cash flows used in investing activities..................... (50,779)
--------
Cash flows from financing activities:
Proceeds from borrowings.................................. 13,771
Proceeds from lines of credit............................. 5,270
Repayment of debt......................................... (2,338)
Related-party financing................................... 23,908
Proceeds from stock issuance.............................. 6,471
--------
Cash flows provided by financing activities................. 47,082
--------
Decrease in cash and cash equivalents....................... (394)
Effect of exchange rate changes on cash and cash
equivalents............................................... (49)
Cash and cash equivalents at beginning of period............ 1,759
--------
Cash and cash equivalents at end of period.................. $ 1,316
========
Supplemental information:
Cash paid for:
Interest................................................ $ 904
--------
Income taxes............................................ $ 1,171
========
</TABLE>

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

118
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

1. NATURE OF BUSINESS AND CORPORATE STATUS

NATURE OF BUSINESS

The accompanying financial statements represent the consolidated accounts of
Iron Mountain Europe Limited and its subsidiaries (collectively "Iron Mountain
Europe" or "IM Europe"). IM Europe is a full service provider of records and
information management services throughout Europe to Government departments, as
well as to commercial, professional, financial and energy businesses. IM Europe
operates primarily in this one business segment.

IM Europe's name was changed to Iron Mountain Europe Limited from Britannia
Data Management Limited on September 22, 1999.

2. BASIS OF PRESENTATION

IM Europe maintains its accounts in accordance with accounting principles
and practices employed by enterprises in their respective country of operation,
whereas the accompanying financial statements reflect certain adjustments not
recorded in IM Europe's books, to present these statements in accordance with
generally accepted accounting principles in the United States ("GAAP"). These
financial statements have been translated into US dollars.

IM Europe was acquired by Mentmore Abbey plc ("Mentmore Abbey") in
October 1996. The accompanying financial statements reflect the "push down" of
Mentmore Abbey's purchase accounting. The financial statements do not reflect
the purchase accounting recorded in Iron Mountain (UK) Limited's (a wholly owned
subsidiary of Iron Mountain Incorporated) books for its purchase of a 50.1%
interest in IM Europe (see Note 4).

IM Europe has elected an October 31 fiscal year end. The results of
operations represent the ten month period since the acquisition of 50.1% of IM
Europe by Iron Mountain (UK) Limited on January 4, 1999.

The consolidated financial statements are not comparable to the United
Kingdom consolidated financial statements.

The significant adjustments made to present the financial statements in
accordance with GAAP relate primarily to accounting for goodwill and income
taxes.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. PRINCIPLES OF CONSOLIDATION

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

B. USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

119
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. REVENUE RECOGNITION

Revenues consist of storage revenues and service and storage material sales
revenues. Storage revenues consist of periodic charges related to the storage of
materials (either on a per unit or per cubic foot of records basis). In certain
circumstances, based upon customer requirements, storage revenues include
periodic charges associated with normal recurring service activities. Service
and storage material sales revenues are comprised of charges for related service
activities and the sale of storage materials. Customers are generally billed on
a monthly basis on contractually agreed-upon terms.

Storage and service revenues are recognized in the month the respective
service is provided. Storage material sales are recognized when shipped to the
customer. Amounts related to future storage for customers, where storage fees
are billed in advance, are accounted for as deferred income and amortized over
the applicable period.

D. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand and cash invested in
short-term securities which have original maturities of less than 90 days. Cash
and cash equivalents are carried at cost, which approximates fair market value.

E. PROPERTY, PLANT AND EQUIPMENT

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

<TABLE>
<S> <C>
Buildings............................................... 50 years
Leasehold improvements.................................. over the lease term
Furniture and fixtures.................................. 10 years
Equipment............................................... 5-20 years
Racking................................................. 5-20 years
Motor vehicles.......................................... 4 years
Computer hardware and software.......................... 5 years
</TABLE>

The gross fixed assets at October 31, 1999 are as follows;

<TABLE>
<CAPTION>
EQUIP- COMPUTER
LEASEHOLD MENT AND HARDWARE FURNITURE
LAND AND IMPROVE- MOTOR AND AND
BUILDINGS MENTS VEHICLES RACKING SOFTWARE FIXTURES TOTAL
--------- --------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross fixed assets at October 31,
1999.............................. $33,882 $693 $275 $12,159 $3,929 $3,714 $54,652
======= ==== ==== ======= ====== ====== =======
</TABLE>

Minor maintenance costs are expensed as incurred. Major improvements to the
leased buildings are capitalized as leasehold improvements and depreciated.

F. GOODWILL

Goodwill reflects the cost in excess of fair value of the net assets of
companies acquired in purchase transactions. Goodwill is amortized using the
straight line method from the date of acquisition over the expected period to be
benefited, currently estimated at 30 years. The recoverability of goodwill is

120
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
periodically assessed based upon the future undiscounted cash flows in
accordance with Statement of Financial Accounting Standards ("SFAS") No 121,
"Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to
be Disposed of."

The net book value of goodwill at October 31, 1999 relates to the following:

<TABLE>
<CAPTION>
MONTH OF GOODWILL - ACCUMULATED NET BOOK
COMPANY/DIVISION ACQUISITION COST AMORTIZATION VALUE
- ---------------- ----------- ---------- ------------ --------
<S> <C> <C> <C> <C>
October
Iron Mountain Europe Limited...................... 1996* $58,614 $6,143 $ 52,471

January
Abbey Records Management ("ARM").................. 1999 5,195 216 4,979

January
Arcus Data Security Limited ("Arcus UK").......... 1999 2,406 99 2,307

Memogarde, S.A. ("Memogarde")..................... June 1999 13,913 232 13,681

September
Stortext (Holdings) Limited ("Stortext").......... 1999 12,787 34 12,753

October
Datavault S.A. ("Datavault")...................... 1999 4,553 -- 4,553
------- ------ --------

$97,468 $6,724 $ 90,744
======= ====== ========
</TABLE>

- ------------------------

* Relates to the acquisition of Iron Mountain Europe Limited by Mentmore Abbey
plc.

G. INVENTORIES

Inventories are valued at the lower of cost, using the first-in, first-out
basis, or market value. Inventories are comprised of cartons, magnetic tape and
dyeline film and paper.

H. DEFERRED INCOME TAXES

Provision is made at current rates for taxation deferred in respect of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for tax purposes.

I. DEFINED CONTRIBUTION PLAN

IM Europe operates a defined contribution plan. The assets of the plan are
held separately from those of IM Europe in an independently administered fund.
Contributions payable for the period are charged to the statement of operations.
IM Europe contributed and charged to expense $128 for the ten month period.

J. FOREIGN CURRENCY

All assets and liabilities of IM Europe are translated at year-end exchange
rates, and revenues and expenses are translated at average exchange rates for
the year in accordance with SFAS No. 52, "Foreign

121
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Currency Translation." Resulting translation adjustments are reflected in the
"Accumulated other comprehensive items" component of stockholders' equity.
Foreign currency transaction gains and losses are included in the accompanying
statements of operations and are not material for the ten months presented.

K. COMPREHENSIVE INCOME

Comprehensive income combines net income and "other comprehensive items,
net," which represents certain amounts that are reported as components of
stockholders' equity in the accompanying balance sheet, including foreign
currency translation adjustments. At October 31, 1999 the balance of accumulated
other comprehensive items represents IM Europe's cumulative translation
adjustment.

4. ACQUISITIONS

IM Europe purchased five records management businesses during the ten months
to October 31, 1999. Each acquisition was accounted for using the purchase
method of accounting and accordingly, the results of operations for each
acquisition have been included in the consolidated results of IM Europe from
their respective acquisition dates. The excess of the purchase price over the
underlying fair value of the assets and liabilities of each acquisition has been
assigned to goodwill and is being amortized over the estimated benefit period of
30 years.

A summary of the consideration paid and resulting goodwill is as follows:

<TABLE>
<CAPTION>
ARM ARCUS UK MEMOGARDE STORTEXT DATAVAULT TOTAL
-------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Consideration paid.......................... $5,799 $2,428 $16,796 $14,092 $4,944 $44,059
Fair value of
- --Assets acquired........................... 1,214 1,038 4,630 4,053 2,195 13,130
- --Liabilities assumed....................... (610) (1,016) (1,747) (2,748) (1,804) (7,925)
------ ------ ------- ------- ------ -------
Fair value of net assets acquired........... 604 22 2,883 1,305 391 5,205
------ ------ ------- ------- ------ -------
Recorded goodwill........................... $5,195 $2,406 $13,913 $12,787 $4,553 $38,854
====== ====== ======= ======= ====== =======
</TABLE>

The consideration paid for the above acquisitions included $38,685 of cash.
Total cash balances acquired within the above amounted to $517.

In January 1999, Iron Mountain (UK) Limited became a 50.1% stockholder in IM
Europe. This was effected through: i) the purchase of shares by Iron Mountain
(UK) Limited directly from Mentmore Abbey, ii) the issuance of 400,000 shares by
IM Europe to Iron Mountain (UK) Limited in exchange for L4,000 cash, iii) the
purchase of IM Europe shares by Iron Mountain (UK) Limited from Abbey Storage
Limited (a wholly owned subsidiary of Mentmore Abbey) and iv) the contribution
of Arcus UK (a wholly owned subsidiary of Iron Mountain (UK) Limited) to IM
Europe in exchange for 150,000 common shares in IM Europe.

Also, in January 1999, Abbey Storage Limited sold the assets and liabilities
of ARM to British Data Management Limited, a wholly owned subsidiary of Iron
Mountain Europe. The consideration for this acquisition was comprised solely of
cash.

122
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

4. ACQUISITIONS (CONTINUED)
IM Europe acquired 100% of the issued common stock of Memogarde on June 1,
1999 for cash consideration of $13,743. In addition, debt was assumed with a
fair value of $3,053.

IM Europe acquired 100% of the issued common stock of Stortext on
September 12, 1999. Consideration was comprised of $14,092 in cash.

IM Europe acquired 100% of the voting common stock of Datavault on
September 28, 1999 for cash consideration of $4,944. This represented 92% of
Datavault's total issued stock. The remaining 8% of issued stock was acquired on
January 2, 2000 for cash consideration of $507. IM Europe has included the
results of Datavault in its consolidated financial statements from the date of
acquiring 100% of the voting common stock.

5. DEBT

a. Long term debt consists of the following:

<TABLE>
<CAPTION>
INTEREST RATE AT
OCTOBER 31, BALANCE
DESCRIPTION 1999 MATURITY 1999
- ----------- ---------------- -------- --------
<S> <C> <C> <C>
Term Loan................................... 6.53% 03/31/06 $13,691
Term Loan................................... 7.25 02/09/00 855
Revolving credit............................ 3.69 12/30/01 3,461
Revolving credit............................ 3.69 12/30/01 10,382
Other....................................... Various Various 3,532
-------
$31,921
=======
</TABLE>

b. Maturities of long term debt are as follows:

<TABLE>
<S> <C>
2000........................................................ $ 2,169
2001........................................................ 16,502
2002........................................................ 2,634
2003........................................................ 2,937
2004........................................................ 2,842
Thereafter.................................................. 4,837
-------
31,921
Current..................................................... 2,169
-------
Long term debt, net of current portion...................... $29,752
=======
</TABLE>

123
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

5. DEBT (CONTINUED)

c. Facilities

On May 28, 1999, IM Europe entered into a bank facility agreement to fund
future acquisitions and support working capital requirements. The facility was
comprised of a term loan ($15,300), a revolving credit facility ($14,100) and a
working capital facility. All payments are payable in UK Sterling.

The facilities are secured by the assets of IM Europe and guaranteed by
corporate cross guarantees, incorporating letters of offset, by each company in
the consolidated group. The facility agreement includes certain financial and
non-financial covenants and restrictions based on net income and net worth. IM
Europe is in compliance with all covenants at October 31, 1999.

Principal and interest payments on the term loan are payable twice a year
through March 31, 2006. The effective rate of interest on the term loan is 1%
over the London Inter-Bank Offered Rate ("LIBOR"). At October 31, 1999, $13,700
of the principal remained outstanding.

The revolving credit facility and working capital facility mature on
December 30, 2001. Interest payments are payable monthly based on 1% over LIBOR.

On August 25, 1998, Stortext entered into a $900 revolving facility to fund
capital expenditures and the repayment of certain term loans. The facility is
subject to an effective rate of interest of 2% over the banks' base rate and is
secured by certain of Stortext's assets. At October 31, 1999, $900 of the
facility was outstanding. The facility has been repaid in full subsequent to
October 31, 1999.

Also on August 25, 1998, Stortext entered into a $600 line of credit
facility. The effective rate of interest on this facility is 1% over LIBOR. The
facility was unused at October 31, 1999.

At October 31, 1999, Datavault had three unsecured line of credit facilities
to fund ongoing operating activities. All payments are payable in Spanish
pesetas. The effective rate of interest on all three facilities is
EURIBOR plus 1%. The total amount available under the facilities is $300 and
none of the facilities were utilized at October 31, 1999.

At October 31, 1999, Memogarde had a number of facilities to fund capital
expenditure and working capital requirements. The total value outstanding on the
facilities at October 31, 1999 was $13,560. All payments are made in French
francs. The fair value of these facilities is not significantly different from
their carrying value. The facilities include a $3,356 term loan with a fixed
effective interest rate of 4.69%. This was unused at October 31, 1999. The
facilities also include a $10,068 term loan with a fixed effective interest rate
of 4.5%. At October 31, 1999, the outstanding amount on this loan was $10,068.
It has an expiry date of December 30, 2001. Memogarde's facilities include five
facilities with a fixed effective interest rate.

6. INCOME TAXES

Income taxes have been accounted for in accordance with SFAS No. 109, which
requires the recognition of deferred tax assets and liabilities for the expected
tax consequences of temporary differences between the tax and financial
reporting bases of assets and liabilities. The primary temporary differences are
due to timing differences from the depreciation of property, plant and
equipment. IM Europe had aggregate gross deferred tax assets of $74 at
October 31, 1999, and aggregate gross deferred tax liabilities of $1,352 at
October 31, 1999.

124
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

6. INCOME TAXES (CONTINUED)
All individual companies within IM Europe file individual tax returns.

The provision for income tax consists of the following components:

<TABLE>
<CAPTION>
1999
--------
<S> <C>
UK Corporation tax--current................................. $ 936
UK Corporation tax--deferred................................ 259
French Corporation tax--current............................. 395
------
$1,590
======
</TABLE>

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

<TABLE>
<CAPTION>
1999
--------
<S> <C>
DEFERRED TAX ASSETS
Accrued liabilities......................................... $ 45
Deferred rent............................................... 29

DEFERRED TAX LIABILITIES
Plant and equipment, principally due to differences in
depreciation.............................................. (1,352)
-------
Net deferred tax liability.................................. $(1,278)
=======
</TABLE>

A reconciliation of total income tax expense and the amount computed by
applying the UK corporation tax rate of 30% to income taxes is as follows:

<TABLE>
<CAPTION>
1999
--------
<S> <C>
Computed "expected" tax provision........................... $ 731
Increase in income taxes resulting from:
Non deductible goodwill amortization...................... 636
Other..................................................... 122
Impact of foreign tax rate and tax law differential......... 101
------
$1,590
======
</TABLE>

125
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

7. ACCRUED EXPENSES

Accrued expenses and other payables consist of the following:

<TABLE>
<CAPTION>
1999
--------
<S> <C>
Accrued expenses............................................ $3,499
Income taxes................................................ 557
Sales taxes................................................. 949
Accrued payroll taxes....................................... 760
------
$5,765
======
</TABLE>

8. STOCKHOLDERS' EQUITY

SHARE CAPITAL

AUTHORIZED:
Common stock is comprised of 32,000 ordinary shares of 10 pence nominal
value.

<TABLE>
<CAPTION>
1999
--------
<S> <C>
ALLOTTED, ISSUED AND FULLY PAID:
Common stock--ordinary shares, 10 pence nominal value....... $4,252
======
</TABLE>

On January 4, 1999 IM Europe issued 150,000 new ordinary shares in exchange
for the entire issued share capital of Arcus UK, a company wholly owned by Iron
Mountain (UK) Limited. In addition, IM Europe issued 400,000 new ordinary shares
to Iron Mountain (UK) Limited for a consideration of L4,000.

In February 1999, Mentmore Abbey issued stock options with a fair value of
$1,005 to a key executive of Iron Mountain Europe. The related compensation
expense is being amortized over the five-year vesting period of the options.

9. COMMITMENTS AND CONTINGENCIES

CAPITAL LEASES

The present value of the minimum lease payments for capital leases is as
follows:

<TABLE>
<CAPTION>
1999
--------
<S> <C>
2000........................................................ $ 798
2001........................................................ 343
2002........................................................ 24
-----
Gross payments.............................................. 1,165
Current portion............................................. 798
-----
Capital leases, net of current portion...................... $ 367
=====
</TABLE>

Assets under capital leases consist primarily of equipment and racking. The
gross amount of assets held under capital leases is $2,464 at October 31, 1999.
The accumulated depreciation on these assets is

126
<PAGE>
IRON MOUNTAIN EUROPE LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

9. COMMITMENTS AND CONTINGENCIES (CONTINUED)
$520 at October 31, 1999. The depreciation on these assets charged in 1999 is
included within the depreciation expense.

OPERATING LEASES

IM Europe leases most of its facilities under various operating leases. A
majority of these leases have an average lease life of between ten and twenty
years and have either fixed or Consumer Price Index escalation clauses. IM
Europe also leases motor vehicles under operating leases which have an average
lease life of three years. The amounts paid in respect of operating leases
including rent expense were $2,648 in 1999.

The minimum future lease payments for buildings under operating leases are
as follows:

<TABLE>
<CAPTION>
YEAR 1999
- ---- --------
<S> <C>
2000........................................................ $ 3,718
2001........................................................ 3,646
2002........................................................ 3,590
2003........................................................ 3,516
2004........................................................ 3,444
2005 and thereafter......................................... 28,578
-------
Total minimum lease payments................................ $46,492
=======
</TABLE>

10. RELATED PARTY TRANSACTIONS

TRANSACTIONS WITH RELATED PARTIES

Certain administrative expenses such as insurance and certain professional
fees have been paid on behalf of and charged to Iron Mountain Europe and
subsidiaries, at cost by Mentmore Abbey and Iron Mountain Incorporated. In
addition a management fee has been charged by Mentmore Abbey as IM Europe uses
certain resources and administrative staff of Mentmore Abbey. The management fee
is variable and is calculated on the basis of expenditure incurred. The fee
charged for the ten months ended October 31, 1999 was $65.

11. SUBSEQUENT EVENTS

IM Europe acquired 100% of the stock in Documentalia, a Spanish medical
records storage company, on February 11, 2000. The consideration paid amounted
to approximately $6,900 in cash.

12. NON-CASH TRANSACTIONS

IM Europe used the following as part of the consideration paid for certain
acquisitions:

<TABLE>
<CAPTION>
1999
--------
<S> <C>
Fair value of common stock issued........................... $9,124
======
</TABLE>

127
<PAGE>
REPORT OF THE INDEPENDENT AUDITORS

To the Board of Directors of
Iron Mountain Europe Limited:

We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Iron Mountain Europe Limited for the
ten months ended October 31, 1999 and have issued our report thereon dated
February 28, 2000. Our audit was made for the purpose of forming an opinion on
those statements taken as a whole. The supplemental schedule listed in the
accompanying index is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and regulations under the Securities Exchange Act of 1934 and
is not a required part of the basic financial statements. The supplemental
schedule has been subjected to the auditing procedures applied in our audits of
the basic financial statements and, in our opinion, is fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.

RSM ROBSON RHODES

Birmingham, England
February 28, 2000

128
<PAGE>
SCHEDULE II

IRON MOUNTAIN EUROPE LIMITED
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING OF CHARGED TO OTHER END OF THE
YEAR ENDED DECEMBER 31, THE PERIOD EXPENSE ADDITIONS (1) PERIOD
- ----------------------- ------------ ---------- ------------- ----------
<S> <C> <C> <C> <C>
Allowance for doubtful accounts and credit memos:
1999............................................. $106 $28 $200 $334
</TABLE>

- ------------------------

(1) Includes allowance of businesses acquired during the year as described in
Note 4 of Notes to Consolidated Financial Statements, as well as currency
translation adjustments.

129
<PAGE>
SIGNATURES

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

<TABLE>
<S> <C> <C>
IRON MOUNTAIN INCORPORATED

By: /s/ C. RICHARD REESE
-----------------------------------------
C. Richard Reese, Chairman of the
Board and Chief Executive Officer
</TABLE>

Dated: March 30, 2000

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

<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ C. RICHARD REESE
------------------------------------------- Chairman, and Chief Executive March 30, 2000
C. Richard Reese Officer and Director

/s/ J. PETER PIERCE
------------------------------------------- President and Director March 30, 2000
J. Peter Pierce

/s/ JOHN F. KENNY, JR. Executive Vice President,
------------------------------------------- Chief Financial Officer and March 30, 2000
John F. Kenny, Jr. Director

/s/ CLARKE H. BAILEY
------------------------------------------- Director March 30, 2000
Clarke H. Bailey

------------------------------------------- Director March , 2000
Constantin R. Boden

/s/ KENT P. DAUTEN
------------------------------------------- Director March 30, 2000
Kent P. Dauten

/s/ EUGENE B. DOGGETT
------------------------------------------- Director March 30, 2000
Eugene B. Doggett
</TABLE>

130
<PAGE>

<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ B. THOMAS GOLISANO
------------------------------------------- Director March 30, 2000
B. Thomas Golisano

/s/ ARTHUR D. LITTLE
------------------------------------------- Director March 30, 2000
Arthur D. Little

/s/ HOWARD D. ROSS
------------------------------------------- Director March 30, 2000
Howard D. Ross

/s/ VINCENT J. RYAN
------------------------------------------- Director March 30, 2000
Vincent J. Ryan
</TABLE>

131
<PAGE>
INDEX TO EXHIBITS

Exhibits indicated below are incorporated by reference to documents of the
Company, Old Iron Mountain and Pierce Leahy on file with the Commission. Exhibit
numbers in parentheses refer to the Exhibit numbers in the applicable filing
(which are identified in the footnotes appearing at the end of this index). All
other exhibits are filed herewith. Each exhibit marked by a pound sign (#) is a
management contract or compensatory plan.

<TABLE>
<CAPTION>
EXHIBIT NO. ITEM EXHIBIT
- ----------- ---- -------
<S> <C> <C>
2.1 Asset Purchase and Sale Agreement, dated February 18, 2000, Filed herewith as
by and among Iron Mountain Records Management, Inc., Data Exhibit 2.1
Storage Center, Inc., DSC of Florida, Inc., DSC of
Massachusetts, Inc., and Suddath Van Lines, Inc.

2.2 Agreement and Plan of Merger, dated as of October 20, 1999, (2.1)(16)
by and between Old Iron Mountain and Pierce Leahy.

