exv10w5



 





Exhibit 10.5




$150,000,000




CREDIT AGREEMENT




among




U-STORE-IT TRUST,




U-STORE-IT, L.P.,

as Borrower,




The Several Lenders

from Time to Time Parties Hereto,




LEHMAN BROTHERS INC.

and

WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arrangers




WACHOVIA CAPITAL MARKETS, LLC,

as Syndication Agent,




SUNTRUST BANK

and

LASALLE BANK NATIONAL ASSOCIATION,

as Co-Documentation Agents




and




LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent




Dated as of October 27, 2004




 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	SECTION 1. DEFINITIONS
	 	 	1	 
	1.1 Defined Terms
	 	 	1	 
	1.2 Other Definitional Provisions
	 	 	24	 
	SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
	 	 	25	 
	2.1 Commitments
	 	 	25	 
	2.2 Procedure for Borrowing
	 	 	25	 
	2.3 Repayment of Loans; Evidence of Debt
	 	 	25	 
	2.4 Commitment Fees, etc.
	 	 	26	 
	2.5 Termination or Reduction of Commitments
	 	 	26	 
	2.6 Optional Prepayments
	 	 	27	 
	2.7 Mandatory Prepayments
	 	 	27	 
	2.8 Conversion and Continuation Options
	 	 	27	 
	2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches
	 	 	28	 
	2.10 Interest Rates and Payment Dates
	 	 	28	 
	2.11 Computation of Interest and Fees
	 	 	28	 
	2.12 Inability to Determine Interest Rate
	 	 	29	 
	2.13 Pro Rata Treatment and Payments
	 	 	29	 
	2.14 Requirements of Law
	 	 	31	 
	2.15 Taxes
	 	 	32	 
	2.16 Indemnity
	 	 	33	 
	2.17 Illegality
	 	 	34	 
	2.18 Change of Lending Office
	 	 	34	 
	2.19 Extension of Termination Date
	 	 	34	 
	2.20 Commitment Increases
	 	 	35	 
	SECTION 3. LETTERS OF CREDIT
	 	 	37	 
	3.1 L/C Commitment
	 	 	37	 
	3.2 Procedure for Issuance of Letter of Credit
	 	 	37	 
	3.3 Fees and Other Charges
	 	 	37	 
	3.4 L/C Participations
	 	 	38	 
	3.5 Reimbursement Obligation of the Borrower
	 	 	39	 
	3.6 Obligations Absolute
	 	 	39	 
	3.7 Letter of Credit Payments
	 	 	40	 
	3.8 Applications
	 	 	40	 
	SECTION 4. BORROWING BASE PROPERTIES
	 	 	40	 
	4.1 Acceptance of Borrowing Base Properties
	 	 	40	 
	4.2 Release of Borrowing Base Properties
	 	 	43	 
	4.3 Frequency of Calculations of Borrowing Base
	 	 	44	 
	4.4 Appraisals Required by Governmental Authorities
	 	 	44	 
	4.5 Recording of Mortgages
	 	 	45	 
	4.6 Status of Escrowed Documents
	 	 	47	 







 









 






	 	 	 	 	 
	 	 	Page
	SECTION 5. REPRESENTATIONS AND WARRANTIES
	 	 	47	 
	5.1 Financial Condition
	 	 	47	 
	5.2 No Change
	 	 	48	 
	5.3 Corporate Existence; Compliance with Law
	 	 	48	 
	5.4 Corporate Power; Authorization; Enforceable Obligations
	 	 	48	 
	5.5 No Legal Bar
	 	 	49	 
	5.6 No Material Litigation
	 	 	49	 
	5.7 No Default
	 	 	49	 
	5.8 Ownership of Property; Liens
	 	 	49	 
	5.9 Intellectual Property
	 	 	49	 
	5.10 Taxes
	 	 	50	 
	5.11 Federal Regulations
	 	 	50	 
	5.12 Labor Matters
	 	 	50	 
	5.13 ERISA
	 	 	50	 
	5.14 Investment Company Act; Other Regulations
	 	 	51	 
	5.15 Subsidiaries
	 	 	51	 
	5.16 Use of Proceeds
	 	 	51	 
	5.17 Environmental Matters
	 	 	51	 
	5.18 Accuracy of Information, etc.
	 	 	52	 
	5.19 Security Documents
	 	 	53	 
	5.20 Solvency
	 	 	53	 
	5.21 REIT Status; Borrower Tax Status; Listing
	 	 	53	 
	5.22 Regulation H
	 	 	54	 
	SECTION 6. CONDITIONS PRECEDENT
	 	 	54	 
	6.1 Conditions to Initial Extension of Credit
	 	 	54	 
	6.2 Conditions to Each Extension of Credit
	 	 	57	 
	6.3 Conditions to Borrowing Base Properties
	 	 	58	 
	SECTION 7. AFFIRMATIVE COVENANTS
	 	 	61	 
	7.1 Financial Statements
	 	 	61	 
	7.2 Certificates; Other Information
	 	 	62	 
	7.3 Payment of Obligations
	 	 	63	 
	7.4 Conduct of Business and Maintenance of Existence; Compliance
	 	 	63	 
	7.5 Maintenance of Property; Insurance
	 	 	64	 
	7.6 Inspection of Property; Books and Records; Discussions
	 	 	64	 
	7.7 Notices
	 	 	64	 
	7.8 Environmental Laws
	 	 	65	 
	7.9 Interest Rate Protection
	 	 	65	 
	7.10 Additional Collateral, etc.
	 	 	65	 
	7.11 Further Assurances
	 	 	67	 
	7.12 Maintenance of Occupancy Rate
	 	 	67	 
	7.13 Acquiport/Amsdell V, LLC and Acquiport/Amsdell VI, LLC
	 	 	67	 
	SECTION 8. NEGATIVE COVENANTS
	 	 	67	 
	8.1 Financial Condition Covenants
	 	 	67	 
	8.2 Limitation on Indebtedness
	 	 	68	 







 ii 




 









 








	 	 	 	 	 
	 	 	Page
	8.3 Limitation on Liens
	 	 	68	 
	8.4 Limitation on Fundamental Changes
	 	 	69	 
	8.5 Limitation on Disposition of Property
	 	 	70	 
	8.6 Limitation on Restricted Payments
	 	 	70	 
	8.7 Limitation on Investments
	 	 	71	 
	8.8 Limitation on Transactions with Affiliates
	 	 	72	 
	8.9 Limitation on Sales and Leasebacks
	 	 	72	 
	8.10 Limitation on Changes in Fiscal Periods
	 	 	72	 
	8.11 Limitation on Negative Pledge Clauses
	 	 	72	 
	8.12 Limitation on Restrictions on Subsidiary Distributions
	 	 	73	 
	8.13 Limitation on Lines of Business
	 	 	73	 
	8.14 Limitation on Subject Property and Ground Leases
	 	 	73	 
	8.15 Special Covenants Relating to the REIT
	 	 	73	 
	8.16 Taxation of the Borrower
	 	 	74	 
	8.17 Limitation on Hedge Agreements
	 	 	74	 
	SECTION 9. EVENTS OF DEFAULT
	 	 	74	 
	SECTION 10. THE AGENTS
	 	 	77	 
	10.1 Appointment
	 	 	77	 
	10.2 Delegation of Duties
	 	 	77	 
	10.3 Exculpatory Provisions
	 	 	77	 
	10.4 Reliance by Agents
	 	 	78	 
	10.5 Notice of Default
	 	 	78	 
	10.6 Non-Reliance on Agents and Other Lenders
	 	 	78	 
	10.7 Indemnification
	 	 	79	 
	10.8 Agent in Its Individual Capacity
	 	 	79	 
	10.9 Successor Administrative Agent
	 	 	80	 
	10.10 Authorization to Release Liens and Guarantees
	 	 	80	 
	10.11 The Arrangers; the Syndication Agent; the Co-Documentation Agents
	 	 	80	 
	SECTION 11. MISCELLANEOUS
	 	 	80	 
	11.1 Amendments and Waivers
	 	 	80	 
	11.2 Notices
	 	 	82	 
	11.3 No Waiver; Cumulative Remedies
	 	 	84	 
	11.4 Survival of Representations and Warranties
	 	 	84	 
	11.5 Payment of Expenses
	 	 	84	 
	11.6 Successors and Assigns; Participations and Assignments
	 	 	86	 
	11.7 Adjustments; Set-off
	 	 	89	 
	11.8 Counterparts
	 	 	89	 
	11.9 Severability
	 	 	89	 
	11.10 Integration
	 	 	90	 
	11.11 GOVERNING LAW
	 	 	90	 
	11.12 Submission To Jurisdiction; Waivers
	 	 	90	 
	11.13 Acknowledgments
	 	 	90	 
	11.14 Confidentiality
	 	 	91	 
	11.15 Release of Collateral and Guarantee Obligations
	 	 	91	 







 iii 




 









 








	 	 	 	 	 
	 	 	Page

	11.16 Accounting Changes
	 	 	92	 
	11.17 Delivery of Lender Addenda
	 	 	92	 
	11.18 WAIVERS OF JURY TRIAL
	 	 	92	 







iv









 







ANNEXES:




A     Pricing Grid




	 	 	 
	SCHEDULES:
	 	 
	 
	 	 
	1.1A

	 	Initial Borrowing Base Properties
	1.1B

	 	Real Property
	4.1(b)

	 	Limited Review Criteria
	5.4

	 	Consents, Authorizations, Filings and Notices
	5.15

	 	Subsidiaries
	5.19(a)-1UCC

	 	Filing Jurisdictions
	5.19(a)-2UCC

	 	Financing Statements to Remain on File
	5.19(a)-3UCC

	 	Financing Statements to be Terminated
	5.19(b)

	 	Mortgage Filing Jurisdictions
	6.1(c)

	 	Terminated Indebtedness
	8.2(d)

	 	Existing Indebtedness
	8.2(f)

	 	Exceptions to Non-Recourse
	8.3(f)

	 	Existing Liens







	 	 	 
	EXHIBITS:
	 	 
	 
	 	 
	A

	 	Form of Guarantee and Collateral Agreement
	B

	 	Form of Compliance Certificate
	C

	 	Form of Closing Certificate
	D

	 	Form of Mortgage
	E

	 	Form of Assignment and Acceptance
	F

	 	Form of Legal Opinion of Hogan & Hartson L.L.P.
	G

	 	Form of Note
	H

	 	Form of Exemption Certificate
	I

	 	Form of Lender Addendum
	J

	 	Form of Borrowing Notice
	K-1

	 	Form of New Lender Supplement
	K-2

	 	Form of Commitment Increase Supplement
	L

	 	Form of Borrowing Base Certificate
	M

	 	Form of Borrowing Base Property Officer’s Certificate
	N

	 	Form of Escrow Agreement
	O

	 	Form of Environmental Indemnity Agreement







 









 






           CREDIT AGREEMENT, dated as of October 27, 2004, among U-STORE-IT TRUST, a
Maryland real estate investment trust (the “REIT”), U-STORE-IT, L.P., a
Delaware limited partnership (the “Borrower”), the several banks and
other financial institutions or entities from time to time parties to this
Agreement (the “Lenders”), LEHMAN BROTHERS INC. and WACHOVIA CAPITAL
MARKETS, LLC, as joint advisors, joint lead arrangers and joint bookrunners
(collectively, in such capacity, the “Arrangers”), WACHOVIA CAPITAL
MARKETS, LLC, as syndication agent (in such capacity, the “Syndication
Agent”), SUNTRUST BANK and LASALLE BANK NATIONAL ASSOCIATION, as
co-documentation agents (in such capacity, the “Co-Documentation
Agents”) and LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such
capacity, the “Administrative Agent”).



WITNESSETH:




           WHEREAS, the existing equity holders (the “Existing Equity
Holders”) of the Borrower have formed the REIT and contributed
substantially all of the outstanding equity interests of the Borrower held by
the Existing Equity Holders to the REIT in a series of one or more transactions
(the “Restructuring”) and the remaining partnership interests are owned
by the members of the Permitted Investors;



           WHEREAS, the Borrower and its Subsidiaries intend to obtain collateralized
mortgage-backed security financing of certain of their real property with gross
proceeds equal to approximately $270,000,000 (the “CMBS Financing”);



           WHEREAS, the shares of common stock of the REIT will be offered pursuant
to an initial public offering (the “IPO”);



           WHEREAS, in connection with the Restructuring, the CMBS Financing and the
IPO, the Borrower requested that the Lenders make available a revolving credit
facility in an aggregate amount equal to $150,000,000; and



           WHEREAS, the Lenders are willing to make such credit facilities available
upon and subject to the terms and conditions hereinafter set forth;



           NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:



SECTION 1. DEFINITIONS




           1.1 Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.



           “Acquisition Price”: with respect to any Subject Property, the
purchase price paid by the Borrower or any of its Subsidiaries for such
Property less closing costs and any amounts paid by the Borrower or such
Subsidiary as a purchase price adjustment, to be held in escrow, to be retained
as a contingency reserve, or other similar amounts.



           “Adjusted Asset Value”: with respect to any Subject Property, on
any date of determination, (i) with respect to any Subject Property owned in
fee simple or leased by the



 









 





REIT or any of its Subsidiaries for more than two
full fiscal quarters ended prior to such date of determination and for which
financial statements are available, an amount equal to (a) the Net Operating
Income of such Subject Property for the two full fiscal quarters of the
Borrower most recently ended for which financial statements are available
multiplied by two divided by (b) the Capitalization Rate and (ii)
otherwise, an amount equal to 90% of the Acquisition Price of such Property,
provided that, if an Appraisal has been obtained with respect to such
Subject Property, then the Adjusted Asset Value shall be an amount equal to the
lesser of (x) the Appraised Value of such Property and (y) the value determined
pursuant to the preceding clause (i) or (ii), as applicable. Notwithstanding
the foregoing, the Adjusted Asset Value for any Lease-Up Property shall be an
amount equal to 90% of the Acquisition Price of such Property.




