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