2.3 Stock Purchase Agreement, dated as of April 1, 1999, by and (2.2)(13)
among IMRM, First American Records Management, Inc. and all
of the stockholders of First American Records Management,
Inc. (confidential treatment granted as to certain
portions).

2.4 Stock Purchase Agreement, dated as of February 28, 1999, by (2.10)(11)
and among Old Iron Mountain, Data Base, Inc. and all of the
stockholders of Data Base, Inc. (confidential treatment
granted as to certain portions).

2.5 First Amendment to Stock Purchase Agreement, dated as of (10.1)(13)
April 8, 1999, by and among Old Iron Mountain, Data Base,
Inc. and all of the stockholders of Data Base, Inc.

2.6 Share Purchase Agreement, dated February 26, 1999, among (10.14)(25)
Charles Greaves Stuart-Menteth and Others, Pierce Leahy
Europe Limited and Eagle Trustees Limited, as the Sole
Trustee of the Stuart-Menteth Family Trust.

2.7 Agreement and Plan of Merger, dated as of June 5, 1998, by (2.1)(8)
and among IMRM, Iron Mountain/NUS, Inc. and National
Underground Storage, Inc. (confidential treatment granted as
to certain portions).

2.8 Stock Purchase Agreement, dated May 21, 1998, among Pierce (10.1)(22)
Leahy and the shareholders of Kestrel Holdings, Inc.

2.9 Asset Purchase Agreement, dated February 4, 1998, and (10.1 and 10.2)(20)
Amending Agreement, dated April 7, 1998, among Pierce Leahy
Command Company, Archivex Inc., the shareholders of Archivex
Inc., and certain parties related to Archivex Inc.

3.1 Amended and Restated Articles of Incorporation of the (Annex D)( 25)
Company.

3.2 Amended and Restated Bylaws of the Company. (Annex E)(25)

4.1 Form of stock certificate representing shares of Common (4.1)(26)
Stock, $.01 par value per share, of the Company.

9.0 Amended and Restated Voting Trust Agreement, dated as of (9.0)(19)
February 28, 1998, by and among certain shareholders of the
Company. (#)

10.1 Shareholders' Agreement, dated as of October 20, 1999, among (Annex B)(25)
Old Iron Mountain, Pierce Leahy, and those shareholders of
Pierce Leahy listed on Schedule A thereto. (#)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. ITEM EXHIBIT
- ----------- ---- -------
<S> <C> <C>
10.2 Stockholders' Agreement, dated as of September 26, 1997, by (10.16)(5)
and among Old Iron Mountain and certain stockholders of
Arcus Group, Inc. (#)

10.3 Stockholders' Agreement, dated as of September 17, 1997, by (10.13)(6)
and between Old Iron Mountain and Kent P. Dauten. (#)

10.4 Stockholders' Agreement, dated as of February 19, 1997, by (10.20)(2)
and between Old Iron Mountain and certain stockholders of
Safesite Records Management Corporation. (#)

10.5 Employment Agreement, dated as of February 1, 2000, by and Filed herewith as
between Pierce Leahy and J. Peter Pierce. (#) Exhibit 10.5

10.6 Pierce Leahy Corp. Non-Qualified Stock Option Plan. (#) (10.3)(17)

10.7 Pierce Leahy Corp. 1997 Stock Option Plan. (#) (10.2)(18)

10.8 Pierce Leahy Corp. Profit Sharing/401(k) Plan, as amended. (10)(23)

10.9 Iron Mountain/ATSI 1995 Stock Option Plan. (#) (10.2)(7)

10.10 Iron Mountain Incorporated 1998 Employee Stock Purchase (10.8)(9)
Plan. (#)

10.11 Iron Mountain Incorporated 1995 Stock Incentive Plan, as (10.3)(13)
amended. (#)

10.12 Third Amended and Restated Credit Agreement, dated as of (10.1)(26)
January 27, 2000, among the Company and certain lenders
party thereto and the Chase Manhattan Bank, as
Administrative Agent.

10.13 Indenture for 8 1/4% Senior Subordinated Notes due 2011, (10.1)(14)
dated April 26, 1999, by and among Old Iron Mountain,
certain of its subsidiaries and The Bank of New York, as
trustee.

10.14 Indenture for 8 3/4% Senior Subordinated Notes due 2009, (4.1)(4)
dated October 24, 1997, by and among Old Iron Mountain,
certain of its subsidiaries and The Bank of New York, as
trustee.

10.15 Indenture for 10 1/8% Senior Subordinated Notes due 2006, (10.3)(2)
dated October 1, 1996, by and among Old Iron Mountain,
certain of its subsidiaries and First National Association,
as trustee.

10.16 Indenture 8 1/8% Senior Notes due 2008, dated as of April 7, (4.1(c))(21)
1998, by and among Pierce Leahy Command Company, as issuer,
Pierce Leahy and The Bank of New York, as trustee.

10.17 Indenture for 9 1/8% Senior Subordinated Notes due 2007, (10.5)(19)
dated as of July 7, 1997, by and between Pierce Leahy, as
issuer, and The Bank of New York, as trustee.

10.18 Indenture for 11 1/8% Senior Subordinated Notes due 2006, (4.4)(17)
dated as of July 15, 1996, between Pierce Leahy, as issuer,
and United States Trust Company of New York, as trustee.

10.19 Amended and Restated Registration Rights Agreement, dated as (10.1)(3)
of June 12, 1997, by and among Old Iron Mountain and certain
stockholders of Old Iron Mountain. (#)

10.20 Joinder to Registration Rights Agreement, dated as of (10.12)(5)
October 31, 1997, by and between Old Iron Mountain and Kent
P. Dauten. (#)
</TABLE>

ii
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. ITEM EXHIBIT
- ----------- ---- -------
<S> <C> <C>
10.21 Registration Rights Agreement Joinder, dated as of February Filed herewith as
1, 2000, by and among Old Iron Mountain and certain Exhibit 10.21
shareholders of the Company. (#)

10.22 Tax Indemnification Agreement among Pierce Leahy and certain (10.9)(18)
of its shareholders.

10.23 Record Center Storage Services Agreement between Old Iron (10.18)(1)
Mountain Records Management, Inc. and Resolution Trust
Corporation, dated July 31, 1992, as renewed by letter
agreement effective May 20, 1999, between Old Iron Mountain
and the Federal Deposit Insurance Corporation.

10.24 Strategic Alliance Agreement, dated as of January 4, 1999, (10.2)(12)
by and among Old Iron Mountain, Iron Mountain (U.K.)
Limited, Britannia Data Management Limited and Mentmore
Abbey plc.

10.25 Lease Agreement, dated as of October 1, 1998, between Iron (10.20)(10)
Mountain Statutory Trust--1998 and IMRM.

10.26 Unconditional Guaranty, dated as of October 1, 1998, from (10.21)(10)
Old Iron Mountain to Iron Mountain Statutory Trust--1998.

10.27 Amendment and Consent to Unconditional Guaranty, dated as of (10.1)(15)
July 1, 1999, between Old Iron Mountain and Iron Mountain
Statutory Trust--1998 and consented to by to by the lenders
listed therein.

10.28 Amended and Restated Agency Agreement, dated October 1, (10.1)(10)
1998, by and between Iron Mountain Statutory Trust--1998 and
IMRM.

10.29 Lease Agreement, dated as of July 1, 1999, by and between (10.2)(16)
Iron Mountain Statutory Trust--1999 and IMRM.

10.30 Agency Agreement, dated as of July 1, 1999, by and between (10.1)(16)
Iron Mountain Statutory Trust--1999 and IMRM.

10.31 Unconditional Guaranty, dated as of July 1, 1999, from Old (10.3)(16)
Iron Mountain to Iron Mountain Statutory Trust--1999.

21 Subsidiaries of the Company. Filed herewith as
Exhibit 21

23.1 Consent of Arthur Andersen LLP (Old Iron Mountain). Filed herewith as
Exhibit 23.1

23.2 Consent of Arthur Andersen LLP (Pierce Leahy). Filed herewith as
Exhibit 23.2

23.3 Consent of RSM Robinson Rhodes (Iron Mountain Europe) Filed herewith as
Exhibit 23.3

27.1 Financial Data Schedule--December 31, 1999 (Old Iron Filed herewith as
Mountain). Exhibit 27.1

27.2 Financial Data Schedule--December 31, 1999 (Pierce Leahy). Filed herewith as
Exhibit 27.2

27.3 Financial Data Schedule--October 31, 1999 (Iron Mountain Filed herewith as
Europe). Exhibit 27.3
</TABLE>

- ------------------------------

(1) Filed as an Exhibit to Old Iron Mountain's Registration Statement
No. 33-99950, filed with the Commission on December 1, 1995.

iii
<PAGE>
(2) Filed as an Exhibit to Old Iron Mountain's Annual Report on Form 10-K for
the year ended December 31, 1996, filed with the Commission, File
No. 0-27584.

(3) Filed as an Exhibit to Old Iron Mountain's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997, filed with the Commission, File
No. 0-27584.

(4) Filed as an Exhibit to Old Iron Mountain's Current Report on Form 8-K dated
October 30, 1997, filed with the Commission, File No. 0-27584.

(5) Filed as an Exhibit to Old Iron Mountain's Registration Statement
No. 333-41045, filed with the Commission on November 26, 1997.

(6) Filed as an Exhibit to Old Iron Mountain's Registration Statement
No. 333-44185, filed with the Commission on January 13, 1998.

(7) Filed as an Exhibit to Old Iron Mountain's Current Report on Form 8-K dated
March 9, 1998, filed with the Commission, File No. 0-27584.

(8) Filed as an Exhibit to Old Iron Mountain's Current Report on Form 8-K dated
July 10, 1998, filed with the Commission, File No. 0-27584.

(9) Filed as an Exhibit to Amendment No. 1 to Old Iron Mountain's Registration
Statement No. 333-44187, filed with the Commission on August 3, 1998.

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

(11) Filed as an Exhibit to Old Iron Mountain's Annual Report on Form 10-K for
the year ended December 31, 1998, filed with the Commission, File
No. 0-27584.

(12) Filed as an Exhibit to Old Iron Mountain's Current Report on Form 8-K dated
January 19, 1999, filed with the Commission, File No. 0-27584.

(13) Filed as an Exhibit to Old Iron Mountain's Current Report on Form 8-K dated
April 16, 1999, filed with the Commission, File No. 0-27584.

(14) Filed as an Exhibit to Old Iron Mountain's Current Report of Form 8-K dated
May 11, 1999, filed with the Commission, File No. 0-27584.

(15) Filed as an Exhibit to Old Iron Mountain's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999, filed with the Commission, File
No. 0-27584.

(16) Filed as an Exhibit to Old Iron Mountain's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999, filed with the Commission, File
No. 1-14937.

(17) Filed as an Exhibit to Pierce Leahy's Registration Statement No. 333-9963,
filed with the Commission on August 12, 1996.

(18) Filed as an Exhibit to Pierce Leahy's Registration Statement
No. 333-23121, filed with the Commission on March 11, 1997.

(19) Filed as an Exhibit to Pierce Leahy's Annual Report on Form 10-K for the
year ended December 31, 1997, filed with the Commission, File
No. 333-09963.

(20) Filed as an Exhibit to Pierce Leahy's Current Report on Form 8-K dated
April 20, 1998, filed with the Commission, File No. 1-13045.

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

(22) Filed as an Exhibit to Pierce Leahy's Current Report on Form 8-K dated
July 6, 1998, filed with the Commission, File No. 1-13045.

(23) Filed as Exhibit to Pierce Leahy's Registration Statement No. 333-69859,
filed with the Commission on December 29, 1998.

(24) Filed as an Exhibit to Pierce Leahy's Annual Report on Form 10-K for the
year ended December 31, 1998, filed with the Commission, File
No. 333-09963.

(25) Filed as an Annex or Exhibit to Amendment No. 1 to Pierce Leahy's
Registration Statement No. 333-91577, filed with the Commission on
December 13, 1999.

(26) Filed as an Exhibit to the Company's Current Report on Form 8-K dated
February 1, 2000, filed with the Commission, File No. 1-13045.

<PAGE>

EXHIBIT 2.1

ASSET PURCHASE AND SALE AGREEMENT

AMONG

IRON MOUNTAIN RECORDS MANAGEMENT, INC.

AS BUYER

DATA STORAGE CENTER, INC.

DSC OF FLORIDA, INC.

AND

DSC OF MASSACHUSETTS, INC.

COLLECTIVELY, AS SELLER

AND

SUDDATH VAN LINES, INC.

as Stockholder

AS OF FEBRUARY 18, 2000

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1. DEFINITIONS.................................................1
Section 1.1. Affiliate..................................................1
Section 1.2. Agreement..................................................1
Section 1.3. Business...................................................1
Section 1.4. Charter Documents..........................................2
Section 1.5. Closing....................................................2
Section 1.6. Closing Date...............................................2
Section 1.7. Contract and Contractual Obligation........................2
Section 1.8. Effective Time.............................................2
Section 1.9. Encumbrances...............................................2
Section 1.10. Event.....................................................2
Section 1.11. Excluded Assets...........................................2
Section 1.12. GAAP......................................................3
Section 1.13. HSR Act...................................................3
Section 1.14. Improvements..............................................3
Section 1.15. Knowledge.................................................3
Section 1.16. Leases....................................................3
Section 1.17. Leased Premises...........................................3
Section 1.18. Material Contract.........................................3
Section 1.19. Owned Premises............................................4
Section 1.20. Permitted Encumbrances....................................4
Section 1.21. Real Property.............................................4
Section 1.22. Seller Accounts Receivable................................4
Section 1.23. Subject Assets............................................4
Section 1.24. Taxes.....................................................4
Section 1.25. Other Definitions.........................................4
ARTICLE 2. SALE AND PURCHASE OF SUBJECT ASSETS.........................5
Section 2.1. Sale and Transfer..........................................5
Section 2.2. Purchase Price; Assumption of Certain Obligations..........6
Section 2.3. Allocation.................................................8
Section 2.4. Post-Closing Adjustment....................................8
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND
STOCKHOLDER.................................................9
Section 3.1. Organization and Good Standing.............................9
Section 3.2. Authorization..............................................9
Section 3.3. Compliance With Other Instruments..........................9
Section 3.4. No Governmental or Other Authorization Required...........10
Section 3.5. Title; Judicial Orders; Sufficiency.......................10
Section 3.6. Contracts and Other Interests.............................10
Section 3.7. Taxes 11
Section 3.8. Litigation; Claims; Defaults..............................11
Section 3.9. Compliance with Laws......................................11
Section 3.10. Certain Environmental Matters............................11
Section 3.11. Real Property............................................12
Section 3.12. Condition of Subject Assets..............................14
</TABLE>

<PAGE>

TABLE OF CONTENTS
(Continued)

<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 3.13. Financial Statements.....................................14
Section 3.14. ERISA Plans..............................................15
Section 3.15. Absence of Certain Changes...............................15
Section 3.16. No Material Undisclosed Liabilities......................16
Section 3.17. Employment Arrangements..................................16
Section 3.18. Patents, Trademarks, Trade Secrets, Etc..................16
Section 3.19. Insurance................................................17
Section 3.20. Transactions with Interested Persons.....................17
Section 3.21. Records Services and Storage.............................17
Section 3.22. Business in Ordinary Course..............................17
Section 3.23. No Material Adverse Change...............................18
Section 3.24. Adverse Restrictions.....................................18
Section 3.25. Disclosure...............................................19
Section 3.26. Brokers..................................................19
Section 3.27. Year 2000 Compliance.....................................19
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER....................19
Section 4.1. Organization and Good Standing............................19
Section 4.2. Authorization.............................................19
Section 4.3. Compliance with Other Instruments.........................19
Section 4.4. Litigation................................................20
Section 4.5. No Governmental or Other Authorization Required...........20
Section 4.6. No Broker.................................................20
Section 4.7. Disclosure................................................20
ARTICLE 5. PRE-CLOSING AGREEMENTS.....................................20
Section 5.1. Access to Information and Facilities......................20
Section 5.2. Confidentiality...........................................21
Section 5.3. Additional Financial Statements...........................22
Section 5.4. Seller's Employees........................................22
Section 5.5. Continued Efforts.........................................23
Section 5.6. Operation of Business Prior to Closing....................23
Section 5.7. Monthly Financial Statements..............................24
Section 5.8. Notice of Developments....................................24
Section 5.9. Public Announcements......................................24
Section 5.10. Exclusivity..............................................24
ARTICLE 6. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE.......25
Section 6.1. Accuracy of Representations and Performance of Seller.....25
Section 6.2. Absence of Certain Litigation.............................25
Section 6.3. Escrow Agreement..........................................25
Section 6.4. Confidentiality and Non-Competition Agreements............25
Section 6.5. Leases and Subleases of Leased and Owned Premises.........25
Section 6.6. Third Party Consents......................................26
Section 6.7. Corporate Approval........................................26
Section 6.8. Encumbrances..............................................26
</TABLE>

<PAGE>

TABLE OF CONTENTS
(Continued)

<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 6.9. No Material Adverse Change................................26
Section 6.10. Trademark Assignment.....................................26
Section 6.11. Instruments of Conveyance and Transfer...................27
Section 6.12. Conversion and Removal...................................27
Section 6.13. Opinion of Seller's Counsel..............................27
Section 6.14. Divided Sublease Space...................................27
Section 6.15. Certificates, Etc........................................27
Section 6.16. Further Documents........................................27
Section 6.17. Non-Disturbance and Attornment Agreements................27
ARTICLE 7. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER...............28
Section 7.1. Accuracy of Representations and Performance of Conditions.28
Section 7.2. Corporate Approval........................................28
Section 7.3. Absence of Certain Litigation.............................28
Section 7.4. Third Party Consents......................................28
Section 7.5. Escrow Agreement..........................................29
Section 7.6. Leases and Subleases of Leased and Owned Premises.........29
Section 7.7. Further Documents.........................................29
Section 7.8. Trademark Assignment......................................29
ARTICLE 8. THE CLOSING................................................29
Section 8.1. Closing and Closing Provisions............................29
Section 8.2. Deliveries by Seller and Stockholder......................30
Section 8.3. Deliveries by Buyer.......................................30
ARTICLE 9. POST-CLOSING MATTERS.......................................30
Section 9.1. Records of the Business...................................30
Section 9.2. Employees.................................................30
Section 9.3. Transitional Employee Services............................31
Section 9.4. Reasonable Efforts and Cooperation........................31
ARTICLE 10. TERMINATION................................................32
Section 10.1. Termination of Agreement.................................32
Section 10.2. Effect of Termination....................................32
ARTICLE 11. INDEMNIFICATION............................................32
Section 11.1. Survival.................................................32
Section 11.2. Indemnification..........................................33
Section 11.3. Limitation of Liability; Escrow Amount...................34
Section 11.4. Notice of Claims.........................................35
Section 11.5. Defense of Third Party Claims............................35
Section 11.6. Exclusive Remedy.........................................36
ARTICLE 12. MISCELLANEOUS PROVISIONS...................................36
Section 12.1. Commissions..............................................36
Section 12.2. Expenses.................................................36
Section 12.3. Headings; Schedules......................................36
Section 12.4. Counterparts.............................................37
Section 12.5. Rights of Parties........................................37
</TABLE>
iii

<PAGE>

TABLE OF CONTENTS
(Continued)

<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 12.6. Assignment...............................................37
Section 12.7. Compliance with Bulk Sales Law...........................37
Section 12.8. Notices..................................................37
Section 12.9. Applicable Law; Jurisdiction and Remedies................38
Section 12.10. Additional Instruments and Assistance...................39
Section 12.11. Severability............................................39
Section 12.12. Pronouns and Terms......................................39
Section 12.13. Entire Agreement, Amendments and Waivers................39
Section 12.14. Construction............................................39
</TABLE>

<PAGE>

[The following schedules and exhibits have been omitted and will be
supplementally filed with the Commission upon request.]

SCHEDULES

<S> <C>
1.11 Excluded Assets
1.15 Basis for Knowledge
1.16 Leases
1.21 Real Property
2.2(c)(i) Assumed Affiliate Contracts
2.2(c)(ii) Specifically Excluded Contracts
2.2(d) Initial Purchase Price Adjustments
2.3 Allocation of Purchase Price
3.4 Governmental Authorizations
3.5 Encumbrances; Vehicle and Equipment Leases; Excluded Useful Assets
3.6(a) Material Contracts
3.6(c) Significant Customers
3.7 Taxes
3.8 Litigation
3.9 Compliance with Laws/Permits
3.10 Environmental Matters
3.11 Real Property
3.11(a) Owned Premises
3.11(b) Leased Premises
3.13 Financial Statements
3.14 ERISA
3.15 Changes in Business
3.17 Employees
3.18 Intellectual Property Rights
3.20 Transactions with Affiliates
3.21 Records Services
3.22 Extraordinary events
3.24 Adverse Restrictions
4.5 Approvals and Third Party Consents

EXHIBITS

6.4 Form of Confidentiality and Non-Competition Agreement
6.5(a)(i)(A) Form of Lease Assignments
6.5(a)(ii)(A) Form of Sublease Agreements
6.5(b) Form of Lease Agreement
6.5(c) Form of Sublease Agreement for Dallas Location
</TABLE>

<PAGE>

ASSET PURCHASE AND SALE AGREEMENT

THIS AGREEMENT ("Agreement") is made as of the 18th day of February,
2000 by and among Iron Mountain Records Management, Inc., a Delaware corporation
("Buyer"), Data Storage Center, Inc., a Florida corporation, DSC of Florida,
Inc., a Florida corporation, and DSC of Massachusetts, Inc., a Massachusetts
corporation (collectively, "Seller"), and Suddath Van Lines, Inc., a Florida
corporation d/b/a Suddath Relocation Systems (the "Stockholder").

RECITALS

A. Seller is engaged, in the business of providing records storage and
management in the greater metropolitan areas of Atlanta, Georgia; Boston,
Massachusetts; Charlotte, North Carolina; Dallas, Texas; Deerfield Beach,
Gainesville, Jacksonville, Melbourne, Miami, Orlando, Pensacola and St.
Petersburg, Florida; Los Angeles, California; Richmond, Virginia; and Waldorf,
Maryland under the trade name "Data Storage Center."

B. Buyer desires to purchase, and Seller desires to sell, substantially
all the assets of the Business (as hereinafter defined) on the terms and subject
to the conditions contained in this Agreement.

C. The Stockholder, which directly or indirectly owns 100% of the
issued and outstanding stock of Seller, joins in this Agreement to confirm
certain representations, warranties and agreements of Seller herein and to
indemnify Buyer in connection with certain matters.

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

ARTICLE 1.

DEFINITIONS

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

Section 1.1. AFFILIATE. The term "Affiliate" shall mean, with respect
to any party hereto, (a) any individual or entity at the time directly or
indirectly controlling, controlled by or under direct or indirect common control
with such party, (b) any general partner, executive officer or director of such
party, and (c) when used with respect to an individual, shall include any member
of such individual's immediate family or a family trust.

Section 1.2. AGREEMENT. The term "Agreement" shall mean all or any part
of this Agreement, including all schedules, exhibits, and appendices, as any of
the foregoing may be amended, modified or supplemented in writing from time to
time.