           “Adjusted EBITDA”: for any period, Consolidated EBITDA for such
period less Reserves for Capital Expenditures for all Subject Properties
for such period.



           “Adjusted Total Revenue”: for any period, an amount equal to (i)
the total revenue of the Borrower and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP, minus (ii)
the aggregate amount of total revenue of all the Excluded Financing
Subsidiaries for such period.



           “Adjustment Date”: as defined in the Pricing Grid.



           “Administrative Agent”: as defined in the preamble hereto.



           “Affiliate”: as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, “control” of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.



           “Agents”: the collective reference to the Syndication Agent, the
Co-Documentation Agents and the Administrative Agent.



           “Aggregate Exposure”: with respect to any Lender at any time, an
amount equal to the amount of such Lender’s Commitment then in effect or, if
the Commitments have been terminated, the amount of such Lender’s Extensions of
Credit then outstanding.



           “Aggregate Exposure Percentage”: with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure
at such time to the sum of the Aggregate Exposures of all Lenders at such time.



           “Agreement”: this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.



           “Anticipated Mortgage Payment”: for any period of determination, an
amount equal to the annual principal and interest payment sufficient to
amortize in full during a 30-year period an amount equal to the average daily
aggregate Total Extensions of Credit during such period, calculated using an
interest rate equal to the greater of (i) the yield on a 10-year United



2









 





States
Treasury Note at such time as determined by the Administrative Agent
plus 1.50% or (ii) 8.5%.




     “Applicable Margin”: for each Type of Loan, the rate per annum set
forth under the relevant column heading below:



	 	 	 	 	 
	Base Rate	 	Eurodollar
	Loans
	 	Loans

	0.75%
	 	 	1.75	%







; provided, that on and after the first Adjustment Date occurring after
the completion of two full fiscal quarters of the Borrower after the Closing
Date, the Applicable Margin will be determined pursuant to the Pricing Grid.




           “Applicable Reserve Amount”: $0.15.



           “Application”: an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing Lender to
issue a Letter of Credit.



           “Appraisal”: with respect to any Subject Property, an appraisal
commissioned by and addressed to the Administrative Agent, conforming with the
Uniform Standards of Professional Appraisal Practice as defined by The
Appraisal Foundation and in form and substance reasonably acceptable to the
Administrative Agent, prepared by a professional appraiser acceptable to the
Administrative Agent, having at least the minimum qualifications required by
any Governmental Authority governing the Administrative Agent and the Lenders,
including FIRREA, and determining the “as is” market value of such Property in
its current condition as of such date as between a willing buyer and a willing
seller.



           “Appraised Value”: with respect to any Subject Property, the “as
is” market value of such Property as reflected in the most recent Appraisal of
such Property.



           “Asset Value”: with respect to any Subject Property, on any date of
determination, (i) with respect to any Subject Property owned by the REIT or
any of its Subsidiaries for more than two full fiscal quarters ended prior to
such date of determination and for which financial statements are available, an
amount equal to (a) the Adjusted EBITDA of such Subject Property for the two
full fiscal quarters of the Borrower most recently ended for which financial
statements are available multiplied by two divided by (b) the
Capitalization Rate and (ii) otherwise, an amount equal to 90% of the
Acquisition Price of such Property. Notwithstanding the foregoing, the Asset
Value for any Lease-Up Property shall be an amount equal to 90% of the
Acquisition Price of such Property.



           “Arrangers”: as defined in the preamble hereto.



           “Assignee”: as defined in Section 11.6(c).



           “Assignor”: as defined in Section 11.6(c).



3









 





           “Available Commitment”: with respect to any Lender at any time, an
amount equal to the excess, if any, of (a) such Lender’s Commitment then in
effect over (b) such Lender’s Extensions of Credit then outstanding.



           “Base Rate”: for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: “Prime Rate”
shall mean the prime lending rate as set forth on the British Banking
Association Telerate Page 5 (or such other comparable publicly available page
as may, in the reasonable opinion of the Administrative Agent after notice to
the Borrower, replace such page for the purpose of displaying such rate if such
rate no longer appears on the British Bankers Association Telerate page 5), as
in effect from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually available. Any change
in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.



           “Base Rate Loans”: Loans for which the applicable rate of interest
is based upon the Base Rate.



           “Benefitted Lender”: as defined in Section 11.7.



           “Board”: the Board of Governors of the Federal Reserve System of
the United States (or any successor).



           “Borrower”: as defined in the preamble hereto.



           “Borrowing Base”: on any date of determination, an amount equal to
the lesser of:




     (i) (x) the sum of the Borrowing Base Values of the Borrowing Base
Properties for such date as set forth in the most recent Borrowing Base
Report delivered by the Borrower pursuant to Section 4.2(b), Section
6.1(s), Section 6.3(h) or Section 7.2(f) multiplied by (y) 0.60,
provided that, the Borrowing Base Value of all Lease-Up Properties
may not exceed 10% of the Borrowing Base and any excess of such amounts
shall be excluded when determining the Borrowing Base; and




     (ii) the maximum amount necessary to cause the ratio of (x) the Net
Operating Income for all Borrowing Base Properties for the period of two
consecutive fiscal quarters of the REIT most recently ended for which
financial statements are available multiplied by two to (y) the
Anticipated Mortgage Payment for such period to be equal to 1.50 to 1.00.



           “Borrowing Base Leverage Ratio”: on any date of determination, the
ratio of (a) the Total Extensions of Credit on such date to (b) the sum of the
Borrowing Base Values of the Borrowing Base Properties for such date as set
forth in the most recent Borrowing Base Report delivered by the Borrower
pursuant to Section 4.2(b), Section 6.1(s), Section 6.3(h) or Section 7.2(f).



4









 





           “Borrowing Base Property”: (a) each Subject Property owned in fee
simple or leased by a Loan Party and listed on Schedule 1.1A on the
Closing Date and (b) each Subject Property owned in fee simple or leased by a
Loan Party and (i) which the Administrative Agent and, to the extent required,
the Required Lenders have agreed to include in the calculation of the Borrowing
Base pursuant to Section 4.1 and (ii) with respect to which the Administrative
Agent has received all documents required to be executed and delivered pursuant
to Section 4.1 and Section 6.3.



           “Borrowing Base Report”: a report substantially in the form of
Exhibit L, executed and certified by the chief financial officer or the
controller of the Borrower, setting forth the calculations required to
establish the Borrowing Base Value for each Borrowing Base Property and the
Borrowing Base for all Borrowing Base Properties, with supporting detail
reasonably satisfactory to the Administrative Agent.



           “Borrowing Base Value”: with respect to each Borrowing Base
Property, on any date of determination, (i) if such Borrowing Base Property has
been owned in fee simple or leased by any Loan Party for more than two full
fiscal quarters ended prior to such date of determination and financial
statements are available for such period, an amount equal to (a) the Net
Operating Income of such Borrowing Base Property for the two full fiscal
quarters of the Borrower most recently ended for which financial statements are
available multiplied by two divided by (b) the Capitalization
Rate, and (ii) otherwise, an amount equal to 90% of the Acquisition Price of
such Borrowing Base Property, provided that, if an Appraisal has been
obtained with respect to such Borrowing Base Property, then the Borrowing Base
Value shall be an amount equal to the lesser of (x) the Appraised Value of such
Property and (y) the value determined pursuant to the preceding clause (i) or
(ii), as applicable. Notwithstanding the foregoing, (1) the Borrowing Base
Value for any Lease-Up Property shall be an amount equal to 90% of the
Acquisition Price of such Property and (2) the Borrowing Base Value of any of
the following types of Subject Property shall be $0:




     (A) Subject Property not owned in fee simple by a Loan Party, unless
a Loan Party has a leasehold interest in such Property and the
Administrative Agent has approved the applicable lease in writing,
provided that, there may not be more than five Subject Properties
leased by the Loan Parties included in the determination of the Borrowing
Base at any one time;




     (B) Subject Property, or any interest of a Loan Party therein,
subject to a Lien (other than as permitted by Sections 8.3(b) through
(e)) or a negative pledge clause;




     (C) with respect to any Subject Property owned or leased by a
Subsidiary Guarantor, the Borrower’s direct or indirect ownership
interest of such Subsidiary
Guarantor is subject to a Lien (other than as permitted by Sections
8.3(b) through (e)) or a negative pledge clause;




     (D) Subject Property with respect to which any Loan Party is
prohibited from taking the following actions without the consent of any
Person: (I) creating Liens on such Property as security for Indebtedness
of such Loan Party and (II) the sale, transfer or other Disposition of
such Property;



5









 






     (E) Subject Property (other than a Lease-Up Property) on any date of
determination, the Occupancy Rate of which is less than 50% on such date;




     (F) Business Park Properties representing aggregate leaseable square
footage in excess of 5% of the aggregate leaseable square footage of all
Borrowing Base Properties;




     (G) Subject Property subject to structural defects, title defects,
environmental conditions or other adverse matters which materially and
adversely affect the profitable operation of such Property as determined
by the Administrative Agent in its sole discretion;




     (H) Subject Property, at any time after the 90th day following the
Recordation Date, for which the Administrative Agent does not have a
valid and perfected first priority Lien on such Property and any
Collateral relating to such Property;




     (I) Subject Property with respect to which a Default under the
related Mortgage has occurred and is continuing; and




     (J) Subject Property designated by the Borrower as having a
Borrowing Base Value of $0, provided that, the Borrower may
rescind such designation upon written notice to the Administrative Agent.



           “Borrowing Date”: any Business Day specified by the Borrower as a
date on which the Borrower requests the Lenders to make Loans hereunder.



           “Borrowing Notice”: with respect to any request for borrowing of
Loans hereunder, a notice from the Borrower, substantially in the form of, and
containing the information prescribed by, Exhibit J, delivered to the
Administrative Agent.



           “Business Day”: (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close
and (b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.



           “Business Park Property”: a business park owned and operated by the
Borrower or any of its Subsidiaries immediately adjacent to a Storage Property.



           “Capital Expenditures”: for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions
to equipment (including replacements, capitalized repairs and improvements
during such period) which are required to be capitalized under GAAP on a
balance sheet of such Person.



           “Capital Lease Obligations”: with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right



6









 





to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.




           “Capital Stock”: any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.



           “Capitalization Rate”: 8.50%.



           “Cash Equivalents”: (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor’s Ratings Services (“S&P”)
or P-2 by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (d)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
30 days with respect to securities issued or fully guaranteed or insured by the
United States government; (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s; (f) securities with maturities of six
months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition; and (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.



           “Change of Control”: the occurrence of any of the following
events: (a) any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Exchange
Act), shall become, or obtain rights (whether by means or warrants,
options or otherwise) to become, the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more
than 25% of the outstanding common stock of the REIT; (b) the board of
directors of the REIT shall cease to consist of a majority of Continuing
Directors; or (c) the REIT shall cease to own and control, of record and
beneficially, directly, 75% of each class of outstanding Capital Stock of the
Borrower free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement).



7









 





           “Closing Date”: the date on which the conditions precedent set
forth in Section 6.1 shall have been satisfied, which date shall be not later
than October 27, 2004.



           “CMBS Financing”: as defined in the recitals.



           “Code”: the Internal Revenue Code of 1986, as amended from time to
time.



           “Collateral”: all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.



           “Commitment”: as to any Lender, the obligation of such Lender to
make Loans and participate in Letters of Credit, in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
“Commitment” opposite such Lender’s name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Total Commitments is $150,000,000.



           “Commitment Fee Rate”: 0.25% per annum; provided, that on
and after the first Adjustment Date occurring after the completion of two full
fiscal quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be as determined pursuant to the Pricing Grid.



           “Commitment Increase Notice”: as defined in Section 2.20(a).



           “Commitment Percentage”: as to any Lender at any time, the
percentage which such Lender’s Commitment then constitutes of the Total
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender’s
Extensions of Credit then outstanding constitutes of the Total Extensions of
Credit then outstanding).



           “Commitment Period”: the period from and including the Closing
Date to the Termination Date.



           “Commonly Controlled Entity”: an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.



           “Compliance Certificate”: a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.



           “Confidential Information Memorandum”: a collective reference to
the marketing materials furnished to the initial Lenders in connection with the
syndication of the Facility.



           “Consolidated Adjusted Asset Value”: on any date of determination,
the sum (without duplication) of (a) the aggregate Adjusted Asset Value of all
Subject Properties on such date plus (b) the book value (determined in
accordance with GAAP) of all other tangible assets of the REIT and its
Subsidiaries on such date, provided that, (x) the portion of the
Consolidated



8









 





Adjusted Asset Value attributable to clause (b) above shall not
exceed 5% of the Consolidated Adjusted Asset Value and (y) the portion of the
Consolidated Adjusted Asset Value attributable to Lease-Up Properties shall not
exceed 10% of the Consolidated Adjusted Asset Value and any excess of such
amounts shall be excluded when determining the Consolidated Adjusted Asset
Value.




