Document:

Exhibit 4.1

 

 

 

IRON MOUNTAIN INCORPORATED

 

THE GUARANTORS NAMED HEREIN

 

AND

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee

 

5.750% Senior Subordinated Notes due 2024

 

SECOND SUPPLEMENTAL INDENTURE

 

Dated as of August 10, 2012

 

TO

 

SENIOR SUBORDINATED INDENTURE

 

Dated as of September 23, 2011

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 1. DEFINITIONS
    	
1
    
	
 
    	
 
    
	
 
    	
Section 1.1.
    	
Definitions
    	
1
    
	
 
    	
 
    
	
ARTICLE 2. FORM AND TERMS OF THE NOTES
    	
16
    
	
 
    	
 
    
	
 
    	
Section 2.1.
    	
Form and   Dating
    	
16
    
	
 
    	
 
    	
(a)
    	
General
    	
16
    
	
 
    	
 
    	
(b)
    	
Global   Notes
    	
16
    
	
 
    	
 
    	
(c)
    	
Book-Entry   Provisions
    	
16
    
	
 
    	
 
    	
(d)
    	
Definitive   Note
    	
17
    
	
 
    	
Section 2.2.
    	
Execution   and Authentication
    	
17
    
	
 
    	
Section 2.3.
    	
Depository   and Paying Agent for Notes
    	
17
    
	
 
    	
Section 2.4.
    	
Transfer   and Exchange of Notes
    	
17
    
	
 
    	
 
    	
(a)
    	
Transfer   and Exchange of Global Notes
    	
17
    
	
 
    	
 
    	
(b)
    	
Transfer   and Exchange of Definitive Notes
    	
17
    
	
 
    	
 
    	
(c)
    	
Restrictions   on Transfer and Exchange of Global Notes
    	
17
    
	
 
    	
 
    	
(d)
    	
Authentication   of Definitive Notes in Absence of Depository
    	
17
    
	
 
    	
 
    	
(e)
    	
Cancellation   and/or Adjustment of the Global Notes
    	
18
    
	
 
    	
 
    	
(f)
    	
General   Provisions Relating to Transfers and Exchanges
    	
18
    
	
 
    	
Section 2.5.
    	
Redemption
    	
19
    
	
 
    	
Section 2.6.
    	
Additional   Covenants
    	
21
    
	
 
    	
 
    	
(a)
    	
Restricted   Payments
    	
21
    
	
 
    	
 
    	
(b)
    	
Incurrence   of Indebtedness and Issuance of Preferred Stock
    	
24
    
	
 
    	
 
    	
(c)
    	
Liens
    	
26
    
	
 
    	
 
    	
(d)
    	
Dividend   and Other Payment Restrictions Affecting Restricted Subsidiaries
    	
26
    
	
 
    	
 
    	
(e)
    	
Transactions   with Affiliates
    	
28
    
	
 
    	
 
    	
(f)
    	
Certain   Senior Subordinated Debt
    	
29
    
	
 
    	
 
    	
(g)
    	
Additional   Subsidiary Guarantees
    	
29
    
	
 
    	
 
    	
(h)
    	
Designation   of Unrestricted Subsidiaries
    	
30
    
	
 
    	
 
    	
(i)
    	
Limitation   on Sale and Leaseback Transactions
    	
31
    
	
 
    	
 
    	
(j)
    	
Asset   Sales
    	
31
    
	
 
    	
 
    	
(k)
    	
Change   of Control Offer
    	
33
    
	
 
    	
 
    	
(l)
    	
Changes   in Covenants When Notes Rated Investment Grade
    	
35
    
	
 
    	
Section 2.7.
    	
Subsidiary   Guarantees
    	
35
    
	
 
    	
Section 2.8.
    	
Legal   Defeasance and Covenant Defeasance
    	
35
    
	
 
    	
Section 2.9.
    	
Subordination
    	
36
    
	
 
    	
Section 2.10.
    	
Amend,   Restate and Replace Provision Regarding Redemption
    	
36
    
	
 
    	
 
    
	
ARTICLE 3. MISCELLANEOUS
    	
36
    
	
 
    	
 
    
	
 
    	
Section 3.1.
    	
Effect   of Headings
    	
36
    
	
 
    	
Section 3.2.
    	
Successors   and Assigns
    	
36
    
	
 
    	
Section 3.3.
    	
Separability   Clause
    	
36
    
	
 
    	
Section 3.4.
    	
Governing   Law
    	
36
    
	
 
    	
Section 3.5.
    	
Supplement   to Supersede Indenture
    	
37
    
	
 
    	
Section 3.6.
    	
Trustee   Not Responsible
    	
37
    
	
 
    	
 
    
	
EXHIBITS
    	
 
    
	
Exhibit A
    	
FORM OF NOTE
    	
 
    
						

 

 

	
Exhibit B
    	
FORM OF SUPPLEMENTAL INDENTURE
    	
 
    

 

 

THIS SECOND SUPPLEMENTAL INDENTURE, dated as of August 10, 2012 (“Supplemental Indenture”), is by and between IRON MOUNTAIN INCORPORATED, a Delaware corporation (the “Company”), having its principal office at 745 Atlantic Avenue, Boston, Massachusetts 02111, the guarantors signatory hereto (the “Guarantors”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association, as trustee (the “Trustee”), having its principal corporate trust office at 525 William Penn Place, 38th Floor, Pittsburgh, PA 15259.

 

WITNESSETH:

 

WHEREAS, the Company and the Trustee are parties to that certain Senior Subordinated Indenture, September 23, 2011 (the “Indenture”), to provide for the issuance by the Company from time to time of Securities to be issued in one or more series as provided in the Indenture;

 

WHEREAS, the issuance and sale of up to $1,000,000,000 aggregate principal amount of a series of the Company’s Securities (the “Notes”) have been authorized by resolutions adopted by the Board of Directors of the Company on July 31, 2012 and by the Strategic Planning and Capital Allocation Committee of the Board of Directors of the Company on August 3, 2012;

 

WHEREAS, the Company desires to issue and sell $1,000,000,000 aggregate principal amount of the Notes on the date hereof;

 

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

 

WHEREAS, all things necessary have been done by the Company to make this a legal, valid and binding Supplemental Indenture, enforceable against the Company, and

 

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

 

ARTICLE 1.

 

DEFINITIONS

 

Section 1.1.                           Definitions.

 

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

 

“Acquired Debt” means, with respect to any specified Person:

 

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

 

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

 

 

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

 

(1)                                 EBITDA of such Acquisition EBITDA Entity for the most recently ended four full quarters for which internal financial statements are available at such date of determination (adjusted to give pro forma effect to any acquisition or disposition of a business or Person by such Acquisition EBITDA Entity consummated during the period covered by, or after the date of, such four full fiscal quarters) or, if statements are not available for such four full fiscal quarters, EBITDA for the most recently ended fiscal quarter for which internal financial statements are available, annualized, plus

 

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

 

“Acquisition EBITDA Entity” means, as of any date of determination, a business or Person:

 

(1)                                 which has been acquired by the Company or one of its Restricted Subsidiaries and with respect to which internal financial statements on a consolidated basis with the Company are not available for four full fiscal quarters; or

 

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

 

“Additional Notes” means such amount of the Company’s 5.750% Senior Subordinated Notes due 2024  (other than the Initial Notes) as the Company may issue from time to time under this Supplemental Indenture in accordance with Section 2.2 hereof as part of the same series as the Initial Notes.

 

“Adjusted EBITDA” means, as of any date of determination and without duplication, the sum of:

 

(1)                                 EBITDA of the Company and its Restricted Subsidiaries for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available at such date of determination; and

 

(2)                                 Acquisition EBITDA of each business or Person that is an Acquisition EBITDA Entity as of such date of determination, multiplied by a fraction, (i) the numerator of which is 12 minus the number of months (and/or any portion thereof) in such most recent four full fiscal quarters for which the financial results of such Acquisition EBITDA Entity are included in the EBITDA of the Company and its Restricted Subsidiaries under clause (1) above, and (ii) the denominator of which is 12.  The effects of unusual items, including merger-related expenses permitted to be shown as a separate line item on a statement of operations in accordance with GAAP, or non-recurring items in respect of the Company, a Restricted

 

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

 

“Agent Members” means members of, or participants in, the Depository.

 

“Attributable Indebtedness” in respect of a Sale and Leaseback Transaction means, as of the time of determination, the greater of:

 

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

 

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

 

“Cash Equivalents” means:

 

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

 

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

 

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

 

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

 

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

 

“Change of Control” means the occurrence of any of the following events:

 

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

 

(2)                                 the Company consolidates with, or merges with or into, another Person or conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any Person, or any Person consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction in which the outstanding Voting Stock of the Company is converted into or exchanged for cash, securities

 

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

 

(3)                                 during any consecutive two-year period, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election to such Board of Directors, or whose nomination for election by the stockholders of the Company, was approved by a vote of 662/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office; or

 

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

 

“Consolidated Adjusted Net Income” means, for any period, the net income (or net loss) of the Company and its Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP, adjusted to the extent included in calculating such net income or loss by excluding:

 

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

 

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

 

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

 

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

 

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“Consolidated Income Tax Expense” means, for any period, the provision for federal, state, local and foreign income taxes of the Company and its Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Interest Expense” means, for any period, without duplication, the sum of:

 

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

 

(i)            amortization of debt discount;

 

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

 

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

 

(iv)          amortization of debt issuance costs; and

 

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

 

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

 

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

 

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

 

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

 

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

 

(1)                                 Consolidated Interest Expense for such period; plus

 

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

 

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

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Equity Proceeds” means:

 

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

 

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

 

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

 

“Existing Indebtedness” means Indebtedness of the Company and its Subsidiaries (other than under the Credit Agreement) in existence on the date of this Supplemental Indenture, until such amounts are repaid.

 

“Existing Senior Subordinated Securities” means the 6 5/8% Notes, the 6 3/4% Notes, the 7 1/4% Notes, the 7 1/2% Notes, the 8% Notes, the Second 8% Notes, the 8 3/8% Notes, the 8 3/4% Notes and the 7 3/4% Notes.

 

“GAAP” means accounting principles generally accepted in the United States of America which were in effect on December 30, 2002.

 

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

 

“Indebtedness” means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person, and whether or not contingent:

 

(1)                                 every obligation of such Person for money borrowed;

 

(2)                                 every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(3)                                 every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person;

 

(4)                                 every obligation of such Person issued or assumed as the deferred purchase price of property or services;

 

(5)                                 every Capital Lease Obligation and every obligation of such Person in respect of Sale and Leaseback Transactions that would be required to be capitalized on the balance sheet in accordance with GAAP;

 

(6)                                 all Disqualified Stock of such Person valued at the greater of its voluntary or involuntary maximum fixed repurchase price, plus accrued and unpaid dividends (unless included in such maximum repurchase price);

 

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(7)                                 all obligations of such Person under or with respect to Hedging Obligations which would be required to be reflected on the balance sheet as a liability of such Person in accordance with GAAP; and

 

(8)                                 every obligation of the type referred to in clauses (1) through (7) of another Person and dividends of another Person the payment of which, in either case, such Person has guaranteed.

 

For purposes of this definition, the “maximum fixed repurchase price” of any Disqualified Stock that does not have a fixed repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were repurchased on any date on which Indebtedness is required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock, such fair market value will be determined in good faith by the board of directors of the issuer of such Disqualified Stock. Notwithstanding the foregoing, trade accounts payable and accrued liabilities arising in the ordinary course of business and any liability for federal, state or local taxes or other taxes owed by such Person shall not be considered Indebtedness for purposes of this definition. The amount outstanding at any time of any Indebtedness issued with original issue discount is the aggregate principal amount at maturity of such Indebtedness, less the remaining unamortized portion of the original issue discount of such Indebtedness at such time, as determined in accordance with GAAP. Indebtedness shall be calculated without giving effect to the effects of Accounting Standards Codification No. 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.