Section 1.3. BUSINESS. The term "Business" shall mean the records
management and records storage businesses conducted by Seller in the greater
metropolitan areas of Atlanta,

<PAGE>

Georgia; Boston, Massachusetts; Charlotte, North Carolina; Dallas, Texas;
Deerfield Beach, Gainesville, Jacksonville, Melbourne, Miami, Orlando and St.
Petersburg, Florida; Los Angeles, California; Richmond, Virginia; and Waldorf,
Maryland under the trade name "Data Storage Center" (it being understood that
such Business does not include the moving and storage business of Seller's
Affiliates or any records management and storage businesses conducted by Seller
in the greater metropolitan area of Pensacola, Florida).

Section 1.4. CHARTER DOCUMENTS. The term "Charter Documents" shall
mean, with respect to any party hereto its charter or articles of incorporation,
its by-laws and all shareholder agreements, voting trusts and similar
arrangements applicable to any of its capital stock.

Section 1.5. CLOSING. The term "Closing" shall mean the occasion upon
which the transactions contemplated by this Agreement are carried out by the
delivery of documents, payment of funds and other actions contemplated herein,
as described in Article 8.

Section 1.6. CLOSING DATE. The term "Closing Date" shall mean May 1,
2000, unless the conditions to closing in Articles 6 and 7 hereof have not been
satisfied or waived on or before such date (other than those which require
delivery of opinions or other documents at closing), in which case the Closing
Date shall be on the third business day after the last of such conditions is
satisfied or waived (other than those which require delivery of opinions or
other documents at closing), or such other date as the parties may agree.

Section 1.7. CONTRACT AND CONTRACTUAL OBLIGATION. The terms "Contract"
and "Contractual Obligation" shall mean any term, condition, provision,
representation, warranty, agreement, covenant, undertaking, commitment,
indemnity or other obligation which is outstanding or existing under any
instrument, contract, lease or other contractual undertaking, whether written or
oral, to which Seller or by which it or any of the Business is subject or its
property or assets is bound.

Section 1.8. EFFECTIVE TIME. The term "Effective Time" shall mean 12:01
a.m. eastern standard time on the Closing Date.

Section 1.9. ENCUMBRANCES. The term "Encumbrances" shall mean any and
all encumbrances, mortgages, security interests, liens, Taxes, claims,
liabilities, options, commitments, charges, restrictions or other obligations of
whatsoever kind, quantity or nature, whether accrued, absolute, contingent or
otherwise, which affect title to the Subject Assets.

Section 1.10. EVENT. The term "Event" shall mean the existence or
occurrence of any act, action, activity, circumstance, condition, event, fact,
failure to act, omission, incident or practice, or any set or combination of any
of the foregoing

Section 1.11. EXCLUDED ASSETS. The term "Excluded Assets" shall mean
(i) all cash and cash equivalents of Seller as determined in accordance with
GAAP, (ii) those assets of Seller used exclusively in connection with Seller's
moving and storage business, (iii) those assets of Seller principally devoted,
as of June 30, 1999, to the operation of its records management and storage
business in the greater metropolitan area of Pensacola, Florida, (iv) all real
property, buildings and improvements of Seller (subject to any leasehold
interests to be granted, assigned

2
<PAGE>

or demised pursuant to the terms of this Agreement), (v) all rights and
interests of Seller in, and claims of Seller now or hereafter existing under,
any insurance policies of Seller maintained in connection with the operation of
the Business and Seller's records management and storage business in the greater
metropolitan area of Pensacola, Florida, (vi) any rights and claims arising in
connection with or otherwise related to an Excluded Liability, and (vii) those
assets used in connection with or useful to the Business that are set forth on

Schedule 1.11 hereof.

Section 1.12. GAAP. The term "GAAP" shall mean generally accepted
accounting principles in the United States.

Section 1.13. HSR ACT. The term "HSR Act" shall mean the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Section 1.14. IMPROVEMENTS. The term "Improvements" shall mean all
buildings, fixtures, walls, fences, landscaping and other structures and
improvements situated on, affixed or appurtenant to the Real Property.

Section 1.15. KNOWLEDGE. The term "Knowledge" or the phrases "to the
knowledge of" or "to the best of Seller's knowledge," when used in reference to
Seller or Stockholder, or both, shall mean (except as otherwise stated herein)
matters actually known by James Spinney, Barry Vaughn, Robert Price, Michael
Demont, Stephen Suddath and A. Quinn Bell, after inquiry of the General Managers
of the Business. For purposes of this Section 1.15, the term "inquiry" shall
mean the taking of only those actions set forth on Schedule 1.15.

Section 1.16. LEASES. The term "Leases" shall mean the lease agreements
entered into by Seller with regard to the Leased Premises and listed on Schedule
1.16 hereto, including all of Seller's rights under such lease agreements.

Section 1.17. LEASED PREMISES. The term "Leased Premises" shall mean
the buildings and improvements and land parcels on which they are located, that
are leased by Seller pursuant to a Lease, and all other rights of Seller under
any such Lease.

Section 1.18. MATERIAL CONTRACT. The term "Material Contract" shall
mean, with respect to the Business, any Contract that (a) was not entered into
in the ordinary course of business, (b) was entered into in the ordinary course
of business that (i) involved the purchase, sale or lease of goods or materials,
or purchase of services, aggregating more than $100,000 during any one of the
last three fiscal years, or (ii) is not terminable on sixty (60) days or less
notice without penalty or other payment, (c) involves a capitalized lease
obligation or indebtedness for borrowed money, (d) is or otherwise constitutes a
written agency, broker, dealer, license, distributorship, sales representative
or similar written agreement, (e) accounted for more than three percent (3%) of
the revenues of the Business in any one of the last three fiscal years or is
likely to account for more than three percent (3%) of the revenues of the
Business during fiscal year 1999, (f) is a joint venture or similar Contract,
(g) is a non-disclosure or confidentiality agreement (other than those entered
into in the ordinary course of business with customers, suppliers and
employees), (h) constitutes or contains a power of attorney, or (i) prohibits
Seller from freely engaging in any business or competing anywhere in the world.

3
<PAGE>

Section 1.19. OWNED PREMISES. The term "Owned Premises" shall mean,
collectively, all of the Real Property and the Improvements.

Section 1.20. PERMITTED ENCUMBRANCES. The term "Permitted Encumbrances"
shall mean (a) liens for Taxes, assessments and governmental charges with
respect to the Subject Assets not yet due and payable; (b) applicable zoning
regulations and ordinances provided the same do not prohibit or impair in any
material respect use of the Owned Premises or Leased Premises as currently
operated and constructed; and (c) any other non-monetary encumbrances that do
not impair marketability and do not materially interfere with the use of the
Subject Assets or the Business as currently operated and constructed.

Section 1.21. REAL PROPERTY. The term "Real Property" shall mean the
real property owned by Seller and described on Schedule 1.21 attached hereto,
together with all easements, rights of way, privileges, licenses and
appurtenances which Seller may now own or hereafter acquire with respect
thereto.

Section 1.22. SELLER ACCOUNTS RECEIVABLE. The term "Seller Accounts
Receivable" shall mean Seller's billed and unbilled accounts receivable, net of
allowances for doubtful accounts in accordance with GAAP, in connection with the
Business which (a) were generated in the ordinary course of business and
represent fully completed bona fide transactions that require no further act on
the part of Seller, (b) are not subject to any claim or counterclaim, setoff or
deduction, and (c) represent valid obligations owing to Seller by account
debtors.

Section 1.23. SUBJECT ASSETS. The term "Subject Assets" shall mean all
of those assets and properties of Seller used, useful to or held by Seller in
the operation of the Business including, without limitation, all racking,
shelving, warehouse equipment, owned and leased vehicles, office equipment,
telephone systems, security systems, computers, computer programs (including
data security inventory software), customer Contracts, deposits, the right to
use the name "Data Storage Center," non-competition and confidentiality
agreements obtained by Seller for the benefit of the Business, accounts
receivable and security deposits; PROVIDED, HOWEVER, that the Subject Assets
shall not include the Excluded Assets.

Section 1.24. TAXES. The term "Taxes" shall mean any and all taxes,
sums or amounts assessed or assessable, levied and due by any federal, state or
county or other local governmental authority or agency, including without
limitation, real and personal property taxes, income taxes, whether measured by
gross or net income or profit, franchise, excise, sales and use taxes, employee
withholding, social security, unemployment taxes and any other taxes required to
be paid by Seller, including interest and penalties in respect thereof whether
disputed or not, and whether accrued, contingent, due, absolute, deferred,
unknown or other, together with any and all penalties, interests and additions
to all such taxes, sums or amounts.

Section 1.25. OTHER DEFINITIONS. In addition to the foregoing, the
following terms have the meanings given them in the following sections:

TERM: SECTION:
---- -------
Bonus 9.3
Buyer's Documents 4.2

4
<PAGE>

Buyer Indemnified Parties 11.2(a)
CERCLA 3.10
COBRA 9.2(b)
Code 3.14(a)
Collateral Documents 11.1
Confidentiality and Non-Competition Agreements 6.4
Dispute Notice 2.4
Environmental Laws and Regulations 3.10
ERISA 3.14(a)
ERISA Affiliate 3.14(a)
Escrow Agent 6.3
Escrow Agreement 6.3
Escrow Amount 6.3
Escrow Deposit 2.2(b)
Escrow Period 11.1
Excluded Liabilities 2.2(c)(ii)
Enforceability Limitations 3.2
FICA 9.2(c)
Final Adjustment Statement 2.4
Financial Statements 3.13
FUTA 9.2(c)
IMI 4.5
Indemnity Period 11.1
Initial Adjustment Statement 2.2(d)
Intellectual Property 3.18
Loss and Expense 11.2(a)
Neutral Auditor 2.4
Non-Competition Parties 2.2(b)
Plans 3.14(a)
Purchase Price 2.2(a)
Representatives 5.2(a)
Resolution Period 2.4
Seller's Documents 3.2
Seller Employees 3.17
Seller Indemnified Parties 11.2(b)
Settlement Proposal 11.5
Transactions 5.5(a)

ARTICLE 2.
SALE AND PURCHASE OF SUBJECT ASSETS

Section 2.1. SALE AND TRANSFER. Subject to the terms and conditions set
forth in this Agreement, Seller shall sell, convey, transfer, assign and deliver
to Buyer, and Buyer shall purchase and receive from Seller at the Closing, free
and clear of all Encumbrances (other than Permitted Encumbrances), all of the
Subject Assets.

5
<PAGE>

Section 2.2. PURCHASE PRICE; ASSUMPTION OF CERTAIN OBLIGATIONS.

(a) PURCHASE PRICE. The purchase price to be paid by Buyer for all
the Subject Assets and the Confidentiality and Non-Competition Agreements (the
"Purchase Price") shall be Fifty-Four Million Dollars ($54,000,000), subject to
adjustment as provided in Sections 2.2(d), 2.4, 6.3, and 7.5.

(b) PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable at
the Closing by wire transfer of immediately available funds to Seller and to
those individuals entering into Confidentiality and Non-Competition Agreements
(the "Non-Competition Parties") pursuant to Sections 6.4 to such account as such
parties shall designate in writing not less than two business days prior to the
Closing Date. As described in Sections 6.3 and 7.5, a portion of the Purchase
Price shall be funded by Buyer's delivery of $2,700,000 (the "Escrow Deposit")
to the Escrow Agent at the Closing.

In the event that Seller and the Non-Competition Parties cannot agree
on the allocation of Purchase Price to the Confidentiality and Non-Competition
Agreements, Buyer may at Closing (i) deposit ten percent (10%) of the Purchase
Price with the Escrow Agent, to be held in escrow on behalf of the Seller and
the Non-Competition Parties and released from escrow as mutually agreed by and
among the Seller and the Non-Competition Parties, and (b) pay the remainder of
the Purchase Price to the Seller, which together shall constitute full
satisfaction of Buyer's obligations under this Agreement to pay the Purchase
Price in exchange for the Subject Assets and the Confidentiality and
Non-Competition Agreements.

(i) Buyer shall assume no obligations or liabilities of Seller,
except that Buyer shall assume and perform the following:

(a) all post-Effective Time obligations of Seller in
respect of Seller's Contracts and arrangements with its customers providing for
storage of records which Seller has entered into in the ordinary course of
business, including, but not limited to such obligations for which Seller has
received payment prior to Closing;

(b) all post-Effective Time obligations of Seller under (i)
the Leases assumed pursuant to Sections 6.5 and 7.6 (and the subleases entered
into pursuant to such Sections, to the extent that Seller's post-Effective Time
obligations are expressly assumed by Buyer under such subleases), provided that,
the landlord under each such Lease shall have consented to the assignment of
Seller's obligations thereunder to Buyer, and (ii) the Contracts listed on
Schedule 2.2(c)(i) hereto; and

(c) all post-Effective Time obligations of Seller under
Contracts for goods or services to be supplied to the Business after the
Closing, provided that such Contracts do not require the payment of more than
$10,000 per annum and can be canceled by Buyer on not more than 60 days' notice.

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(ii) Buyer shall not assume or become obligated to perform
any debt, liability or obligation of Seller relating to the ownership or
operation of the Subject Assets and the conduct of the Business prior to the
Effective Time or any obligations and liabilities of Seller relating to Events
occurring or existing prior to the Effective Time (collectively, the "Excluded
Liabilities"), including without limitation:

(a) Taxes, un-funded pension costs, any employment
arrangement (including without limitation any obligation to any Seller Employee
for severance, employee benefits, workers' compensation, healthcare, vacation
time or sick leave), and any of the following to the extent they arise from
Events occurring prior to the Effective Time: products liability, products
warranty, legal actions or other claims, and obligations and liabilities
relating to Environmental Laws and Regulations;

(b) any obligations or liabilities under Seller's
Contracts relating to the period prior to the Effective Time, including, without
limitation, Seller's indebtedness for borrowed money and any capitalized leases;

(d) those required to be disclosed in the disclosure
schedule which are not so disclosed or which, if disclosed, Schedule 2.2(c)(ii)
indicates that such obligation or liability will not be assumed;

(e) any obligation or liability relating to any
Excluded Asset;

(f) any Taxes, fees, expenses or other amounts
required to be paid by Seller pursuant to the provisions of this Agreement or
any Collateral Document; and

(g) any Contract with any Affiliate of Seller, other
than those set forth in Schedule 2.2(c)(ii).

(d) PURCHASE PRICE ADJUSTMENTS. The Purchase Price shall be
initially adjusted as set forth in Schedule 2.2(d) hereto (the "Initial
Adjustment Statement"), which shall be agreed upon by Buyer and Seller no later
than the third (3rd) business day prior to the Closing and which shall reflect
the following, to the extent known or then subject to calculation, as of the
Effective Time:

(i) Buyer shall receive a dollar for dollar credit against
the Purchase Price for any deferred revenue recognized in accordance with GAAP
for which Seller has received payment prior to the Effective Time.

(ii) Buyer shall receive a dollar for dollar credit against
the Purchase Price (a) to the extent that the Seller Accounts Receivable as of
the Effective Time are below $1,560,000, and (b) for any Seller Accounts
Receivable which are outstanding more than one hundred and twenty (120) days as
of the Effective Time. Buyer shall make reasonable commercial efforts to collect
any Seller Accounts Receivable that are deducted from the

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Purchase Price pursuant to clause (b) above, and shall remit any such amounts to
Seller promptly after receipt thereof.

(iii) With respect to ongoing expenses (excluding income
taxes) the billing period for which extends across the Effective Time, Buyer and
Seller shall make adjustments to the Purchase Price as of the Effective Time so
that Seller bears the costs of operating the Business properly accruable under
GAAP in respect of the period prior to the Effective Time and Buyer bears the
cost thereof properly accruable under GAAP in respect of the period commencing
at the Effective Time and thereafter; PROVIDED, HOWEVER, that no purchase price
adjustment shall be made for Seller's failure to accrue lease payments on a
straight line basis in accordance with GAAP.

Section 2.3. ALLOCATION. The Purchase Price shall be allocated among
each of the Subject Assets and to the Confidentiality and Non-Competition
Agreements in the manner set forth in a schedule, which shall be agreed upon by
Buyer and Seller no later than the tenth (10th) business day prior to the
Closing Date. In the event that Seller and the Non-Competition Parties cannot
agree on the allocation of Purchase Price to the Confidentiality and
Non-Competition Agreements on or before the tenth (10th) business day prior to
the Closing Date, the amount allocated to the Confidentiality and
Non-Competition Agreements shall be in accordance with Section 2.2(b).

Section 2.4. POST-CLOSING ADJUSTMENT. Within ninety (90) days after the
Closing Date, Buyer shall (a) review and adjust the Initial Adjustment Statement
(as adjusted, the "Final Adjustment Statement") to reflect any changes from the
adjustments shown on the Initial Adjustment Statement that are necessary to
properly reflect the items set forth in Sections 2.2(d)(i),(ii) and (iii), and
(b) deliver such Final Adjustment Statement to Seller. Seller shall have thirty
(30) days after its receipt to review the Final Adjustment Statement, together
with the work papers used in the preparation thereof. Unless Seller delivers
written notice to Buyer on or before the 30th day after Seller's receipt of the
Final Adjustment Statement, specifying in reasonable detail all disputed items
and the basis therefor (a "Dispute Notice"), Seller shall be deemed to have
accepted and agreed to the Final Adjustment Statement. Thereafter, Buyer or
Seller, as the case may be, shall promptly remit to the other any amounts owed
as reflected on the Final Adjustment Statement.

If Seller so notifies Buyer of its objection to the Final Adjustment
Statement, Seller and Buyer shall, within thirty (30) days following such
Dispute Notice (the "Resolution Period"), attempt in good faith to resolve their
differences and any resolution by them as to any disputed amounts shall be
final, binding and conclusive. Any dispute with regard to the final Purchase
Price adjustment that is not resolved during the Resolution Period shall be
submitted to an independent public accounting firm acceptable to both parties
(the "Neutral Auditor"). Each party agrees to execute, if requested by the
Neutral Auditor, a reasonable engagement letter. All fees and expenses relating
to the work, if any, to be performed by the Neutral Auditor shall be borne
equally by the Buyer and Seller. The Neutral Auditor shall act as an arbitrator
to determine, based solely on presentations by the Buyer and Seller only those
issues still in dispute. In no event may the Neutral Auditor consider any
issues, amounts or matters not disputed under Section 2.2(d). The Neutral
Auditor's determination shall be made within sixty

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(60) days of its selection, shall be set forth in a written statement delivered
to the Buyer and Seller and shall be final, binding, conclusive and
non-appealable by the parties.

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
OF SELLER AND STOCKHOLDER

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

Section 3.1. ORGANIZATION AND GOOD STANDING. Each Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of either Florida or Massachusetts, as applicable, and has all
requisite corporate power and authority to own, operate, sell and lease its
properties and to carry on its business as presently conducted. Seller has all
requisite corporate power and authority to execute and deliver, and perform its
obligations under, this Agreement. Seller is qualified to do business as a
foreign corporation in each jurisdiction where failure to so qualify would have
a material adverse impact on the Subject Assets or the Business.

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

Section 3.3. COMPLIANCE WITH OTHER INSTRUMENTS. Neither the execution
and delivery by Seller or Stockholder of this Agreement and the Seller's
Documents, nor the consummation by Seller or Stockholder of the transactions
contemplated hereby and thereby, will, with or without the giving of notice or
passage of time, or both, (i) conflict with, or result in a breach or violation
of, or constitute a default under any Charter Documents or applicable law or
(ii) except for any records storage Contracts with customers of Seller that are
not assignable by their terms, as to which no representation is made under this
Section 3.3, conflict with or violate, breach, or constitute a default under, or
permit the termination or acceleration of maturity of, or result in the
imposition of any Encumbrance upon any Subject Asset pursuant to any provision
of, any note, bond, indenture, mortgage, deed of trust, evidence of indebtedness
or other Contract or any judgment, order, injunction or decree by which Seller
or Stockholder is bound, to which either of them is a party, or to which the
Subject Assets are subject; nor is the effectiveness or enforceability of this
Agreement or such other documents adversely affected by any provision of the
Charter Documents of Seller.

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Section 3.4. NO GOVERNMENTAL OR OTHER AUTHORIZATION REQUIRED. Except
for any consents or authorizations required under Seller's records storage
Contracts with its customers, as to which no representation is made under this
Section 3.4, no authorization, consent or approval of, or filing with, any
governmental agency, authority or other body or any other third persons will be
required in connection with Seller's or Stockholder's execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby other
than (i) pursuant to the HSR Act, and (ii) as set forth in Schedule 3.4.

Section 3.5. TITLE; JUDICIAL ORDERS; SUFFICIENCY. Seller has, or at
Closing will have, good and marketable title to all the Subject Assets, free and
clear of all Encumbrances except as set forth on Schedule 3.5, which Schedule
identifies leases for vehicles and equipment (if any) as well as Encumbrances.
All Encumbrances (other than Permitted Encumbrances and except for liabilities
and obligations to be assumed by Buyer pursuant to Section 2.2(c)(i)) shall be
satisfied and discharged at or before Closing. Seller is not a party to, nor are
the Subject Assets subject to, any judgment, judicial order, writ, injunction or
decree that adversely affects the Subject Assets or the use thereof by Seller.
The Subject Assets include all assets used, useful to or held by Seller in the
operation of the Business, except as set forth on Schedule 3.5.

Section 3.6. CONTRACTS AND OTHER INTERESTS.

(a) Listed on Schedule 3.6(a) are all Material Contracts (including
all customer contracts which constitute Material Contracts) relating to the
ownership and operation of the Subject Assets or the conduct of Business or to
which the Subject Assets are subject. Subject to the Enforceability Limitations
and except as otherwise set forth on Schedule 3.6(a), all such Material
Contracts are in full force and effect, valid and enforceable in accordance with
their respective terms against Seller and, to Seller's knowledge, against the
other parties thereto; and there are no existing material defaults of Seller or,
to Seller's knowledge, the other party thereto, or events of default that, with
the giving of notice or lapse of time, or both, would constitute material
defaults of Seller or the other party thereto under any such Contracts, nor are
material amendments pending with respect to any such Contracts.

(b) Seller has provided Buyer with copies of (i) the Seller's records
storage contracts with its twenty-five (25) largest customers as measured by
revenue generation during the year ended December 31, 1999 for each geographic
market serviced by the Business, (ii) every records storage contract utilized in
the Business that contains non-standard terms concerning Seller's liability in
the event of the loss or destruction of, or damage to, stored material and (iii)
its standard form of records storage contract.

(c) Schedule 3.6(c) lists Seller's ten largest customers (measured by
storage revenues during the year ended December 31, 1999). Seller has delivered
a copy of each written Contract it has with each such customer to Buyer.

(d) To Seller's knowledge, Seller has no oral agreements with
customers which require Seller to provide storage or services at no charge or at
rates significantly below the average rates for such services set forth in
Seller's written customer contracts, except for immaterial discounts and/or free
services provided as incentives to certain accounts.