           “Consolidated EBITDA”: for any period, Consolidated Net Income of
the REIT and its Subsidiaries for such period plus, without duplication
and to the extent reflected as a charge in the statement of such Consolidated
Net Income for such period, the sum of (a) income tax expense, (b) interest
expense of the REIT and its Subsidiaries, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness, (c) depreciation and amortization
expense, (d) amortization of intangibles (including, but not limited to,
goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, losses on sales of assets outside of the ordinary course of
business), and (f) any other non-cash charges, and minus, to the extent
included in the statement of such Consolidated Net Income for such period, the
sum of (a) interest income (except to the extent deducted in determining such
Consolidated Net Income), (b) any extraordinary, unusual or non-recurring
income or gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, gains on
the sales of assets outside of the ordinary course of business), (c) any other
non-cash income and (d) any cash payments made during such period in respect of
items described in clause (e) above subsequent to the fiscal quarter in which
the relevant non-cash expenses or losses were reflected as a charge in the
statement of Consolidated Net Income, all as determined on a consolidated
basis.



           “Consolidated Fixed Charge Coverage Ratio”: for any period, the
ratio of (a) Adjusted EBITDA for such period to (b) Consolidated Fixed Charges
for such period.



           “Consolidated Fixed Charges”: for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b) all
regularly scheduled payments made during such period on account of principal of
Indebtedness of the REIT or any of its Subsidiaries, other than balloon
principal, bullet or similar principal payments which repays in full such
Indebtedness, (c) dividends accrued (whether or not declared or payable) on the
preferred stock of the REIT or its Subsidiaries during such period and (d) the
REIT’s and its
Subsidiaries’ pro-rata share of all expenses and payments referred to in
the preceding clauses (a) and (b) of any unconsolidated Person in which they
have an equity interest.



           “Consolidated Interest Coverage Ratio”: for any period, the ratio
of (a) Adjusted EBITDA for such period to (b) Consolidated Interest Expense for
such period.



           “Consolidated Interest Expense”: for any period, the total interest
expense of the REIT and its Subsidiaries (including that attributable to
Capital Lease Obligations and any capitalized interest expense) for such period
with respect to all outstanding Indebtedness of the REIT and its Subsidiaries
(including, without limitation, all commissions, discounts and other fees and
charges owed by the REIT and its Subsidiaries with respect to letters of
credit, bankers’ acceptance financing and net costs of the REIT and its
Subsidiaries under Hedge Agreements in



9









 





respect of interest rates to the extent
such net costs are allocable to such period in accordance with GAAP,
plus the REIT’s and its Subsidiaries’ pro-rata share of all such
expenses of any unconsolidated Person in which they have an equity interest.




           “Consolidated Leverage Ratio”: on any date of determination, the
ratio of (a) Consolidated Total Debt on such day to (b) Consolidated Adjusted
Asset Value in effect on such day.



           “Consolidated Net Income”: of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP;
provided, that in calculating Consolidated Net Income of the REIT and
its consolidated Subsidiaries for any period, there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the REIT or is merged into or consolidated with the REIT or any
of its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of the Borrower) in which the REIT or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the REIT or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the REIT
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.



           “Consolidated Total Asset Value”: on any date of determination,
the sum (without duplication) of (a) the aggregate Asset Value of all Subject
Properties on such date plus (b) the book value (determined in
accordance with GAAP) of all other tangible assets of the REIT and its
Subsidiaries on such date, provided that, (x) the portion of the
Consolidated Total Asset Value attributable to clause (b) above shall not
exceed 5% of the Consolidated Total Asset Value and (y) the portion of the
Consolidated Total Asset Value attributable to Lease-Up Properties shall not
exceed 10% of the Consolidated Total Asset Value and any excess of such amounts
shall be excluded when determining the Consolidated Total Asset Value.



           “Consolidated Total Debt”: at any date, the aggregate principal
amount of all Indebtedness of the REIT and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.



           “Construction Budget”: the fully-budgeted costs for the acquisition
and construction of a given piece of real property (including the cost of
acquiring such piece of real property) as reasonably determined by the Borrower
in good faith.



           “Continuing Directors”: the directors of the REIT on the Closing
Date, after giving effect to the IPO and the other transactions contemplated
hereby, and each other director of the REIT, if, in each case, such other
director’s nomination for election to the board of directors of the REIT is
recommended by at least 66-2/3% of the then Continuing Directors.



           “Contractual Obligation”: as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.



10









 





           “Control Investment Affiliate”: as to any Person, any other Person
that (a) directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, “control” of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.



           “Default”: any of the events specified in Section 9, whether or
not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.



           “Derivatives Counterparty”: as defined in Section 8.6.



           “Disposition”: with respect to any Property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms “Dispose” and “Disposed of” shall have correlative
meanings.



           “Dollars” and “$”: dollars in lawful currency of the United
States of America.



           “Domestic Subsidiary”: any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States of America.



           “Environmental Indemnity Agreement”: the Environmental Indemnity
Agreement to be executed and delivered by each Loan Party executing a mortgage,
substantially in the form of Exhibit O.



           “Environmental Laws”: any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any state,
local, municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has been, is
now, or may at any time hereafter be, in effect.



           “Environmental Permits”: any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations under any
Environmental Law.



           “ERISA”: the Employee Retirement Income Security Act of 1974, as
amended from time to time.



           “Escrow Agent”: Chicago Title Insurance Company, and its
successors and assigns.



           “Escrow Agreement”: the Escrow Agreement to be executed and
delivered by the REIT, the Borrower, the Subsidiary Guarantors, the
Administrative Agent and the Escrow Agent, substantially in the form of Exhibit
O, as the same may be amended, supplemented or otherwise modified from time to
time.



11









 





           “Eurocurrency Reserve Requirements”: for any day, the aggregate
(without duplication) of the maximum rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.



           “Eurodollar Base Rate”: with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on
the first day of such Interest Period appearing on Page 3750 of the Telerate
screen as of 11:00 A.M., London time, two Business Days prior to the beginning
of such Interest Period. In the event that such rate does not appear on Page
3750 of the Telerate screen (or otherwise on such screen), the “Eurodollar
Base Rate” for purposes of this definition shall be determined by reference
to such other comparable publicly available service for displaying eurodollar
rates as may be selected by the Administrative Agent.



           “Eurodollar Loans”: Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.



           “Eurodollar Rate”: with respect to each day during each Interest
Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):



Eurodollar Base Rate








1.00 - Eurocurrency Reserve Requirements




           “Eurodollar Tranche”: the collective reference to Eurodollar Loans
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).



           “Event of Default”: any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.



           “Exchange Act”: the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.



           “Excluded Foreign Subsidiary”: any Foreign Subsidiary in respect
of which either (a) the pledge of all of the Capital Stock of such Subsidiary
as Collateral or (b) the guaranteeing by such Subsidiary of the Obligations,
would, in the good faith judgment of the Borrower, result in adverse tax
consequences to the Borrower.


           “Excluded Financing Subsidiary”: any Subsidiary of the Borrower (i)
which is the primary obligor with respect to any Indebtedness outstanding under
Section 8.2(d) or 8.2(f) and such Indebtedness expressly prohibits the pledge
of the Capital Stock of such Subsidiary to secure the Obligations and (ii)
which does not own or lease a Borrowing Base Property.



12









 







           “Extensions of Credit”: as to any Lender at any time an amount
equal to the sum of (a) the aggregate principal amount of all Loans made by
such Lender then outstanding and (b) such Lender’s Commitment Percentage of the
L/C Obligations then outstanding.



           “Facility”: the Commitments and the extensions of credit made
thereunder.



           “Fair Market Value”: with respect to any asset, the price which
could be negotiated in an arm’s length transaction, for cash, between a willing
seller and a willing buyer, neither of which is under pressure or compulsion to
complete the transaction. Fair Market Value shall be determined by the board
of directors of the general partner of the Borrower acting in good faith and
evidenced by a board resolution thereof delivered to the Administrative Agent
or, with respect to any asset valued at less than $1,000,000, such
determination may be by a duly authorized officer of the Borrower evidenced by
a certificate of Responsible Officer delivered to the Administrative Agent.



           “Federal Funds Effective Rate”: for any day, the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.



           “FIRREA”: the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.



           “Foreign Subsidiary”: any Subsidiary of the Borrower that is not a
Domestic Subsidiary.



           “Funding Office”: the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and the
Lenders.



           “Funds From Operations”: for any period, with respect to the REIT
and its Subsidiaries, Consolidated Net Income of the REIT and its Subsidiaries
for such period, plus real estate depreciation and amortization
(excluding amortization of financing costs), plus amortization
associated with the purchase of property management companies, plus
non-cash charges for the impairment of real estate assets for such period,
minus, to the extent included in the statement of such Consolidated Net
Income for such period (without duplication), gains or losses from debt
restructuring and sales of property, and after adjustments for unconsolidated
partnerships and joint ventures (with adjustments for unconsolidated
partnerships and joint ventures calculated to reflect funds from operations on
the same basis) together with adjustments for the non-cash deferred portion of
any income tax provision for unconsolidated subsidiaries and the payment of
dividends on preferred stock, as interpreted by the National Association of
Real Estate Investment Trusts in its March, 1995, White Paper on Funds From
Operations; provided that, the following shall be excluded when
calculating “Funds From Operations”: (i) non-cash adjustments for loan
amortization costs, and (ii) interest expense charges (or benefits) for
minority interest marked-to-market adjustments arising under Statement of



13









 





Financial Accounting Standards No. 150 of the Financial Accounting Standards
Board (“FAS 150”) as interpreted under GAAP.




           “GAAP”: generally accepted accounting principles in the United
States of America as in effect from time to time.



           “Governmental Authority”: any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).



           “Guarantee and Collateral Agreement”: the Guarantee and Collateral
Agreement to be executed and delivered by the REIT, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may
be amended, supplemented or otherwise modified from time to time.



           “Guarantee Obligation”: as to any Person (the “guaranteeing
person”), any obligation, including a reimbursement, counterindemnity or
similar obligation, of the guaranteeing person that guarantees or in effect
guarantees, or which is given to induce the creation of a separate obligation
by another Person (including any bank under any letter of credit) that
guarantees or in effect guarantees any Indebtedness, leases, dividends or other
obligations (the “primary obligations”) of any other third Person (the
“primary obligor”) in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii)
to purchase Property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however,
that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee Obligation is made
and (b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by
the Borrower in good faith.



           “Guarantors”: the collective reference to the REIT and the
Subsidiary Guarantors.



14









 





           “Hedge Agreements”: all interest rate or currency swaps, caps or
collar agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by the Borrower or its Subsidiaries providing for
protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.



           “Increase Effective Date”: the date on which the Administrative
Agent shall have received a Commitment Increase Notice and all conditions
precedent to the effectiveness of the related Commitment increase set forth in
Section 2.20 shall have been satisfied, which date shall occur no later than
the second anniversary of the Closing Date.



           “Increase Option Period”: the period beginning on the Closing Date
to, but excluding, the date that is the second anniversary of the Closing Date.



           “Indebtedness”: of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of Property or services (other than
trade payables incurred in the ordinary course of such Person’s business), (c)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations of such Person,
(f) all obligations of such Person, contingent or otherwise, as an account
party or applicant under acceptance, letter of credit, surety bond or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above, (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent
or otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of
such obligation and (j) for the purposes of Section 9(e) only, all obligations
of such Person in respect of Hedge Agreements. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership
in which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable therefor,
provided that, Indebtedness shall include such Person’s pro-rata share
of any Indebtedness of any joint venture in which such Person is a partner,
regardless if such Person is liable therefor.



           “Indemnified Liabilities”: as defined in Section 11.5.



           “Indemnitee”: as defined in Section 11.5.



           “Insolvency”: with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.



15









 





           “Insolvent”: pertaining to a condition of Insolvency.



           “Intellectual Property”: the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.



           “Interest Payment Date”: (a) as to any Base Rate Loan, the last
day of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Base Rate Loan), the date of any
repayment or prepayment made in respect thereof.



           “Interest Period”: as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M., New York City time, on the date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing
provisions relating to Interest Periods are subject to the following:




(1) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day;




(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and




(3) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period.



           “Investments”: as defined in Section 8.7.



           “IPO”: as defined in the recitals.



16









 





           “Issuing Lender”: Wachovia Bank, National Association or any
Lender from time to time designated by the Borrower as an Issuing Lender with
the consent of such Lender and the Administrative Agent.



           “L/C Commitment”: $10,000,000.



           “L/C Fee Payment Date”: the last day of each March, June,
September and December and the last day of the Commitment Period.



           “L/C Obligations”: at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.



           “L/C Participants”: with respect to any Letter of Credit, the
collective reference to all the Lenders other than the Issuing Lender that
issued such Letter of Credit.



           “Lease-Up Property”: any Subject Property upon which construction
of all improvements has been completed but has not reached stabilization. For
the purposes of this definition, the “stabilization” of any Subject Property is
the earlier to occur of (a) the first date on which the Occupancy Rate equals
or exceeds 65% and (b) the date that is twelve months after the completion of
such construction.



           “Lehman Entity”: any of Lehman Commercial Paper Inc. or any of its
affiliates (including Syndicated Loan Funding Trust).



           “Lender Addendum”: with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit I, to be executed and delivered
by such Lender on the Closing Date as provided in Section 11.17.



           “Lenders”: as defined in the preamble hereto.



           “Letters of Credit”: as defined in Section 3.1(a).



           “Lien”: any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).



           “Loan”: any loan made by any Lender pursuant to this Agreement.



           “Loans”: as defined in Section 2.1.



           “Loan Documents”: this Agreement, the Security Documents, the
Environmental Indemnity Agreement, the Escrow Agreement, the Applications and
the Notes.



17









 





           “Loan Parties”: the REIT, the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.



           “Material Adverse Effect”: a material adverse effect on (a) the
Transactions, (b) the business, assets, property, operations, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole or (c) the validity or enforceability of this Agreement or any
of the other Loan Documents or the rights or remedies of the Agents or the
Lenders hereunder or thereunder.