 

“Initial Notes” means the first $1,000,000,000 aggregate principal amount of 5.750% Senior Subordinated Notes due 2024 that are issued under this Supplemental Indenture, as amended or supplemented from time to time pursuant to the Indenture.

 

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

 

“Leverage Ratio” means, at any date, the ratio of:

 

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

 

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

 

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

 

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

 

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

 

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

 

‘‘Make-Whole Amount’’ means, with respect to any Note, an amount equal to the excess, if any, of:

 

(1) the present value of the remaining principal, premium and interest payments that would be payable with respect to such Note if such Note were redeemed on August 15, 2017, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over

 

(2) the outstanding principal amount of such Note.

 

‘‘Make-Whole Average Life’’ means, with respect to any date of redemption of Notes, the number of years (calculated to the nearest one-twelfth) from such redemption date to August 15, 2017.

 

“Make-Whole Price” means, with respect to any Note, the greater of:

 

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

 

(2)                                 the redemption price of such Note on August 15, 2017.

 

“Market Price” means:

 

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

 

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

 

The closing price for each day shall be:

 

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

 

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principal national securities exchange on which such Equity Interests are listed or admitted to trading (which shall be the national securities exchange on which the greatest number of such Equity Interests have been traded during such 20 consecutive trading days); or

 

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

 

“Net Proceeds” means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale, which amount is equal to the excess, if any, of:

 

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

 

(2)                                 the sum of:

 

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

 

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

 

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

 

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

 

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

 

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“Officers’ Certificate” means a certificate signed, unless otherwise specified, by any two of the Chairman of the Board, a Vice Chairman of the Board, the Chief Executive Officer and President, the Chief Financial Officer, the Controller, or an Executive Vice President of the Company, and delivered to the Trustee.

 

“Permitted Investments” means:

 

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

 

(2)                                 any Investments in Cash Equivalents;

 

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

 

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

 

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

 

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

 

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

 

(6)                                 Investments by the Company or a Restricted Subsidiary (other than an Excluded Restricted Subsidiary) in one or more Excluded Restricted Subsidiaries, the aggregate outstanding amount of which does not exceed 30% of the consolidated assets of the Company and its Restricted Subsidiaries (and, for the avoidance of doubt, Permitted Investments shall include any Investment by an Excluded Restricted Subsidiary in another Excluded Restricted Subsidiary).

 

“Permitted Liens” means:

 

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

 

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

 

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

 

(4)                                 Liens securing the Notes or the Subsidiary Guarantees;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

“Principal Stockholders” means each of Vincent J. Ryan, Schooner Capital Corporation, C. Richard Reese, Kent P. Dauten, and their respective Affiliates.

 

“Qualified Equity Offering” means an offering of Capital Stock, other than Disqualified Stock, of the Company for Dollars, whether registered or exempt from registration under the Securities Act.

 

“Qualified Issuer” means:

 

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

 

(2)                                 any commercial bank:

 

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

 

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

 

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

 

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

 

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

 

(2)                                 such Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness 

 

12

 

so repaid, redeemed, defeased, extended, refinanced, renewed, replaced or refunded or shall mature after the maturity date of the Notes;

 

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

 

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

 

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

 

“Restricted Subsidiary” means:

 

(1)                                 each direct and indirect Subsidiary of the Company organized or existing under the laws of the United States, any state thereof or the District of Columbia and existing on the date of the Indenture (other than Iron Mountain Assurance Corporation and Upper Providence Venture I, L.P. and their respective direct and indirect Subsidiaries) and only the following direct and indirect foreign Subsidiaries of the Company (all of which are Excluded Restricted Subsidiaries): Iron Mountain Canada Corporation and its direct and indirect Subsidiaries, Iron Mountain Information Management (Luxembourg) S.C.S, Iron Mountain Cayman Ltd., Iron Mountain (Gibraltar) Holdings Limited, Iron Mountain Luxembourg S.A.R.L., Iron Mountain BPM International S.a.r.l., Iron Mountain BPM SPRL, Marshgate Morganis S.a.r.l., Iron Mountain Switzerland GmbH, Iron Mountain Europe (Group) Limited, Iron Mountain Europe Limited, Iron Mountain (UK) Limited and Iron Mountain Secure Shredding Ltd.; and

 

(2)                                 any other direct or indirect Subsidiary of the Company formed, acquired or existing after the date of the Indenture (including an Excluded Restricted Subsidiary), excluding, however (unless otherwise designated by the Company’s board of directors) any such direct or indirect Subsidiary of any Unrestricted Subsidiary as of the date of the Indenture,

 

which, in the case of (1) or (2), is not designated by the Company’s Board of Directors as an “Unrestricted Subsidiary.”

 

13

 

“Senior Debt” means:

 

(1)                                 the Senior Bank Debt; and

 

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

 

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

 

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

 

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

 

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

 

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

 

(3)                                 any trade payables; or

 

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

 

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

 

“Unrestricted Subsidiary” means:

 

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

 

(2)                                 any Subsidiary of an Unrestricted Subsidiary.

 

14

 

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

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

 

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

 

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

 

“Wholly Owned Restricted Subsidiary” means any Restricted Subsidiary of the Company all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by the Company or by one or more Wholly Owned Restricted Subsidiaries of the Company.

 

“7 3/4% Notes” means the Company’s 7 3/4% Senior Subordinated Notes due 2019 issued pursuant to the First Supplemental Indenture dated as of September 23, 2011, by and among the Company, certain of its Subsidiaries and The Bank of New York Mellon Trust Company, N.A, as trustee.

 

(b)                                 Other Definitions.

 

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

 

	
Term
    	
 
    	
Defined in Section
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
“Affiliate   Transaction”
    	
 
    	
2.6(e)
    	
 
    
	
“Asset   Sale”
    	
 
    	
2.6(j)
    	
 
    
	
“Asset   Sale Offer”
    	
 
    	
2.6(j)
    	
 
    
	
“Change   of Control Offer”
    	
 
    	
2.6(k)
    	
 
    
	
“Change   of Control Payment”
    	
 
    	
2.6(k)
    	
 
    
	
“Change   of Control Payment Date”
    	
 
    	
2.6(k)
    	
 
    
	
“Commencement   Date”
    	
 
    	
2.6(j)
    	
 
    
	
“Company”
    	
 
    	
Preamble
    	
 
    
	
“Company   Order”
    	
 
    	
2.2
    	
 
    
	
“Supplemental   Indenture”
    	
 
    	
Preamble
    	
 
    
	
“Excess   Proceeds”
    	
 
    	
2.6(j)
    	
 
    
	
“Indenture”
    	
 
    	
Recitals
    	
 
    
	
“Offer   Amount”
    	
 
    	
2.5
    	
 
    
	
“Offer   Period”
    	
 
    	
2.5
    	
 
    
	
“Previously   Issued Notes”
    	
 
    	
2.16
    	
 
    
	
“Purchase   Date”
    	
 
    	
2.5
    	
 
    
	
“Restricted   Payments”
    	
 
    	
2.6(a)
    	
 
    
	
“Trustee”
    	
 
    	
Preamble
    	
 
    

 

15

 

ARTICLE 2.

 

FORM AND TERMS OF THE NOTES

 

Section 2.1.                           Form and Dating.

 

(a)                                 General.  The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A attached hereto.  The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage.  Each Note shall be dated the date of its authentication.  The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

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

 

(b)                                 Global Notes.  Notes shall be issued initially in the form of the Global Notes, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Depository at its New York office, and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.

 

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

 

(c)                                  Book-Entry Provisions.  This Section 2.1(c) shall apply only to the Global Notes deposited with or on behalf of the Depository.

 

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

 

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

 

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

 

Section 2.2.                           Execution and Authentication.

 

The Trustee shall, upon a written order of the Company signed by an Officer (the “Company Order”), authenticate up to $1,000,000,000 aggregate principal amount of Initial Notes and such amount of Additional Notes as the Company may issue from time to time.

 

Section 2.3.                           Depository and Paying Agent for Notes.

 

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

 

Section 2.4.                           Transfer and Exchange of Notes.

 

(a)                                 Transfer and Exchange of Global Notes.  The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depository, in accordance with this Supplemental Indenture and the Indenture and the procedures of the Depository therefor.  Beneficial interests in the Global Notes may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the Global Notes.

 

(b)                                 Transfer and Exchange of Definitive Notes.  When Definitive Notes are presented by a Holder to the Registrar with a request:

 

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

 

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

 

(c)                                  Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any other provision of this Supplemental Indenture or the Indenture (other than the provisions set forth in subsection (d) of this Section 2.4), the Global Notes may not be transferred as a whole except by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or to another nominee of the Depository, or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

 

(d)                                 Authentication of Definitive Notes in Absence of Depository. If at any time:

 

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

 

17

 

(ii) the Company at its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes under this Supplemental Indenture and the Indenture, then the Company shall execute, and the Trustee shall, upon receipt of a Company Order, authenticate and deliver, Definitive Notes in an aggregate principal amount equal to the principal amount of the Global Notes in exchange for such Global Notes.

 

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

 

(f)                                   General Provisions Relating to Transfers and Exchanges.

 

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

 

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

 

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

 

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

 

(v)           Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent, the Company and any Guarantor may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for all purposes, including receiving payment of principal of 

 

18

 

and interest on such Notes, and neither the Trustee, any Agent, the Company nor any Guarantor shall be affected by notice to the contrary.

 

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

 

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

 

Section 2.5.                           Redemption.  With respect to the Notes issued under this Supplemental Indenture, the following Sections supplement Article III of the Indenture:

 

§ 3.7.                  Optional Redemption.

 

Prior to August 15, 2017, the Notes shall be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the Make-Whole Price, plus accrued and unpaid interest to but excluding the applicable redemption date. On and after August 15, 2017, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the redemption price (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest to but excluding the applicable redemption date, if redeemed during the 12-month period beginning on August 15 of the years indicated below:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
2017 
    	
 
    	
102.875
    	
%
    
	
2018 
    	
 
    	
101.917
    	
%
    
	
2019 
    	
 
    	
100.958
    	
%
    
	
2020 and thereafter 
    	
 
    	
100.000
    	
%
    

 

Notwithstanding the foregoing, at any time prior to August 15, 2015 the Company may on any one or more occasions redeem the Notes at a redemption price of 5.750% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings; provided that:

 

(1)                                 at least $650.0 million in aggregate principal amount of the Notes (including any Additional Notes) issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or any of its subsidiaries); and

 

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

 

§ 3.8.                  Mandatory Redemption.

 

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

 

19

 

§ 3.9                     Asset Sale Offers.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(7)                                 that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Trustee shall select the Notes to be purchased on a pro rata basis and in accordance with the procedures of the Depositary (with such adjustments as may be deemed to be appropriate by the Company so that only 

 

20

 

Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall be purchased); and

 

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

 

On or before 12:00 noon on each Purchase Date, the Company shall irrevocably deposit with the Trustee or Paying Agent in immediately available funds the aggregate purchase price with respect to a principal amount of Notes equal to the Offer Amount, together with accrued interest thereon, to be held for payment in accordance with the terms of this Section 3.9.  On such Purchase Date, the Company shall, to the extent lawful, (i) accept for payment, on a pro rata basis to the extent applicable, an aggregate principal amount equal to the Offer Amount of Notes and other notes (in accordance with the terms of Section 4.17 of the Indenture) tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes and such other notes or portions thereof tendered, (ii) deliver or cause the Paying Agent or depositary, as the case may be, to deliver to the Trustee Notes so accepted and (iii) deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.9.  The Company, Depositary or Paying Agent, as the case may be, shall promptly (but in any case not later than three Business Days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price with respect to the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee shall authenticate and mail or deliver such new Note, to such Holder, equal in principal amount to any unpurchased portion of such Holder’s Notes surrendered.  Any Note not accepted in the Asset Sale Offer shall be promptly mailed or delivered by the Company to the Holder thereof.  The Company shall publicly announce in a newspaper of general circulation the results of the Asset Sale Offer on the Purchase Date.