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Section 3.7. TAXES. Except as set forth on Schedule 3.7, Seller has
filed all federal, state and local income tax returns, and Seller has filed all
excise or franchise tax returns, real estate and personal property tax returns,
sales and use tax returns and other tax returns (including returns in respect of
withholding and unemployment tax) required to be filed by it and has paid all
taxes owing by it, including any interest and penalties thereon, except taxes
which have not yet accrued or otherwise become due and for which adequate
provision has been made.

Section 3.8. LITIGATION; CLAIMS; DEFAULTS. Except as set forth on
Schedule 3.8, Seller has not been served with any currently effective summons or
complaint and there is no action or suit, equitable or legal, to which Seller is
a party, nor any administrative, arbitration or other proceeding pending or, to
Seller's knowledge, threatened against Seller in respect of the Subject Assets
or the Business, nor, to the Seller's knowledge, is there any valid basis
therefor. Except as set forth on Schedule 3.8, during the past two (2) years
Seller has not received any written assertions from customers of the Business to
the effect that their materials stored with Seller have been lost, damaged or
inappropriately destroyed or that such customers are being or have been billed
inaccurately for storage of materials or records. Seller is not in default with
respect to any currently effective judgment, order, writ, injunction, decree,
demand or assessment issued by any court or any federal, state, municipal or
other governmental agency, board, commission, bureau, instrumentality or
department that relates to Seller's operation of the Business or the Subject
Assets. Except as set forth on Schedule 3.8, to Seller's knowledge, Seller is
not under investigation with respect to any violation of any provision of any
federal, state, municipal or other law or administrative rule or regulation with
respect to the Subject Assets or the Business.

Section 3.9. COMPLIANCE WITH LAWS. Except as set forth on Schedule 3.9,
and except with respect to fire sprinkler and fire suppression systems (as to
which Seller represents that it has received no notice of non-compliance from
any authority), (i) Seller has complied, and through the Closing will continue
to comply, in all material respects with federal, state and local laws, rules
and regulations applicable to the Business and the Subject Assets, and (ii)
Seller possesses such certificates, authorizations or permits issued by the
appropriate local, state or federal regulatory agencies or bodies as are
necessary to conduct the Business in all material respects; and Seller has not
received any written notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit. Schedule 3.9 sets
forth a list of all occupancy, fire inspection and other certificates,
authorities and permits presently held by Seller with respect to the Business.

Section 3.10. CERTAIN ENVIRONMENTAL MATTERS. Except as set forth on
Schedule 3.10:

(a) Seller is operating and has operated the Business and the
Owned and Leased Premises in material compliance with all applicable local,
state and federal environmental, health and safety laws, statutes,
regulations and ordinances relating to or otherwise imposing liability or
standards of conduct concerning pollution, protection of the environment or
human health and safety, including, but not limited to, the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. Sections
9601 ET seq. ("CERCLA"), the Resource Conservation and Recovery Act, 42
U.S.C. Sections 6901 ET seq., the Clean Water Act, 33 U.S.C. Sections 1251 et
seq., and, to the extent they are applicable to any particular portion of the
Business or the Owned or Leased Premises, the environmental laws, statutes
and regulations of the States of California, Florida, Georgia, Maryland,
North Carolina

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and Texas and the Commonwealths of Massachusetts and Virginia and any other
state in which the Business operates as each such law, statute, regulation or
ordinance has been amended from time to time ("Environmental Laws and
Regulations");

(b) to Seller's knowledge, Seller has not accepted for storage, and
does not store, any nitrate film or any hazardous substance or hazardous
material in the Owned or Leased Premises except for de-minimis amounts of items
such as cleaning supplies used or stored in the ordinary course of business;

(c) neither Seller nor, to Seller's knowledge, any third party has
ever disposed, released or caused the release from, at, under or onto the Owned
or Leased Premises of an amount of any hazardous substance or hazardous material
into the environment which release or disposal would constitute a material
violation of, require a reporting or notification to any governmental agency
pursuant to, or require investigation or clean-up under, any Environmental Laws
and Regulations. To Seller's knowledge, no disposal, release or burial of any
hazardous substance or hazardous material has occurred at any facility or site
to which hazardous substances or hazardous materials from or generated by the
Business may have been taken at any time in the past;

(d) To Seller's knowledge it is not a potentially responsible party
under, nor has it received any notice that it is a potentially responsible
party, notice of responsibility, notice of violation or request for information
from any government agency or other person under any Environmental Laws and
Regulations with respect to the Business or the Owned or Leased Premises. Seller
does not own, lease, rent or otherwise utilize any underground storage tanks in
connection with the Business, and, to the best of Seller's knowledge, there are
no tanks, containers, cylinders, drums or cans buried, stored or deposited in or
at the Owned or Leased Premises;

(e) neither the Owned or Leased Premises contains any (i) friable
asbestos, (ii) polychlorinated biphenyl (PCB) substances or (iii) waste
petroleum products which would have a material adverse impact on the Subject
Assets or the Business;

(f) Seller will, at least ten (10) days prior to Closing, deliver to
Buyer copies of all environmental surveys in Seller's possession related to the
Owned or Leased Premises; and

(g) for purposes of this Section 3.10, "hazardous substance,"
"release" and "environment" shall have the same meanings as such terms are
defined by Section 101 of CERCLA, 42 U.S.C. Section 9601, and "hazardous
material" means any substance (i) the presence of which requires
notification, removal or remediation under any Environmental Laws and
Regulations or (ii) which is defined as a "hazardous waste," "hazardous
material," "dangerous waste," "toxic substance" or similar term under any
Environmental Laws and Regulations, including without limitation, gasoline,
diesel fuel, and other petroleum products.

Section 3.11. REAL PROPERTY. Except as set forth on Schedule 3.11, the
Leased Premises and the Owned Premises constitute all of the real property that
Seller owns or leases in connection with the Business.

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(a) With respect to the Owned Premises, except as disclosed in
Schedule 3.11(a):

(i) Seller has good record and marketable title to the Owned
Premises free and clear of all liens and other Encumbrances (other than
Permitted Encumbrances). There are no parties (other than Seller) in or entitled
to possession of any of the Owned Premises;

(ii) (A) the Improvements are located within the boundary lines
of the described parcels of land, are not in violation of applicable setback
requirements, zoning laws and ordinances (and none of the properties or
buildings or improvements thereon are subject to "permitted non-conforming use"
or "permitted non-conforming structure" classifications), and Seller has
received no written notice of any threatened request, application, proceeding,
plan or study which would materially adversely affect the present zoning of the
Owned Premises or which would modify or realign any adjacent street or highway,
(B) the Improvements do not encroach on any easement which may burden the land,
(C) none of the Owned Premises serve any adjoining property for any purpose that
has a material adverse effect on that property or the portion of the Business
conducted there, and (D) none of the Owned Premises are located within any flood
plain or subject to any similar type restriction for which any permits or
licenses necessary and material to the use thereof have not been obtained, and
Seller has received no contrary notice as to any such matters;

(iii) except as provided in the Collateral Documents, there are
no outstanding options or rights of first refusal to purchase any of the Owned
Premises, or any portion thereof or interest therein;

(iv) to Seller's knowledge, other than the amounts disclosed by
tax bills, no taxes or special assessments of any kind (special, bond or
otherwise) are or have been levied with respect to any of the Owned Premises, or
any portion thereof, which are outstanding or unpaid, other than amounts not yet
due and payable or, if due and payable, not yet delinquent, and, to Seller's
knowledge, no such levies are pending or threatened;

(v) Seller has not received written notice from any insurance
carrier of defects or inadequacies in any of the Owned Premises which, if
uncorrected, would result in a termination of insurance coverage or an increase
in the premiums charged therefor; and

(vi) all facilities located on the Owned Premises are supplied
with utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer, and
storm sewer, all of which services are adequate, are in material conformity with
all applicable laws, ordinances, rules, and regulations and are provided via
public roads or via permanent, irrevocable, appurtenant easements benefiting the
parcel of real property, and to Seller's knowledge, no fact, condition or
proceeding exists which would result in the termination or impairment of the
furnishing of such utilities to the Owned Premises.

(b) With respect to the Leased Premises, except as disclosed in
Schedule 3.11(b):

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<PAGE>

(i) Seller has delivered to Buyer a complete and correct copy of
the Leases related to such Leased Premises;

(ii) each of the Leases is legal, valid and binding upon Seller
(and to its knowledge, the Lessor), enforceable (subject to the Enforceability
Limits), and in full force and effect;

(iii) upon obtaining the consents described in Schedule 3.4, the
Leases (including any option to extend, expand or purchase, and any right of
first refusal or right of first offer) will continue to be legal, valid,
binding, enforceable, and in full force and effect to the extent represented in
the immediately preceding subparagraph (ii) on identical terms following the
consummation of the transactions contemplated hereby, except to the extent they
are modified by the Collateral Documents;

(iv) Seller is not and, to Seller's knowledge, no other party to
any Lease is, in breach or default of any Lease, and no event has occurred
which, with notice or lapse of time, would constitute a breach or default or
permit termination, modification, or acceleration thereunder;

(v) to Seller's knowledge, no party to any of the Leases has
repudiated any provision thereof;

(vi) to Seller's knowledge, there are no disputes, oral
agreements or forbearance programs in effect as to the Leases;

(vii) Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or Encumbered any such leasehold interest;

(viii) to the best of Seller's knowledge, all facilities leased
thereunder (including alterations constructed by Seller and shelving installed
by Seller) have received all approvals of governmental authorities (including
licenses and permits) required in connection with the operation thereof and have
been operated and maintained in accordance with applicable laws, rules, and
regulations; and

(ix) all facilities leased thereunder are supplied with utilities
and other services necessary for the operation of said facilities.

Section 3.12. CONDITION OF SUBJECT ASSETS. Except for any immaterial
exceptions, all the tangible Subject Assets are at present, and will be as of
the Effective Time, in good operating condition, normal wear and tear excepted,
and Seller has not received written notice of any violation of the Occupational
Safety and Health Act with respect thereto, or rules and regulations issued
thereunder with respect to the Business or the Subject Assets.

Section 3.13. FINANCIAL STATEMENTS. Seller has heretofore made
available to Buyer the financial statements listed in Schedule 3.13 (the
"Financial Statements"). The Financial Statements, including in each case the
notes thereto, have been prepared in accordance with GAAP, except as disclosed
on Schedule 3.13, applied on a consistent basis throughout the

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<PAGE>

periods covered thereby, except as otherwise noted therein, are true, accurate
and complete in all material respects, and fairly present the financial
condition and the results of operations and cash flow of the Business (together
with the results of operation of Seller's records storage business in the
greater metropolitan area of Pensacola, Florida, and the effect of Seller's
ownership of the Owned Premises), on the bases therein stated, as of the
respective dates thereof, and for the respective periods covered thereby
subject, in the case of unaudited financial statements, to normal nonmaterial
year-end audit adjustments and accruals.

Section 3.14. ERISA PLANS.

(a) Schedule 3.14 sets forth a complete and correct list of each Plan
that provides or may provide benefits in respect of any employee or former
employee of the Seller or an ERISA Affiliate (or the beneficiaries or dependents
of any such employee or former employee of the Seller or an ERISA Affiliate) who
works or worked in the operations of the Business to the extent such person has
any present or future right to benefits under any Plan or under which Seller or
an ERISA Affiliate has any present or future liability with respect to such
person. For purposes of this Agreement, the term "Plan" shall include each
"employee benefit plan," as such term is defined in section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and each bonus,
incentive or deferred compensation, severance, termination, retention, change of
control, stock option, stock appreciation, stock purchase, phantom stock or
other equity-based, performance or other employee or retiree benefit or
compensation plan, program, arrangement, agreement, policy or understanding,
whether written or unwritten. For purposes of this Agreement, the term "ERISA
Affiliate" shall include any organization that is or has ever been treated as a
single employer with Seller under Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code").

(b) With respect to each Plan, Seller has delivered or will upon
request deliver to Buyer a true and complete copy of such plan document,
including any amendments, and a copy of any related trust agreement, the most
recent summary plan description, together with any summaries of material
modifications, and the most recently filed Form 5500, as applicable, and other
material related documents.

(c) Except as set forth on Schedule 3.14, neither Seller nor any
ERISA Affiliate maintains or has ever maintained a "defined benefit plan" within
the meaning of Section 3(35) of ERISA or Section 414(j) of the Code or is a
party to a multiemployer plan within the meaning of Sections 3(37) or 4001(a)(3)
of ERISA or Section 414(f) of the Code.

Section 3.15. ABSENCE OF CERTAIN CHANGES. Except as disclosed on
Schedule 3.15, since December 31, 1998, none of Seller's largest twenty-five
(25) customers measured by revenue generation during the year ended December 31,
1999 in each geographic market serviced by the Business has terminated or
indicated in writing (or, to the best of Seller's knowledge, orally) an
intention to terminate its business with, or substantially reduce the volume of
its business with, Seller. Except as otherwise stated in Schedule 3.15, to
Seller's knowledge, Seller has no customers whose storage business is or has
within 90 days prior to the date of this Agreement been the subject of
competitive bidding procedures.

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<PAGE>

Section 3.16. NO MATERIAL UNDISCLOSED LIABILITIES. Except as described
in this Agreement or reflected in the Financial Statements, (a) there are no
liabilities or obligations of Seller related to the operation of the Business,
whether accrued, absolute or contingent, which in the aggregate are material to
the Business, other than liabilities and obligations that have been incurred in
the ordinary course of business consistent with past practice since December 31,
1998, and (b) to Seller's knowledge, there do not exist any circumstances,
conditions, events or arrangements which may hereafter give rise to any
liabilities of Seller or any successor of Seller, other than the liabilities
which would exist in the ordinary course of business.

Section 3.17. EMPLOYMENT ARRANGEMENTS. Schedule 3.17 lists the name of
all full and part time employees and consultants of Seller (or leased employees
utilized by Seller) who perform services primarily for the Business and sets
forth a brief job description or title and compensation for each such person
(collectively, the "Seller Employees"). Schedule 3.17 also sets forth a list of
all written employment, non-competition and confidentiality agreements with all
Seller Employees. Seller has no obligation or liability, contingent or other,
under any employment arrangement with any Seller Employee, other than (i) those
listed or described in Schedule 3.17, or (ii) those incurred in the ordinary and
usual course of business. Except as described in Schedule 3.17, (A) none of the
Seller Employees is now, or since Seller's organization has been, represented by
any labor union or other employee collective bargaining organization, and Seller
is not, and never has been, a party to any labor or other collective bargaining
agreement with respect to any of the Seller Employees, (B) there are no pending
grievances, disputes or controversies with any union or any other employee or
collective bargaining organization of such employees, or threats of strikes,
work stoppages or slowdowns or any pending demands for collective bargaining by
any such union or other organization, and (C) neither Seller nor any of such
employees is now, or has since its organization been, subject to or involved in
or, to Seller's knowledge, threatened with, any union elections, petitions
therefor or other organizational or recruiting activities, in each case with
respect to the Seller.

Section 3.18. PATENTS, TRADEMARKS, TRADE SECRETS, ETC.

(a) Except for the trade names "DSC Data Storage Centers" and "DSC"
and the designs related thereto and as set forth on Schedule 3.18, Seller has no
trademarks, service marks, trade names, copyrights, computer programs or rights,
patents, licenses or other similar intangible property rights and interests
("Intellectual Property") which it uses in connection with the Business. Except
as set forth on Schedule 3.18, Seller's records adequately document its
ownership of all software listed thereon. Seller has not received written notice
from any third party that its use of the name "Data Storage Center" or any other
Intellectual Property conflicts with the intellectual property rights of any
third party. No person has made or, to the Seller's knowledge, threatened to
make any claims that the operation of the Business is in violation of or
infringes any intellectual property rights of any third party.

(b) Seller has received no written claims challenging its right to
use any trade secrets, customer lists or operating methods required for or
incident to the operation of the Business. To the best of its knowledge, Seller
is not using or in any way making use of any confidential information or trade
secrets of any third party, including without limitation, a former employer of
any present or past employee or Seller.

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Section 3.19. INSURANCE. There is in force, and will be until the
Closing, comprehensive general liability and casualty insurance for the Subject
Assets and the Business which, to Seller's knowledge, is appropriate and
adequate coverage for such assets and operations.

Section 3.20. TRANSACTIONS WITH INTERESTED PERSONS. Except as set forth
on Schedule 3.20, none of Seller, Stockholder or, to Seller's knowledge, any of
the other Affiliate of Seller or Stockholder has a Material Contract with
respect to the Business or is an Affiliate of any customer, competitor or
supplier of the Business, or any organization which has a Material Contract with
the Business (other than Material Contracts with Seller, which shall be
terminated prior to the Closing).

Section 3.21. RECORDS SERVICES AND STORAGE. Except as set forth on
Schedule 3.21;

(a) All items received and stored by Seller on behalf of each of
Seller's customers are held in storage by Seller and are locatable and
accessible without extraordinary effort except for items withdrawn or destroyed
at the respective customer's request;

(b) Seller's invoices to customers are accurate in respect of storage
and services provided except for matters which are immaterial as to each
customer and in the aggregate;

(d) Absent delays attributable to unique circumstances resulting from
significant workload variations, Seller invoices its customers for special
projects, such as purges and re-boxing programs, only with respect to completed
work, and has completed all destructions and other inventory and special-service
projects for which Seller has invoiced customers or for which it has been paid;

(e) Absent delays attributable to unique circumstances resulting from
significant workload variations, Seller logs customer storage materials (both
hard copy and magnetic media) into its computer system within twenty-four (24)
hours after receipt at Seller's premises, and places (i) magnetic media in
permanent storage locations within two (2) days after such receipt, and (ii)
hard-copy media in permanent storage locations within seven (7)days after such
receipt. Subject to immaterial exceptions, all customer storage materials can be
located with the use of Seller's computer system; and

(f) Since December 31, 1998, no customer records in storage have
suffered material damage (including damage from water) or been lost or
improperly destroyed.

Section 3.22. BUSINESS IN ORDINARY COURSE. From September 30, 1999 (or
the most recent balance sheet included in the Financial Statements) until the
date hereof, the Business has been conducted in the ordinary course in
accordance with past practice. Without limiting the generality of the foregoing,
except as set forth on Schedule 3.22, Seller has not, since such date:

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(a) mortgaged, pledged or otherwise Encumbered any of the Subject
Assets (except in the ordinary course of business);

(b) sold, assigned, transferred or waived any material rights with
respect to any part of the Subject Assets (except in the ordinary course of
business);

(c) suffered any material damage, destruction or loss (whether or not
covered by insurance) relating to the Subject Assets or the Business or any
acquisition or taking of material property relating to the Subject Assets or the
Business by any governmental authority;

(d) excluding this Agreement and any documents related thereto,
entered into, amended or terminated any Material Contract relating to the
Subject Assets or the Business, any governmental authorization relating to the
Subject Assets or the Business, any Material Contract or other transaction with
any Affiliate except for terminations in the ordinary course of business,
consistent with prior practice, in accordance with the terms thereof;

(e) entered into or adopted any employee benefit plan or any
employment or severance agreement, or increased in any manner the compensation
or fringe benefits of its officers or employees (except in the ordinary course
of business and consistent with past practice or pursuant to pre-existing
agreements or as required by law);

(f) materially changed its billing, accounts payable, accounts
receivable, collections or other cash management practices relating to the
Business;

(g) materially and adversely changed its building or vehicle
maintenance practices relating to the Business;

(h) entered into any contracts with customers providing for storage
or services at rates substantially lower than the storage and service rates
generally charged by Seller at such time; or

(i) agreed to take any of the foregoing actions.

Section 3.23. NO MATERIAL ADVERSE CHANGE. Since December 31, 1998,
there has been no material adverse change in the Subject Assets (including,
without limitation, loss of or damage to a material amount or part of the
Subject Assets) or the Business (including without limitation the operations,
management, properties or the condition (financial or other), or results of
operation (including without limitation, earnings before interest, taxes,
depreciation and amortization) of the Business), other than possible
industry-wide changes.

Section 3.24. ADVERSE RESTRICTIONS. Except to the extent that customer
service Contracts of Seller included within the Subject Assets or the Business
are not assignable by their terms, to Seller's knowledge, neither it nor any
Subject Asset is a party to or subject to, any applicable law, governmental
license, order, permit or other authorization, Contract, or any other obligation
or restriction of any kind or character, or any aggregation thereof, which
impairs or will impair in any material respect the ability of Seller or, after
the Closing, Buyer to conduct the Business in

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substantially the same manner as it is being conducted as of the date hereof,
except as set forth in Schedule 3.24.

Section 3.25. DISCLOSURE. No representation or warranty made by Seller
or Stockholder in this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement of facts
contained within it not materially misleading.

Section 3.26. BROKERS. Seller has not entered into any Contract,
arrangement or understanding (including any such Contract, arrangement or
understanding with Heritage Capital Group, Inc.) with any person or firm
regarding finder's fees, brokerage or agent's commissions or other like payments
in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby which will result in the
obligation of Buyer to pay any such fees, commissions or other like payments.
Seller shall be solely responsible to pay, and shall indemnify Buyer from any
claims for, any such fees or commissions of Heritage Capital Group, Inc.

Section 3.27. YEAR 2000 COMPLIANCE. The "Year 2000 Problem" (that is,
the risk that computer applications used by Seller may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date on or after December 31, 1999) has not had a material adverse
effect on the Subject Assets or the Business.

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows as of the
date hereof:

Section 4.1. ORGANIZATION AND GOOD STANDING. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and is qualified to do business and in good standing as a
foreign corporation in the States of California, Florida, Georgia, Maryland,
North Carolina and Texas and the Commonwealths of Massachusetts and Virginia.
Buyer possesses all requisite corporate power and authority to own, operate and
lease its properties and carry on its business as presently conducted, and to
execute and deliver, and perform its obligations under, this Agreement.

Section 4.2. AUTHORIZATION. The execution and delivery of this
Agreement and performance by Buyer of its obligations hereunder, and all
transactions contemplated hereby, have been duly and validly authorized by all
necessary corporate action. This Agreement has been, and the other agreements
and documents required to be delivered by Buyer in accordance with the
provisions hereof (the "Buyer's Documents") will be, duly executed and delivered
on behalf of Buyer by duly authorized officers of Buyer; and this Agreement
constitutes, and the Buyer's Documents when executed and delivered will
constitute, the valid and binding obligations of Buyer, enforceable in
accordance with their respective terms, except as enforcement may be limited by
the Enforceability Limitations.

Section 4.3. COMPLIANCE WITH OTHER INSTRUMENTS. Neither the execution
and delivery by Buyer of this Agreement and the Buyer's Documents, nor the
consummation by Buyer of the transactions contemplated hereby and thereby, will,
with or without the giving of notice or

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passage of time, or both, (i) conflict with, or result in a breach or violation
of, or constitute a default under, any Charter Documents or applicable law or
(ii) conflict with or violate, breach, or constitute a default under, or permit
the termination or acceleration of maturity of, or result in the imposition of
any Encumbrance upon any property or asset of Buyer pursuant to any provision
of, any note, bond, indenture, mortgage, deed of trust, evidence of indebtedness
or other Contract or any judgment, order, injunction or decree by which Buyer is
bound or to which the assets of Buyer are subject; nor is the effectiveness or
enforceability of this Agreement or such other documents adversely affected by
any provision of the Charter Documents of Buyer.