           “Material Environmental Amount”: an amount or amounts payable by
the Borrower and/or any of its Subsidiaries, in the aggregate in excess of
$1,000,000, for: costs to comply with any Environmental Law; costs of any
investigation, and any remediation, of any Material of Environmental Concern;
and compensatory damages (including, without limitation damages to natural
resources), punitive damages, fines, and penalties pursuant to any
Environmental Law.



           “Material Subsidiary”: any Subsidiary of the Borrower (other than
any Excluded Foreign Subsidiary or Excluded Financing Subsidiary or any
Subsidiary of an Excluded Foreign Subsidiary or Excluded Financing Subsidiary)
which (a) owns, or otherwise has any interest in, any Borrowing Base Property
or any other property or asset which is taken into account when calculating
Borrowing Base Value; (b) has total assets greater than or equal to 5% of total
assets of the Borrower determined on a consolidated basis (calculated as of the
end of the fiscal quarter most recently ending for which financial statements
are available) or (c) has total revenues greater than or equal to 5% of the
total revenues of the Borrower determined on a consolidated basis (calculated
for the fiscal quarter most recently ending for which financial statements are
available). In any event, the term “Material Subsidiaries” shall mean
and include all Subsidiaries of the Borrower, which, together with the
Borrower, account for 90% or more of the Adjusted Total Revenue of the Borrower
determined on a consolidated basis for the fiscal quarter most recently ended
for which financial statements are available. If more than one combination of
Subsidiaries satisfies such threshold, then those Subsidiaries so determined to
be “Material Subsidiaries” shall be specified by the Borrower.
Schedule 5.15 sets forth the Material Subsidiaries as of the Closing
Date.



           “Materials of Environmental Concern”: any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise
to liability under any Environmental Law.



           “Mortgages”: each of the mortgages and deeds of trust made by any
Loan Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Secured Parties, substantially in the form of Exhibit D (with
such changes thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.



18









 





           “Multiemployer Plan”: a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.



           “Net Operating Income”: with respect to any Subject Property for
any period, the sum (without duplication) of (a) rents and other revenues
received in the ordinary course of business from operating such Property
(including the proceeds of rent loss insurance, but excluding pre-paid rents
and revenues and security deposits (except to the extent applied in
satisfaction of tenants’ obligations for rents)) during such period
minus (b) all expenses paid or accrued related to the ownership,
operation or maintenance of such Property, including, but not limited to,
taxes, assessments and other similar charges, insurance, utilities, payroll
costs, maintenance, repair and landscaping expenses and on-site marketing
expenses during such period minus (c) Reserves for Capital Expenditures
with respect to such Property for such period minus (d) an implied
management fee in an amount equal to 5.0% of the total gross revenues for such
Property for such period.



           “Net Proceeds”: with respect to any issuance or sale of equity
securities of any Person, the aggregate amount of all cash proceeds and the
Fair Market Value of all other Property received by such Person from such
issuance, net of investment banking fees, legal fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection therewith.



           “New Lender”: as defined in Section 2.20(b).



           “Non-Excluded Taxes”: as defined in Section 2.15(a).



           “Non-U.S. Lender”: as defined in Section 2.15(d).



           “Note”: as defined in Section 2.3.



           “Obligations”: the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans,
the Reimbursement Obligations and all other obligations and liabilities of the
Borrower to
the Administrative Agent or to any Lender or any Qualified Counterparty,
whether direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, the Letters of
Credit, any Specified Hedge Agreement or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of counsel
to the Administrative Agent or to any Lender that are required to be paid by
the Borrower pursuant hereto) or otherwise; provided, that (i)
obligations of the Borrower or any Subsidiary under any Specified Hedge
Agreement shall be secured and guaranteed pursuant to the Security Documents
only to the extent that, and for so long as, the other Obligations are so
secured and guaranteed and (ii) any release of Collateral or Guarantors



19









 





effected in the manner permitted by this Agreement shall not require the
consent of holders of obligations under Specified Hedge Agreements.




           “Occupancy Rate”: with respect to any Subject Property on any date
of determination, the ratio, expressed as a percentage of (a) the aggregate
leaseable square footage of all completed space of such Property actually
occupied by tenants that are not Affiliates of any Loan Party, paying rent at
market rates pursuant to binding leases as to which no monetary default has
occurred and has continued for a period in excess of 45 days to (b) the
aggregate leaseable square footage of all completed space of such Property.



           “Other Taxes”: any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.



           “Participant”: as defined in Section 11.6(b).



           “Payment Office”: the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and the
Lenders.



           “PBGC”: the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).



           “Permitted Investors”: the collective reference to Robert J.
Amsdell, Barry L. Amsdell, Todd C. Amsdell, the Robert J. Amsdell Family
Irrevocable Trust and the Loretta Amsdell Family Irrevocable Trust.



           “Person”: an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.



           “Plan”: at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.



           “Pricing Grid”: the pricing grid attached hereto as Annex A.



           “Pro Forma Balance Sheet”: as defined in Section 5.1(a).



           “Projections”: as defined in Section 7.2(c).



           “Property”: any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.



           “Property Management Agreement”: with respect to a Subject
Property, an agreement entered into by a Loan Party to engage a Person to
advise such Loan Party with



20









 





respect to the management of such Property. As of
the Closing Date, all Borrowing Base Properties are subject to the Property
Management Agreement, dated as of October 27, 2004, between the Borrower and
YSI Management LLC, a Delaware corporation.




           “Qualified Counterparty”: with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.



           “Recordation Date”: the earlier of: (i) the date on which an
Event of Default shall have occurred and is continuing or (ii) the date on
which the Administrative Agent receives notice pursuant to Section 7.2(g)
stating that the Borrowing Base Leverage Ratio equals or exceeds 0.55 to 1.00.



           “Recourse Indebtedness”: with respect any Indebtedness or
Guarantee Obligation initially incurred by any Person pursuant to Section
8.2(f), such Indebtedness shall be deemed “Recourse” and excluded from
Section 8.2(f) if, and to the extent that, any of the events giving rise to the
nonrecourse exceptions for liability of the Borrower as guarantor of such
Indebtedness described in (i) Section (A) of Schedule 8.2(f) has
occurred and the aggregate amount of such losses, costs, expenses and
liabilities exceeds $10,000,000 or (ii) Section (B) of Schedule 8.2(f)
has occurred. An obligation of the Borrower that is without Recourse to the
assets and/or properties of the Borrower shall not be considered a
“Recourse” obligation unless any of the events or circumstances
described in Section (A) or (B) of Schedule 8.2(f) have occurred.



           “REIT”: as defined in the preamble.



           “REIT Status”: with respect to any Person, (a) the qualification
of such Person as a real estate investment trust under Sections 856 through 860
of the Code, and (b) the applicability to such Person and its shareholders of
the method of taxation provided for in Sections 857 et seq. of
the Code.



           “Register”: as defined in Section 11.6(d).



           “Regulation H”: Regulation H of the Board as in effect from time
to time.



           “Regulation U”: Regulation U of the Board as in effect from time
to time.



           “Reimbursement Obligation”: the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit issued by such Issuing Lender.



           “Related Fund”: with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same
investment advisor as such Lender, by such Lender or an Affiliate of such
Lender.



           “Reorganization”: with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.



21









 





           “Reportable Event”: any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
§ 4043.



           “Required Lenders”: at any time, the holders of more than 66-2/3%
of the Total Commitments then in effect or, if the Commitments have been
terminated, more than 66-2/3% of the Total Extensions of Credit then
outstanding.



           “Requirement of Law”: as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person
or any of its Property is subject.



           “Reserves for Capital Expenditures”: with respect to any Subject
Property for any period, an amount equal to (a) the aggregate leaseable square
footage of all completed space of such Property multiplied by (b) the
Applicable Reserve Amount multiplied by (c) the number of days actually
elapsed during such period divided by (d) 365.



           “Responsible Officer”: the chief executive officer, president or
chief financial officer of the general partner of the Borrower, but in any
event, with respect to financial matters, the chief financial officer of the
general partner of the Borrower.



           “Restricted Payments”: as defined in Section 8.6.



           “Restructuring”: as defined in the recitals.



           “SEC”: the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).



           “Secured Parties”: as defined in the Guarantee and Collateral
Agreement.



           “Security Documents”: the collective reference to the Guarantee
and Collateral Agreement, the Mortgages and all other security documents
hereafter delivered to the Administrative Agent granting a Lien in favor of the
Administrative Agent for the benefit of the
Secured Parties on any Property of any Person to secure the obligations
and liabilities of any Loan Party under any Loan Document.



           “Single Employer Plan”: any Plan that is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.



           “Solvent”: with respect to any Person, as of any date of
determination, (a) the amount of the “present fair saleable value” of the
assets of such Person will, as of such date, exceed the amount of all
“liabilities of such Person, contingent or otherwise”, as of such date, as such
quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present
fair saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such Person



22









 





will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business, and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) “debt” means
liability on a “claim”, and (ii) “claim” means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.




           “Specified Hedge Agreement”: any Hedge Agreement entered into by
the Borrower or any Subsidiary Guarantor and any Qualified Counterparty.



           “Storage Property”: a self-storage facility owned and operated by
the Borrower or any of its Subsidiaries.



           “Subject Property”: any Storage Property or Business Park
Property.



           “Subsidiary”: as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of
a contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.



           “Subsidiary Guarantor”: each Subsidiary of the Borrower that is a
party to the Guarantee and Collateral Agreement.



           “Syndication Agent”: as defined in the preamble hereto.



           “Tangible Net Worth”: for any Person on any date of determination,
such Person’s total stockholder’s equity, plus accumulated depreciation
and amortization, minus (to the extent reflected in determining
stockholders’ equity of such Person): (a)
the amount of any write-up in the book value of any assets reflected in
any balance sheet resulting from revaluation thereof or any write-up in excess
of the cost of such assets acquired, and (b) the aggregate of all amounts
appearing on the asset side of any such balance sheet for patents, patent
applications, copyrights, trademarks, trade names, goodwill and other like
assets which would be classified as intangible assets under GAAP.



           “Termination Date”: October 27, 2007, as it may be extended
pursuant to Section 2.19.



           “Tie-In Jurisdiction”: a jurisdiction in which a “tie-in”
endorsement may be obtained for a title insurance policy covering real property
located in such jurisdiction, which endorsement effectively ties coverage to
other title insurance policies covering real property located in other
jurisdictions.



23









 





           “Total Commitments”: at any time, the aggregate amount of the
Commitments then in effect.



           “Total Extensions of Credit”: at any time, the aggregate amount of
the Extensions of Credit of the Lenders outstanding at such time.



           “Transactions”: a collective reference to the Restructuring, the
financing thereof pursuant to this Agreement, the CMBS Financing and the IPO.



           “Transferee”: as defined in Section 11.15.



           “Type”: as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.



           “Wholly Owned Subsidiary”: as to any Person, any other Person all
of the Capital Stock of which (other than directors’ qualifying shares required
by law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.



           “Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that
is a Wholly Owned Subsidiary of the Borrower.



           1.2 Other Definitional Provisions. Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.



           (b) As used herein and in the other Loan Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to the REIT, the Borrower and its Subsidiaries not defined in Section
1.1 and accounting terms partly defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP.



           (c) The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.



           (d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.



           (e) All calculations of financial ratios set forth in Section 8.1 and the
calculation of the ratio of Consolidated Total Debt to Consolidated Total Asset
Value for purposes of determining the Applicable Margin shall be calculated to
the same number of decimal places as the relevant ratios are expressed in and
shall be rounded upward if the number in the decimal place immediately
following the last calculated decimal place is five or greater. For example,
if the relevant ratio is to be calculated to the hundredth decimal place and
the calculation of the ratio is 5.126, the ratio will be rounded up to 5.13.



24









 





SECTION 2. AMOUNT AND TERMS OF COMMITMENTS




           2.1 Commitments. Subject to the terms and conditions hereof, the
Lenders severally agree to make revolving credit loans (“Loans”) to the
Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding (i) for each Lender which, when
added to such Lender’s Commitment Percentage of the L/C Obligations then
outstanding, does not exceed the amount of such Lender’s Commitment and (ii)
for all Lenders, does not exceed the Borrowing Base at such time. During the
Commitment Period the Borrower may use the Commitments by borrowing, prepaying
the Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof. The Loans may from time to time be Eurodollar
Loans or Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.8, provided
that no Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Termination Date.



           (b) The Borrower shall repay all outstanding Loans on the Termination
Date.



           2.2 Procedure for Borrowing. The Borrower may borrow under the
Commitments on any Business Day during the Commitment Period, provided
that the Borrower shall deliver to the Administrative Agent a Borrowing Notice
(which Borrowing Notice must be received by the Administrative Agent prior to
12:00 Noon, New York City time, (a) three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior
to the requested Borrowing Date, in the case of Base Rate Loans). Any Loans
made on the Closing Date shall initially be Base Rate Loans, and no Loan may be
made as, converted into or continued as a Eurodollar Loan having an Interest
Period in excess of one month prior to the date which is the earlier of (i) 60
days after the Closing Date and (ii) the date on which the Arrangers notify the
Borrower that the primary syndication of the Facility is complete. Each
borrowing of Loans under the Commitments shall be in an amount equal to (x) in
the case of Base Rate Loans,
$1,000,000 or a whole multiple in excess of $100,000 thereof (or, if the
then aggregate Available Commitments are less than $1,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $2,000,000 or a whole multiple
of $100,000 in excess thereof. Upon receipt of any such Borrowing Notice from
the Borrower, the Administrative Agent shall promptly notify each Lender
thereof. Each Lender will make its Commitment Percentage of the amount of each
borrowing of Loans available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent in like funds as received by the
Administrative Agent.