 

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

 

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

 

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

 

Section 2.6.                           Additional Covenants.

 

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

 

(a)                                 Restricted Payments.

 

§4.8.  Restricted Payments.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(1)                                 declare or pay any dividend or make any distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (other than dividends or 

 

21

 

distributions payable in Equity Interests (other than Disqualified Stock) of the Company or such Restricted Subsidiary or dividends or distributions payable to the Company or any Restricted Subsidiary);

 

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

 

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

 

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

 

unless, at the time of such Restricted Payment:

 

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

 

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

 

(iii)          such Restricted Payment, together with the aggregate of all other Restricted Payments made by the Company and its Restricted Subsidiaries after October 1, 1996 is less than (x) the cumulative EBITDA of the Company, minus 1.75 times the cumulative Consolidated Interest Expense of the Company, in each case for the period (taken as one accounting period) from June 30, 1996, to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, plus (y) the aggregate net Equity Proceeds received by the Company from the issuance or sale since October 1, 1996 of Equity Interests of the Company or of debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests or convertible debt securities sold to a Restricted Subsidiary of the Company and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock), plus (z) $2.0 million.

 

The foregoing provisions will not prohibit:

 

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

 

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

 

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Subsidiary of the Company) of other Equity Interests of the Company (other than any Disqualified Stock);

 

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

 

(4)                                 the defeasance, redemption, repurchase, retirement or other acquisition or retirement for value of Indebtedness that is subordinated in right of payment to the Notes in exchange for, or with the net cash proceeds of, a substantially concurrent issue and sale (other than to the Company or any of its Restricted Subsidiaries) of Refinancing Indebtedness;

 

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

 

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

 

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

 

If an Investment results in the making of a Restricted Payment, the aggregate amount of all Restricted Payments deemed to have been made as calculated under the foregoing provision shall be reduced by the amount of any net reduction in such Investment (resulting from the payment of interest or dividends, loan repayment, transfer of assets or otherwise) to the extent such net reduction is not included in the Company’s EBITDA; provided, however, that the total amount by which the aggregate amount of all Restricted Payments may be reduced may not exceed the lesser of (a) the cash proceeds received by the Company and its Restricted Subsidiaries in connection with such net reduction and (b) the initial amount of such Investment.  In addition, for the avoidance of doubt and to avoid double counting, if an Investment results in the making of a Restricted Payment, then the subsequent assignment, contribution, distribution or other transfer of such Investment by the Company or any Restricted Subsidiary of the Company to any Excluded Restricted Subsidiary or Unrestricted Subsidiary shall not be considered a new Investment or Restricted Payment and shall not further reduce the amount that would otherwise be available for Restricted Payments under clause (iii) of the first paragraph of this Section.

 

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

 

For the purpose of making any Restricted Payment calculations under the Indenture:

 

(1)                                  Investments shall include the fair market value of the net assets of any Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary that is designated as a Restricted Subsidiary, in each case with fair market value determined by the Board of Directors in good faith and, for the avoidance of doubt, such inclusions and exclusions will not be limited by the amount of any Investment or aggregate Investments;

 

(2)                                  any asset or property transferred to or from an Unrestricted Subsidiary shall be valued at fair market value at the time of such transfer, provided that, in each case, the fair market value of an asset or property is as determined by the Board of Directors in good faith and, for the avoidance of doubt, the fair market value (as so determined) of such asset of property shall be subtracted from (in the case of a transfer to an Unrestricted Subsidiary) or added to (in the case of a transfer from an Unrestricted Subsidiary) the calculation under clause (iii) of the first paragraph of this Section; and

 

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

 

The Board of Directors may designate a Restricted Subsidiary to be an Unrestricted Subsidiary in compliance with Section 4.15 of the Indenture.  Upon such designation, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments made at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this Section 4.8.  Such designation will only be permitted if such Restricted Payment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

(b)                                 Incurrence of Indebtedness and Issuance of Preferred Stock.

 

§4.9.  Incurrence of Indebtedness and Issuance of Preferred Stock.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise become directly or indirectly liable with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt) and the Company shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness and may permit a Restricted Subsidiary to incur Indebtedness if at the time of such incurrence and after giving effect thereto the Leverage Ratio would be less than 6.5 to 1.0.

 

The foregoing limitations shall not apply to:

 

(1)                                  the incurrence by the Company or any Restricted Subsidiary of Senior Bank Debt in an aggregate amount not to exceed $790.0 million at any one time outstanding;

 

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

 

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

 

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

 

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

 

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

 

(7)                                  Hedging Obligations that are incurred in the ordinary course of business, provided, in the case of Hedging Obligations with respect to Indebtedness, that such Indebtedness is permitted to be outstanding by the terms of the Indenture;

 

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

 

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

 

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

 

(11)                            the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (11), not to exceed $50.0 million.

 

For purposes of determining compliance with this Section 4.9, for the avoidance of doubt, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted debt described in clauses (1) through (11) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.9, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.9. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock

 

25

 

in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.9; provided, in each such case, that the amount thereof is included in the Consolidated Interest Expense of the Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.9, the maximum amount of Indebtedness that the Company or any of its Restricted Subsidiaries may incur pursuant to this Section 4.9 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

 

The amount of any Indebtedness outstanding as of any date will be:

 

(1)                                  the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

 

(2)                                  the principal amount of the Indebtedness, in the case of any other Indebtedness; and

 

(3)                                  in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

 

(i)                                     the fair market value of such assets at the date of determination; and

 

(ii)                                  the amount of the Indebtedness of the other Person.

 

(c)                                  Liens.

 

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

 

(d)                                 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

§4.11.  Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to:

 

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

 

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

 

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

 

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

 

(1)                                  Existing Indebtedness;

 

(2)                                  the Credit Agreement as in effect as of the date of the Indenture, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancing thereof, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive in the aggregate with respect to such dividend and other payment restrictions than those contained in the Credit Agreement as in effect on the date of the Indenture;

 

(3)                                  the Indenture and the Notes;

 

(4)                                  applicable law, including, for the avoidance of doubt, any applicable rule, regulation or order;

 

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

 

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

 

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

 

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

 

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

 

27

 

references to the “Company” and its “Restricted Subsidiaries” or similar references in the definition of “Leverage Ratio” and other defined terms necessary to determine the Leverage Ratio shall be deemed to refer to such Excluded Restricted Subsidiary and its Restricted Subsidiaries, respectively; or

 

(10)                            agreements governing other Indebtedness permitted to be incurred under the provisions of Section 4.9 and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements; provided that the restrictions therein are not materially more restrictive, taken as a whole, than those contained in the Indenture, the Notes and the Subsidiary Guarantees.

 

(e)                                  Transactions with Affiliates

 

§4.12.  Transactions with Affiliates.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”), unless:

 

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

 

(2)                                  the Company delivers to the Trustee:

 

(i)                                     with respect to any Affiliate Transaction involving aggregate payments in excess of $10.0 million, a resolution of the Board of Directors set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) above and such Affiliate Transaction is approved by a majority of the disinterested members of the Board of Directors; and

 

(ii)                                  with respect to any Affiliate Transaction involving aggregate payments in excess of $25.0 million, an opinion as to the fairness to the Company or such Restricted Subsidiary from a financial point of view issued by an investment banking, appraisal or accounting firm of national standing.

 

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

 

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

 

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

 

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

 

28

 

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

 

The provisions set forth in clause (2) above shall not apply to sales of inventory by the Company or any Restricted Subsidiary to any Affiliate in the ordinary course of business.  The provisions of clause (2) (ii) above shall not apply to loans or advances to the Company or any Restricted Subsidiary from, or equity investments in the Company or any Restricted Subsidiary by, any Affiliate to the extent permitted by the provisions of Section 4.9 of the Indenture.

 

(f)                                    Certain Senior Subordinated Debt.

 

§4.13.  Certain Senior Subordinated Debt.  The Company shall not incur any Indebtedness that is subordinated or junior in right of payment to any Senior Debt of the Company and senior in any respect in right of payment to the Notes.  The Company shall not permit any Restricted Subsidiary to incur any Indebtedness that is subordinated or junior in right of payment to its Senior Debt and senior in any respect in right of payment to its Subsidiary Guarantee.

 

(g)                                 Additional Subsidiary Guarantees.

 

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

 

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

 

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

 

(2)                                  immediately after giving effect to such transaction, no Default or Event of Default exists; and

 

(3)                                  such Restricted Subsidiary, or any Person formed by or surviving any such consolidation (or amalgamation) or merger, would be permitted to incur, immediately after giving effect to such transaction, at least $1.00 of additional Indebtedness pursuant to the test set forth in the first paragraph of Section 4.9 of the Indenture.

 

In the event of:

 

(1)                                  a sale or other disposition of all of the assets of any Restricted Subsidiary, by way of merger, consolidation (or amalgamation) or otherwise;

 

29

 

(2)                                  a sale or other disposition of all of the capital stock of any Restricted Subsidiary; or

 

(3)                                  the designation of a Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the terms of Section 4.15 of the Indenture,

 

then such Restricted Subsidiary (in the event of a sale or other disposition, by way of such a merger, consolidation (or amalgamation) or otherwise, of all of the capital stock of such Restricted Subsidiary or in the event of the designation of such Restricted Subsidiary as an Unrestricted Subsidiary) or the Person acquiring the property (in the event of a sale or other disposition of all of the assets of such Restricted Subsidiary) will be released and relieved of any obligations under its Subsidiary Guarantee, provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of Section 4.17 of the Indenture.

 

(h)                                 Designation of Unrestricted Subsidiaries.

 

§4.15.  Designation of Unrestricted Subsidiaries.  The Board of Directors may designate any Subsidiary (including any Restricted Subsidiary or any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary so long as:

 

(1)                                  neither the Company nor any Restricted Subsidiary is directly or indirectly liable for any Indebtedness of such Subsidiary;

 

(2)                                  no default with respect to any Indebtedness of such Subsidiary would permit (upon notice, lapse of time or otherwise) any holder of any other Indebtedness of the Company or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity;

 

(3)                                  any Investment in such Subsidiary deemed to be made as a result of designating such Subsidiary an Unrestricted Subsidiary will not violate the provisions of Section 4.8 of the Indenture;

 

(4)                                  neither the Company nor any Restricted Subsidiary has a contract, agreement, arrangement, understanding or obligation of any kind, whether written or oral, with such Subsidiary other than (i) those that might be obtained at the time from Persons who are not Affiliates of the Company or (ii) administrative, tax sharing and other ordinary course contracts, agreements, arrangements and understandings or obligations entered into in the ordinary course of business; and

 

(5)                                  neither the Company nor any Restricted Subsidiary has any obligation to subscribe for additional shares of Capital Stock or other Equity Interests in such Subsidiary, or to maintain or preserve such Subsidiary’s financial condition or to cause such Subsidiary to achieve certain levels of operating results other than as permitted under Section 4.8 of the Indenture.