Section 4.4. LITIGATION. There is no currently effective summons,
complaint, order, injunction, decree, judgment, writ or assessment, and no
action, suit or proceeding of any kind pending or, to the knowledge of Buyer,
threatened, against Buyer that might interfere with Buyer's ability to
consummate the transactions contemplated hereunder.

Section 4.5. NO GOVERNMENTAL OR OTHER AUTHORIZATION REQUIRED. Except as
required by the HSR Act, filings required of Iron Mountain Incorporated ("IMI"),
the parent of Buyer, under federal and state securities laws, or otherwise set
forth on Schedule 4.5, no authorization or approval of, or filing with, any
governmental agency, authority or other body or any other third persons will be
required in connection with Buyer's execution and delivery of this Agreement and
Buyer's Documents or its consummation of the transactions contemplated hereby
and thereby.

Section 4.6. NO BROKER. Buyer has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Buyer or Seller to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby,
and, except for Seller's arrangement with Heritage Capital Group, Inc., Buyer
has no knowledge of any claim or basis for any claim for payment of any finder's
fees, brokers or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.

Section 4.7. DISCLOSURE. No representation or warranty made by Buyer in
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statement of facts contained within
it not materially misleading.

ARTICLE 5.
PRE-CLOSING AGREEMENTS

Section 5.1. ACCESS TO INFORMATION AND FACILITIES. Seller shall afford
Buyer and its representatives full access during normal business hours to all
facilities, properties, books, accounts, records, contracts and documents of or
relating to the Business in Seller's possession or control, subject to
reasonable requirements that Buyer not interfere with the operations and
activity of the Business. Such access shall include inspections by Buyer and its
representatives of the Owned Premises and the Leased Premises (including,
without limitation, all roofs, electric, mechanical and structural elements, and
HVAC systems), soil analysis and environmental investigations, and examination
of the records of Seller with respect thereto. Except as provided in the second
paragraph of Section 11.2(a) hereof, no investigation pursuant to this Section
5.1

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shall affect any representation or warranty in this Agreement of any party
hereto or any condition to the obligations of the parties hereto.

Section 5.2. CONFIDENTIALITY.

(a) Seller, Stockholder and their Affiliates, on the one hand, and
Buyer and its Affiliates, on the other hand, shall not use or disclose to
others, or permit the use or disclosure of, any and all non-public information
furnished by each to the other (including confidential information transmitted
by each to its representatives, accountants, counsel, advisors or bankers
("Representatives")) in the course of negotiations relating to this Agreement
and the business and financial reviews and investigations referred to in this
Agreement, except to their respective officers, directors, employees and
Representatives who need to know such information (and who will each be subject
to confidentiality as provided herein) in connection with this Agreement.

(b) Each of Buyer, Seller and Stockholder agrees that at no time
shall it or its Representatives use or knowingly permit any other person or
entity to examine, use or derive benefit from any non-public information of the
other without the other's express written consent. None of Buyer, Seller or
Stockholder shall disclose any such non-public information to anyone other than
its Representatives and to those third parties who have a reasonable need for
such information, which third parties have been advised of the confidential
nature of the information and, other than those persons or entities to whom
disclosure is made pursuant to Section 5.2(c), have agreed in writing to be
bound by the terms of this Section 5.2 or a similar confidentiality agreement.
The duty of non-disclosure shall not apply to information which: (i) was in the
public domain at the time it was communicated to Buyer, Seller or Stockholder or
subsequently enters the public domain through no fault of Buyer, Seller or
Stockholder; (ii) Buyer, Seller or Stockholder can prove was already known to
such party at the time of receipt; (iii) was rightfully communicated to Buyer,
Seller or Stockholder free of any obligation of non-disclosure and without
restriction as to use; or (iv) is disclosed by Buyer, Seller or Stockholder
pursuant to judicial order or other compulsion of law, provided that each party
shall give the others prompt notice of any such order and shall comply with any
protective order (or equivalent) imposed on such disclosure.

(c) Notwithstanding the foregoing, (i) Buyer's parent, IMI, shall
have the right to include disclosure regarding the transactions contemplated by
this Agreement in any registration statement, filing or other report which IMI,
Buyer or any of their respective Affiliates files with the Securities and
Exchange Commission or the New York Stock Exchange, including in each case any
financial and other information concerning Seller and the transactions
contemplated hereby, required in connection therewith; (ii) disclosure of such
information may be made to the extent required by judicial or regulatory
process, and reviews by financial institutions which are lenders to either party
so long as such lenders have been advised of the confidential nature of such
information; (iii) such information may be used to the extent necessary as
evidence in or in connection with any pending or threatened litigation relating
to this Agreement or any transaction contemplated hereby; and (iv) Seller may
disclose the existence of this Agreement to customers, landlords, lenders,
employees or others to the extent reasonably necessary for the consummation of
the transactions contemplated hereby.

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(d) In the event that the sale contemplated by this Agreement is not
consummated for any reason, each party agrees to return to the other party all
materials containing nonpublic information provided by the other immediately
with or without request. The confidentiality obligation set forth in this
Section 5.2 shall survive termination of this Agreement.

(e) Each party agrees that the confidential information of the other
party is unique and that its release or misuse in contravention of the terms of
this Agreement may not be compensable in monetary damages and that the
non-breaching party shall be entitled to seek appropriate injunctive relief
therefor. In connection therewith the parties waive the claim or defense that an
adequate remedy exists at law.

Section 5.3. ADDITIONAL FINANCIAL STATEMENTS. Without intending to
limit the generality of Section 5.2, Seller (i) shall use its reasonable best
efforts to supply financial statements for the Business (and any and all
documents and consents related thereto) which comply with Regulation S-X under
the Securities Act of 1933, as amended, and the applicable published rules and
regulations thereunder for inclusion in any registration statement or other
public filing of IMI under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and the applicable published rules
and regulations thereunder, and any other offering circular or document used by
IMI in any other offering of securities, whether public or private, (ii) shall
use its reasonable best efforts to cause Seller's independent accountants to
cooperate with IMI in connection with the foregoing (including, without
limitation, using reasonable best efforts to cause such independent accountants
to deliver so-called "comfort letters," written consents and representation
letters relating to the foregoing), and (iii) shall engage its independent
accountants to perform a quarterly review of the Seller's financial statements
for the first quarter of fiscal 2000 in accordance with Statements on Auditing
Standards No. 71; PROVIDED, HOWEVER, that Buyer shall reimburse Seller for its
reasonable out-of-pocket expenses incurred in connection with its compliance
with this Section 5.3; PROVIDED FURTHER that such reimbursement obligation shall
not extend to any services that would ordinarily be provided by such accountants
to Seller. The Seller shall complete and deliver its December 31, 1999 audited
financial statements to the Buyer on or before April 15, 2000. Without limiting
the generality of the foregoing, Seller agrees that it will (i) consent to the
use of such audited financial statements in any such registration statement,
document or circular and (ii) execute and deliver, and cause its officers to
execute and deliver, such "representation" letters as are customarily delivered
in connection with audits and as Seller's and IMI's independent accountants may
reasonably request under the circumstances.

Section 5.4 SELLER'S EMPLOYEES. Buyer shall not be obligated to offer
employment to any Seller Employee in connection with the acquisition of the
Subject Assets, and such acquisition shall not grant any Seller Employee a right
of continued employment with Buyer. Buyer shall notify Seller in writing no
later than the close of business on the tenth (10th) business day prior to the
Closing of the names of those Seller Employees to whom Buyer intends to offer
employment at Closing. Such notification shall reflect Buyer's good faith
intentions at such time, but shall not constitute an obligation of Buyer to
offer initial or continued employment to any such employee. Without limiting the
generality of the foregoing, in no event shall Buyer be obligated to hire or
otherwise employ any Seller Employee or former employee of Seller who is

<PAGE>

reinstated under, or who voluntarily returns to any previous employment position
pursuant to, any settlement agreement or any arbitration, judicial or
administrative action, order, decree or other process to which Buyer is not a
party. Buyer and Seller shall mutually agree on the timing and content of a
program of communications to employees and customers of the Business in respect
of the transactions contemplated hereby; provided that Seller may elect to
inform its employees of the pending transaction if it determines such disclosure
is necessary or desirable.

Section 5.5. CONTINUED EFFORTS.

(a) Each of the parties hereto shall use reasonable business efforts
(i) to take, or cause to be taken, all actions and to do, or cause to be done,
all things necessary, proper or advisable under applicable law to consummate the
transactions contemplated hereby (the "Transactions"), and (ii) to refrain from
taking, or cause to be refrained from taking, any action and to refrain from
doing or causing to be done, anything which could impede or impair the
consummation of the Transactions, including, in all cases, without limitation
using its reasonable business efforts (A) to prepare and file with the
applicable governmental authorities as promptly as practicable after the
execution of this Agreement all requisite applications and amendments thereto,
together with related information, data and exhibits, necessary to request
issuance of orders approving the Transactions by all such applicable
authorities, (B) to obtain all necessary or appropriate waivers, consents and
approvals, (C) to effect all necessary registrations, filings and submissions
(including without limitation filings within three (3) business days of the date
of this Agreement under the HSR Act), (D) to lift any injunction or other legal
bar to the Transactions (and, in such case, to proceed therewith as
expeditiously as possible), (E) to obtain the satisfaction of the conditions
specified in Articles 6 and 7, and (F) to advise the other of any disclosure
schedule changes that would be required if the applicable representations and
warranties set forth in Articles 3 and 4 did not refer to the date of this
Agreement. Notwithstanding anything to the contrary contained in this Agreement,
in connection with or as a condition to receiving the consent or approval of any
governmental authority or otherwise, IMI shall not be required to divest,
abandon, license or take similar action with respect to any assets (tangible or
intangible) of it or any of its subsidiaries (including, without limitation, the
Subject Assets after the Closing).

(b) The parties hereto shall cooperate with one another in the
preparation of all tax returns, questionnaires, applications or other documents
regarding any Taxes or transfer, recording, registration or other fees which
become payable in connection with the Transactions and which are required to be
filed on or before the Closing Date.

Section 5.6. OPERATION OF BUSINESS PRIOR TO CLOSING. From the date
hereof until the Effective Time, Seller shall conduct the Business in the
ordinary course consistent with past practice, including, without limitation, by
acquiring and erecting racking and making other customary capital expenditures,
and shall use its commercially reasonable efforts to maintain and service the
Business, to keep available the services of present employees and agents and to
maintain existing business relationships. Without limiting the generality of the
foregoing, Seller shall not take any of the actions described in Section 3.22
and Seller (a) shall comply with (i) all material laws, regulations and other
requirements from time to time applicable of every governmental body having
jurisdiction of the Owned and Leased Premises or the use or occupancy of the
Improvements located thereon consistent with Seller's conduct of the Business

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prior to the date of this Agreement and (ii) all terms, covenants and conditions
of all instruments of record and other agreements affecting the Owned and Leased
Premises, (b) shall continue to operate the Owned and Leased Premises as
currently operated in a good and businesslike fashion consistent with its past
practices and cause the Owned and Leased Premises to be maintained in good
working order and condition in a manner consistent with its past practice, and
(c) shall not take any action to accelerate the collection of any accounts
receivable.

Section 5.7. MONTHLY FINANCIAL STATEMENTS. From the date hereof until
the Closing Date, Seller shall provide to Buyer monthly financial statements
related to the Business promptly after they become available.

Section 5.8. NOTICE OF DEVELOPMENTS. Each party shall give prompt
notice to the other of the occurrence or non-occurrence of any Event the
occurrence or non-occurrence of which would be likely to cause (i) any
representation or warranty made by it contained in this Agreement to be untrue
or inaccurate, (ii) any change to be made in its disclosure schedules, or (iii)
any failure of Seller or Buyer, as the case may be, to comply with or satisfy,
or be able to comply with or satisfy, any material covenant, condition or
agreement to be complied with or satisfied by it hereunder. No disclosure by
Seller or Buyer pursuant to this Section 5.8 which constitutes a material change
in information originally presented in this Agreement or in its schedules shall
constitute a waiver by the party receiving such disclosure of any condition to
such party's obligation to close the transactions contemplated hereby unless the
party to which such disclosure is made agrees in writing to waive such condition
(it being understood that the delivery of any notice pursuant to this Section
5.8 shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice).

Section 5.9. PUBLIC ANNOUNCEMENTS. Until the Closing, or in the event
of termination of this Agreement, each party shall consult with the other before
issuing any press release or otherwise making any public statements with respect
to this Agreement or any of the transactions contemplated hereby, and shall not
issue any such press release or make any such public statement without the prior
consent of the other, which consent shall not be unreasonably withheld or
delayed. Notwithstanding the foregoing, Seller acknowledges and agrees that
Buyer or IMI may, without the prior consent of Seller, issue such press releases
or make such public statements as may be required by applicable law or the
listing requirements of The New York Stock Exchange, in which case, to the
extent practicable, IMI and Buyer will consult with, and exercise in good faith
all reasonable business efforts to agree with, Seller regarding the nature,
extent and form of such press release or public statement, and in any event with
prior notice to Seller.

Section 5.10. EXCLUSIVITY. Unless this Agreement has been terminated in
accordance with Article 10, neither Seller nor Stockholder will solicit,
initiate or encourage the submission of any proposal or offer from any person or
entity relating to the acquisition of the Business or any portion of the Subject
Assets, and none of Seller's directors, officers or agents shall be permitted to
take any such action.

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<PAGE>

ARTICLE 6.
CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE

The obligations of Buyer to purchase the Subject Assets and carry out
the other transactions contemplated hereby are, unless waived in writing by
Buyer, subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:

Section 6.1. ACCURACY OF REPRESENTATIONS AND PERFORMANCE OF SELLER. The
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as though made on and as of such date; each and all of the
conditions and covenants to be performed or satisfied by Seller hereunder at or
prior to the Closing Date shall have been duly performed or satisfied in all
material respects; and Seller shall have furnished Buyer with a certificate to
that effect.

Section 6.2. ABSENCE OF CERTAIN LITIGATION. On the Closing Date, no
suit, action or other proceeding, or injunction or judgment relating thereto,
shall be pending or threatened before any court or governmental or regulatory
official or agency, in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby, or which might materially and adversely
affect the Business or the Subject Assets, and no investigation that might
result in any such suit, action or proceeding shall be pending.

Section 6.3. ESCROW AGREEMENT. Buyer, Seller and First Union National
Bank (the "Escrow Agent") shall have entered into an escrow agreement which is
reasonably satisfactory in form, scope and substance to both Buyer and Seller
(the "Escrow Agreement"), pursuant to which Buyer shall deliver to the Escrow
Agent an amount equal to $2,700,000, which delivery shall constitute payment of
a portion of the Purchase Price. Subject to any payments made therefrom pursuant
to Section 11.3(b) hereof, the amounts held by the Escrow Agent pursuant to the
terms of the Escrow Agreement, including any interest earned thereon
(collectively, the "Escrow Amount") shall be delivered to Seller at the
termination of the Escrow Period as payment in full of the remaining Purchase
Price due Seller under this Agreement.

Section 6.4. CONFIDENTIALITY AND NON-COMPETITION AGREEMENTS. Seller,
Stockholder, James Spinney, Barry Vaughn, Robert Price, Michael Demont, Stephen
Suddath and A. Quinn Bell shall have each executed and delivered a
Confidentiality and Non-Competition Agreement substantially in the form attached
as Exhibit 6.4 hereto (the "Confidentiality and Non-Competition Agreements").

Section 6.5. LEASES AND SUBLEASES OF LEASED AND OWNED PREMISES.

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Buyer space at the Leased Premises, and the landlord under each such Lease shall
have consented thereto in writing. In the event that such landlord does not
consent to assignment of the Lease, but grants both its consent to sublease and
a Non-Disturbance and Attornment Agreement with regard to the Leased Premises,
Seller and Buyer agree to enter into a sublease, the terms of which shall
include the requirement that Buyer pay to Seller monthly the full rent due to
the landlord with respect to the portion of the Leased Premises subleased
thereunder.

(b) With regard to each of the Owned Premises, Seller and Buyer shall
have entered into lease agreements substantially in the forms attached hereto as
Exhibits 6.5(b) (together with statutory form memoranda of lease suitable for
recording) whereby Seller shall lease to Buyer space at the Owned Premises.

(c) With regard to the premises located at 1990 E. North Highway 360
Dallas Texas, Seller and Buyer shall have entered into a sublease agreement
substantially in the form of the lease attached hereto (except options to extend
thereunder shall coincide with Seller's extension options contained in the prime
lease) as Exhibit 6.5(c) (together with a statutory form memorandum of sublease
suitable for recording) whereby Seller subleases to Buyer space at such
premises.

Section 6.6. THIRD PARTY CONSENTS. All waiting periods (and any
extension thereof) applicable under the HSR Act shall have expired or been
terminated, and Seller shall have procured all of the third party consents
identified in Schedule 3.4, except for those consents relating to licenses for
commercially available, retail, off-the shelf software.

Section 6.7. CORPORATE APPROVAL. Seller shall deliver certified copies
of resolutions of its Board of Directors and stockholder pertaining to the
authorization of this Agreement and the consummation of the transactions
contemplated hereby, and a certificate executed by its secretary or assistant
secretary as to the due election, qualification and incumbency and valid
signature of the officers authorized to sign this Agreement and any document,
instrument or certificate to be delivered hereunder, and Seller's articles of
incorporation and by-laws.

Section 6.8. ENCUMBRANCES. Seller shall have delivered evidence
reasonably satisfactory to Buyer of the satisfaction and release of any
Encumbrances affecting, or security interests or liens encumbering, the Subject
Assets (other than Permitted Encumbrances).

Section 6.9. NO MATERIAL ADVERSE CHANGE. There shall not have occurred
and be continuing any material adverse change in the Subject Assets (including,
without limitation, loss of or damage to a material amount or part of the
Subject Assets, whether or not insured) or the Business (including without
limitation the operations, management, properties or the condition, (financial
or other), or results of operation (including without limitation, earnings
before interest, taxes, depreciation and amortization)), of the Business between
September 30, 1999 and the Closing Date.

Section 6.10. TRADEMARK ASSIGNMENT. Seller shall have executed and
delivered to Buyer an Assignment of Trademarks, regarding the trademarks and
related designs forming part of the Subject Assets, reasonably satisfactory in
form, scope and substance to both Buyer and Seller.

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Section 6.11. INSTRUMENTS OF CONVEYANCE AND TRANSFER. Seller shall have
delivered to Buyer all bills of sale, endorsements, assignments and other
instruments of conveyance and transfer reasonably satisfactory in form and
substance to Buyer and its counsel, effecting the sale, transfer, assignment and
conveyance of Seller's right, title and interest in and to the Subject Assets to
Buyer.

Section 6.12. CONVERSION AND REMOVAL. Seller shall have completed (a)
the removal of all cartons and other materials which do not constitute Subject
Assets from its facilities located at 315 East Bay Street, Jacksonville, Florida
and 1470 North Gate Boulevard, Sarasota, Florida, and (b) all conversions of the
computerized hard copy inventory system to the Andrews inventory system at the
Seller's facilities.

Section 6.13. OPINION OF SELLER'S COUNSEL. Seller's counsel, Smith
Hulsey & Busey, shall have delivered its opinion which shall be reasonably
satisfactory in form, scope and substance to Buyer and its counsel.

Section 6.14. DIVIDED SUBLEASE SPACE. Seller, at its sole cost and
expense, shall have completed the construction of a permanent demising wall
dividing the portion of the leased space at Seller's Grand Prairie, Texas
location which is to be subleased at Closing pursuant to the terms of this
Agreement.

Section 6.15. CERTIFICATES, ETC. Seller shall have delivered to Buyer
copies of all certificates, authorities and permits set forth on Schedule 3.9.

Section 6.16. FURTHER DOCUMENTS. Seller shall have executed and
delivered to Buyer such documents, instruments, agreements, and certificates as
may reasonably be needed to carry out the transactions contemplated by this
Agreement, including such documents, instruments and agreements as Buyer's
counsel may reasonably request in connection therewith.

Section 6.17. NON-DISTURBANCE AND ATTORNMENT AGREEMENTS. Seller shall
have Non-Disturbance and Attornment Agreements, reasonably satisfactory in form,
scope and substance to Buyer and its counsel, from any person holding a mortgage
or other obligation secured by any Owned Premises to be leased by Buyer pursuant
to Section 6.5 and 7.6; and Seller shall use reasonable efforts to obtain
Non-Disturbance and Attornment Agreements from any landlord of Leased Premises
which Buyer is to sublease in whole or in part pursuant to Section 6.5 and 7.6.
If Seller shall fail to obtain a Non-Disturbance and Attornment Agreement for
the sublease at 1990 North Highway 360 Dallas, Texas from the prime landlord,
then Seller (i) shall use best efforts to obtain an agreement from such prime
landlord whereby the prime landlord shall agree to lease directly to Buyer the
entire premises demised to Seller following termination of the lease to Seller
(the "Dallas Lease") for a term to commence on the date of such termination and
to expire on the same date as the Dallas Lease would have expired if it had
otherwise continued uninterrupted until its scheduled date of termination, and
containing all of the same rights, terms, covenants, considerations, un-expired
options and obligations as set forth in the Dallas Lease or (ii) shall enter
into an assignment of the Dallas Lease with Buyer by a lease assignment
substantially in the form attached hereto as Exhibit 6.5(a)(i)(A) (including,
without limitation, full execution of all exhibits by all parties thereto),
whereupon, if consented to by the prime landlord, Seller (as subtenant) and
Buyer (as sublessor) shall enter into a sublease for the portion

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of the premises currently occupied by Stockholder, such sublease to be
substantially in the form attached hereto as Exhibit 6.5(c) with the same per
square foot rental rate and pro-rata additional rent as provided in the Dallas
Lease.

For purposes of this Sections 6.5, 7.6, and 6.17, the term
"Non-Disturbance and Attornment Agreement" shall mean an agreement from any
person holding a mortgage or other obligation secured by any Owned Premises to
be leased by Buyer pursuant to Section 6.5 and 7.6, or from any lessor of Leased
Premises to be subleased pursuant to Section 6.5(c), providing Buyer the right
to occupy the premises demised by any Lease or sublease and to continue to enjoy
all of the rights granted to Buyer under such Lease or sublease (notwithstanding
any breach by the landlord as borrower, tenant or other obligor), provided Buyer
is not in breach of its obligations under such Lease or sublease beyond the
expiration of any applicable cure period following notice.