           2.3 Repayment of Loans; Evidence of Debt. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Lender, the then unpaid principal amount of each Loan of such
Lender on the Termination Date (or on such earlier date on which the Loans
become due and payable pursuant to Section 9). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time to
time outstanding from the date hereof until payment in full thereof at the
rates per annum, and on the dates, set forth in Section 2.10.



25









 





           (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.



           (c) The Administrative Agent, on behalf of the Borrower, shall maintain
the Register pursuant to Section 11.6(d), and a subaccount therein for each
Lender, in which shall be recorded (i) the amount of each Loan made hereunder
and any Note evidencing such Loan, the Type of such Loan and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender’s share thereof.



           (d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.3(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with the
terms of this Agreement.



           (e) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note of the Borrower evidencing any Loans of such Lender,
substantially in the form of Exhibit G (a “Note”), with appropriate
insertions as to date and principal amount; provided, that delivery of
Notes shall not be a condition precedent to the occurrence of the Closing Date
or the making of the Loans or issuance of Letters of Credit on the Closing
Date.



           2.4 Commitment Fees, etc. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including the Closing Date to the last day of the Commitment
Period, computed at the Commitment Fee Rate on the average daily amount of the
Available Commitment of such Lender during the period for which payment is
made, payable quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date, commencing on the first of
such dates to occur after the date hereof.



           (b) The Borrower agrees to pay to the Administrative Agent the fees in the
amounts and on the dates from time to time agreed to in writing by the Borrower
and the Administrative Agent.



           2.5 Termination or Reduction of Commitments. The Borrower shall
have the right, upon not less than three Business Days’ notice to the
Administrative Agent (which shall be distributed to the Lenders), to terminate
the Commitments or, from time to time, to reduce the aggregate amount of the
Commitments; provided that no such termination or reduction of
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the Total
Extensions of Credit would exceed the Total Commitments. Any such reduction
shall be in an amount equal to $10,000,000, or a whole



26









 





multiple of $5,000,000
in excess thereof, and shall reduce permanently the Commitments then in effect.




           2.6 Optional Prepayments. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty
(except as otherwise provided herein), upon irrevocable notice delivered to the
Administrative Agent no later than 11:00 A.M., New York City time, three
Business Days prior thereto in the case of Eurodollar Loans and no later than
11:00 A.M., New York City time, one Business Day prior thereto in the case of
Base Rate Loans, which notice shall specify the date and amount of such
prepayment and whether such prepayment is of Eurodollar Loans or Base Rate
Loans; provided, that if a Eurodollar Loan is prepaid on any day other
than the last day of the Interest Period applicable thereto, the Borrower shall
also pay any amounts owing pursuant to Section 2.16. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except
in the case of Base Rate Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof.



           2.7 Mandatory Prepayments. If, on any date the Total Extensions of
Credit exceeds the Borrowing Base in effect on such date, the Borrower shall
repay the Total Extensions of Credit outstanding on such date to the extent of
such excess (without resulting in a permanent reduction of the Commitments),
provided that if the aggregate principal amount of Loans then
outstanding is less than the amount of the Total Extensions of Credit
outstanding on such date
(because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Secured
Parties on terms and conditions satisfactory to the Administrative Agent.



           2.8 Conversion and Continuation Options. The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days’ prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may
be made only on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent at least three Business Days’ prior
irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no Base Rate Loan
may be converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has, or the Required
Lenders have, determined in its or their sole discretion not to permit such
conversions or (ii) after the date that is one month prior to the Termination
Date. Upon receipt of any such notice the Administrative Agent shall promptly
notify each relevant Lender thereof.



           (b) The Borrower may elect to continue any Eurodollar Loan as such upon
the expiration of the then current Interest Period with respect thereto by
giving irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.1,
of the length of the next Interest Period to be applicable to such Loan,
provided that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing and the Administrative Agent
has, or the Required Lenders have,



27









 





determined in its or their sole discretion
not to permit such continuations or (ii) after the date that is one month prior
to the Termination Date, and provided, further, that if the
Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso, such Loans shall be converted automatically to Base Rate Loans on the
last day of such then expiring Interest Period. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.




           2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, (a) after giving effect thereto, the aggregate
principal amount of the Eurodollar Loans comprising each Eurodollar Tranche
shall be equal to $2,000,000 or a whole multiple of $100,000 in excess thereof
and (b) no more than ten Eurodollar Tranches shall be outstanding at any one
time.



           2.10 Interest Rates and Payment Dates. Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin in
effect for such day.



           (b) Each Base Rate Loan shall bear interest for each day on which it is
outstanding at a rate per annum equal to the Base Rate in effect for such day
plus the Applicable Margin in effect for such day.



           (c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to (x) in the
case of the Loans, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2% or (y) in the case
of Reimbursement Obligations, the rate applicable to Base Rate Loans
plus 2%, and (ii) if all or a portion of any interest payable on any
Loan or Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans plus 2%,
in each case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).



           (d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.



           2.11 Computation of Interest and Fees. Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base
Rate Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate.



28









 





Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.




           (b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.10(a).



           2.12 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:




     (a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or




     (b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost
to the Lenders (as conclusively certified by the Lenders) of making or
maintaining their affected Loans during such Interest Period,



the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the Lenders as soon as practicable thereafter. If such notice
is given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar
Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar
Loans shall be converted, on the last day of the then current Interest Period
with respect thereto, to Base Rate Loans. Until such notice has been withdrawn
by the Administrative Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrower have the right to convert Loans to
Eurodollar Loans.




           2.13 Pro Rata Treatment and Payments. Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee or Letter of Credit fee, and any reduction of the
Commitments of the Lenders, shall be made pro rata according to
the Commitment Percentages of the Lenders. Each payment of interest in respect
of the Loans and each payment in respect of fees payable hereunder shall be
applied to the amounts of such obligations owing to the Lenders pro
rata according to the respective amounts then due and owing to the
Lenders.



           (b) Each payment (including each prepayment) by the Borrower on account of
principal of the Loans shall be made pro rata according to the
respective outstanding principal amounts of the Loans then held by the Lenders.
Each payment in respect of Reimbursement



29









 





Obligations in respect of any Letter
of Credit shall be made to the Issuing Lender that issued such Letter of
Credit.




           (c) The application of any payment of Loans (including optional and
mandatory prepayments) shall be made, first, to Base Rate Loans and,
second, to Eurodollar Loans. Each payment of the Loans (except in the
case of Base Rate Loans) shall be accompanied by accrued interest to the date
of such payment on the amount paid.



           (d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for
the account of the Lenders, at the Payment Office, in Dollars and in
immediately available funds. Any payment made by the Borrower after 12:00
Noon, New York City time, on any Business Day shall be deemed to have been
on the next following Business Day. If any payment hereunder (other than
payments on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension
of any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.



           (e) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its share of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor and
the Administrative Agent has made such amount available to the Borrower, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the greater of (i) the Federal Funds
Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, for the
period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this paragraph shall be
conclusive in the absence of manifest error. If such Lender’s share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days after such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Base Rate Loans, on demand, from the Borrower. No
Lender shall be responsible for the failure of another Lender to make its
required advance.



           (f) Unless the Administrative Agent shall have been notified in writing by
the Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent



30









 





may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is
not made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.




           (g) Upon receipt by the Administrative Agent of payments on behalf of
Lenders, the Administrative Agent shall promptly distribute such payments to
the Lender or Lenders entitled thereto, in like funds as received by the
Administrative Agent.



           2.14 Requirements of Law. If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:




     (i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis
of taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes covered by Section 2.15 and changes in the
rate of tax on the overall net income of such Lender);




     (ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or




     (iii) shall impose on such Lender any other condition;



and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section, it shall
promptly notify the Borrower (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled.




           (b) If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation
or application thereof or compliance by such Lender or any corporation
controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the



31









 





rate of return on such Lender’s or such corporation’s capital as a
consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s or such corporation’s policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such corporation for such reduction.




           (c) A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this
Section shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.



           2.15 Taxes. All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on any Agent or any Lender as a result of a present
or former connection between such Agent or such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from such Agent’s or such Lender’s having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or any Other Taxes are required to be withheld from any amounts
payable to any Agent or any Lender hereunder, the amounts so payable to such
Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement; provided, however, that
the Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender’s failure to comply with the requirements of paragraph (d) or (e) of
this Section or (ii) that are United States withholding taxes imposed on
amounts payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph
(a).



           (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.



           (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes or Other Taxes when due to the appropriate taxing



32









 





authority
or fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agents and the
Lenders for any incremental taxes, interest or penalties that may become
payable by any Agent or any Lender as a result of any such failure. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.




           (d) Each Lender (or Transferee) that is not a “U.S. Person” as defined in
Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to
the Borrower and the Administrative Agent (or, in the case of a Participant, to
the Lender from which the
related participation shall have been purchased) two copies of either U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of “portfolio
interest” a statement substantially in the form of Exhibit H and a Form W-8BEN,
or any subsequent versions thereof or successors thereto properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.



           (e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided
that such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender’s reasonable judgment such completion,
execution or submission would not materially prejudice the legal position of
such Lender.



           2.16 Indemnity. The Borrower agrees to indemnify each Lender for,
and to hold each Lender harmless from, any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest that would have



33









 





accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced
on the date of such failure) in each case at the applicable rate of interest
for such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank Eurodollar market.
A certificate as to any amounts payable pursuant to this Section submitted to
the Borrower by any Lender shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.




           2.17 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender’s Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
2.16.



           2.18 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.14, 2.15(a)
or 2.17 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in
this Section shall affect or postpone any of the obligations of any Borrower or
the rights of any Lender pursuant to Section 2.14, 2.15(a) or 2.17.



           2.19 Extension of Termination Date. Not earlier than 90 days
prior to, nor later than 60 days prior to the Original Termination Date (as
defined below), the Borrower may request by written notice to Administrative
Agent (who shall promptly notify Lenders) a one-time, one year extension of the
Termination Date. Such request shall include a certificate signed by a
Responsible Officer stating that (i) the representations and warranties
contained in Section 5 are true and correct on and as of the date of such
certificate and (ii) no Default or Event of Default exists.



           (b) The Termination Date shall be extended to the same date in the
following calendar year, effective as of a date to be determined by
Administrative Agent and the Borrower (the “Extension Effective Date”),
and Administrative Agent shall promptly notify Lenders thereof. On or prior to
the Extension Effective Date, the Borrower shall deliver to



34









 





Administrative
Agent, in form and substance satisfactory to Administrative Agent: (x)
corporate resolutions and incumbency certificates of the Borrower dated as of
the Extension Effective Date approving such extension, (y) new or amended
Notes, if requested by any new or affected
Lender, evidencing such new or extended Commitments and (z) an
acknowledgment and consent from each Guarantor affirming the effectiveness of
the Guarantee and Collateral Agreement and any Security Document to which it is
a party after giving effect to the Termination Date, as extended hereunder.




           (c) Only one extension of the Termination Date may be made, and the
Termination Date shall not, in any event, be extended beyond October 27, 2008.



           (d) The Borrower shall pay to Administrative Agent, for the ratable
benefit of the Lenders, an extension fee (the “Extension Fee”) equal to
0.375% of the aggregate Commitments in effect on the Termination Date (without
giving effect to any extension thereof pursuant to this Section 2.19, the
“Original Termination Date”). The Extension Fee shall be payable on the
Original Termination Date and such extension fees are fully earned on the date
paid. The extension fee paid to each Lender is solely for its own account and
is nonrefundable.



           (e) Upon the satisfaction of the conditions by the Borrower referred to in
this Section 2.19, the extension of the Termination Date pursuant to this
Section 2.19 shall not require the consent of any Lender.



           2.20 Commitment Increases. In the event that the Borrower wishes
to increase the Commitments at any time during the Increase Option Period,
subject to the approval of the Administrative Agent, it shall notify the
Administrative Agent in writing of the amount (the “Offered Increase
Amount”) of such proposed increase (such notice, a “Commitment Increase
Notice”) in a minimum amount equal to at least $10,000,000; provided
that, no Default or Event of Default shall have occurred and be continuing
immediately prior to and after giving effect to any such increase. The
Borrower may, at its election, (i) offer one or more of the Lenders the
opportunity to provide all or a portion of any Offered Increase Amount pursuant
to paragraph (c) below and/or (ii) with the consent of each Issuing Lender and
the Administrative Agent (which consent shall not be unreasonably withheld),
offer one or more additional banks, financial institutions or other entities
the opportunity to provide all or a portion of such Offered Increase Amount
pursuant to paragraph (b) below. Each Commitment Increase Notice shall specify
which Lenders and/or banks, financial institutions or other entities the
Borrower desires to provide such Offered Increase Amount. The Borrower or, if
requested by the Borrower, the Administrative Agent will notify such Lenders,
and/or banks, financial institutions or other entities of such offer.



           (b) Any additional bank, financial institution or other entity which the
Borrower selects to offer participation in any Offered Increase Amount and
which elects to become a party to this Agreement and provide a Commitment in an
amount so offered and accepted by it pursuant to clause (ii) of Section 2.20(a)
shall execute a New Lender Supplement with the Borrower and the Administrative
Agent, substantially in the form of Exhibit K-1, whereupon such bank, financial
institution or other entity (herein called a “New Lender”) shall become
a Lender for all purposes and to the same extent as if originally a party
hereto and shall



35









 





be bound by and entitled to the benefits of this Agreement,
provided that, the Commitment of any such New Lender shall be in an
amount not less than $5,000,000.