 

Notwithstanding the foregoing, the Company may not designate as an Unrestricted Subsidiary any Subsidiary which, on April 26, 1999, was a Significant Subsidiary, and may not sell, transfer or otherwise dispose of any properties or assets of any such Significant Subsidiary to an Unrestricted Subsidiary, other than in the ordinary course of business, in each case other than Iron Mountain Global, Inc. and its Subsidiaries (including without limitation Iron Mountain Europe Limited and its Subsidiaries). For the avoidance of doubt, the provisions of this Section 4.15 shall not limit or

 

30

 

restrict the ability of any Restricted Subsidiary to sell, transfer or otherwise dispose of any properties or assets to any other Subsidiary, including any Unrestricted Subsidiary, to the extent such sale, transfer or other disposition is permitted by the provisions of the Indenture described under Section 4.12 or Section 4.17.

 

The Board of Directors may designate any Unrestricted Subsidiary as a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if:

 

(1)                                  such Indebtedness is permitted under Section 4.9 of the Indenture; and

 

(2)                                  no Default or Event of Default would occur as a result of such designation.

 

(i)                                     Limitation on Sale and Leaseback Transactions.

 

§4.16.  Limitation on Sale and Leaseback Transactions.  The Company will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction unless:

 

(1)                                  the consideration received in such Sale and Leaseback Transaction is at least equal to the fair market value of the property sold, as determined by a resolution of the Board of Directors; and

 

(2)                                  the Company or such Restricted Subsidiary could incur the Attributable Indebtedness in respect of such Sale and Leaseback Transaction in compliance with Section 4.9 of the Indenture.

 

(j)                                     Asset Sales.

 

§4.17.  Asset Sales.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to:

 

(1)                                  sell, lease, convey or otherwise dispose of any assets (including by way of a Sale and Leaseback Transaction, but excluding a Qualifying Sale and Leaseback Transaction) other than sales of inventory in the ordinary course of business (provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company will be governed by the provisions of Section 4.18 of the Indenture and/or the provisions of Section 5.1 of the Indenture and not by the provisions of this Section 4.17); or

 

(2)                                  issue or sell Equity Interests of any of its Restricted Subsidiaries

 

that in the case of either clause (1) or (2) above, whether in a single transaction or a series of related transactions:

 

(i)                                     have a fair market value in excess of $2.0 million; or

 

(ii)                                  result in Net Proceeds in excess of $2.0 million (each of the foregoing, an “Asset Sale”) unless (x) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by an Officers’ Certificate delivered to the Trustee, and

 

31

 

for Asset Sales having a fair market value or resulting in Net Proceeds in excess of $10.0 million, evidenced by a resolution of the Board of Directors set forth in an Officers’ Certificate delivered to the Trustee) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash, Cash Equivalents, like-kind assets or other assets used in or useful in the Company’s business (in each case as determined in good faith by the Company, evidenced by a resolution of the Board of Directors and certified by an Officers’ Certificate delivered to the Trustee);

 

provided, however, that the amount of:

 

(A)                              any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Company or such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets; and

 

(B)                                any notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are immediately converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) or Cash Equivalents,

 

shall be deemed to be cash for purposes of this provision; and provided, further, that the 75% limitation referred to in the foregoing clause (ii) (y) shall not apply to any Asset Sale in which the cash portion of the consideration received therefrom is equal to or greater than what the after-tax proceeds would have been had such Asset Sale complied with the aforementioned 75% limitation.  For the avoidance of doubt, a disposition that constitutes a Restricted Payment will be governed by the provisions of Section 4.8 and not by this Section 4.17.

 

A transfer of assets or issuance of Equity Interests by the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary will not be deemed to be an Asset Sale.

 

Within 360 days of any Asset Sale, the Company may, at its option, apply an amount equal to the Net Proceeds from such Asset Sale either:

 

(1)                                  to permanently reduce Senior Debt; or

 

(2)                                  to an investment in a Restricted Subsidiary or in another business or capital expenditure or other long-term/tangible assets, in each case, in the same line of business as the Company or any of its Restricted Subsidiaries was engaged in on the date of this Supplemental Indenture or in businesses similar or reasonably related thereto.

 

Pending the final application of any such Net Proceeds, the Company may temporarily reduce Senior Bank Debt or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture.  Any Net Proceeds from such Asset Sale that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall make an offer to all Holders of the Notes, all holders of the Existing Senior Subordinated Securities and the holders of any future

 

32

 

Indebtedness ranking pari passu with the Notes, which Indebtedness contains similar provisions requiring the Company to repurchase such Indebtedness (an “Asset Sale Offer”), to purchase the maximum principal amount of Notes and such other Indebtedness that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, in accordance with the procedures set forth in the Indenture.  To the extent that the aggregate amount of Notes and other pari passu Indebtedness (including the Existing Senior Subordinated Securities) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes.  If the aggregate principal amount of Notes and such other Indebtedness surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other Indebtedness to be purchased on a pro rata basis and in accordance with the procedures of the applicable Depositary in the case of Global Notes. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.

 

The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.17, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such conflict.

 

An Asset Sale Offer shall be made pursuant to the provisions of Section 3.9 hereof.  No later than the date which is five Business Days after the date on which the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall notify the Trustee of such Asset Sale Offer and provide the Trustee with an Officers’ Certificate setting forth the calculations used by the Company in determining the amount of Net Proceeds to be applied to the purchase of Notes.  The Company shall commence or cause to be commenced the Asset Sale Offer on a date no later than 15 Business Days after such notice (the “Commencement Date”).

 

(k)                                  Change of Control Offer.

 

§ 4.18.              Change of Control Offer.

 

(a)                                  Upon the occurrence of a Change of Control, each Holder of Notes shall have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes pursuant to the offer described below (the “Change of Control Offer”) at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest to but excluding the date of repurchase (the “Change of Control Payment”).

 

Within 30 calendar days following any Change of Control, the Company shall mail a notice to each Holder, with a copy to the Trustee, stating:

 

(1)                                  that the Change of Control Offer is being made pursuant to this Section 4.18 and that all Notes tendered shall be accepted for payment;

 

(2)                                  the purchase price and the purchase date, which shall be no earlier than 30 calendar days nor later than 60 calendar days from the date such notice is mailed (the “Change of Control Payment Date”);

 

(3)                                  that any Note not tendered shall continue to accrue interest;

 

33

 

(4)                                  that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on and after the Change of Control Payment Date;

 

(5)                                  that Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes completed, to the Paying Agent at the address specified in such notice prior to the close of business on the fifth Business Day preceding the Change of Control Payment Date;

 

(6)                                  that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing its election to have such Notes purchased; and

 

(7)                                  that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.

 

The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, to the extent such laws and regulations are applicable to the repurchase of the Notes in connection with a Change of Control.  To the extent that the provisions of any securities laws or regulations conflict with this Section 4.18, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the Change of Control provisions of the Indenture or this Supplemental Indenture by virtue of such conflict.

 

(b)                                 On the Change of Control Payment Date, the Company shall, to the extent lawful:

 

(1)                                  accept for payment Notes or portions thereof tendered pursuant to the Change of Control Offer;

 

(2)                                  deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and

 

(3)                                  deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the Notes or portions thereof tendered to the Company.

 

The Paying Agent shall promptly mail to each Holder of Notes so accepted the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

 

The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in

 

34

 

compliance with the requirements set forth in this Section 4.18 applicable to a Change of Control Offer made by the Company and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer.  Notwithstanding anything to the contrary contained in the Indenture, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.

 

(l)                                     Changes in Covenants When Notes Rated Investment Grade.

 

§ 4.19.              Changes in Covenants When Notes Rated Investment Grade.

 

If on any date following the date of this Supplemental Indenture:

 

(1)                                  at least two of the following events occur:

 

i.                  the Notes are rated Baa3 or better by Moody’s Investors Service,

 

ii.               the Notes are rated BBB- or better by Standard & Poor’s Rating Group, a division of The McGraw-Hill Companies, Inc., or

 

iii.            the Notes rated BBB- or better by Fitch Ratings, Inc.,

 

(or, if any such entity ceases to rate the Notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company as a replacement agency); and

 

(2)                                  no Default or Event of Default shall have occurred and be continuing,

 

then, beginning on that day and continuing at all times thereafter regardless of any subsequent changes in the rating of the Notes, Sections 3.9, 4.8, 4.9, 4.11, 4.12, 4.15 and 4.17, clause (3) of Section 4.14, clause (2) of Section 4.16 and clause (d) of Section 5.1 of the Indenture shall no longer be applicable to the Notes.

 

Section 2.7.                             Subsidiary Guarantees.

 

With respect to the Notes issued under this Supplemental Indenture, Article XII of the Indenture shall apply, and the Notes shall constitute a Series to be guaranteed by the Guarantors pursuant to Article XII of the Indenture.

 

Section 2.8.                             Legal Defeasance and Covenant Defeasance.

 

With respect to the Notes issued under this Supplemental Indenture, Article VIII of the Indenture shall apply, and the Company shall have the option to effect Legal Defeasance or Covenant Defeasance pursuant to Article VIII of the Indenture.  In connection with any Covenant Defeasance, the Company shall be released from its obligations under the covenants specified in Sections 4.2 and 5.1 of the Indenture and Section 2.6 of this Supplemental Indenture.

 

35

 

Section 2.9.                             Subordination.

 

With respect to the Notes issued under this Supplemental Indenture, Article XIII of the Indenture shall apply, and the Notes shall be subject to subordination pursuant to Article XIII of the Indenture.

 

Section 2.10.                       Amend, Restate and Replace Provision Regarding Redemption.

 

With respect to the Notes issued under this Supplemental Indenture, Section 3.2 of the Indenture is amended, restated and replaced in its entirety by the following:

 

§ 3.2.                    Selection of Securities to be Redeemed.

 

If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the applicable Holders on a pro rata basis (or, in the case of Notes issued in global form as discussed in Section 2.1(c), based on a method that most nearly approximates a pro rata selection as the Trustee deems fair and appropriate) unless otherwise required by law or applicable stock exchange or depositary requirements, provided that no Securities of $2,000 or less shall be redeemed in part.

 

The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

 

ARTICLE 3.

 

MISCELLANEOUS

 

Section 3.1.                             Effect of Headings.

 

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

 

Section 3.2.                             Successors and Assigns.

 

All covenants and agreements in this Supplemental Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

 

Section 3.3.                             Separability Clause.

 

In case any provision in this Supplemental Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 3.4.                             Governing Law.

 

This Supplemental Indenture and the Notes created hereby shall be governed by and construed in accordance with the laws of the State of New York without giving effect to any conflicts of law provisions (other than Section 5-1401 of the New York General Obligations Law) that might cause

 

36

 

this Supplemental Indenture and the Notes to be governed by or construed or enforced in accordance with the laws of any other jurisdiction.

 

Section 3.5.                             Supplement to Supersede Indenture.

 

The Indenture, as supplemented by this Supplemental Indenture, remains in full force and effect as of the date hereof.  Notwithstanding the foregoing, to the extent that any provision of the Indenture shall conflict with any provision of this Supplemental Indenture, the terms of this Supplemental Indenture shall be deemed controlling and the conflicting provision of the Indenture shall be null and void to the extent of such conflict.

 

Section 3.6.                             Trustee Not Responsible

 

The Trustee makes no representations or warranties as to the validity or sufficiency of this Supplemental Indenture or for, or in respect of, the recitals contained herein, all of which are recitals made solely by the Company.

 

[The rest of this page has been intentionally left blank.]

 

37

 

IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed, and attested, all as of the date and year first written above.