ARTICLE 7.
CONDITIONS PRECEDENT TO OBLIGATION OF SELLER

The obligations of Seller to sell, assign, transfer and deliver the
Subject Assets to Buyer hereunder and to carry out the other transactions
contemplated hereby are, unless waived in writing by Seller, subject to the
satisfaction on or prior to the Closing Date of the following conditions:

Section 7.1. ACCURACY OF REPRESENTATIONS AND PERFORMANCE OF CONDITIONS.
The representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as though made on and as of such date; each and all of the
conditions and covenants to be performed or satisfied by Buyer hereunder at or
prior to the Closing Date shall have been duly performed or satisfied in all
material respects; and Buyer shall have furnished Seller with Buyer's
certificate to that effect.

Section 7.2. CORPORATE APPROVAL. Buyer shall deliver certified copies
of resolutions adopted by Buyer's Board of Directors pertaining to the
authorization of this Agreement and the consummation of the transactions
contemplated herein, and a certificate executed by the secretary or assistant
secretary of Buyer as to the due election, qualification and incumbency and
valid signatures of its officers authorized to sign this Agreement and any
documents or certificates to be delivered hereunder, and Buyer's corporate
charter and by-laws.

Section 7.3. ABSENCE OF CERTAIN LITIGATION. On the Closing Date, no
suit, action or other proceeding, or injunction or judgment relating thereto,
shall be pending or threatened before any court or governmental or regulatory
official or agency, in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby, and no investigation that might result in
any such suit, action or proceeding shall be pending.

Section 7.4. THIRD PARTY CONSENTS. All waiting periods applicable under
the HSR Act shall have expired or been terminated, and Buyer shall have procured
all third party consents, authorizations and approvals identified on Schedule
4.5.

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Section 7.5. ESCROW AGREEMENT. Buyer, Seller and the Escrow Agent shall
have entered into the Escrow Agreement.

Section 7.6. LEASES AND SUBLEASES OF LEASED AND OWNED PREMISES.

(a) With regard to (i) each of the Leased Premises included in
Section A of Schedule 1.16, Seller and Buyer shall have entered into lease
assignments substantially in the forms attached hereto as Exhibits 6.5(a)(i)(A)
(including full execution of all exhibits by all parties thereto) whereby Seller
shall assign to Buyer its interest as tenant in the Lease for such Leased
Premises, and (ii) each of the Leased Premises included in Section B of Schedule
1.16, Seller and Buyer shall have entered into sublease agreements substantially
in the forms attached hereto as Exhibits 6.5(a)(ii)(A) whereby Seller or its
Affiliate shall sublease to Buyer space at the Leased Premises, and the landlord
under each such Lease shall have consented thereto in writing. In the event that
such landlord does not consent to assignment of the Lease, but grants both its
consent to sublease and a Non-Disturbance and Attornment Agreement with regard
to the Leased Premises, Seller and Buyer agree to enter into a sublease, the
terms of which shall include the requirement that Buyer pay to Seller monthly
the full rent due to the landlord with respect to the portion of the Leased
Premises subleased thereunder.

(b) With regard to each of the Owned Premises, Seller and Buyer shall
have entered into lease agreements substantially in the form attached hereto as
Exhibits 6.5(b)(i) (together with statutory form memoranda of lease suitable for
recording) whereby Seller shall lease to Buyer space at the Owned Premises.

(c) With regard to the premises located at 1990 E. North Highway 360
Dallas Texas, Seller and Buyer shall have entered into a sublease agreement
substantially in the form attached hereto (except options to extend thereunder
shall coincide with Seller's extension options contained in the prime lease) as
Exhibits 6.5(c) (together with statutory form memoranda of lease suitable for
recording) whereby Seller subleases to Buyer space at such premises.

Section 7.7. FURTHER DOCUMENTS. Buyer shall have executed and delivered
to Seller such documents, instruments, agreements, and certificates as may
reasonably be needed to carry out the transactions contemplated by this
Agreement, including such documents, instruments and agreements as Seller's
counsel may reasonably request in connection therewith.

Section 7.8. TRADEMARK ASSIGNMENT. Buyer shall have executed and
delivered to Seller an Assignment of Trademarks, regarding the trademarks and
related designs forming part of the Subject Assets, reasonably satisfactory in
form, scope and substance to both Buyer and Seller.

ARTICLE 8.
THE CLOSING

Section 8.1. CLOSING AND CLOSING PROVISIONS. The Closing shall be
effected by delivery of documents at the office of Sullivan & Worcester LLP,
Boston, Massachusetts, and payment of the Purchase Price each as provided herein
or in such other manner and at such place as the parties may agree.

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Section 8.2. DELIVERIES BY SELLER AND STOCKHOLDER. At or prior to the
Closing, Seller and Stockholder shall execute and deliver to Buyer all of the
certificates and other documents designated as conditions precedent and
deliveries precedent to Buyer's obligation to close under this Agreement or to
carry out the transactions contemplated hereby.

Section 8.3. DELIVERIES BY BUYER. At the Closing Buyer shall deliver to
Seller the Purchase Price, subject to adjustments as permitted by this
Agreement, in the manner and form provided for in this Agreement, and all the
certificates and other documents designated as conditions precedent and
deliveries precedent to Seller's obligation to close under this Agreement or to
carry out the transactions contemplated hereby.

ARTICLE 9.
POST-CLOSING MATTERS

Section 9.1. RECORDS OF THE BUSINESS. For a period of four years
following the Closing Date or for such longer period as the statute of
limitations applicable to claims for Taxes relating to the Business for any
period through the Closing Date shall be extended (through voluntary extension
or otherwise), Buyer shall grant to Seller and its representatives, at Seller's
request, reasonable access to and the right to make copies of those records and
documents which report the conduct of the Business or the results thereof as may
be necessary in connection with Seller's affairs or the Business, at Buyer's
customary fees therefor. If Seller notifies Buyer that Seller requires retention
of such records beyond four years, Seller shall have the right to take such
records or pay Buyer's customary storage charges for such post-four-year period.
Seller shall, for at least two years after the Closing Date, retain copies of
all records of the Business retained by Seller, and shall grant access thereto
to Buyer upon reasonable request.

Section 9.2. EMPLOYEES.

(a) Seller shall assume and remain responsible for the payment of any
and all retention, change in control or other similar compensation or benefits
that are or may become payable to or in respect of any current or former
employee of the Business in connection with the consummation of the transactions
contemplated by this Agreement.

(b) Employees of the Business, and their spouses and dependents, who
participate in Plans that are subject to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), shall be entitled to elect
continuation coverage pursuant to COBRA as of the Closing Date. Seller, rather
than Buyer, shall satisfy and be fully responsible for any and all COBRA
obligations that arise as a result of the transactions contemplated herein and
Buyer shall have no responsibility with respect to any individual entitled to
elect continuation coverage pursuant to COBRA as a result of a "qualifying
event" that occurred on or prior to the Closing Date.

(c) If permitted by applicable law, Seller and Buyer agree to treat
Buyer as a "successor employer" and Seller as a "predecessor employer," within
the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to
employees of the Business that are hired by Buyer for purposes of the taxes
imposed under the United States Federal Unemployment Tax Act ("FUTA") or the
United States Federal Insurance Contributions Act ("FICA"). At the

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request of Buyer with respect to any particular applicable law relating to
employment, unemployment insurance, social security, disability, workers'
compensation, payroll, health care or other similar tax other than taxes imposed
under FICA and FUTA, Seller and Buyer will, if permitted under applicable law,
treat Buyer as a successor employer and Seller as a predecessor employer, within
the meaning of the relevant provisions of such tax law, with respect to retained
employees.

(d) Seller shall treat the transactions contemplated by this
Agreement as a disposition of assets in accordance with Section 401(k)(10) of
the Code and shall take such actions as shall be necessary to permit employees
of the Business to elect to receive a distribution of benefits from any Plan
that is intended to be qualified under Section 401(a) of the Code.

Section 9.3. TRANSITIONAL EMPLOYEE SERVICES. Buyer shall notify Seller
in writing no later than the close of business on the tenth (10th) business day
prior to the Closing of the names of those Seller Employees (i) to whom Buyer
does not intend to offer employment at Closing pursuant to Section 5.4 hereof,
and (ii) who Buyer determines will be necessary to assist with the transition of
the Business and the Subject Assets to Buyer for a period not to exceed sixty
(60) days following the Closing Date. Seller shall use reasonable commercial
efforts to continue the employment of such Seller Employees (on the terms and
conditions of employment existing at the Effective Time, unless otherwise
approved by Buyer) and Seller shall use reasonable commercial efforts to make
such continuing Seller Employees available to Buyer. Any COBRA or severance
payments for such continuing Seller Employees shall be paid by Seller. The
salary and other expenses of such continuing Seller Employees, including the
special bonus payments required to retain such Seller Employees' services (the
"Bonuses") shall also be paid by Seller, PROVIDED, HOWEVER, that Buyer shall
reimburse Seller for such salary, expenses and Bonuses promptly upon receipt of
documentation of payment of such amounts. Such salary, expenses and Bonuses to
be reimbursed by Buyer, including the timing of any such payments, shall be set
forth in a schedule which shall be provided by Buyer to Seller no later than the
tenth (10th) business day prior to the Closing Date.

Section 9.4. REASONABLE EFFORTS AND COOPERATION. For a period of
thirty-six (36) months after the Closing, each of Buyer and Seller shall notify
the other promptly after it becomes aware of any lost, damaged or improperly
destroyed customer records which may give rise to an indemnification Claim under
Article 11. Buyer shall utilize all commercially reasonable efforts to locate
any missing or misplaced storage boxes or other containers for which it may seek
indemnification under Article 11. In addition, Buyer shall provide Seller with
reasonable access during normal business hours to its facilities and records
(including electronic records and related computers) in order to permit Seller
to locate such missing or misplaced boxes or other storage containers, PROVIDED,
HOWEVER, that Seller shall not unreasonably disrupt Buyer's business operations
in connection with such efforts.

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ARTICLE 10.
TERMINATION

Section 10.1. TERMINATION OF AGREEMENT. The parties may terminate this
Agreement as provided below:

(a) Buyer and Seller may terminate this Agreement by mutual written
consent at any time prior to the Closing;

(b) Buyer may terminate this Agreement by giving written notice to
Seller at any time prior to the Closing (i) in the event Seller has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, Buyer has notified Seller of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach or
(ii) if the Closing shall not have occurred on or before May 1, 2000, by reason
of the failure of any condition precedent under Article 6 hereof (unless the
failure results primarily from Buyer itself breaching any representation,
warranty, or covenant contained in this Agreement); and

(c) Seller may terminate this Agreement by giving written notice to
Buyer at any time prior to the Closing (i) in the event Buyer has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, Seller has notified Buyer of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach or
(ii) if the Closing shall not have occurred on or before May 1, 2000, by reason
of the failure of any condition precedent under Article 7 hereof (unless the
failure results primarily from Seller itself breaching any representation,
warranty, or covenant contained in this Agreement).

Section 10.2. EFFECT OF TERMINATION. If either party terminates this
Agreement pursuant to Section 10.1, all rights and obligations of the parties
hereunder, other than the confidentiality obligation set forth in Section 5.2,
shall terminate without any liability of any party to any other party; PROVIDED,
HOWEVER, that such termination shall not relieve any party from liability for
breach of any representation, warranty, covenant or agreement set forth in this
Agreement.

ARTICLE 11.
INDEMNIFICATION

Section 11.1. SURVIVAL. The representations and warranties of the
parties contained in or made pursuant to this Agreement, any Seller's Document
or any Buyer's Document (collectively, the "Collateral Documents") shall survive
the Closing and shall remain operative and in full force and effect for a period
of eighteen (18) months after the Closing Date (the "Escrow Period"), except
that in the case of title to the Subject Assets, matters relating to
Environmental Laws and Regulations and matters of a nature referred to in
Sections 3.7 and 3.10, which shall survive and remain operative and in full
force and effect for the applicable statute of limitations, regardless of any
investigation or statement as to the results thereof made by or on behalf of any
party hereto, except as provided in Section 11.2. The covenants and agreements
of the parties contained in or made pursuant to this Agreement that by their
terms do not survive the Closing shall also remain operative and in full force
and effect for the Escrow

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Period. All other covenants and agreements of the parties contained in or made
pursuant to this Agreement or any Collateral Document shall survive the Closing
and shall remain operative and in full force and effect until fully performed or
until termination of the statute of limitations applicable to contractual
obligations, whichever occurs first. The term "Indemnity Period" shall mean the
applicable period with respect to which a representation, warranty, covenant or
agreement survives the Closing as provided in this Section 11.1; PROVIDED,
HOWEVER, that the "Indemnity Period" for any Excluded Liability resulting from a
lost, damaged or improperly destroyed record of a customer shall be thirty-six
(36) months after the Closing Date. No claim for indemnification, other than
with respect to fraud or intentional and willful breach or willful
misrepresentation, may be asserted after the expiration of the Indemnity Period.
Notwithstanding anything herein to the contrary, any breach of a representation,
warranty, covenant or agreement which arises and is the subject of a claim that
is asserted in writing prior to the expiration of the applicable Indemnity
Period shall survive with respect to such claim or any dispute with respect
thereto until the final resolution thereof.

Section 11.2. INDEMNIFICATION

(a) Seller and Stockholder agree, jointly and severally, that on and after the
Closing they shall indemnify and hold harmless Buyer and its Affiliates,
stockholders, directors, officers, employees, agents and representatives
(collectively, the "Buyer Indemnified Parties") from and against any and all
damages, claims, losses, expenses, costs, obligations, and liabilities
including, without limiting the generality of the foregoing, liabilities for all
reasonable attorneys', accountants' and experts' fees and expenses actually
paid, including those incurred to enforce the terms of this Agreement or any
Collateral Document (excluding consequential damages, lost profits, lost
business opportunities and incidental damages) (collectively, "Loss and
Expense"), suffered by the Buyer Indemnified Parties by reason of or arising out
of (i) any breach of representation or warranty made by Seller or Stockholder
pursuant to this Agreement or any Collateral Document, (ii) any failure by
Seller or Stockholder to perform or fulfill any of its covenants or agreements
set forth in this Agreement or any Collateral Document, (iii) any Excluded
Liability (including, without limitation, any such Loss and Expense suffered by
the Buyer Indemnified Parties by reason of or arising out of the rack collapses
at Seller's Miami, Florida facilities in 1995 and at Seller's Dallas, Texas
facilities in August 1999, and the computerized inventory tracking server and
backup failure at Seller's Charlotte, North Carolina facilities in 1997), (iv)
for a period of twenty-four (24) months after the Closing Date, without limiting
anything contained in Section 11.2(a)(iii), any lost, damaged or improperly
destroyed records of customers with which Seller did not, as of the Effective
Time, have a contract which limited Seller's liability in the event of loss,
damage or destruction to $3.00 or less per standard letter legal carton, if it
cannot be determined with reasonable certainty whether the date of such loss,
damage or destruction occurred prior to or after the Effective Time, provided
that, with respect to any loss, damage or destruction described in this Section
11.2(a)(iv), Seller shall indemnify Buyer for only fifty percent (50%) of any
such Loss and Expense, and (v) any hazardous substance, hazardous material or
other environmental condition existing on, in or under the Owned or Leased
Premises on or before the Effective Time.

Notwithstanding anything in this Section 11.2(a) to the contrary, in
the event that (i) Buyer (A) on or prior to the date hereof, has actual
knowledge of any breach, untruth or

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inaccuracy of any representation or warranty of Seller or Seller's failure to
perform any pre-Closing covenant or agreement set forth in this Agreement or any
Collateral Document, or (B) between the date hereof and the Closing Date,
obtains actual knowledge of any breach, untruth or inaccuracy of any
representation or warranty of Seller or Seller's failure to perform any any
pre-Closing covenant or agreement set forth in this Agreement or any Collateral
Document which, in either case, would reasonably be expected to cause the Seller
to fail to satisfy any condition precedent contained in Article 6, and (ii)
Buyer elects to proceed with the Closing, it shall be deemed to have waived any
right thereafter to assert any claim with respect to such breach, untruth,
inaccuracy or failure of performance so known. For purposes of the preceding
sentence, Buyer shall have actual knowledge of a breach, untruth, inaccuracy or
failure of performance only if actual knowledge thereof is possessed by any one
or more of the following individuals: C. Richard Reese, Sean Slade and Robert
Miller.

(b) Buyer agrees that on and after the Closing it will indemnify
Seller and its Affiliates, stockholders, directors, officers, employees, agents
and representatives (collectively, the "Seller Indemnified Parties") and hold
them harmless from and against all Loss and Expense suffered by the Seller
Indemnified Parties by reason of or arising out of (i) any breach of
representation or warranty made by Buyer pursuant to this Agreement or any
Collateral Document, (ii) any failure by Buyer to perform or fulfill any of its
covenants or agreements set forth in this Agreement or any Collateral Document,
(iii) any liabilities or obligations assumed by Buyer under Section 2.2(c)
hereof, and (iv) for a period of twenty-four (24) months after the Closing Date,
any lost, damaged or destroyed records of customers described in Section
11.2(a)(iv), provided that, with respect to any such loss, damage or
destruction, Buyer shall indemnify Seller for only fifty percent (50%) of any
such Loss and Expense.

Notwithstanding anything in this Section 11.2(b) to the contrary, in
the event that (i) Seller (A) on or prior to the date hereof, has actual
knowledge of any breach, untruth or inaccuracy of any representation or warranty
of Buyer or Buyer's failure to perform any pre-Closing covenant or agreement set
forth in this Agreement or any Collateral Document, or (B) between the date
hereof and the Closing Date, obtains actual knowledge of any breach, untruth or
inaccuracy of any representation or warranty of Buyer or Buyer's failure to
perform any pre-Closing covenant or agreement set forth in this Agreement or any
Collateral Document which, in either case, would reasonably be expected to cause
the Buyer to fail to satisfy any condition precedent contained in Article 7, and
(ii) Seller elects to proceed with the Closing, it shall be deemed to have
waived any right thereafter to assert any claim with respect to such breach,
untruth, inaccuracy or failure of performance so known. For purposes of the
preceding sentence, Seller shall have actual knowledge of a breach, untruth,
inaccuracy or failure of performance only if actual knowledge thereof is
possessed by any one or more of the following individuals: James Spinney, Barry
Vaughn, Robert Price, Michael Demont, Stephen Suddath and A. Quinn Bell.

Section 11.3. LIMITATION OF LIABILITY; ESCROW AMOUNT.

(a) Notwithstanding the provisions of Section 11.2, after the
Closing, the Buyer Indemnified Parties shall be entitled to recover their Loss
and Expense in respect of (i) any Claim under Section 11.2(a)(i) (other than as
a result of any breach of the representation or

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warranty contained in Section 3.26 or that relates to lost, damaged or
improperly destroyed records of customers) only in the event that the aggregate
Loss and Expense for all Claims exceed, in the aggregate, $250,000, in which
event the indemnified party shall be entitled to recover all such Loss and
Expense including such $250,000; and (ii) any Claim (A) under Section 11.2(a)(i)
(other than as a result of any breach of the representation or warranty
contained in Section 3.26), (B) under Section 11.2(a)(iv) or (C) relating to
lost, damaged or improperly destroyed records of customers (including, without
limitation, any such event that also constitutes an Excluded Liability) only to
the extent that the aggregate Loss and Expense for all Claims do not exceed
$5,400,000. Notwithstanding anything contained herein, the limitations on
recovery of Loss and Expense described in this Section 11.3(a) shall not apply
to any Claim relating to lost, damaged or improperly destroyed records of
customers described in the parenthetical clause contained in Section
11.2(a)(iii).

(b) Notwithstanding any other provision herein contained, Buyer may
(but shall not be required to), at any time during the Escrow Period, set-off
against the Escrow Amount any amounts for which the Seller or Stockholder is
required to indemnify the Buyer if and to the extent the Seller or Stockholder
has not previously paid any such amount. In no event shall such right to set-off
against the Escrow Amount be deemed to constitute a limitation on the liability
of Seller or the Stockholders under the provisions of this Article 11.

Section 11.4. NOTICE OF CLAIMS. If an indemnified party believes that
it has suffered or incurred any Loss and Expense, it shall notify the
indemnifying party promptly in writing, and in any event within the applicable
Indemnity Period specified in Section 11.1, describing such Loss and Expense,
all with reasonable particularity and containing a reference to the provisions
of this Agreement in respect of which such Loss and Expense shall have occurred.
If any litigation, arbitration or other proceeding is instituted by a third
party with respect to which an indemnified party intends to claim any liability
or expense as Loss and Expense under this Article, such indemnified party shall
promptly notify the indemnifying party of such legal action. In no event shall
the failure to notify the indemnifying party under this Section relieve the
indemnifying party of its obligations under this Article, except to the extent
such failure to notify prejudices such indemnifying party (including, without
limitation, its ability to defend against such claim).

Section 11.5. DEFENSE OF THIRD PARTY CLAIMS. The indemnifying party
shall have the right to conduct and control, through counsel of its own
choosing, reasonably acceptable to the indemnified party, any third party legal
action or other claim, but the indemnified party may, at its election,
participate in the defense thereof at its sole cost and expense; PROVIDED,
HOWEVER, that if the indemnifying party shall fail to defend any such legal
action or other claim, then the indemnified party may defend, through counsel of
its own choosing, such legal action or other claim, and (so long as it gives the
indemnifying party at least fifteen (15) days' notice of the terms of the
proposed settlement thereof and permits the indemnifying party to then undertake
the defense thereof) settle such legal action or other claim and to recover the
amount of such settlement or of any judgment and the reasonable costs and
expenses of such defense. The indemnifying party shall not compromise or settle
any such legal action or other claim without the prior written consent of the
indemnified party, which consent shall not unreasonably be withheld, delayed or
conditioned if the terms and conditions of such compromise or settlement
proposed by the indemnifying party and agreed to in writing by the claimant in
such legal action

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or other claim (the "Settlement Proposal") (a) include a full release of the
indemnified party from the legal action or other claim which is the subject of
the Settlement Proposal, and (b) if the indemnified party is a Buyer Indemnified
Party, do not include any term or condition which would restrict in any material
manner the continued ownership or operations of the Subject Assets or the
conduct of the Business in substantially the manner previously owned, operated
and conducted by Seller. No matter whether an indemnifying party defends or
prosecutes any third party legal action or claim, the indemnified and
indemnifying parties shall cooperate in the defense or prosecution thereof. Such
cooperation shall include access during normal business hours afforded to the
indemnifying party to, and reasonable retention by the indemnified party of,
records and information which are reasonably relevant to such third party legal
action or claim, and making employees available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder, and the indemnifying party shall reimburse the indemnified party for
all its reasonable out-of-pocket expenses in connection therewith.

Section 11.6. EXCLUSIVE REMEDY. Except for fraud, willful and
intentional misrepresentation or willful and intentional breach of warranty,
covenant or agreement, the indemnification provided in this Article shall be the
sole and exclusive post-Closing remedy available to any party against any other
party for any claim relating to this Agreement.