           (c) Any Lender which accepts an offer to it by the Borrower to increase
its Commitment pursuant to clause (i) of Section 2.20(a) shall, in each case,
execute a Commitment Increase Supplement with the Borrower, the Issuing Banks
and the Administrative Agent, substantially in the form of Exhibit K-2,
whereupon such Lender shall be bound by and entitled to the benefits of this
Agreement with respect to the full amount of its Commitment as so increased.



           (d) On any Increase Effective Date, (i) each bank, financial institution
or other entity that is a New Lender pursuant to Section 2.20(b) or any Lender
which has increased its Commitment pursuant to Section 2.20(c) shall make
available to the Administrative Agent such amounts in immediately available
funds as the Administrative Agent shall determine, for the benefit of the other
relevant Lenders, as being required in order to cause, after giving effect to
such increase and the use of such amounts to make payments to such other
relevant Lenders, each Lender’s portion of the outstanding Loans of all the
Lenders to equal its Commitment Percentage of such outstanding Loans and (ii)
the Borrower shall be deemed to have repaid and reborrowed all outstanding
Loans as of the date of any increase in the Commitments (with such reborrowing
to consist of the Types of Loans, with related Interest Periods if applicable,
specified in a notice delivered by the Borrower in accordance with the
requirements of Section 2.2). The deemed payments made pursuant to clause (ii)
of the immediately preceding sentence in respect of each Eurodollar Loan shall
be subject to indemnification by the Borrower pursuant to the provisions of
Section 2.16 if the deemed payment occurs other than on the last day of the
related Interest Periods.



           (e) Notwithstanding anything to the contrary in this Section 2.20, (i) in
no event shall any transaction effected pursuant to this Section 2.20 cause the
sum of Total Commitments to exceed $200,000,000, (ii) in no event may the
Borrower deliver more than two Commitment Increase Notices, (iii) in no event
shall there be more than two Increase Effective Dates and (iv) no Lender shall
have any obligation to increase its Commitment unless it agrees to do so in its
sole discretion. Any increase pursuant to this Section 2.20 shall not require
the consent of the Lenders, other than the Lenders, if any, providing
Commitments pursuant to Section 2.20(c).



           (f) The Administrative Agent shall have received on or prior to each
Increase Effective Date, for the benefit of the Lenders, (i) a legal opinion of
counsel to the Borrower covering such matters as are customary for transactions
of this type and such other matters as may be reasonably requested by the
Administrative Agent, (ii) certified copies of resolutions of the Borrower
authorizing such Offered Increase Amount and (iii) an acknowledgment and
consent from each Guarantor affirming the effectiveness of the Guarantee and
Collateral Agreement and any Security Document to which it is a party, after
giving effect to the related increase.



36









 





SECTION 3. LETTERS OF CREDIT




           3.1
L/C Commitment.  (a) Subject to the terms and conditions hereof, each Issuing Lender, in
reliance on the agreements of the other Lenders set forth in Section 3.4(a),
agrees to issue letters of credit (the “Letters of Credit”) for the
account of the Borrower on any Business Day during the Commitment Period in
such form as may be approved from time to time by such Issuing Lender;
provided, that no Issuing Lender shall have any obligation to issue any
Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment, (ii) the aggregate amount of the
Available Commitments would be less than zero or (iii) the Total Extensions of
Credit would exceed the Borrowing Base. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Termination Date; provided that any Letter of
Credit with a one-year term may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date referred to in
clause (y) above).



           (b) No Issuing Lender shall at any time be obligated to issue any Letter
of Credit hereunder if such issuance would conflict with, or cause such Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.



           3.2 Procedure for Issuance of Letter of Credit. The Borrower may
from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of such Issuing Lender,
and such other certificates, documents and other papers and information as such
Issuing Lender may request. Concurrently with the delivery of an Application
to an Issuing Lender, the Borrower shall deliver a copy thereof to the
Administrative Agent. Upon receipt of any Application, an Issuing Lender will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed to by such Issuing Lender and the
Borrower (but in no event shall any Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other
papers and information relating thereto). Promptly after issuance by an
Issuing Lender of a Letter of Credit, such Issuing Lender shall furnish a copy
of such Letter of Credit to the Borrower. Each Issuing Lender shall promptly
give notice to the Administrative Agent of the issuance of each Letter of
Credit issued by such Issuing Lender (including the face amount thereof), and
shall provide a copy of such Letter of Credit to the Administrative Agent as
soon as possible after the date of issuance.



           3.3
Fees and Other Charges. (a) The Borrower will pay a fee on the
aggregate drawable amount of all outstanding Letters of Credit at a per annum
rate equal to the Applicable Margin then in effect with respect to Eurodollar
Loans, shared ratably among the Lenders in accordance with their respective
Commitment Percentages and payable quarterly in arrears on each L/C Fee Payment
Date after the issuance date. In addition, the Borrower shall pay to the
relevant Issuing Lender for its own account a fronting fee on the aggregate
drawable amount of all outstanding Letters of
Credit issued by it at a rate per annum agreed between the



37









 





Borrower and
such Issuing Lender, payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date.




           (b) In addition to the foregoing fees, the Borrower shall pay or reimburse
each Issuing Lender for such normal and customary costs and expenses as are
incurred or charged by such Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.



           3.4
L/C Participations. (a) Each Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce each Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from each
Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant’s own account and risk, an undivided interest equal to such L/C
Participant’s Commitment Percentage in each Issuing Lender’s obligations and
rights under each Letter of Credit issued by such Issuing Lender hereunder and
the amount of each draft paid by such Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit issued by such Issuing
Lender for which such Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Administrative Agent for the account of such Issuing Lender upon demand
at such Issuing Lender’s address for notices specified herein (and thereafter
the Administrative Agent shall promptly pay to such Issuing Lender) an amount
equal to such L/C Participant’s Commitment Percentage of the amount of such
draft, or any part thereof, that is not so reimbursed. Each L/C Participant’s
obligation to pay such amount shall be absolute and unconditional and shall not
be affected by any circumstance, including (i) any setoff, counterclaim,
recoupment, defense or other right that such L/C Participant may have against
the Issuing Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5, (iii)
any adverse change in the condition (financial or otherwise) of the Borrower,
(iv) any breach of this Agreement or any other Loan Document by the Borrower,
any other Loan Party or any other L/C Participant or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.



           (b) If any amount (a “Participation Amount”) required to be paid by
any L/C Participant to an Issuing Lender pursuant to Section 3.4(a) in respect
of any unreimbursed portion of any payment made by such Issuing Lender under
any Letter of Credit is paid to such Issuing Lender within three Business Days
after the date such payment is due, such Issuing Lender shall so notify the
Administrative Agent, which shall promptly notify the L/C Participants, and
each L/C Participant shall pay to the Administrative Agent, for the account of
such Issuing Lender, on demand (and thereafter the Administrative Agent shall
promptly pay to such Issuing Lender) an amount equal to the product of (i) such
Participation Amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any
Participation Amount required to be paid by any L/C Participant pursuant
to Section 3.4(a) is not made available to the Administrative Agent for the
account of the relevant Issuing Lender by such L/C Participant



38









 





within three
Business Days after the date such payment is due, the Administrative Agent on
behalf of such Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such Participation Amount with interest thereon
calculated from such due date at the rate per annum applicable to Base Rate
Loans. A certificate of the Administrative Agent submitted on behalf of an
Issuing Lender to any L/C Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of manifest error.




           (c) Whenever, at any time after an Issuing Lender has made payment under
any Letter of Credit and has received from the Administrative Agent any L/C
Participant’s pro rata share of such payment in accordance with Section
3.4(a), such Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by such Issuing Lender), or any payment of interest
on account thereof, such Issuing Lender will distribute to the Administrative
Agent for the account of such L/C Participant (and thereafter the
Administrative Agent will promptly distribute to such L/C Participant) its pro
rata share thereof; provided, however, that in the event that any
such payment received by such Issuing Lender shall be required to be returned
by such Issuing Lender, such L/C Participant shall return to the Administrative
Agent for the account of such Issuing Lender (and thereafter the Administrative
Agent shall promptly return to such Issuing Lender) the portion thereof
previously distributed by such Issuing Lender.



           3.5 Reimbursement Obligation of the Borrower. The Borrower agrees
to reimburse each Issuing Lender, on each date on which such Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by such Issuing Lender, for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment (the amounts
described in the foregoing clauses (a) and (b) in respect of any drawing,
collectively, the “Payment Amount”). Each such payment shall be made to
such Issuing Lender at its address for notices specified herein in lawful money
of the United States of America and in immediately available funds. Interest
shall be payable on each Payment Amount from the date of the applicable drawing
until payment in full at the rate set forth in (i) until the second Business
Day following the date of the applicable drawing, Section 2.10(b) and (ii)
thereafter, Section 2.10(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 9(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.2 of Base Rate Loans in the amount of
such drawing. The Borrowing Date with respect to such borrowing shall be the
first date on which a borrowing of Loans could be made, pursuant to Section
2.2, if the Administrative Agent had received a notice of such borrowing at the
time the Administrative Agent receives notice from the relevant Issuing Lender
of such drawing under such Letter of Credit.



           3.6 Obligations Absolute. The Borrower’s obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment that the Borrower may have or have had
against any Issuing Lender, any beneficiary of a Letter of Credit or any other
Person. The Borrower also agrees with each Issuing Lender that such Issuing
Lender shall not be responsible for, and the Borrower’s Reimbursement
Obligations under Section 3.5 shall not be affected by, among other



39









 





things, the
validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among the Borrower and any beneficiary of any Letter
of Credit or any other party to which such Letter of Credit may be transferred
or any claims whatsoever of the Borrower against any beneficiary of such Letter
of Credit or any such transferee. No Issuing Lender shall be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Issuing Lender. The Borrower agrees
that any action taken or omitted by an Issuing Lender under or in connection
with any Letter of Credit issued by it or the related drafts or documents, if
done in the absence of gross negligence or willful misconduct and in accordance
with the standards or care specified in the Uniform Commercial Code of the
State of New York, shall be binding on the Borrower and shall not result in any
liability of such Issuing Lender to the Borrower.




           3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the relevant Issuing Lender shall promptly
notify the Borrower and the Administrative Agent of the date and amount
thereof. The responsibility of the relevant Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit, in
addition to any payment obligation expressly provided for in such Letter of
Credit issued by such Issuing Lender, shall be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment appear on their face to be in conformity with
such Letter of Credit.



           3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.



SECTION 4. BORROWING BASE PROPERTIES




           4.1 Acceptance of Borrowing Base Properties.




     (a) Initial Borrowing Base Properties. As of the Closing
Date, the Administrative Agent and the Lenders have approved for
inclusion in calculations of the Borrowing Base the Subject Properties
identified on Schedule 1.1A and the Borrowing Base Value
attributable to each such Property as of such date (as set forth on
Schedule 1.1A); provided that, on or prior to the Closing
Date, the
Administrative Agent and the Lenders shall have received (in
electronic form, if feasible and acceptable to the Lenders), in form and
substance reasonably satisfactory to the Administrative Agent, all of the
documents required to be provided under Section 6.3 with respect to such
Properties.




     (b) Additional Borrowing Base Properties. After the Closing
Date, the Borrower may request that the Lenders include any additional
Subject Property in calculations of the Borrowing Base, by written notice
to the Administrative Agent and the Lenders and compliance with the
provisions of the immediately following clause (i) or (ii) as applicable.



40









 






     (i) Limited Review Properties. If (A) the initial
Borrowing Base Value of such Subject Property is less than
$10,000,000 and (B) such Subject Property satisfies the limited
review criteria set forth on Schedule 4.1(b), then upon
delivery of all of the following documents to the Administrative
Agent and the Lenders (in electronic form, if feasible and
acceptable to the Lenders), in form and substance satisfactory to
the Administrative Agent, such Subject Property shall become a
Borrowing Base Property:




     (1) a certificate of the chief financial officer of the
general partner of the Borrower substantially in the form of
Exhibit M setting forth, among other things, a description of
such Property and certifying that the conditions set forth in
(A) and (B) above have been satisfied with respect to such
Property;




     (2) a true and correct copy of all materials relating to
such Property submitted by the general partner of the
Borrower to the Investment Committee of its board of
directors for their approval of such Property;




     (3) all of the documents required to be provided under
Section 6.3 and, if the Recordation Date has occurred,
Section 4.5(b), with respect to such Property, if not
previously delivered to the Administrative Agent;




     (4) if there exists any deferred maintenance with
respect to such Property, an engineering report prepared by
Borrower or one of its Affiliates with respect to such
Property setting forth in reasonable detail such deferred
maintenance and the estimated cost thereof; and




     (5) such other items or documents as may be appropriate
under the circumstances as reasonably requested by the
Administrative Agent.