 

 

	
 
    	
IRON   MOUNTAIN INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John P. Lawrence
    
	
 
    	
 
    	
Name:   John P. Lawrence
    
	
 
    	
 
    	
Title:   Senior Vice President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN FULFILLMENT SERVICES, INC.
    
	
 
    	
IRON   MOUNTAIN INFORMATION MANAGEMENT, INC.
    
	
 
    	
IRON MOUNTAIN INTELLECTUAL PROPERTY   MANAGEMENT, INC.
    
	
 
    	
MOUNTAIN   REAL ESTATE ASSETS, INC.
    
	
 
    	
MOUNTAIN   RESERVE III, INC.
    
	
 
    	
NETTLEBED   ACQUISITION CORP.
    
	
 
    	
TREELINE   SERVICES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John P. Lawrence
    
	
 
    	
 
    	
Name:   John P. Lawrence
    
	
 
    	
 
    	
Title:   Senior Vice President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN GLOBAL LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John P. Lawrence
    
	
 
    	
 
    	
Name:   John P. Lawrence
    
	
 
    	
 
    	
Title:   Senior Vice President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN GLOBAL HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John P. Lawrence
    
	
 
    	
 
    	
Name:   John P. Lawrence
    
	
 
    	
 
    	
Title:   Senior Vice President and Treasurer
    
					

 

 

	
 
    	
IRON   MOUNTAIN STATUTORY TRUST - 1998
    
	
 
    	
 
    
	
 
    	
By:
    	
U.S.   BANK NATIONAL ASSOCIATION, not individually but as Owner Trustee under that   certain Amended and Restated Owner Trust Agreement dated as of   October 1, 1998, as amended
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John G. Correia
    
	
 
    	
 
    	
 
    	
Name:   John G. Correia
    
	
 
    	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN STATUTORY TRUST - 1999
    
	
 
    	
 
    
	
 
    	
By:
    	
U.S.   BANK NATIONAL ASSOCIATION, not individually but as Owner Trustee under that   certain Owner Trust Agreement dated as of July 1, 1999, as amended
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John G. Correia
    
	
 
    	
 
    	
 
    	
Name:   John G. Correia
    
	
 
    	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IRON   MOUNTAIN STATUTORY TRUST - 2001
    
	
 
    	
 
    
	
 
    	
By:
    	
U.S.   BANK NATIONAL ASSOCIATION, not individually but as Owner Trustee under that   certain Owner Trust Agreement dated as of May 22, 2001, as amended
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   John G. Correia
    
	
 
    	
 
    	
 
    	
Name:   John G. Correia
    
	
 
    	
 
    	
 
    	
Title:   Vice President
    
							

 

 

	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Linda Garcia
    
	
 
    	
 
    	
Name:   Linda Garcia
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

EXHIBIT A

 

FORM OF NOTES

 

 

[FACE OF NOTE]

 

5.750% Senior Subordinated Notes due 2024

 

 

	
 
    	
No. [   ]
    
	
ISIN   No.: US46284PAP99
    	
$500,000,000
    
	
CUSIP   No.: 46284P AP9
    	
 
    

 

IRON MOUNTAIN INCORPORATED

 

promises to pay to CEDE & Co. or registered assigns, the principal sum of [            ] DOLLARS on August 15, 2024.

 

Interest Payment Dates:  February 15 and August 15

 

Record Dates:  February 1 and August 1

 

Dated:  August 10, 2012

 

 

	
 
    	
IRON   MOUNTAIN INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Brian   P. McKeon
    
	
 
    	
Title:
    	
Executive   Vice President and
    
	
 
    	
 
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Ernest   W. Cloutier
    
	
 
    	
Title
    	
Executive   Vice President, General Counsel and Secretary
    

 

(SEAL)

 

This is one of the Notes
 referred to in the within-
 mentioned Indenture:

 

	
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
    
	
as Trustee
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
			

 

A-1

 

Authorized Signatory

 

A-2

 

5.750% Senior Subordinated Notes due 2024

 

This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depository or a nominee of the Depository. This Security is exchangeable for Securities registered in the name of a Person other than the Depository or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a whole by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.

 

Unless and until it is exchanged in whole or in part for Notes in definitive form, this Note may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) (“DTC”), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

1.                                      INTEREST. Iron Mountain Incorporated, a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at 5.750% per annum from August 10, 2012 until August 15, 2024.  The Company shall pay interest, semi-annually in arrears on February 15 and August 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”).  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be February 15, 2013.  The Company shall pay interest (including post-petition interest to the extent allowed in any proceeding under any Bankruptcy Law) on overdue principal from time to time on demand at a rate equal to the per annum rate on the Notes then in effect; it shall pay interest (including post-petition interest to the extent allowed in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

2.                                      METHOD OF PAYMENT.  The Company will pay principal, premium, if any, and interest on the Notes in money of the United States that at the time of payment is legal tender

 

A-3

 

for payment of public and private debts. The Company, however, may pay principal, premium, if any, and interest by check payable in such money. It may mail an interest check to a Holder’s registered address.

 

3.                                      PAYING AGENT AND REGISTRAR.  Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as paying agent, registrar and service agent.  The Notes may be presented for registration of transfer and exchange at the offices of the registrar.  The Company may change any paying agent, service agent or registrar without notice to any Holder.  The Company or any of its Subsidiaries may act in any such capacity.

 

4.                                      INDENTURE.  The Company issued the Notes under an Indenture dated as of September 23, 2011 (the “Base Indenture”) as supplemented by a Second Supplemental Indenture dated as of August 10, 2012 (the “Second Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes issued under the Indenture are subordinated unsecured obligations of the Company limited to $1,000,000,000 in aggregate principal amount.

 

5.                                      OPTIONAL REDEMPTION.  Prior to August 15, 2017, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the Make-Whole Price, plus accrued and unpaid interest to but excluding the applicable redemption date. On and after August 15, 2017, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 10 nor more than 60 days’ notice, at the redemption price (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest to but excluding the applicable redemption date, if redeemed during the 12-month period beginning on August 15 of the years indicated below:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
2017 
    	
 
    	
102.875
    	
%
    
	
2018 
    	
 
    	
101.917
    	
%
    
	
2019 
    	
 
    	
100.958
    	
%
    
	
2020 and thereafter 
    	
 
    	
100.000
    	
%
    

 

Notwithstanding the foregoing, at any time prior to August 15, 2015 the Company may on any one or more occasions redeem the Notes at a redemption price of 105.750% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings; provided that: (i) at least $650.0 million in the aggregate principal amount of the Notes (including any Additional Notes) issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or any of its Subsidiaries); and (ii) the redemption must occur within six months of the date of the closing of any such Qualified Equity Offering.

 

A-4

 

6.                                      NOTICE OF REDEMPTION.  Notice of redemption will be mailed at least 10 days but not more than 60 days before the redemption date to each Holder of the Notes to be redeemed at such Holder’s address of record. The Notes in denominations larger than $2,000 may be redeemed in part but only in integral multiples of $1,000 in excess thereof, unless all the Notes held by a Holder are to be redeemed. In the event of a redemption of less than all of the Notes, the Notes will be chosen for redemption by the Trustee in accordance with the Indenture. On and after the redemption date, interest ceases to accrue on the Notes or portions of them called for redemption.

 

If this Note is redeemed subsequent to a Record Date with respect to any Interest Payment Date specified above and on or prior to such Interest Payment Date, then any accrued interest will be paid to the Person in whose name this Note is registered at the close of business on such Record Date.

 

7.                                      MANDATORY REDEMPTION.  Except as set forth in paragraph 8 below, the Company shall not be required to repurchase or to make mandatory redemption payments with respect to the Notes.  There are no sinking fund payments with respect to the Notes.

 

8.                                      REPURCHASE AT OPTION OF HOLDER.  This Note is subject to purchase at the option of the Holder upon the circumstances set forth in Sections 3.9, 4.17 and 4.18 of the Indenture.

 

9.                                      SUBORDINATION. The payment of the principal of, interest on or any other amounts due on the Notes is subordinated in right of payment to all existing and future Senior Debt of the Company, as described in the Indenture. Each Holder, by accepting a Note, agrees to such subordination and authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and appoints the Trustee as its attorney-in-fact for such purpose.

 

10.                               DENOMINATIONS, TRANSFER AND EXCHANGE.  The Notes are in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

 

11.                               PERSONS DEEMED OWNERS.  The registered Holder of a Note may be treated as its owner for all purposes.

 

12.                               AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture with respect to the Notes or the Notes may be amended or supplemented with the written consent of the Holders of a majority in principal amount of the Notes and any existing default or compliance with any provision of the Indenture with respect to the Notes or the Notes may be

 

A-5

 

waived with the consent of the Holders of a majority in principal amount of the Notes (including, in each case, Additional Notes, if any). Without the consent of any Holder of the Notes, the Indenture with respect to the Notes or the Notes may be amended or supplemented to, in addition to other events more fully described in the Indenture, cure any ambiguity, defect or inconsistency, provide for uncertificated Notes in addition to or in place of certificated Notes, provide for the assumption of the Company’s obligations to Holders of the Notes in the case of a merger or consolidation, make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, or comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA.

 

13.                               DEFAULTS AND REMEDIES.  An Event of Default with respect to the Notes occurs upon the occurrence of any of the following events: the default for 30 days in the payment when due of interest on the Notes (whether or not prohibited by the subordination provisions of the Indenture); the default in payment when due of the principal of or premium, if any, on the Notes (whether or not prohibited by the subordination provisions of the Indenture); the failure by the Company to comply with Section 4.18 of the Indenture; the failure by the Company or any Guarantor for 60 days after written notice from the Trustee or Holders of not less than 25% of the aggregate principal amount of the Notes (including Additional Notes, if any) outstanding to comply with any of its other agreements in the Indenture, Notes or the Subsidiary Guarantees; the default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee exists on the date of the Indenture or is created thereafter, if: (i) such default results in the acceleration of such Indebtedness prior to its express maturity or shall constitute a default in the payment of such Indebtedness at final maturity of such Indebtedness and (ii) the principal amount of any such Indebtedness that has been accelerated or not paid at maturity, when added to the aggregate principal amount of all other such Indebtedness that has been accelerated or not paid at maturity, exceeds $50.0 million; the failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $50.0 million, which judgments remain unpaid, undischarged or unstayed for a period of 60 days; certain events of bankruptcy or insolvency with respect to the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary; or except as permitted by the Indenture or the Subsidiary Guarantees, any Subsidiary Guarantee issued by a Restricted Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect, or any Restricted Subsidiary or any Person acting on behalf of any Restricted Subsidiary shall deny or disaffirm in writing its obligations under its Subsidiary Guarantee.

 

If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes (including Additional Notes, if any) may declare all the Notes to be due and payable immediately; provided, however, that if any Obligation with respect to Senior Bank Debt is outstanding pursuant to the Credit Agreement upon a declaration of acceleration of the Notes, the principal, premium, if any, and interest on the Notes will not be payable until the earlier of: (1) the day which is five business days after written notice of acceleration is received by the Company and the Credit Agent or (2) the date of acceleration of the Indebtedness under the Credit Agreement. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the

 

A-6

 

Company or any Restricted Subsidiary that is a Significant Subsidiary, the principal of, and premium, if any, and any accrued and unpaid interest on all outstanding Notes will become due and payable without further action or notice. In the event of a declaration of acceleration of the Notes because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in Section 6.1(e) of the Indenture, the declaration of acceleration of the Notes shall be automatically annulled if the holders of any Indebtedness described in such section have rescinded the declaration of acceleration in respect of such Indebtedness within 30 days from the date of such declaration and if: (1) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a competent jurisdiction and (2) all existing Events of Default, except non-payment of principal or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.

 

Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default and what action the Company is taking or proposes to take thereto.