ARTICLE 12.
MISCELLANEOUS PROVISIONS

Section 12.1. COMMISSIONS. Each party represents and warrants that,
except for Seller's engagement of Heritage Capital Group, Inc. and as disclosed
pursuant to its representations and warranties, it has dealt with no broker or
finder in connection with this Agreement and, insofar as it knows, no broker or
other person is entitled to any commission or finder's fee in connection with
the consummation of the transactions contemplated by this Agreement. If either
party has retained or been represented by a broker or finder in this
transaction, such party shall be solely responsible to pay, and shall indemnify
the other from any claims for, any fees or commissions of such person.

Section 12.2. EXPENSES. Except as otherwise provided herein, each of
the parties shall pay all costs and expenses incurred or to be incurred by it in
the negotiation and preparation of this Agreement and in closing and carrying
out the transactions contemplated by this Agreement. Except for any costs, fees
and expenses associated with compliance with federal and state securities laws,
which shall be the sole responsibility of Buyer, Buyer and Seller shall split
equally all costs, fees and expenses associated with state, city, county,
municipal and other regulatory filings, licenses and notices required in
connection with this Agreement or the Closing, including, without limitation,
any fees payable in connection with the HSR Act.

Section 12.3. HEADINGS; SCHEDULES. The subject headings of the sections
and subsections of this Agreement are included only for purposes of convenience,
and shall not affect the construction or interpretation of any of its
provisions. Any disclosure made by Seller in a Schedule hereto shall be deemed a
disclosure on all Schedules hereto.

36
<PAGE>

Section 12.4. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures on this
Agreement delivered by fax or telecopier shall be considered original signatures
for purposes of effectiveness of this Agreement.

Section 12.5. RIGHTS OF PARTIES. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action against any party to this Agreement.

Section 12.6. ASSIGNMENT. Except as provided in the following
paragraph, the rights and obligations of the parties to this Agreement and any
interest in this Agreement shall not be assigned, transferred, hypothecated,
pledged or otherwise disposed of without the prior written consent of the
nonassigning party which consent may be withheld in such party's sole
discretion.

Buyer shall have the right to assign to a wholly-owned subsidiary of
Buyer its rights and obligations under this Agreement; provided that such
assignment shall not release Buyer from its obligations hereunder, and Buyer
shall remain fully liable for all of Buyer's obligations hereunder, including
without limitation the payment of the entire Purchase Price (including
indemnification obligations).

Section 12.7. COMPLIANCE WITH BULK SALES LAW. Buyer and Seller hereby
waive compliance by Seller with the bulk sales law, if any, and any other
similar laws in any applicable jurisdiction in respect of the transactions
contemplated by this Agreement. Seller and Stockholder shall jointly and
severally indemnify Buyer from, and hold it harmless against, any liabilities,
damages, costs and expenses resulting from or arising out of (a) the parties'
failure to comply with any of such laws in respect of the transactions
contemplated by this Agreement, or (b) any action brought or levy made as a
result thereof, other than those liabilities which have been expressly assumed,
on such terms as expressly assumed, by Buyer pursuant to this Agreement.

Section 12.8. NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if delivered by telecopier (with
notice of receipt provided that a copy is delivered to the recipient by
overnight private carrier), or if served personally on the party to whom notice
is to be given; or if delivered by overnight private carrier, on the date of
delivery; or on the third day after mailing if mailed to the party to whom
notice is to be given by first class mail, certified, postage prepaid, and
properly addressed as following:

37
<PAGE>

To Seller or the Stockholder:

Suddath Van Lines, Inc.
815 South Main Street, 6th Floor
Jacksonville, Florida 32207
Attention: Robert J. Price
Telecopier: (904) 390-7117

With a copy (which shall not constitute notice but which is nonetheless
required for notice) to:

Smith Hulsey & Busey
225 Water Street, Suite 1800
Jacksonville, Florida 32202
Attention: John R. Smith, Jr.
Telecopier: (904) 359-7708

To Buyer:

Iron Mountain Records Management, Inc.
745 Atlantic Avenue, 10th Floor
Boston, Massachusetts 02111-2735
Attention: John F. Kenny, Jr.
Telecopier: (617) 350-7881

With a copy (which shall not constitute notice but which is nonetheless
required for notice) to:

William J. Curry, Esq.
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02111-2735
Telecopier: (617) 338-2880

Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set for above.

Section 12.9. APPLICABLE LAW; JURISDICTION AND REMEDIES. This Agreement
shall take effect as a sealed instrument, and is governed by and shall be
construed and enforced in accordance with the internal laws of the State of
Florida (without reference to principles of conflicts or choice of law that
would cause the application of the internal laws of any other jurisdiction),
except that matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement shall be
governed by the jurisdiction under which such entity derives its powers. The
parties hereto expressly consent and agree that any dispute, controversy, legal
action or other proceeding that arises under, results from, concerns or relates
to this Agreement shall be brought in the federal and state courts in and of the
State of Florida and acknowledge that they will accept service of process by
registered or certified mail or the equivalent directed to their last known
address as determined by the other

38
<PAGE>

party in accordance with this Agreement or by whatever other means are permitted
by such courts. The parties hereto hereby acknowledge that said courts have
jurisdiction over any such dispute or controversy, and that they hereby waive
any objection to personal jurisdiction or venue in these courts or that such
courts are an inconvenient forum. All remedies at law, in equity, by statute or
otherwise shall be cumulative and may be enforced concurrently or from time to
time and, subject to the express terms of this Agreement, the election of any
remedy or remedies shall not constitute a waiver of the right to pursue any
other available remedies.

Section 12.10. ADDITIONAL INSTRUMENTS AND ASSISTANCE. Each party hereto
shall at any time, and from time to time after the Closing Date, upon reasonable
request of the other party or its counsel, execute, acknowledge and deliver all
such further acts, deeds, assignments, transfers, conveyances, powers of
attorney and assurances as may be required to carry out the intent of this
Agreement, at the expense of the requesting party, unless the requesting party
is entitled to indemnification with respect to such matter.

Section 12.11. SEVERABILITY. If any provision of this Agreement is held
or deemed to be invalid or unenforceable to any extent when applied to any
person or circumstance, such invalidity or unenforceability shall not affect the
remaining provisions of this Agreement; the remaining provisions hereof and the
enforcement of such provision with respect to other persons or circumstances, or
to another extent, shall not be affected thereby and each provision hereof shall
be enforced to the fullest extent allowed by law. Moreover, the invalid or
inoperative provision shall be reformed and construed so that it shall be valid
and enforceable to the maximum extent permitted.

Section 12.12. PRONOUNS AND TERMS. In this Agreement, the singular
shall include the plural, the plural the singular, and the use of any gender
shall include all genders.

Section 12.13. ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This
Agreement, together with all Exhibits and Schedules hereto, constitutes the
entire agreement among the parties pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no representations, warranties or other agreements among the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.

Section 12.14. CONSTRUCTION. The language in this Agreement will be
deemed the language chosen by the parties to express their mutual intent and no
rule of strict construction will be applied against any party.

[Signatures appear on following page.]

39
<PAGE>

IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
on the date first above written.

<TABLE>
<CAPTION>
DATA STORAGE CENTER, INC. IRON MOUNTAIN RECORDS
MANAGEMENT, INC.

<S> <C>
By: /s/ MICHAEL E. DEMONT By: /s/ JOHN F. KENNY JR.
-------------------------------- -----------------------------
Michael E. Demont Name: John F. Kenny, Jr.
Chief Executive Officer Title: EVP & CFO

DSC OF FLORIDA, INC.

By /s/ MICHAEL E. DEMONT
--------------------------------
Michael E. Demont
Chief Executive Officer

DSC OF MASSACHUSETTS, INC.

By /s/ MICHAEL E. DEMONT
--------------------------------
Michael E. Demont
Chief Executive Officer

SUDDATH VAN LINES, INC.

By /s/ BARRY S. VAUGHN
--------------------------------
Barry S. Vaughn
Chief Operating Officer
</TABLE>

<PAGE>

EXHIBIT 10.5

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made this 1st day of February, 2000, by and between
Pierce Leahy Corp., a Pennsylvania corporation (hereinafter called "Employer"),
and J. Peter Pierce, an individual residing at 269 Hilldale Road, Villanova,
Pennsylvania 19085 (hereinafter called "Executive").

BACKGROUND

A. Executive has been President and Chief Executive Officer of
Employer prior to the execution of this Agreement.

B. Concurrent with the execution of this Agreement, Iron Mountain
Incorporated ("Iron Mountain") is merging into Employer (the "Merger") and as
a condition to the Merger Employer and Executive are entering into this
Agreement.

C. Employer wishes to employ Executive and Executive wishes to
continue his employment by Employer on the terms and conditions contained in
this Agreement.

NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Employer
and Executive agree as follows:

1. EMPLOYMENT. Employer hereby agrees to employ Executive and
Executive hereby accepts employment by Employer for the period and upon the
terms and conditions specified in this Agreement.

2. OFFICE AND DUTIES.

(a) Executive shall serve Employer generally as (i) President of
Employer and (ii) President, Chief Operating Officer and the most senior officer
of Employer's paper records management operations operating in the Americas
(I.E. North America, South America and Central America). Executive shall have
the duties, authority and responsibilities consistent with the duties, authority
and responsibilities typically performed by persons serving in such capacities
of businesses of similar size. In such capacities, Executive shall report
directly to C. Richard Reese ("Reese").

(b) Executive shall serve as a member of the Board of Directors
of Employer unless he is not elected by the shareholders of Employer.

(c) So long as Executive shall remain an employee of Employer,
Executive agrees to devote his best efforts and substantially all his working
time, energy and skill to the performance of his duties hereunder.
Notwithstanding the foregoing, Executive may engage in charitable, civic,
fraternal and professional association activities and may manage personal
investments so long as they do not unreasonably interfere with the carrying out
of his duties and responsibilities hereunder.

<PAGE>

(d) The principal place of employment of Executive shall be
within a twenty-five mile radius of King of Prussia, Pennsylvania, or such other
location as is consented to by Executive. It is understood however and agreed
that Executive may be required in connection with the performance of his duties,
to travel from time to time to other locations. When required to travel to
and/or spend time at such other locations, Executive's reasonable travel
expenses shall be reimbursed by Employer, upon submittal of vouchers in
accordance with the general reimbursement policies of Employer, or at
Executive's request, he shall be entitled to receive reasonable advances of such
travel expenses.

3. TERM. The term of employment ("Term of Employment") of Executive
pursuant to this Agreement shall be four (4) years, commencing on the date the
Merger is effective (as determined pursuant to the Agreement and Plan of Merger
by and among Iron Mountain and Employer dated as of October 20, 1999). Unless
either party elects to terminate this Agreement at the end of the initial or any
renewal term by giving the other party written notice of such election at least
ninety (90) days before the expiration of the then current term, the Term of
Employment shall be deemed to have been renewed for an additional term of one
(1) year commencing on the day after the expiration of the then current term.

4. COMPENSATION.

(a) For all of the service rendered by Executive to Employer,
Executive shall receive: (i) Base Compensation at the gross annual rate (without
regard to authorized or legally required deductions and withholdings) of Three
Hundred Twenty-Five Thousand Dollars ($325,000), payable in substantially equal
installments in accordance with Employer's regular payroll practices in effect
from time to time and (ii) bonus(es) in such amounts as are determined from time
to time by Employer's Board of Directors (or any committee thereof), provided
Executive shall have the same opportunity to participate in Employer's bonus
plans and arrangements as Reese.

(b) Base Compensation will be reviewed at the first time after the
date hereof that Employer generally reviews its senior executives and annually
thereafter, and may be increased in connection with such review if and to the
extent such an increase is determined to be appropriate by the Board of
Directors of Employer. Executive's Base Compensation in any year shall not be
less than the Base Compensation in the preceding year.

(c) Executive shall receive stock options in the same number and
under the same terms as Reese receives such options. "Stock options" for the
purposes of this paragraph shall be defined broadly and shall include by way of
example stock appreciation rights, restricted stock awards and other incentive
equity based compensation arrangements.

5. FRINGE BENEFITS.

As an inducement to Executive to enter into this Agreement, and in
consideration of Executive's covenants under this Agreement, Executive shall be
entitled to the benefits set forth below during the Term of Employment.

(a) Executive shall have the opportunity to participate in Employer's
benefit plans on the same basis as Reese, including but not limited to:
automobile allowance; health insurance; life insurance; accident insurance;
disability insurance, short term

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and long term; paid time off (including vacation, sick, and personal time); club
and professional memberships; legal, tax, or accounting services; coverage under
general liability and director and officers liability insurance; and profit
sharing, 401(k), pension, employee stock ownership, and other retirement plans.
Executive shall enjoy such benefits on the same terms and basis as Reese.

(b) Employer will reimburse Executive for all reasonable expenses
incurred by Executive in connection with the performance of Executive's duties
hereunder upon receipt of documentation therefor in accordance with Employer's
regular reimbursement procedures and practices in effect from time to time.

(c) Employer shall provide Executive with a fully furnished office,
and the facilities of Employer shall be generally available to Executive in the
performance of Executive's duties, it being understood that all equipment,
supplies, secretarial staff and other office personnel required in the
performance of Executive's duties shall be supplied by Employer.

6. DISABILITY. If Executive suffers a Disability (as defined below),
Employer may terminate this Agreement at any time thereafter by giving Executive
thirty (30) days written notice of termination. "Disability" shall mean
Executive's inability for a period of one hundred eighty (180) consecutive days,
to perform the essential duties of Executive's position, with any reasonable
accommodation required by law, due to a mental or physical impairment which
substantially limits one or more major life activities.

7. DEATH. If Executive dies during the Term of Employment, the Term of
Employment and Executive's employment with Employer shall terminate as of the
date of death.

8. DEATH AND DISABILITY PAYMENTS. In the event of the termination of
Executive's employment due to Executive's death or Disability, Executive or
Executive's legal representatives, as the case may be, shall be entitled to:

(a) in the case of death, unpaid Base Compensation earned through
Executive's date of death and continued Base Compensation at a rate in effect at
the time of death for a period of twelve (12) months following the month in
which such termination of employment due to death occurs, or in the case of
Disability, unpaid Base Compensation earned through Executive's date of
termination plus the disability benefit available under Employer's normal
procedures and policies for its most senior executives;

(b) any performance or special incentive bonus earned but not yet
paid;

(d) reimbursement for expenses incurred but not yet reimbursed by
Employer; and

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<PAGE>

(e) any other compensation and benefits to which Executive or
Executive's legal representatives may be entitled under applicable plans,
programs and agreements of Employer to the extent permitted under the terms
hereof.

9. TERMINATION FOR CAUSE.

(a) Employer may terminate Executive's employment relationship with
Employer at any time for Cause in the manner set forth below.

"Cause" shall mean:

(i) Executive is imprisoned for more than thirty (30)
consecutive days for any crime or convicted of a FELONY or other crime involving
moral turpitude or has entered a plea of nolo contendere (or similar plea) to a
charge of such an offense;

(ii) Executive's willful misconduct in the performance of his
duties and responsibilities hereunder or Executive's material neglect, refusal
or failure to perform his employment duties and responsibilities on more than
one occasion, other than for reasons of sickness, accident or similar causes
beyond Executive's control; or

(iii) Executive willfully violates Section 13 of this Agreement.

(b) If Employer believes that an event constituting Cause has
occurred, Employer must give Executive written notice of its intention to
terminate this Agreement for Cause. The preceding sentence notwithstanding,
Executive's employment shall not be deemed to have been terminated for Cause
unless (i) Employer has given or delivered to Executive reasonable notice
setting forth the reasons for Employer's intention to terminate Executive's
employment for Cause; (ii) if the written notice is of an event constituting
Cause as defined herein and if and only if the event is capable of being
cured, Executive shall have thirty (30) days following actual receipt of such
notice in which to cure; (iii) Executive shall have been given a reasonable
opportunity at any time during the 30-day period after Executive's receipt of
such notice, for Executive, together with Executive's counsel, to be heard
before the Board of Directors of Employer; and (iv) if such a Board hearing
occurs, a second written notice from Employer stating that, in the good faith
opinion of not less than a majority of the entire membership of the Board,
Executive was guilty of the conduct giving rise to termination for Cause as
defined herein. In the event Executive's employment is terminated by Employer
for Cause, Executive shall be entitled to:

(i) Unpaid Base Compensation earned at the rate in effect at
the time of Executive's termination through the date of termination of
Executive's employment;

(ii) any performance or special incentive bonus earned to the
date of employment termination but not yet paid;

(iii) reimbursement for expenses incurred but not yet
reimbursed by Employer; and

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<PAGE>

(iv) any other compensation and benefits to which Executive
may be entitled under applicable documents relating to plans, programs and
agreements of Employer.

10. RESIGNATION FOR GOOD REASON. Executive may resign and terminate his
employment relationship for Good Reason upon ten (10) days prior written notice
by Executive to Employer, in which event he shall be entitled to the payments
set forth in Section 11; provided, however, that if Executive does not send a
notice to Employer invoking his rights under this section within one year after
the occurrence of the specific event constituting Good Reason, Executive shall
no longer be able to invoke his rights under this section with respect to such
specific event. "Good Reason" shall mean any of the following:

(a) Executive is removed by Employer from, either or both of the
positions described in Section 2(a) other than for Cause;

(b) there is a diminution in Executive's authority, duties or
responsibilities normally associated with either of Executive's positions or
there are assigned to Executive duties and responsibilities materially
inconsistent with those normally associated with either of such positions other
than for Cause, which is not cured within thirty (30) days after written notice
to Employer; provided, however, that Executive shall not be required to give
notice and provide Employer an opportunity to cure pursuant to this subsection
(b) more than once in any twelve month period prior to terminating this
Agreement pursuant to this subsection (b);

(c) the failure of the Board of Directors to nominate Executive for
re-election as a director other than for Cause, or the removal of Executive as a
director other than for Cause;

(d) any change in the reporting relationships described in Section
2, which is not cured within thirty (30) days after written notice to
Employer; provided, however, that Executive shall not be required to give
notice and provide Employer an opportunity to cure pursuant to this
subsection (d) more than once in any twelve month period prior to terminating
this Agreement pursuant to this subsection (d);

(e) any failure by Employer to comply with any of the provisions of
this Agreement and/or any breach by Employer of any of the terms of this
Agreement which is not cured within thirty (30) days after written notice to
Employer; provided, however, that Executive shall not be required to give notice
and provide Employer an opportunity to cure pursuant to this subsection (e) more
than once in any twelve month period prior to terminating this Agreement
pursuant to this subsection (e);

(f) any purported termination by Employer of Executive's employment
otherwise than as expressly permitted by this Agreement;

(g) any action taken by Employer, including without limitation, a
restructuring, which reduces materially the assets, net worth, cash flow or
earnings of Executive's business unit;

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<PAGE>

(h) Reese ceases to be the most senior executive officer of Employer;

(i) Executive's benefits under any material benefit plan or program
of Employer or Executive's incentive or equity opportunity under any material
incentive or equity program of Employer is or are reduced other than a reduction
caused by changes that are applicable to all other senior executives in a
similar manner;

(j) Employer requires Executive to move to an office more than
twenty-five (25) miles from King of Prussia, Pennsylvania; or

(k) the assignment of Executive to office space which is not
commensurate with his position and title, the failure of Employer to provide the
ministerial, administrative and secretarial support customarily associated with
the title and position or the withdrawal by Employer of any such ministerial,
administrative and secretarial support.

11. TERMINATION PAYMENTS. In the event Executive's employment is
terminated by Employer without Cause, or in the event Executive resigns for Good
Reason, Executive shall receive his Base Compensation for the greater of the
remaining term of this Agreement or one year (such length of time being the
"Payment Term") in a lump sum (minus applicable withholding taxes) within five
(5) days after the date Executive's employment terminates. In addition, Employer
shall pay (a) the premiums in connection with Executive's continued
participation in Employer's group health plan pursuant to COBRA or otherwise for
the length of the Payment Term; and (b) reimbursement for expenses incurred but
not yet reimbursed by Employer.

12. EMPLOYER PROPERTY. All advertising, sales, manufacturers' and other
materials or articles or information, including without limitation data
processing reports, computer programs, software, customer information and
records, business records, price lists or information, samples, or any other
materials or data of any kind furnished to Executive by Employer or developed by
Executive on behalf of Employer or at Employer's direction or for Employer's use
or otherwise in connection with Executive's employment hereunder, are and shall
remain the sole property of Employer, including in each case all copies thereof
in any medium, including computer tapes and other forms of information storage.
If Employer requests the return of such materials at any time at or after the
termination of Executive's employment, Executive shall deliver all copies of the
same to Employer immediately.

13. CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION.

(a) Except with the prior written consent of Employer, during
Executive's active employment with Employer and for a period of one (1) year
after the termination of Executive's employment with Employer, but in no event
less than five (5) years after the date hereof (the "Restricted Period"),
Executive agrees that he shall not disclose or make available, directly or
indirectly, to others or use for his or others' benefit confidential
information, whether or not reduced to written or other recorded from, related
to Employer and its subsidiaries, including the names of customers, the contact
persons at customers, pricing, the software programs utilized by Employer and
its subsidiaries in the operation of its business and all other information
material to the operation, management, marketing or financing of Employer

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<PAGE>

and its subsidiaries which is not known or generally available to the public or
competitors in the records management or records storage industries.

The confidentiality obligations of this Section shall not apply to
information:

(i) which is required to be disclosed by judicial or
administrative process or order, or by other requirements of law;

(ii) which is or becomes generally available to the public other
than as a result of a breach of this Section 13;

(iii) which is received from a third party who obtained such
information other than under an obligation of confidentiality; or

(iv) which the Employer discloses on a non-confidential basis or
otherwise makes available to the general public or the trade.

(b) Executive agrees that during the Restricted Period, he shall not
directly or indirectly own, manage, engage in, participate in, provide advice
to, be employed by, have a financial interest in, or solicit or attempt to
obtain business from any customer of Employer or any of its subsidiaries on
behalf of, any enterprise which provides records management or records storage
and related services to business facilities (including, without limitation, the
management, handling, storage, filing, processing and retrieval of medical
records used by hospitals, private practitioners, and other medical
institutions) located in the geographic areas in which Executive oversees
operations at the time of the termination of his employment (the "Restricted
Area"). Section 13(b) shall not prohibit Executive from owning equity securities
of Employer or acquiring up to five percent (5%) of any class of securities
registered pursuant to the Securities Exchange Act of 1934, as amended, of any
corporation which may engage in the records management storage services in
direct competition with the business of Employer and its subsidiaries within the
Restricted Area.

(c) Executive agrees that during the Restricted Period, Executive
shall not on his own behalf or on behalf of any other person under his control
or on behalf of others, directly or indirectly solicit for employment (including
as an independent contractor), or endeavor to entice away, any of the officers,
employees or independent contractors of Employer and its subsidiaries who
perform services for Employer and its subsidiaries. For the avoidance of doubt,
Employer acknowledges that this Section 13(c) shall not prohibit Executive from
employing, on his own behalf or on behalf of any other person under his control
or on behalf of others, a former officer, employee or independent contractor of
Employer and its subsidiaries who has ceased to perform services for Employer
and its subsidiaries without enticement by Executive and who seeks employment
(including as an independent contractor) by Executive without solicitation by
Executive.