     (ii)
Other Properties. (A) If such Subject Property does
not otherwise satisfy any of the conditions set forth in the
immediately preceding clause (i), such Property will not be
included in the calculation of the Borrowing Base until it has been
approved for inclusion by the Required Lenders. To seek such
approval of the Required Lenders, the Borrower shall deliver to the
Administrative Agent and the Lenders (in electronic form, if
feasible and acceptable to the Lenders) the following documents, in
form and substance satisfactory to the Administrative Agent:




     (1) a description of such Property, including the
location, size and Occupancy Rate of such Property;




     (2) a copy of the materials relating to such Property
submitted by the general partner of the Borrower to the
Investment Committee of its board of directors for their
approval of such Property;



41









 






     (3) a detailed operating statement for such Property for
the current fiscal year through the fiscal quarter most
recently ending, certified by the chief financial officer of
the general partner of the Borrower to the best of such
Officer’s knowledge as being true and correct in all material
respects;




     (4) an operating budget for such Property with respect
to the current fiscal year;




     (5) pro-forma financial statements with respect to such
Property for the next succeeding two fiscal years;




     (6) copies of all property condition assessment reports
and mechanical, structural and maintenance studies performed
with respect to such Property not more than 12 months old;




     (7) copies of (I) the applicable Property Management
Agreement and all other material contracts, if any, which
will relate to the use, occupancy, operation, maintenance,
enjoyment or ownership of such Property, and (II) if such
Property is not yet owned by a Loan Party, the purchase
agreement pursuant to which a Loan Party is to acquire such
Property;




     (8) (A) if available, detailed historical Capital
Expenditures for the two fiscal years most recently ending
and (B) projected Capital Expenditures for the immediately
succeeding three full fiscal years for such Property;




     (9) if such Property was acquired by a Loan Party within
the previous six months, the closing statement for the
acquisition of such Property;




     (10) if there exists any deferred maintenance with
respect to such Property, to the extent not otherwise
provided pursuant to item (6) above, an engineering report
prepared by Borrower or one of its Affiliates with respect to
such Property setting forth in reasonable detail such
deferred maintenance and the estimated cost thereof;




     (11) if the relevant Loan Party has a leasehold interest
in such Property, a copy of the current lease for such
Property (which lease shall be a ground lease) and all
documentation related to such lease; and




     (12) such other information the Administrative Agent or
Lenders may reasonably request in order to evaluate such
Property.




     Each Lender shall notify the Administrative Agent in writing
whether it conditionally approves of the designation of such
Property as a Borrowing Base Property within ten Business Days
after receipt of all such documents and



42









 






information. If a Lender
shall fail to so notify the Administrative Agent, then such Lender
shall be deemed to have not conditionally approved of such
Property.




     (B) Upon the conditional approval of such Property as a
Borrowing Base Property by the Required Lenders, if the Recordation
Date has occurred, the Administrative Agent will (I) obtain an
Appraisal of such Property, (II) determine the Appraised Value
thereof and (III) deliver such Appraisal and the Appraised Value to
the Lenders. Each Lender shall notify the Administrative Agent in
writing whether, after review of such assessments and Appraisal, if
applicable, it approves of the designation of such Property as a
Borrowing Base Property within five Business Days (or if the
Recordation Date has occurred, ten Business Days) after receipt of
all such documents and information. If a Lender shall fail to so
notify the Administrative Agent, then such Lender shall be deemed
to have not approved of such Property. Upon approval of such
Property by the Required Lenders, and upon execution and delivery
of all of the following documents in form and substance
satisfactory to the Administrative Agent, such Property shall
become a Borrowing Base Property:




     (1) all of the documents required to be provided under
Section 6.3 and, if the Recordation Date has occurred,
Section 4.5(b), with respect to such Property, to the extent
not previously delivered to the Administrative Agent; and




     (2) such other items or documents as may be appropriate
under the circumstances as reasonably requested by the
Administrative Agent.



           4.2 Release of Borrowing Base Properties. The Borrower may
request, upon not less than 30 days’ prior written notice to the Administrative
Agent (which shall be distributed to the Lenders), that a Borrowing Base
Property and any related Collateral no longer be included in calculations of
the Borrowing Base and that such Property be released from the Liens created by
the applicable Security Documents, which release (the “Property
Release”) shall be effected by the Administrative Agent if the
Administrative Agent determines all of the following conditions are satisfied
as of the date of such Property Release:




     (a) the Borrower shall have delivered to the Administrative Agent a
certificate of a Responsible Officer certifying that no Default or Event
of Default has occurred and
is then continuing or will occur after giving effect to such
Property Release and the reduction in the Borrowing Base by reason of the
release of such Borrowing Base Property;




     (b) the Borrower shall have delivered to the Administrative Agent a
Borrowing Base Report reflecting the Borrowing Base for the most recent
fiscal quarter for which financial statements are available assuming such
Property Release occurred on the first day of such period;




     (c) the Borrower shall have delivered to the Administrative Agent
all documents and instruments reasonably requested by the Administrative
Agent in



43









 






connection with such Property Release including, without
limitation, the following as applicable:




     (i) any instrument to be used to effect such Property Release;
and




     (ii) an appropriate endorsement to the mortgagee title
insurance policy, if any, in effect with respect to the affected
Borrowing Base Property (and appropriate corrective endorsements
with respect to any other mortgagee policies of title insurance on
Borrowing Base Properties which have tie-in clauses which are
affected by the release); and




     (d) the Administrative Agent shall have determined that the Total
Extensions of Credit will not exceed the Borrowing Base after giving
effect to such Property Release and any prepayment to be made and/or the
acceptance of any replacement Subject Property pursuant to Section 4.1,
which is to be given concurrently with such Property Release as an
additional or replacement Borrowing Base Property.



           4.3 Frequency of Calculations of Borrowing Base. On the Closing
Date, the Borrowing Base shall be the amount set forth as such in the Borrowing
Base Report delivered under Section 6.1(s). Thereafter, the Borrowing Base
shall be the amount set forth as such in the Borrowing Base Certificate most
recently delivered under Section 4.2(b), Section 6.3(h) and Section 7.2(f).
Any increase in the Borrowing Base Value of a Borrowing Base Property shall
become effective as of the date on which the next Borrowing Base Report is
delivered pursuant to Section 6.3(h) or Section 7.2(f), provided that,
prior to such date of determination (a) the applicable Borrowing Base Report
substantiates such increase and if such increase is the result of an increase
in the Appraised Value of such Property, the Required Lenders shall have given
their written approval of such increase, and (b) if the Recordation Date has
occurred, the Borrower delivers to the Administrative Agent the following: (i)
if the Property is not located in a Tie-In Jurisdiction, an endorsement to the
title insurance policy in favor of the Administrative Agent for the benefit of
the Secured Parties with respect to such Property increasing the coverage
amount thereof as related to such Property to not less than 100% of the
Borrowing Base Value of such Property and (ii) if the Property is located in a
Tie-In Jurisdiction, an endorsement to the title insurance policy in favor of
the Administrative Agent for the benefit of the Secured Parties with respect to
such Property increasing the coverage amount thereof as related to such
Property to not less than the
Borrowing Base Value of such Property, as well as endorsements to all
other existing title insurance policies issued to the Administrative Agent with
respect to all other Properties located in Tie-In Jurisdictions reflecting an
increase in the aggregate insured amount under the “tie-in” endorsements to an
amount equal to the aggregate amount of the Borrowing Base Values of all such
Properties (including the Property which experienced the increase in Borrowing
Base Value) but in no event in an amount in excess of the aggregate amount of
the Commitments.



           4.4 Appraisals Required by Governmental Authorities. If under
FIRREA or required by any other Governmental Authority, a Lender is required to
obtain an Appraisal of any Borrowing Base Property, whether or not subject to a
Mortgage and whether or not in addition to any other Appraisal previously
obtained with respect to such Property pursuant to this Agreement, the
Administrative Agent shall have the right to cause such an Appraisal to be



44









 





prepared at the Borrower’s cost and expense. The Borrowing Base Value of such
Property shall only be redetermined as a result of delivery of any such new
Appraisal if any Governmental Authority requires such redetermination, in which
case such Borrowing Base Value shall be redetermined in the manner required by
such Governmental Authority.




           4.5 Recording of Mortgages.



           (a) Generally. Any Security Document, except a Mortgage (or other
document customarily recorded in the applicable land records), delivered
pursuant to Section 6.3, the Escrow Agreement or otherwise, may be recorded by
the Administrative Agent upon its delivery to the Administrative Agent. No
Mortgage delivered pursuant to Section 6.3, the Escrow Agreement or otherwise
shall be recorded prior to the Recordation Date. On and after the Recordation
Date, the Administrative Agent shall cause all Mortgages to be recorded upon
the delivery of such Mortgages pursuant to Section 6.3, the Escrow Agreement or
otherwise.



           (b) Required Deliveries. If the Mortgages may be recorded as
provided in Section 4.5(a), the Borrower shall, at its sole cost and expense,
deliver to the Administrative Agent no later than 90 days following (x) in the
event that the Recordation Date occurs due to an increase in the Borrowing Base
Leverage Ratio, the date the Borrowing Base Leverage Ratio first equals or
exceeds 0.55 to 1.00 or (y) in the event that the Recordation Date occurs due
to an Event of Default, the date such Event of Default occurred, as the case
may be, each of the following documents with respect to each Subject Property
subject to a Mortgage, all in form and substance satisfactory to the
Administrative Agent:




     (i) an ALTA 1992 Form mortgagee’s Policy of Title Insurance
(with deletion of the creditor’s rights exclusion and deletion of
the mandatory arbitration provision) or other form acceptable to
the Administrative Agent in favor of the Administrative Agent for
the benefit of the Secured Parties with respect to such Property,
including endorsements with respect to such items of coverage as
the Administrative Agent may request (and which endorsements are
available in the
applicable state), in a coverage amount equal to no less than
100% of the Borrowing Base Value of such Property (excluding the
value of any personal property located at such Property), issued by
a title insurance company acceptable to the Administrative Agent
and with coinsurance or reinsurance (with direct access agreements)
with title insurance companies acceptable to the Administrative
Agent, showing the fee simple title to (or a valid leasehold
interest in) the land and improvements described in the applicable
Mortgage as vested in the applicable Loan Party, and insuring that
the Lien granted by such Mortgage is a valid first priority Lien
against such Property, subject only to Liens permitted by Sections
8.3(b) through (e);




     (ii) copies of all documents of record reflected in Schedule B
of such Policy of Title Insurance;




     (iii) a current or currently certified survey dated within 12
months of the date of the filing of such Mortgage, certified by a
surveyor licensed in the jurisdiction where such Property is
located to have been prepared in accordance



45









 






with the then effective
Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys, and if not adequately covered by the survey certification,
a certificate from a licensed engineer or other professional
satisfactory to the Administrative Agent that such Property is not
located in a Special Flood Hazard Area as defined by the Federal
Insurance Administration; provided, with respect to any
survey dated more than 30 days prior to the date of the filing of
such Mortgage, such survey shall be accompanied by an affidavit
from the Borrower stating that there has been no changes to the
Property or improvements thereto since the date of such survey;
provided, further, in any case such survey shall be
such that title insurance issued described in clause (i) with
respect to such Property does not contain an exception for a
current and accurate survey;




     (iv) UCC, tax, judgment and lien search reports with respect
to the applicable Loan Party and such Property subject to a
Mortgage in all necessary or appropriate jurisdictions and under
all legal and appropriate trade names indicating that there are no
Liens of record on such Property or any of the Collateral relating
thereto other than Liens permitted by Section 8.3;




     (v) an opinion of counsel admitted to practice law in the
jurisdiction in which such Property is located and acceptable to
the Administrative Agent, addressed to the Administrative Agent and
each Lender covering such legal matters relating to the
transactions contemplated hereby as the Administrative Agent may
reasonably request;




     (vi) an opinion or counsel admitted to practice law in the
jurisdiction in which the applicable Loan Party is formed and
acceptable to the Administrative Agent, addressed to the
Administrative Agent and each Lender covering such legal matters
relating to the formation and existence and power of the Person
executing documents, and the due authorization, execution and
delivery of the
Security Documents and other documents for consummating the
transactions contemplated hereby as the Administrative Agent may
reasonably request;




     (vii) a “Phase I” environmental assessment of such Property
not more than 12 months old prepared by an environmental
engineering firm acceptable to the Administrative Agent, and any
additional environmental studies or assessments recommended by such
assessment (including any “Phase II” assessment) or otherwise
available to the Borrower performed with respect to such Property;




     (viii) an Appraisal with respect to such Property; and




     (ix) such other due diligence materials, instruments,
documents, agreements, financing statements, certificates and
opinions as the Administrative Agent may reasonably request.



           (c) Mortgage Filing Tax. If the Mortgages may be recorded pursuant
to Section 4.5(a), the Borrower shall pay to the Administrative Agent an amount
equal to any



46









 





mortgage, recording or documentary filing or similar tax required
to be paid in connection with delivery or filing of such Mortgages within two
Business Days after demand therefor.




           (d) No Borrowings, Etc. If the Mortgages may be recorded as a
result of Borrowing Base Leverage Ratio equaling or exceeding 0.55 to 1.00, the
Borrower may not request any Loans or Letters of Credit until such time as all
of the Mortgages have been recorded and all of the items required to be
delivered pursuant to Section 4.5(b) shall have been delivered.



           (e) Subsequent Release. Once a Mortgage has been recorded, the
Collateral thereunder shall be released only in accordance with the terms
otherwise provided herein and therein, without regard to the Borrowing Base
Leverage Ratio.



           4.6 Status of Escrowed Documents. Notwithstanding anything to the
contrary in this agreement or any other Loan Document, each party hereto
acknowledges and agrees that the Mortgages relating to the Borrowing Base
Properties located in the State of Florida are subject to the Escrow Agreement
and accordingly, shall not be deemed delivered to the Administrative Agent
except as provided therein.



SECTION 5. REPRESENTATIONS AND WARRANTIES




           To induce the Agents and the Lenders to enter into this Agreement and to
make the Loans and issue or participate in the Letters of Credit, the REIT and
the Borrower hereby jointly and severally represent and warrant to each Agent
and each Lender that:



           5.1
Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the REIT and its consolidated Subsidiaries as at
September 30, 2004 (including the notes thereto) (the “Pro Forma Balance
Sheet”), copies of which have heretofore been furnished to each Lender, has
been prepared giving effect (as if such events had occurred on such date) to
(i) the consummation of the Transactions, (ii) the Loans to be made on the
Closing Date and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet has
been prepared based on the best information available to the REIT as of the
date of delivery thereof, and presents fairly on a pro forma
basis the estimated financial position of the REIT and its consolidated
Subsidiaries as at September 30, 2004, assuming that the events specified in
the preceding sentence had actually occurred at such date.