 

14.                               SUBSIDIARY GUARANTEES.  Payment of principal of, premium, if any, and interest (including interest on overdue principal, if any, and interest, if lawful) on the Notes is guaranteed on an unsecured, senior subordinated basis by the Guarantors pursuant to Article XII of the Indenture.

 

15.                               TRUSTEE DEALINGS WITH COMPANY.  The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

 

16.                               NO RECOURSE AGAINST OTHERS.  No director, officer, employee, incorporator or stockholder, as such, of the Company or any Guarantor shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  Each Holder by accepting a Note and the related Subsidiary Guarantees waives and releases all such liability.  The waiver and release are part of the consideration for the issuance of the Notes and the Subsidiary Guarantees.

 

17.                               AUTHENTICATION.  This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

18.                               ABBREVIATIONS.  Customary abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

A-7

 

19.                               CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:

 

Iron Mountain Incorporated
 745 Atlantic Avenue
 Boston, Massachusetts 02111
 Attention:  Chief Financial Officer

 

A-8

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:  (I) or (we) assign and transfer this Note to

 

(Insert assignee’s soc. sec. or  tax I.D. no.)

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint                                                    to transfer this Note on the books of the Company.  The agent may substitute another to act for him.

 

 

	
Date:
    	
 
    	
 
    
	
 
    	
 
    
	
Your   Signature:
    	
 
    	
 
    
	
(Sign exactly as your name appears on the face of   this Note)
    
				

 

A-9

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to Section 4.17 or 4.18 of the Indenture, check the box below:

 

o                                    Section 4.17

 

o                                    Section 4.18

 

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.17 of the Indenture, state the amount you elect to have purchased:  $                   

 

	
Date:
    	
 
    	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
(Sign   exactly as your name appears on the Note)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tax   Identification No.:
    	
                          
    
							

 

A-10

 

SCHEDULE OF EXCHANGES OF NOTES*

 

The following exchanges of a part of this Global Note for other Notes have been made:

 

	
Date of Exchange
    	
 
    	
Amount of

decrease in
   Principal Amount
   of this Global Note
    	
 
    	
Amount of
   increase in
   Principal Amount
   of this Global Note
    	
 
    	
Principal Amount of
   this Global Note
   following such
   decrease (or
   increase)
    	
 
    	
Signature of
   authorized office
   of Trustee or
   Service Agent
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*This schedule should be included only if the Note is issued in global form.

 

A-11

 

EXHIBIT B

 

FORM OF SUPPLEMENTAL INDENTURE
 TO BE DELIVERED BY FUTURE GUARANTORS

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                                 , 20    , among                                (the “Guaranteeing Subsidiary”), a subsidiary of Iron Mountain Incorporated (or its successor), a Delaware corporation (the “Company”),  and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee under the Indenture referred to below (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture, dated as of September 23, 2011, as supplemented by the First Supplemental Indenture, dated as of September 23, 2011 and the Second Supplemental Indenture, dated as of August 10, 2012 (the indenture, as so supplemented, the “Indenture”) providing for the issuance of an aggregate principal amount of up to $1,000,000,000 of 5.750% Senior Subordinated Notes due 2024  (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary Guarantee”); and

 

WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

1.                                      CAPITALIZED TERMS.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2.                                      AGREEMENT TO GUARANTEE.  The Guaranteeing Subsidiary hereby agrees that its obligations to the Holder and the Trustee pursuant to the Subsidiary Guarantee shall be as expressly set forth in Article XII of the Indenture and in such other provisions of the Indenture as are applicable to the Guarantors (including, without limitation, Article XIII of the Indenture), and reference is made to the Indenture for the precise terms of this Supplemental Indenture.  The terms of Article XII of the Indenture and such other provisions of the Indenture (including, without limitation, Article XIII of the Indenture) as are applicable to the Guarantors are incorporated herein by reference.

 

3.                                      EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.

 

(a)                                 If an Officer whose signature is on this Supplemental Indenture no longer holds that office at the time the Trustee authenticates the Note, the Subsidiary Guarantee shall be valid nevertheless.

 

(b)                                 The delivery of any Note by the Trustee, after the authentication thereof under the Indenture, shall constitute due delivery of the Subsidiary Guarantee set forth in this Supplemental Indenture on behalf of the Guaranteeing Subsidiary.

 

B-1

 

4.                                      NO RECOURSE AGAINST OTHERS.  No past, present or future director, officer, employee, incorporator or stockholder of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guarantor (including the Guaranteeing Subsidiary) under the Notes, any Subsidiary Guarantee, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of the Notes by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Notes.

 

5.                                      NEW YORK LAW TO GOVERN.  THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

6.                                      COUNTERPARTS.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.

 

7.                                      EFFECT OF HEADINGS.  The Section headings herein are for convenience only and shall not affect the construction hereof.

 

8.                                      THE TRUSTEE.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

 

B-2

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

 

	
Dated:                                  ,   20   
    	
 
    
	
 
    	
 
    
	
 
    	
[GUARANTEEING   SUBSIDIARY]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
[COMPANY]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
[TRUSTEE],
    
	
 
    	
as   Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

B-3Exhibit 10.1

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

SECOND AMENDMENT TO AGREEMENT

 

This Second Amendment to the Agreement (hereinafter referred to as this “Amendment”) is made and effective as of the 1st day of August, 2012 by and between MITSUBISHI TANABE PHARMA CORPORATION (formerly known as Tanabe Seiyaku Co., Ltd.), a corporation with its principal office at 6-18, Kitahama 2-chome, Chuo-ku, Osaka, 541-8505, Japan (hereinafter referred to as “MTPC”), and VIVUS, INC., a corporation with its principal office at 1172 Castro Street, Mountain View, California, 94040, United States of America (hereinafter referred to as “VIVUS”).

 

Capitalized terms used herein shall have the same meanings as defined in the AGREEMENT (as hereinafter defined), unless otherwise defined in this Amendment.

 

WHEREAS, VIVUS and MTPC entered into certain AGREEMENT dated as of the 28th day of December, 2000, as amended to date (hereinafter referred to as the “AGREEMENT”), under which MTPC has granted to VIVUS the exclusive right to develop and to market pharmaceutical products that contain a selective PDE5 INHIBITOR compound referred to by MTPC as “TA-1790”; and

 

WHEREAS, as the commercial launch of the PRODUCT in the United States and European Union is expected in the near future, the Parties desire to amend and supplement certain terms and conditions as set forth in the AGREEMENT;

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the Parties agree as follows:

 

1.              All references to “TANABE” used in the AGREEMENT shall be deleted and replaced by “MTPC”.

 

2.              The term “, and which shall be supplied by MTPC pursuant to Section 7.1” shall be deleted from Sections 1.3 and 1.4 of the AGREEMENT.

 

3.              Sections 1.17 and 1.39 of the AGREEMENT shall be deleted in their entirety and replaced by the following;

 

“1.17 “FIELD” means any therapeutic use in humans.”

 

1.39 “MTPC PATENT” means the patent which is attached hereto as Appendix A, and any other valid U.S. and foreign patents relating thereto, including without limitation, all substitutions, reissues, renewals, reexaminations, patents of addition, extensions, registrations, confirmations, and all pending patent applications, 

 

 

(including provisional applications, continuations, divisionals and continuation-in-part), which is owned or CONTROLLED by MTPC or its AFFILIATES as of the EFFECTIVE DATE or during the term of this AGREEMENT.  The “MTPC PATENT” shall include but not be limited to patents directed to new uses of the compounds claimed within the MTPC PATENT in the FIELD, and patents directed to manufacturing and formulation of the compounds claimed within the MTPC PATENT in the FIELD unless otherwise set forth herein.”

 

4.              Following Sections 1.45 through 1.49 shall be added to the AGREEMENT;

 

“1.45 “COMMERCIAL SALES” means sales of a PRODUCT to a THIRD PARTY in the TERRITORY in a commercial arms length transaction, invoiced by VIVUS, its AFFILIATES and/or their SUBLICENSEES to such THIRD PARTY.

 

1.46 “PROMOTIONAL SAMPLES” means PRODUCT used as promotional samples to be delivered from VIVUS, its AFFILIATES and/or their SUBLICENSEES to physicians free of charge.”

 

1.47 “STARTING MATERIALS” means *** each of which are used in the manufacture of the COMPOUND.

 

1.48 “SUPPLY PERIOD” means a period commencing on the effective date of this Amendment and expiring upon the earlier of (i) the last day of the CALENDAR QUARTER in which VIVUS notifies MTPC in writing that CMO (as hereinafter defined) assumes all of the manufacturing of the BULK DRUG SUBSTANCE required by VIVUS for commercial use in the TERRITORY or (ii) the 30th day of June, 2015.

 

1.49 “ROYALTY PERIOD” means a period commencing on the first day of the CALENDAR QUARTER following the CALENDAR QUARTER in which the SUPPLY PERIOD expired and expiring upon termination or expiration of this AGREEMENT.”

 

5.              Section 2.1 of the AGREEMENT shall be deleted in its entirety and replaced by the following;

 

“2.1 Grant of License under MTPC PATENT and MTPC KNOW-HOW. MTPC hereby grants to VIVUS, and VIVUS hereby accepts, an exclusive license, with the 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

2

 

right to grant and authorize sublicenses pursuant to Sections 2.3 and 24.2, to develop, use, import, sell, offer to sell, register and market the PRODUCT in the FIELD in the TERRITORY under the MTPC PATENT and the MTPC KNOW-HOW.  In addition, MTPC hereby grants to VIVUS, and VIVUS hereby accepts (a) an exclusive license, with the right to grant and authorize sublicenses pursuant to Sections 2.3 and 24.2, to manufacture or have manufactured the BULK DRUG SUBSTANCE, BULK DRUG TABLET and/or PRODUCT in the TERRITORY for use in the FIELD in the TERRITORY under the MTPC PATENT and the MTPC KNOW-HOW and (b) a non-exclusive license, with the right to grant and authorize sublicenses pursuant to Sections 2.3 and 24.2, to manufacture or have manufactured the BULK DRUG SUBSTANCE, BULK DRUG TABLET and/or PRODUCT in Japan, China, Taiwan and Indonesia for use in the FIELD in the TERRITORY under the MTPC PATENT and the MTPC KNOW-HOW.  Notwithstanding the foregoing, MTPC shall have (i) the right, during the SUPPLY PERIOD, to manufacture and supply the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET for VIVUS’s use in the FIELD in the TERRITORY as set forth herein and (ii) the right to manufacture and to have manufactured the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET in or outside of the TERRITORY for use outside the TERRITORY, provided, however, that, in case of (ii) above, before MTPC may manufacture the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET in the TERRITORY for use outside the TERRITORY, MTPC shall first offer VIVUS and/or its CMOs, with VIVUS’s written consent, the right to supply the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET for MTPC.  MTPC shall be obligated to obtain the supply of the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET from VIVUS’s CMOs if the terms and conditions (including quality of the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET) are substantially similar in all material respects as those afforded to VIVUS by such CMOs.  To the extent VIVUS is manufacturing the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET, MTPC shall be obligated to obtain the supply of its BULK DRUG SUBSTANCE and/or BULK DRUG TABLET from VIVUS if VIVUS offers to supply MTPC the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET on commercially reasonable terms including the quality thereof.  If VIVUS or its CMOs decline to supply or are unable to supply on the terms and conditions set forth above, MTPC shall have the right to have the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET manufactured in the TERRITORY for use outside of the TERRITORY.”