(d) Executive acknowledges that he has carefully read all the terms
herein stated and agrees that the same are necessary for the reasonable and
proper protection of Employer; and that each and every covenant is reasonable
with respect to such matter, length of time, and the geographical area
described; and that irrespective of all other conditions, the covenants and
restrictions hereinabove provided shall be operative during the full period and
throughout the geographical area described. In the event any court finds any
such

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<PAGE>

restraint or limitation to be unreasonable, then it is the intent of the parties
that such court should determine the maximum restraint or limitation which is
reasonable and enforcement will be of that restraint or limitation.

(e) Executive acknowledges that confidential information in his
possession related to the Employer and its subsidiaries has particular value,
the loss of confidentiality of which by communication to unauthorized persons
cannot be reasonably or adequately compensated for by damages alone. Moreover,
Executive agrees that any breach of paragraphs (a) (b) and (c) of this Section
13 would give rise to damages which would be difficult to calculate. Therefore,
the parties hereby agree that in the event of a breach of any of the terms and
conditions of this Section 13, the Employer shall be entitled to equitable
relief by way of an injunction. This Section 13 shall not be construed as a
limitation upon the Employer's remedies for such breach.

(f) The restrictions contained in this Section 13 shall be broadly
construed by any court having jurisdiction of the matter in order to protect the
Employer to the maximum degree possible.

14. INDEMNIFICATION.

(a) Employer shall indemnify Executive to the fullest extent
permitted by Pennsylvania law in effect on the date hereof against all costs,
expenses, liabilities and losses (including, without limitation, attorneys'
fees, judgments, fines, penalties, ERISA excise taxes, penalties and amounts
paid in settlement) reasonably incurred by Executive in connection with a
Proceeding. For the purposes of this Section 14, a "Proceeding" shall mean any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, in which Executive is made, or is threatened to be made, a party
to, or a witness in, such action, suit or proceeding by reason of the fact that
he is or was an officer, director or employee of Employer or is or was serving
as an officer, director, member, employee, trustee or agent of any other entity
at the request of Employer.

(b) Employer shall advance to Executive all reasonable costs and
expenses incurred in connection with a Proceeding within 20 days after receipt
by Employer of a written request for such advance. Such request shall include an
itemized list of the costs and expenses and an undertaking by Executive to repay
the amount of such advance if ultimately it shall be determined that he is not
entitled to be indemnified against such costs and expenses.

(c) If Executive in fact meets the applicable standard of conduct, he
shall be entitled to indemnification whether or not Employer (whether by the
Board, the shareholders, independent legal counsel or other party) determines
that indemnification is proper because he has met such applicable standard of
conduct. Neither the failure of Employer to have made such a determination prior
to the commencement by Executive of any suit or arbitration proceeding seeking
indemnification, nor a determination by Employer that Executive has not met such
applicable standard of conduct, shall create a presumption that Executive has
not met the applicable standard of conduct.

(d) Employer shall not settle any Proceeding or claim in any manner
which would impose on Executive any penalty or limitation without Executive's
prior

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<PAGE>

written consent. Neither Employer nor Executive will withhold consent to any
proposed settlement unreasonably.

(e) Employer shall maintain a policy of directors and officers
liability insurance in a reasonable amount of coverage.

15. NO MITIGATION: NO OFFSET. In the event of any termination of
Executive's employment under this Agreement, Executive shall be under no
obligation to seek other employment, and there shall be no offset against
amounts due under this Agreement on account of any remuneration attributable to
any subsequent employment that Executive may obtain.

16. NATURE OF PAYMENTS. Any amounts due Executive under this Agreement in
the event of any termination of Executive's employment with Employer are in the
nature of severance payments, or liquidated damages which contemplate both
direct damages and consequential damages that may be suffered as a result of the
termination of Executive's employment, or both, and are not in the nature of a
penalty.

17. MISCELLANEOUS.

(a) INDULGENCES. ETC. Neither the failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.

(b) CONTROLLING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
notwithstanding any conflict-of-laws doctrines of such jurisdiction to the
contrary, and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.

(c) NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received when delivered (personally, by
recognized national courier service, or by other messenger, for delivery to the
intended addressee) or upon actual receipt of registered or certified mail,
postage prepaid, return receipt requested, addressed as set forth below:

(i) If to Executive:

J. Peter Pierce
269 Hilldale Road
Villanova, Pennsylvania 19085

-9-
<PAGE>

(ii) If to Employer:

Iron Mountain Incorporated
745 Atlantic Avenue
Boston, Massachusetts 02111

Any party may alter the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.

(d) BINDING NATURE OF AGREEMENT. This Agreement shall be binding upon
and shall inure to the benefit of Employer, its permitted successors and
permitted assigns and shall be binding upon Executive and shall inure to the
benefit of Executive and his estate and personal representatives. This Agreement
may not be assigned by either party (including by operation of law) without the
prior written consent of the other party.

(e) EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories. Any photographic copy of this Agreement, with all signatures
reproduced on one or more sets of signature pages, shall be considered for all
purposes as if it were an executed counterpart of this Agreement.

(f) ENTIRE AGREEMENT. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.

(g) SECTION HEADINGS. The Section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

(h) NUMBER OF DAYS. Except as otherwise provided herein, in computing
the number of days for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays and holidays; provided, however, that if the final
day of any time period falls on a Saturday, Sunday or holiday on which federal
banks are or may elect to be closed, then the final day shall be deemed to be
the next day which is not a Saturday, Sunday or such holiday.

(i) SETTLEMENT OF DISPUTES. Any disputes regarding the interpretation
of the Agreement or relating to Executive's employment shall be resolved by

-10-
<PAGE>

binding arbitration to be held in Philadelphia, Pennsylvania in accordance with
the Employment Dispute Resolution Rules of the American Arbitration Association
then in effect.

IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement in King of Prussia, Pennsylvania on the date first above written.

PIERCE LEAHY CORP.

By: /s/ DOUGLAS B. HUNTLEY
----------------------------
Name: Douglas B. Huntley
Title: Vice President

Attest: /s/ JOSEPH P. LINAUGH
-----------------------
Name: Joseph P. Linaugh
Title: Secretary

/s/ J. PETER PIERCE
---------------------------
J. Peter Pierce

-11-

<PAGE>

EXHIBIT 10.21

REGISTRATION RIGHTS AGREEMENT JOINDER

This Joinder to Registration Rights Agreement (this "Agreement") is
made and entered into as of February 1, 2000 by and among Iron Mountain
Incorporated, a Delaware corporation (the "Company"), and those stockholders
party hereto (the "New Stockholders").

WHEREAS, the Company and certain of its Stockholders are parties to
that certain Amended and Restated Registration Rights Agreement dated as of June
12, 1997, as heretofore supplemented (the "Registration Rights Agreement"); and

WHEREAS, the Company, Pierce Leahy Corp., a Pennsylvania corporation
("Pierce Leahy"), and the New Stockholders are parties to that certain
Shareholders' Agreement dated as of October 20, 1999 (the "Shareholders'
Agreement"); and

WHEREAS, in accordance with the terms of the Registration Rights
Agreement, the Company and the New Stockholders desire to admit the New
Stockholders as Stockholders (this and other capitalized terms used herein
without definition are used with the meanings given to such terms in the
Registration Rights Agreement) under the Registration Rights Agreement.

NOW, THEREFORE, in consideration of the recitals, the mutual covenants
and agreements herein contained, and other valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby covenant and agree as follows:

1. The Agreement and Plan of Merger (the "Merger Agreement"), dated as
of October 20, 1999, by and between the Company and Pierce Leahy shall be an
"Equity Agreement" for purposes of the Registration Rights Agreement. For
purposes of the Registration Rights Agreement, (i) shares of common stock, par
value $.01 per share, of Pierce Leahy shall be "Registrable Securities" and (ii)
only Subject Shares (as defined in the Shareholders' Agreement) shall be
"Registrable Securities".

2. Each New Stockholder hereby (i) joins in and becomes party to the
Registration Rights Agreement as a Stockholder, (ii) shall be entitled to the
rights and privileges of a Stockholder under the Registration Rights Agreement,
(iii) agrees to be bound by and to perform all obligations of a Stockholder
under the Registration Rights Agreement, and (iv) agrees that he, she or it
shall not assign his rights under the Registration Rights Agreement other than
as expressly permitted by Section 9(a) thereof (it being understood that a New
Stockholder shall be entitled to assign its rights under the Registration Rights
Agreement to any Permitted Assignee (as defined in the Shareholders' Agreement)
that receives Subject Shares and is subject to the limitations in Section 3.4 of
the Shareholders' Agreement so long as such Permitted Assignee complies with the
procedures set forth in clause (ii) of the proviso to Section 9(a) of the
Registration Rights Agreement). For the avoidance of doubt, (i) the New
Stockholders shall collectively be considered a "Significant Stockholder" for
purposes of the Registration Rights Agreement, (ii) none of the New Stockholders
shall be considered a "Registered Stockholder" for purposes of the Registration
Rights Agreement and (iii) any rights, privileges, obligations and

<PAGE>

restrictions hereunder or under the Registration Rights Agreement shall only
apply to the New Stockholders with respect to the Subject Shares.

3. Pursuant to Section 1(b) of the Registration Rights Agreement, the
New Stockholders, as a Significant Stockholder, shall collectively have the
right to demand that the Company effect registration of all or part of the
Registrable Securities held by the New Stockholders pursuant to said Section
1(b) on two occasions.

4. Pursuant to Section 5(b) of the Registration Rights Agreement, the
rights and obligations of the New Stockholders under the Registration Rights
Agreement will terminate on the date that the restrictions on the transfer of
Registrable Securities under Section 3.4 of the Shareholders' Agreement
terminate. The provisions of Section 5(a) (relating to other circumstances under
which a Stockholder's rights under the Registration Rights Agreement shall be
terminated) shall not be applicable to the New Stockholders.

5. Except to the extent specifically supplemented hereby, the
provisions of the Registration Rights Agreement shall remain unmodified. The
Registration Rights Agreement, as supplemented hereby, is confirmed as being in
full force and effect. This Agreement may be executed in any number of
counterparts, which together shall constitute one instrument, shall be governed
by and construed in accordance with the laws (other than the conflict of laws
rules) of the Commonwealth of Massachusetts and shall bind and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.

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

IRON MOUNTAIN INCORPORATED

By: /s/ C. RICHARD REESE
---------------------------------
Name: C. Richard Reese
Title: Chairman of the Board and Chief Executive
Officer

-2-
<PAGE>

SHAREHOLDERS:

/s/ LEO W. PIERCE, SR.
--------------------------------------------------------------
Leo W. Pierce, Sr., Trustee u/a/t dated January 6, 1997

/s/ LEO W. PIERCE, SR.
--------------------------------------------------------------
Leo W. Pierce, Sr.

/S/ J. PETER PIERCE
--------------------------------------------------------------
J. Peter Pierce

/s/ J. PETER PIERCE
--------------------------------------------------------------
J. Peter Pierce, Trustee
Leo W. Pierce Trust for the family of J. Peter Pierce

/s/ J. PETER PIERCE
--------------------------------------------------------------
J. Peter Pierce, Trustee
Karen Pierce 1996 Irrevocable Trust

/s/ LEO W. PIERCE, JR.
--------------------------------------------------------------
Leo W. Pierce, Jr.

/s/ LEO W. PIERCE, JR.
--------------------------------------------------------------
Leo W. Pierce, Jr., Trustee Under Irrevocable Agreement
of Trust dated March 6, 1997

/s/ MICHAEL J. PIERCE
--------------------------------------------------------------
Michael J. Pierce

-3-
<PAGE>

/s/ MARY E. PIERCE
--------------------------------------------------------------
Mary E. Pierce

/s/ BARBARA P. QUINN
--------------------------------------------------------------
Barbara P. Quinn

/s/ BARBARA P. QUINN
--------------------------------------------------------------
Barbara P. Quinn, Trustee under Irrevocable Agreement
of Trust dated December 30, 1996 f/b/o Michael J. Pierce

/s/ CONSTANCE P. BUCKLEY
--------------------------------------------------------------
Constance P. Buckley

/s/ CONSTANCE P. BUCKLEY, TRUSTEE
--------------------------------------------------------------
Constance P. Buckley, Trustee under Irrevocable Trust
Agreement dated December 23, 1996

/s/ KATHRYN COX
--------------------------------------------------------------
Kathryn Cox

-4-

<PAGE>

EXHIBIT 21

IRON MOUNTAIN INCORPORATED

<TABLE>
<CAPTION>
SUBSIDIARIES

JURISDICTION OF
SUBSIDIARY ORGANIZATION

<S> <C>
Iron Mountain Records Management, Inc. Delaware
. Iron Mountain Records Management of Michigan, Inc. Delaware
. Iron Mountain/National Underground Storage, Inc. Delaware
. Iron Mountain Consulting Services, LLC Delaware
. Iron Mountain of Maryland LLC Delaware
. IM Billerica, Inc. Massachusetts
. Arcus Data Security, Inc. Delaware
. . Arcus Data Security LLC Delaware
. . Iron Mountain Global, Inc. Delaware
. . . Iron Mountain Global LLC Delaware
. . . . Iron Mountain Mexico, S.A. de R.L. de C.V.(1) Mexico
. . . . . Sistemas de Archivo Corporativo, S.A. de R.L. de C.V. ("SAC")(2) Mexico
. . . . . . Sistemas de Archivo, S.A. de R.L. de C.V. Mexico
. . . . . . Sistemas de Archivo de Mexico, S.A. de R.L. de C.V. Mexico
. . . . Iron Mountain (Netherlands) B.V. Netherlands
. . . . . Iron Mountain (UK) Ltd. United Kingdom
. . . . . . Iron Mountain Europe Limited ("IME")(3) United Kingdom
. . . . . . . Document and Information Management Services, Ltd. United Kingdom
. . . . . . . . Iron Mountain Holdings (France), SNC(4) France
. . . . . . . . . Iron Mountain (France), S.A. France
. . . . . . . . . . MAP, S.A. France
. . . . . . . . . . . BDM S.A. France
. . . . . . . . . . . . FIME S.A. France
. . . . . . . . . . . . . Memogarde, S.A. France
. . . . . . . . . . . . . France Telesauveguard, S.A. France
. . . . . . . . . . . . . Societe Civile Immobiliere du Chemin Cornillon France
. . . . . . . The Document Storage Company Limited United Kingdom
. . . . . . . British Data Management, Ltd. United Kingdom
. . . . . . . . Miller Data Management Limited United Kingdom
. . . . . . . . Kestrel Data Services Limited United Kingdom
. . . . . . . . . Kestrel Data UK Limited United Kingdom
. . . . . . . . . . Kestrel Reprographics Limited United Kingdom
. . . . . . . . . . Kestrel Data Storage & Management Limited United Kingdom
. . . . . . . Arcus Data Security Limited United Kingdom
. . . . . . . Secur' Archiv Aktenmanagement GmbH Germany
. . . . . . . Stortex (Holdings) Limited Scotland
. . . . . . . . Stortex Limited United Kingdom
. . . . . . . . JAD 93 Limited United Kingdom
. . . . . . . Iron Mountain (Holdings) Europe Limited United Kingdom
. . . . . . . . Iron Mountain Espana, S.A. Spain
. . . . . . . . . Innovator Projects, S.A. Spain
. . . . . . . . . . Datavault, S.A.(5) Spain
. . . . . . . . . . . Datavault Iberica, S.A. Spain
. . . . . . . . . . . Datavault Madrid, S.A. Spain
. . . . . . . . . . . Datavault Cantabrico, S.A. Spain
. . . . . . . . . . . Datavault Aragon, S.A. Spain
. . . . . . . . . . . Datavault Andalucia, S.A. Spain
Iron Mountain Records Management (Puerto Rico), Inc. Puerto Rico
DSI Technology Escrow Services, Inc. Delaware
Arcus Staffing Resources, Inc. Delaware
</TABLE>

Page 1 of 2

<PAGE>

<TABLE>
<S> <C>
Advanced Box, Inc. Delaware
Monarch Box, Inc. Delaware
Pierce Maryland, L.L.C. Delaware
Iron Mountain Canada Corporation Nova Scotia
. Pierce Leahy Command Box Company Nova Scotia
. Docuguard Holdings Limited(6) Cypress
. . Docuguard Kft. Hungary
. . Docuguard CR-s.r.o.(7) Czech Republic
Archivex Limited Nova Scotia
. Archivex Box Company Limited Alberta
Pierce Leahy Europe Limited United Kingdom
. Silver Sky Jersey
. Datavault Holdings Limited United Kingdom
. . Datavault Limited(8) Scotland
. . . Datavault (NW) Limited Scotland
. . . Datavault (SW) Limited United Kingdom
Eurostorage Dossier en Arche f beheer BV(9) Netherlands
Sabero Pierce Archive Limited(10) India
Pierce Leahy Chile S.A.(11) Chile
. Pierce Leahy Peru(12) Peru
PLRH, Inc. Pennsylvania
Upper Providence Venture I, L.P.(13) Pennsylvania
</TABLE>

(1) Iron Mountain Mexico, S.A. de R.L. de C.V. is owned 99.9% by Iron
Mountain Global, Inc. and 0.1% by Iron Mountain Global, LLC.

(2) SAC is owned 50.1% by Iron Mountain Mexico, S.A. de R.L. de C.V. and
49.9% by Padilla & Perez, Sistemas de Archivos S.A. de C.V.

(3) IME is owned 50.1% by Iron Mountain (UK) Ltd. and 49.9% by Mentmore
Abbey PLC.

(4) Document and Information Management Services, Ltd. and Miller Data
Management Limited together own 99.9% and 0.1%, respectively, of Iron
Mountain Holdings (France), SNC.

(5) Innovator Projects, S.A. owns 70.83% of Datavault, S.A., and is party to
an agreement to acquire the remainder of the stock.

(6) Iron Mountain Canada Corporation owns 25%.

(7) Docuguard Holdings Limited owns 95%.

(8) Datavault Holdings Limited owns 72.9%; Pierce Leahy Europe Limited owns
20.6%; Silver Sky owns 6.5%.

(9) Iron Mountain Incorporated owns 20%.

(10) Iron Mountain Incorporated owns an estimated 20%.

(11) Iron Mountain Incorporated owns 20%.

(12) Pierce Leahy Chile owns 38%; Iron Mountain Incorporated owns 12%.

(13) PLRH, Inc. owns 1% general partner interest. Iron Mountain Incorporated
owns 54% limited partner interest.
Page 2 of 2

<PAGE>

EXHIBIT 23.1

Consent of Independent Public Accountants

As independent public accountants, we hereby consent to the incorporation of our
reports, dated February 28, 2000, on Iron Mountain Incorporated's, a Delaware
corporation, financial statements included in this Form 10-K, into Iron Mountain
Incorporated's, a Pennsylvania corporation, previously filed registration
statements on Forms S-3 (File Nos. 333-91577 and 333-72191) and S-8 (File Nos.
333-43787, 333-69859 and 333-95901).

/s/ Arthur Andersen LLP

Arthur Andersen LLP

Boston, Massachusetts
March 27, 2000

<PAGE>

EXHIBIT 23.2

Consent of Independent Public Accountants

As independent public accountants, we hereby consent to the incorporation of
our reports, dated February 22, 2000, on Pierce Leahy Corp.'s, a Pennsylvania
corporation, financial statements included in this Form 10-K, into Iron
Mountain Incorporated's, a Pennsylvania corporation, previously filed
registration statements on Forms S-3 (File Nos. 333-91577 and 333-72191) and
S-8 (File Nos. 333-43787, 333-69859 and 333-95901).

/s/ Arthur Andersen LLP

Arthur Andersen LLP

Philadelphia, Pennsylvania
March 27, 2000

<PAGE>

EXHIBIT 23.3

Consent of Independent Public Accountants

As independent public accountants, we hereby consent to the incorporation of our
reports, dated February 28, 2000, on Iron Mountain Europe Limited's financial
statements included in this Form 10-K, into Iron Mountain Incorporated's, a
Pennsylvania corporation, previously filed registration statements on Forms S-3
(File Nos. 333-91577 and 333-72191) and S-8 (File Nos. 333-43787, 333-69859 and
333-95901).

/s/ RSM Robson Rhodes

RSM Robson Rhodes

Birmingham, England
March 27, 2000
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1.000
<CASH> 3,830
<SECURITIES> 0
<RECEIVABLES> 109,814
<ALLOWANCES> (5,740)
<INVENTORY> 0
<CURRENT-ASSETS> 143,664
<PP&E> 497,369
<DEPRECIATION> (93,630)
<TOTAL-ASSETS> 1,317,212
<CURRENT-LIABILITIES> 150,348
<BONDS> 612,947
0
0
<COMMON> 369
<OTHER-SE> 488,385
<TOTAL-LIABILITY-AND-EQUITY> 1,317,212
<SALES> 519,549
<TOTAL-REVENUES> 519,549
<CGS> 260,930
<TOTAL-COSTS> 455,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 54,425
<INCOME-PRETAX> 9,841
<INCOME-TAX> 10,579
<INCOME-CONTINUING> (1,060)
<DISCONTINUED> (13,159)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,219)
<EPS-BASIC> (0.43)
<EPS-DILUTED> (0.43)

</TABLE>

<PAGE>
<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,265
<SECURITIES> 0
<RECEIVABLES> 57,429
<ALLOWANCES> (3,378)
<INVENTORY> 1,126
<CURRENT-ASSETS> 64,193
<PP&E> 361,401
<DEPRECIATION> (85,367)
<TOTAL-ASSETS> 760,466
<CURRENT-LIABILITIES> 98,389
<BONDS> 586,797
0
0
<COMMON> 170
<OTHER-SE> 69,638
<TOTAL-LIABILITY-AND-EQUITY> 760,466
<SALES> 0
<TOTAL-REVENUES> 342,262
<CGS> 0
<TOTAL-COSTS> 275,909
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,363
<INCOME-PRETAX> 13,990
<INCOME-TAX> 6,290
<INCOME-CONTINUING> 7,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,926
<EPS-BASIC> 0.41
<EPS-DILUTED> 0.39

</TABLE>

<PAGE>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> OCT-31-1999
<EXCHANGE-RATE> 1.000
<CASH> 1,316
<SECURITIES> 0
<RECEIVABLES> 11,107
<ALLOWANCES> (334)
<INVENTORY> 0
<CURRENT-ASSETS> 15,112
<PP&E> 54,652
<DEPRECIATION> (5,459)
<TOTAL-ASSETS> 155,049
<CURRENT-LIABILITIES> 46,144
<BONDS> 38,356
0
0
<COMMON> 4,252
<OTHER-SE> 73,256
<TOTAL-LIABILITY-AND-EQUITY> 155,049
<SALES> 30,482
<TOTAL-REVENUES> 30,482
<CGS> 17,293
<TOTAL-COSTS> 26,684
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,362
<INCOME-PRETAX> 2,436
<INCOME-TAX> 1,590
<INCOME-CONTINUING> 846
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 846
<EPS-BASIC> 0
<EPS-DILUTED> 0

</TABLE>