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

3

 

6.              MTPC hereby agrees that VIVUS’s contractual obligation to use best commercial efforts to market the PRODUCT within six (6) months of REGULATORY APPROVAL as set forth in Section 6.1 of the AGREEMENT shall be extended to twelve (12) months for purposes of VIVUS’s marketing of the PRODUCT in the United States following FDA approval and in a European Union member country following such member country’s approval, provided, however, that VIVUS shall be obliged to purchase the following quantity of the BULK DRUG TABLETS in ***.

 

(a) *** for 50mg BULK DRUG TABLET,

 

(b) *** for 100mg BULK DRUG TABLET, and

 

(c) *** for 200mg BULK DRUG TABLET.

 

7.              Section 7.1 of the AGREEMENT shall be deleted in its entirety and replaced by the following;

 

“7.1. Manufacture and Supply of the BULK DRUG TABLETS and BULK DRUG SUBSTANCE.  During the SUPPLY PERIOD, MTPC shall use its commercially reasonable efforts to manufacture and supply to VIVUS, either by itself or by a THIRD PARTY manufacturer approved by VIVUS, BULK DRUG TABLETS for the ORAL PRODUCT and BULK DRUG SUBSTANCE for the formulation and manufacturing of NON-ORAL PRODUCTS.  Detailed conditions for manufacture and supply of the BULK DRUG TABLETS and BULK DRUG SUBSTANCE shall be set forth in Appendix-D.  Upon expiration of the SUPPLY PERIOD, unless otherwise agreed upon by the Parties, MTPC shall not have any obligation to supply the BULK DRUG SUBSTANCE and BULK DRUG TABLET.  Notwithstanding anything to the contrary set forth in the AGREEMENT, VIVUS shall have the right to transfer manufacturing in whole or in part to a CMO at anytime during the SUPPLY PERIOD.  For purposes of this AGREEMENT, the term “CMO” shall mean a THIRD PARTY to replace or supplement current suppliers of STARTING MATERIALS and/or to replace MTPC as the sole supplier of the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET that manufacturers STARTING MATERIALS, BULK DRUG SUBSTANCE or BULK DRUG TABLETS, including a THIRD PARTY assignee or sublicensee under the AGREEMENT.”

 

8.              Section 7.2 of the AGREEMENT shall be deleted in its entirety and replaced by the 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

4

 

following;

 

“7.2 Manufacture of the BULK DRUG SUBSTANCE and the BULK DRUG TABLET by VIVUS.  During the SUPPLY PERIOD, each of MTPC and VIVUS shall use its commercially reasonable efforts to implement the technical transfer relating to the STARTING MATERIALS, BULK DRUG SUBSTANCE and BULK DRUG TABLETS from MTPC to VIVUS and/or CMOs identified and qualified by VIVUS; provided that VIVUS shall use its commercially reasonable efforts to limit the number of potential CMOs to no more than *** for each of the STARTING MATERIALS, BULK DRUG SUBSTANCE and BULK DRUG TABLETS.  The details of the technical transfer, such as, to clarify the assigned tasks and its expenses either on VIVUS and/or on MTPC, to specify the number of CMOs for the STARTING MATERIALS, BULK DRUG SUBSTANCE and BULK DRUG TABLETS to perform the technical transfer as well as their capability, and to clarify the end-point of the technical transfer, shall be negotiated in good faith and agreed upon in writing by the Parties, provided, however, that basic understanding of the Parties for the allocation of the cost, expense and responsibility for such technical transfer is as follows:

 

Each of VIVUS and MTPC agrees to use its respective commercially reasonable efforts to achieve the technical transfer schedule to be agreed upon by the Parties.

 

VIVUS agrees to (i) undertake activities to identify and qualify CMOs acceptable to VIVUS, and (ii) be responsible for necessary technical transfers for such CMOs, provided, that in identifying and qualifying CMOs, VIVUS shall coordinate such qualification activities with MTPC in good faith and when appropriate so as to achieve a smooth and definite technical transfer to such CMOs. MTPC shall use its commercially reasonable efforts to assist VIVUS in the process of identifying and qualifying CMOs and technical transfer to CMOs.  In this regard, MTPC shall provide technical and commercial details and MTPC KNOW-HOW in the form of documentation and consultation to allow the successful identification and qualification of the CMOs and technical transfers, such as, (i) a complete copy of the open and closed portions of the DMF and the ASMF (each as defined below) for CMOs to manufacture the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET, (ii) a complete copy of the API batch record, (iii) names and introductions to suppliers of STARTING MATERIALS, (iv) specific and verifiable MANUFACTURING COST, including, without limitation, prices for STARTING MATERIALS, (v) MTPC’s BULK DRUG SUBSTANCE and BULK DRUG 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

5

 

TABLET manufacturing plan attached hereto as Appendix F, (vi) any documents, information, access to MTPC manufacturing facilities and assistance necessary to achieve the technical transfer, and (vii) any other documents reasonably required by potential CMOs.  MTPC shall provide the documents and information set forth in items (i)-(v) of the preceding sentence at its earliest possible convenience, but within *** after execution of this Amendment.

 

Each Party shall bear its own costs and expenses with regard to identification and qualification of CMOs and technical transfer to VIVUS and CMOs; provided that the material costs for STARTING MATERIALS, BULK DRUG SUBSTANCE and BULK DRUG TABLETS that will be required to qualify the CMOs shall be paid by VIVUS as set forth below.

 

MTPC shall supply the STARTING MATERIALS, BULK DRUG SUBSTANCE and/or BULK DRUG TABLET to VIVUS for purposes of the qualification of, or technical transfer to CMOs at *** in case of the STARTING MATERIALS, at *** for BULK DRUG SUBSTANCE, and at *** in case of the BULK DRUG TABLET; provided, however that the quantities of such STARTING MATERIALS, BULK DRUG SUBSTANCE and BULK DRUG TABLETS for the qualification of CMOs or technical transfer shall be agreed upon by the Parties from time to time to assure (i) sufficient quantities of the BULK DRUG TABLET for COMMERCIAL SALES and PROMOTIONAL SAMPLES consistent with VIVUS’s sales forecast and (ii) the earliest possible date for the transfer of manufacturing to CMOs.

 

MTPC shall also transfer the title as the holder of the DMF and ASMF to VIVUS to expedite the transfer of manufacturing to CMOs and the technical transfer.  As used in this Section 7.2, “DMF” and “ASMF” means the Drug Master File filed with the FDA or the Active Substance Master File filed with the EMA for the BULK DRUG SUBSTANCE manufactured at Onoda Factory by Mitsubishi Tanabe Pharma Factory Ltd.  The exact timing and form of the foregoing transfers shall be determined by VIVUS at its sole and reasonable discretion based on guidance from regulatory consultants and/or the responsible regulatory authorities. Such transfer of title to the DMF and ASMF shall occur automatically at the time determined by VIVUS, and MTPC agrees to take all reasonable actions necessary to effectuate or record such transfer, consistent with the form of transfer determined by VIVUS.  Following such transfer, VIVUS shall be the sole holder of the DMF and ASMF.  However, VIVUS acknowledges that all data and information

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

6

 

included in the DMF and ASMF (collectively, “REGULATORY FILE INFORMATION”) shall be and remain the exclusive property of MTPC, subject to the license set forth in the following sentence.  MTPC hereby grants to VIVUS a perpetual, irrevocable, fully paid, royalty-free, transferable, sublicenseable (through multiple tiers), non-exclusive license to use, disclose, copy, distribute, create derivative works of, practice, and otherwise exploit the REGULATORY FILE INFORMATION for any and all purposes; provided, VIVUS agrees that it shall (i) take reasonable measures to protect the secrecy of and avoid unnecessary disclosure and unauthorized use of the REGULATORY FILE INFORMATION and (ii) take at least those measures that it takes to protect its own confidential information and shall ensure that each THIRD PARTY granted access to the REGULATORY FILE INFORMATION are bound by confidentiality and non-use obligations with respect to such information.  Notwithstanding the foregoing, nothing herein shall prevent VIVUS from disclosing the REGULATORY FILE INFORMATION to comply with applicable laws or regulations, including, without limitation, disclosures to regulatory agencies and courts or tribunals of competent jurisdiction.”

 

9.              Section 7.3 of the AGREEMENT shall be deleted in its entirety and replaced by the following;

 

“7.3 Supply of the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET. During the ROYALTY PERIOD, the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET shall be manufactured by VIVUS or its CMOs.  MTPC shall use its commercially reasonable effort to assist VIVUS to be supplied STARTING MATERIALS directly from MTPC’s current suppliers of such STARTING MATERIALS for VIVUS’s or its CMO’s use for manufacture of the BULK DRUG SUBSTANCE during the SUPPLY PERIOD.  Notwithstanding the foregoing, the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET may be supplied by MTPC at the supply prices and under the terms and conditions to be agreed in writing by the Parties during the ROYALTY PERIOD. Upon request by VIVUS made at least *** prior to the end of the SUPPLY PERIOD, the Parties shall start good faith negotiations on such supply prices, terms and conditions, provided, however, that MTPC shall not have any obligation to supply the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET unless agreed with VIVUS through such good faith discussions.”

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

7

 

10.       Section 7.4 shall be added to the AGREEMENT as follows;

 

“7.4 Suppliers of the STARTING MATERIALS to MTPC.  During the SUPPLY PERIOD, if MTPC reasonably judges identification and qualification of alternative suppliers of the STARTING MATERIALS to be used for manufacturing of the BULK DRUG SUBSTANCE by MTPC are necessary to satisfy the demand of the BULK DRUG SUBSTANCE of VIVUS during the SUPPLY PERIOD or to lower the cost for the STARTING MATERIALS, BULK DRUG SUBSTANCE and/or BULK DRUG TABLET, MTPC shall (i) bear the costs and expenses in identifying and qualifying such alternative STARTING MATERIAL suppliers incurred and (ii) provide the technical transfer for such alternative STARTING MATERIALS suppliers at its cost and expense.  In the event VIVUS identifies any alternative STARTING MATERIALS suppliers which can supply the STARTING MATERIALS that (i) are needed to satisfy VIVUS’s demand for the BULK DRUG SUBSTANCE and BULK DRUG TABLETS or (ii) will reduce the cost of a STARTING MATERIAL by *** percent (***%) or more, MTPC agrees to undertake commercially reasonable efforts to qualify such alternative STARTING MATERIAL suppliers. ”

 

11.       Section 8.1 of the AGREEMENT shall be amended to read as follows;

 

“8.1 Manufacture of the PRODUCT.  VIVUS shall be responsible for manufacturing the PRODUCT using the BULK DRUG SUBSTANCE and BULK DRUG TABLETS supplied by MTPC or manufactured by VIVUS or a CMO.”

 

12.      Section 10.2 shall be added to the AGREEMENT as follows;

 

“10.2  Royalty Payments.

In further consideration of the licenses granted by MTPC to VIVUS hereunder, VIVUS shall make the following non-refundable and non-creditable, except in case of overpayment by VIVUS, royalty payments to MTPC for COMMERCIAL SALES during the ROYALTY PERIOD:

 

*** percent (***%) of the NET SALES for the portion of the annual NET SALES up to and including *** US Dollars (US$***) in the TERRITORY.

 

*** percent (***%) of the NET SALES for the portion of the annual NET SALES in excess of *** US Dollars (US$***) in the TERRITORY.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

8

 

To the extent there are COMMERCIAL SALES of the PRODUCT manufactured by a CMO during the SUPPLY PERIOD, then any such COMMERCIAL SALES shall be (i) treated for all purposes as if they had occurred during the ROYALTY PERIOD, (ii) subject to the royalty payment as set forth in this Section 10.2 and (iii) excluded from the calculation of the NET SALES TRANSFER PRICE (as defined herein).”

 

13.       Existing Section 11.1 of the AGREEMENT shall be renumbered as Section 11.1.1 and shall be deleted in its entirety and replaced by the following;

 

“11.1.1 Supply Price for the BULK DRUG TABLET for COMMERCIAL SALE.  The transfer price (FCA place of manufacture, Incoterms 2010; hereinafter referred to as the “TRANSFER PRICE”) to be paid to MTPC by VIVUS for its shipments to VIVUS of the BULK DRUG TABLETS for COMMERCIAL SALE during the SUPPLY PERIOD shall be the greater of either (a) or (b) below, except as adjusted in Section 11.3;

 

(a)         A fixed price for each dosage forms of the BULK DRUG TABLET (the “FIXED TRANSFER PRICE”) as follows:

 

	
Dosage forms
    	
 
    	
FIXED TRANSFER PRICE per BULK DRUG TABLET
    
	
50mg   Tablet
    	
 
    	
***   United States Dollars per BULK DRUG TABLET (US$***/Tablet)
    
	
100mg   Tablet
    	
 
    	
***   United States Dollars per BULK DRUG TABLET (US$***/Tablet)
    
	
200mg   Tablet
    	
 
    	
***   United States Dollars per BULK DRUG TABLET (US$***/Tablet)
    

 

Notwithstanding anything to the contrary in the AGREEMENT, including Section 11.3, the FIXED TRANSFER PRICE shall remain fixed for a period of *** from effective date of this Amendment; provided that the FIXED TRANSFER PRICE will be reduced due to cost savings attributable to alternative sources of STARTING MATERIALS as set forth in Section 7.4 above.  Thereafter, in the event the price for a BULK DRUG TABLET calculated based upon (i) actual MANUFACTURING COST (including cost for the STARTING MATERIALS), and (ii) conversion rate between Japanese Yen and United States Dollars, falls outside the range of plus or minus *** 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

9

 

percent (***%) of the then current FIXED TRANSFER PRICE, the Parties shall negotiate the adjustment of the FIXED TRANSFER PRICE in good faith.

 

(b)         A price per BULK DRUG TABLET for each dosage forms calculated based on a percentage of annual (CALENDAR YEAR basis) total NET SALES in the TERRITORY according to the following (the “NET SALES TRANSFER PRICE”);

 

	
Annual Total NET SALES in the
   TERRITORY
    	
 
    	
NET SALES TRANSFER PRICE
   per BULK DRUG TABLET
    
	
For   the portion up to *** United States Dollars (US$***).
    	
 
    	
***   percent (***%) of the NET SALES divided by the quantity of each dosage forms   of the PRODUCT for COMMERCIAL SALES during such CALENDAR YEAR
    
	
For   the portion in excess of *** United States Dollars (US$***) and up to ***   United States Dollars (US$***).
    	
 
    	
***   percent (***%) of the NET SALES divided by the quantity of each dosage forms   of the PRODUCT for COMMERCIAL SALES during such CALENDAR YEAR
    
	
For   the portion in excess of *** United States Dollars (US$***).
    	
 
    	
***   percent (***%) of the NET SALES divided by the quantity of each dosage forms   of the PRODUCT for COMMERCIAL SALES during such CALENDAR YEAR
    

 

In the event the NET SALES TRANSFER PRICE per BULK DRUG TABLET is greater than the FIXED TRANSFER PRICE during a CALENDAR YEAR, VIVUS shall make additional payments to MTPC for the difference between those prices of PRODUCT for the COMMERCIAL SALES during such CALENDAR YEAR in accordance with Section 11. 3.”

 

14.       Following Section 11.1.2 shall be added to the AGREEMENT;

 

“11.1.2 Supply Price for ORAL PRODUCT for PROMOTIONAL SAMPLES.  VIVUS shall pay MTPC *** for the BULK DRUG TABLETS for use as PROMOTIONAL SAMPLES.  MTPC acknowledges and agrees that PROMOTIONAL SAMPLES shall be specifically excluded from any NET SALES and royalty payment calculations, including any adjustments thereto, under this 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

10

 

AGREEMENT.”

 

15.       Sections 11.3, 11.4 and 11.5 of the AGREEMENT shall be deleted in its entirety and replaced by the following Sections 11.3 and 11.4;

 

“11.3 TRANSFER PRICE Adjustment. The NET SALES TRANSFER PRICE shall be determined based on the NET SALES on a CALENDAR YEAR basis. Within sixty (60) days after the end of each CALENDAR YEAR, VIVUS shall render to MTPC a report setting forth the calculation of the NET SALES for each dosage forms of the PRODUCT in such CALENDAR YEAR.  In the CALENDAR YEAR that the SUPPLY PERIOD ends, Section 11.6(a) will apply.  In the event the NET SALES TRANSFER PRICE in a CALENDAR YEAR per BULK DRUG TABLET is greater than the FIXED TRANSFER PRICE, VIVUS shall make additional payments to MTPC for the difference between those prices for each BULK DRUG TABLET of the COMMERCIAL SALES during such CALENDAR YEAR. The formula for calculation for such adjustment is as follows;

 

***.

 

11.4 Cash Remittance. For all purchases of the BULK DRUG SUBSTANCE and BULK DRUG TABLETS from MTPC, VIVUS shall pay to MTPC by means of cash remittance (by bank transfer) payable within *** after the date of Air Waybill or Bill of Lading, as applicable for the relevant shipment.”

 

16.       Following Section 11.6 shall be added to the AGREEMENT;

 

“11.6 Transition from the SUPPLY PERIOD to ROYALTY PERIOD.

 

(a) At the end of the CALENDAR QUARTER in which the SUPPLY PERIOD ends, a “FINAL TRANSFER PRICE ADJUSTMENT” to adjust the final transfer price of the PRODUCT by each dosage forms shall be calculated as follows;

 

(i)                  ***.

 

(ii)               ***.

 

(iii)             ***.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

11

 

(iv)            ***.

 

***.  In case of any payment from MTPC to VIVUS as the result of calculation in accordance with this Paragraph, the amount to be paid by MTPC to VIVUS may be creditable towards the future royalty payment from VIVUS to MTPC as set forth in Section 10.2 of the AGREEMENT.

 

(b) VIVUS agrees to purchase all of the quantities of commercially usable STARTING MATERIALS, BULK DRUG SUBSTANCE and/or BULK DRUG TABLET from MTPC that MTPC has at the end of the SUPPLY PERIOD, at *** in case of the STARTING MATERIALS or BULK DRUG SUBSTANCE and at *** in case of the BULK DRUG TABLET.”

 

17.       Section 24.2 of the AGREEMENT shall be deleted in its entirety and replaced by the following:

 

“24.2  This AGREEMENT shall be binding upon and inure to the benefit of MTPC and VIVUS and their respective successors and assignees, provided that any such successor or assignee shall have acquired all or substantially all of the stock or assets of the predecessor by merger, purchase or otherwise.  Otherwise, the rights and obligations set forth in this AGREEMENT shall not be assignable to Non-AFFILIATES without the prior consent in writing of the other party hereto, such consent not to be unreasonably withheld; provided, however, that VIVUS may assign, in whole or in part, its rights and obligations under the AGREEMENT by way of assignment or sublicense to any THIRD PARTY identified on Appendix G hereto or such THIRD PARTY’s affiliates (the “Partner List”).  MTPC will have *** to review and comment on the Partner List after which time it will be valid for a period of ***; provided that VIVUS may propose the addition of a new THIRD PARTY at anytime in writing.”

 

18.       Sections 1.1, 1.2, 1.3 and 1.5 of Appendix-D “Manufacturing and supply of the BULK DRUG SUBSTANCE and BULK DRUG TABLETS” shall be amended to read as follows;

 

“1.1         Order Forecast. By the end of each CALENDAR QUARTER, VIVUS shall provide MTPC with an order forecast for the supply of the BULK DRUG TABLETS for the next *** CALENDAR QUARTERS. Such order forecast shall 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

12

 

show the quantity of the BULK DRUG TABLETS for COMMERCIAL SALES and for PROMOTIONAL SAMPLES and shall be updated or confirmed by VIVUS every CALENDAR QUARTER.

 

1.2  Firm Order. VIVUS shall place with MTPC a firm order at least one-hundred and twenty (120) days before the desired shipping date.  Such firm order shall fall within the range from *** percent (***%) to *** percent (***%) of the order forecast submitted by VIVUS to MTPC nine (9) months prior to the delivery date. MTPC shall accept all such orders.

 

1.3  Form of Order. VIVUS’ orders shall be made in writing, shall provide for shipment in accordance with commercially reasonable delivery schedules and shall indicate the quantity used for as COMMERCIAL SALES and PROMOTIONAL SAMPLES.  No terms contained in any firm order, order acknowledgment or similar standardized form shall be construed to amend or modify the terms of this AGREEMENT and in event of a conflict, this AGREEMENT shall control unless otherwise expressly agreed in writing.

 

1.5  Invoice.  MTPC shall send a single invoice upon delivery of each shipment of the BULK DRUG SUBSTANCE and/or BULK DRUG TABLET to VIVUS at the address to be specified by it in writing on its firm order.  With regard to the shipment of the BULK DRUG TABLET necessary for the launch in the United States, MTPC shall not ship nor invoice for such BULK DRUG TABLET that does not fulfill one hundred percent (100%) of the following quantity unless requested in writing by VIVUS to ship and invoice for such partial supply of BULK DRUG TABLET.

 

(a) *** for 50mg BULK DRUG TABLET,

(b) *** for 100mg BULK DRUG TABLET, and

(c) *** for 200mg BULK DRUG TABLET.”

 

19.       Appendix-A “List of the MTPC PATENT which covers the COMPOUND as of the EFFECTIVE DATE” attached to the AGREEMENT shall be replaced by Appendix-A attached hereto.

 

20.       This Amendment may be executed in one (1) or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument.  This Amendment may be executed by facsimile signature, 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

13

 

which shall be effective.  Upon the execution of this Amendment by MTPC and VIVUS, this Amendment shall be binding upon the parties to the AGREEMENT.

 

21.       Except as set forth in this Amendment, the remainder of the AGREEMENT shall remain in full force and effect and shall be binding on all parties thereto; provided, however, that to the extent a provision in this Amendment conflicts with a provision in the AGREEMENT, then the provision in this Amendment shall control.

 

22.       This Amendment is entered into in the English language.  In the event of any dispute concerning the construction or meaning of this Amendment, reference shall be made only to this Amendment as written in English and not to any translation into any other language.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

14

 

IN WITNESS WHEREOF, the Parties have executed this Amendment on the date first above written.

 

 

	
MITSUBISHI TANABE PHARMA CORPORATION 
    	
 
    	
VIVUS, INC.   
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Michihiro Tsuchiya
    	
 
    	
/s/   Peter Tam
    
	
By: 
    	
Michihiro Tsuchiya
    	
 
    	
By:   
    	
Peter   Tam
    
	
Title: 
    	
President   and Chief Executive Officer Representative Director
    	
 
    	
Title:   
    	
President
    
	
Date: 
    	
August 7, 2012
    	
 
    	
Date:   
    	
August 1,   2012
    

 

 

Attached documents;

Appendix-A: List of the MTPC PATENT which covers the COMPOUND

Appendix-F: MTPC’s BULK DRUG SUBSTANCE and BULK DRUG TABLET manufacturing plan

Appendix-G: Partner List

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

15

 

Appendix-A:

List of the MTPC PATENT

 

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

16

 

Appendix- F:

MTPC’s BULK DRUG SUBSTANCE and BULK DRUG TABLET manufacturing plan

 

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

17

 

Appendix G

Partner List

 

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

18

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