           (b) The audited consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at December 31, 2001, December 31, 2002 and
December 31, 2003, and the related consolidated statements of income and of
cash flows for the fiscal years ended on such dates, reported on by and
accompanied by an unqualified report from Deloitte & Touche LLP, copies of
which have heretofore been furnished to each Lender, present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations
and its consolidated cash flows for the respective fiscal years then ended.
The unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at June 30, 2004, and the related unaudited consolidated
statements of income and cash flows for the six-month period ended on such
date, copies of which have heretofore been furnished to each Lender, present
fairly the consolidated financial



47









 





condition of the REIT and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations
and its consolidated cash flows for the nine-month period then ended (subject
to normal year-end audit adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). The REIT, the Borrower and its Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this
paragraph. During the period from December 31, 2003 to and including the date
hereof there has been no Disposition by the REIT or any of its Subsidiaries of
any material part of its business or Property.




           5.2 No Change. Since December 31, 2003 there has been no development or event that has
had or could reasonably be expected to have a Material Adverse Effect.



           5.3 Corporate Existence; Compliance with Law. Each of the REIT,
the Borrower and its Subsidiaries (a) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (b)
has the corporate power and authority, and the legal right, to own and operate
its Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation or other organization and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.



           5.4 Corporate Power; Authorization; Enforceable Obligations. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party, to consummate
the Transactions and, in the case of the Borrower, to borrow hereunder. Each
Loan Party has taken all necessary corporate or other action to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party, to consummate the Transactions and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the consummation of the Transactions, the borrowings hereunder
or the execution, delivery, performance, validity or enforceability of this
Agreement or any of the other Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 5.4, which
consents, authorizations, filings and notices have been obtained or made and
are in full force and effect and (ii) the filings referred to in Section 5.19.
Each Loan Document (other than the Mortgages subject to the Escrow Agreement)
has been duly executed and delivered on behalf of each Loan Party that is a
party thereto. This Agreement constitutes, and each other Loan Document (other
than the Mortgages subject to the Escrow Agreement) upon execution will
constitute, a legal, valid and binding obligation of each Loan Party that is a
party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium



48









 





or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law). Each of
the Mortgages subject to the Escrow Agreement has been duly executed on behalf
of each Loan Party that is a party thereto, and upon the delivery of such
Mortgage in accordance with the terms of the Escrow Agreement, will constitute
a legal, valid and binding obligation of each Loan Party that is party thereto,
enforceable against each such Loan Party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principals (whether
enforcement is sought by proceedings in equity or at law).




           5.5 No Legal Bar. The execution, delivery and performance of this Agreement and the other
Loan Documents, the consummation of the Transactions, the issuance of Letters
of Credit, the borrowings hereunder and the use of the proceeds thereof will
not violate any Requirement of Law or any Contractual Obligation of the REIT,
the Borrower or any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents). No Requirement of
Law or Contractual Obligation applicable to the Borrower or any of its
Subsidiaries could reasonably be expected to have a Material Adverse Effect.



           5.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the REIT or the Borrower, threatened by or against the
REIT, the Borrower or any of its Subsidiaries or against any of their
respective properties or revenues (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.



           5.7 No Default. Neither the REIT, the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.



           5.8 Ownership of Property; Liens. Each of the REIT, the Borrower
and its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other Property, and none of such Property is subject to any Lien except
as permitted by Section 8.3.



           5.9 Intellectual Property. The REIT, the Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use
of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does the REIT or the Borrower know of any valid
basis for any such claim. The use of Intellectual Property by the REIT, the
Borrower and its Subsidiaries does not infringe on the rights of any Person in
any material respect.



49









 





           5.10 Taxes. Each of the REIT, the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it
or any of its Property and all other taxes, fees or other charges imposed
on it or any of its Property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the REIT, the Borrower or its
Subsidiaries, as the case may be); and no tax Lien has been filed, and, to the
knowledge of the REIT and the Borrower, no claim is being asserted, with
respect to any such tax, fee or other charge.



           5.11 Federal Regulations. No part of the proceeds of any Loans,
and no other extensions of credit hereunder, will be used for “purchasing” or
“carrying” any “margin stock” within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in
effect or for any purpose that violates the provisions of the Regulations of
the Board. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement
to the foregoing effect in conformity with the requirements of FR Form G-3 or
FR Form U-1 referred to in Regulation U.



           5.12 Labor Matters. There are no strikes or other labor disputes
against the REIT, the Borrower or any of its Subsidiaries pending or, to the
knowledge of the REIT or the Borrower, threatened that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect.
Hours worked by and payment made to employees of the REIT, the Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the REIT, the Borrower or any
of its Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the REIT, the Borrower or the relevant Subsidiary.



           5.13 ERISA. Neither a Reportable Event nor an “accumulated funding
deficiency” (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such Plans) did not, as of the last
annual valuation date prior to the date on which this representation is made or
deemed made, exceed the value of the assets of such Plan allocable to such
accrued benefits by a material amount. Neither the Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any
material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as
of the valuation date most closely



50









 





preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.




           5.14 Investment Company Act; Other Regulations. No Loan Party is
an “investment company”, or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.



           5.15 Subsidiaries. The Subsidiaries listed on Schedule
5.15 constitute all the Subsidiaries of the Borrower at the date hereof.
Schedule 5.15 sets forth as of the Closing Date the name and
jurisdiction of incorporation of each Subsidiary and, as to each Subsidiary,
the percentage of each class of Capital Stock owned by each Loan Party and
whether such subsidiary is a Material Subsidiary.



           (b) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors’ qualifying shares) of any nature relating
to any Capital Stock of the REIT, the Borrower or any Subsidiary.



           5.16 Use of Proceeds. The proceeds of the Loans and the Letters of
Credit shall be used (i) to make acquisitions permitted by Section 8.7 and (ii)
for general corporate purposes.



           5.17 Environmental Matters. Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:




     (a) The Borrower and its Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in compliance
with all applicable Environmental Laws; (ii) hold all Environmental
Permits (each of which is in full force and effect) required for any of
their current or intended operations or for any property owned, leased,
or otherwise operated by any of them; (iii) are, and within the period of
all applicable statutes of limitation have been, in compliance with all
of their Environmental Permits; and (iv) reasonably believe that: each
of their Environmental Permits will be timely renewed and complied with,
without material expense; any additional Environmental Permits that may
be required of any of them will be timely obtained and complied with,
without material expense; and compliance with any Environmental Law that
is or is expected to become applicable to any of them will be timely
attained and maintained, without material expense.




     (b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or
operated by the Borrower or any of its Subsidiaries, or at any other
location (including, without limitation, any location to which Materials
of Environmental Concern have been sent for re-use or recycling or for
treatment, storage, or disposal) which could reasonably be expected to
(i) give rise to liability of the Borrower or any of its Subsidiaries
under any applicable



51









 






Environmental Law or otherwise result in costs to
the Borrower or any of its Subsidiaries, or (ii) interfere with the
Borrower’s or any of its Subsidiaries’ continued operations, or (iii)
impair the fair saleable value of any real property owned or leased by
the Borrower or any of its Subsidiaries.




     (c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Borrower or any of its
Subsidiaries is, or to the knowledge of the Borrower or any of its
Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Borrower or any of its Subsidiaries, threatened.




     (d) Neither the Borrower nor any of its Subsidiaries has received
any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act or
any similar Environmental Law, or with respect to any Materials of
Environmental Concern.




     (e) Neither the Borrower nor any of its Subsidiaries has entered
into or agreed to any consent decree, order, or settlement or other
agreement, or is subject to any judgment, decree, or order or other
agreement, in any judicial, administrative, arbitral, or other forum for
dispute resolution, relating to compliance with or liability under any
Environmental Law.




     (f) Neither the Borrower nor any of its Subsidiaries has assumed or
retained, by contract or operation of law, any liabilities of any kind,
fixed or contingent, known or unknown, under any Environmental Law or
with respect to any Material of Environmental Concern.



           5.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement
furnished to the Administrative Agent or the Lenders or any of them, by or on
behalf of any Loan Party for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was so furnished (or,
in the case of the Confidential Information Memorandum, as of the date of this
Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements contained herein or therein not
misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed
as fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount. There is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Agents and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan Documents.



52









 





           5.19
Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when any stock
certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 5.19(a)-1 (which
financing statements have been duly completed and delivered to the
Administrative Agent) and such other filings as are specified on Schedule 3 to
the Guarantee and Collateral Agreement have been completed (all of which
filings have been duly completed), the Guarantee and Collateral Agreement shall
constitute a fully perfected Lien in favor of the Administrative Agent (for the
benefit of the Secured Parties) on, and security interest in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof,
as security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to any other Person
(except, in the case of Collateral other than Pledged Stock, Liens permitted by
Section 8.3). Schedule 5.19(a)-2 lists each UCC Financing Statement
that (i) names any Loan Party as debtor and (ii) will remain on file after the
Closing Date. Schedule 5.19(a)-3 lists each UCC Financing Statement
that (i) names any Loan Party as debtor and (ii) will be terminated on or prior
to the Closing Date; and on or prior to the Closing Date, the Borrower will
have delivered to the Administrative Agent, or caused to be filed, duly
completed UCC termination statements in respect of each UCC Financing Statement
listed in Schedule 5.19(a)-3.



           (b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and enforceable Lien on the Borrowing Base Properties described therein and
proceeds thereof; and when the Mortgages are filed in the offices specified on
Schedule 5.19(b) (in the case of the Mortgages to be executed and
delivered to the Administrative Agent or to be subject to the Escrow Agreement
on the Closing Date) or in the recording office designated by the Borrower (in
the case of any Mortgage to be executed and delivered to the Administrative
Agent pursuant to Section 6.3 or to be subject to the Escrow Agreement), each
Mortgage shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Borrowing Base
Properties described therein and the proceeds thereof, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person (other than Persons holding Liens or
other encumbrances or rights permitted by the relevant Mortgage). Schedule
1.1B lists, as of the Closing Date, each parcel of owned real property and
each
leasehold interest in real property located in the United States and held
by the Borrower or any of its Subsidiaries.



           5.20 Solvency. Each Loan Party is, and after giving effect to the
Transactions and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.



           5.21 REIT Status; Borrower Tax Status; Listing. The REIT has been
organized and will be operated in a manner that will allow it to qualify for
REIT Status commencing with the year ending December 31, 2004 and has
maintained and will maintain REIT Status on a continuous basis since such date.
The Borrower is not an association taxable as a corporation



53









 





under the Code.
The shares of common stock of the REIT are listed on the New York Stock
Exchange.




           5.22 Regulation H. No Mortgage encumbers improved real property
which is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968 (except any Mortgaged Properties as to which such flood
insurance as required by Regulation H has been obtained and is in full force
and effect as required by this Agreement).



SECTION 6. CONDITIONS PRECEDENT




           6.1 Conditions to Initial Extension of Credit. The agreement of
each Lender to make the initial extension of credit requested to be made by it
hereunder is subject to the satisfaction, prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:




     (a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized
officer of the REIT and the Borrower, (ii) the Guarantee and Collateral
Agreement, executed and delivered by a duly authorized officer of the
REIT, the Borrower and each Material Subsidiary, (iii) the Escrow
Agreement, executed and delivered by a duly authorized officer of the
REIT, the Borrower, the Subsidiary Guarantors and the Escrow Agent and
(iv) a Lender Addendum executed and delivered by each Lender and accepted
by the Borrower.




     (b) The Transactions.




     (i) The Restructuring. The Restructuring shall have
been consummated pursuant to documentation reasonably satisfactory
to the Administrative Agent.




     (ii) IPO. The REIT shall have received gross proceeds
of at least $400,000,000 from the IPO and shall have contributed
such proceeds in cash as common equity to the Borrower.




     (iii) CMBS Financing. The Borrower and its
Subsidiaries shall have received gross proceeds of at least
$270,000,000 from the CMBS Financing pursuant to documentation
reasonably satisfactory to the Administrative Agent.




     (iv) Capital Structure. The capital structure of each
Loan Party after the giving effect to the Transactions shall be
satisfactory in all respects.




     (c) Termination of Existing Indebtedness. The
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that the existing Indebtedness described on
Schedule 6.1(c) shall be simultaneously terminated, all amounts
thereunder shall be simultaneously paid in full and arrangements
satisfactory to the Administrative Agent shall have been made for the
termination of Liens and security interests granted in connection
therewith.




54










 






     (d) Pro Forma Balance Sheet; Financial Statements. The
Lenders shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of the Borrower and its Subsidiaries
for the 2001, 2002 and 2003 fiscal years, (iii) unaudited interim
consolidated financial statements of the Borrower and its Subsidiaries
for each fiscal quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clause (ii)
of this paragraph as to which such financial statements are available and
(iv) monthly management reports of the Borrower and its Subsidiaries for
July 2004, August 2004 and September 2004; and such financial statements
and reports shall not, in the reasonable judgment of the Lenders, reflect
any material adverse change in the consolidated financial condition of
the Borrower and its Subsidiaries, as reflected in the financial
statements or projections contained in the Confidential Information
Memorandum.




     (e) Approvals. All governmental and third party approvals
(including landlords’ and other consents) necessary in connection with
the Transactions, the continuing operations of the REIT, the Borrower and
its Subsidiaries and the transactions contemplated hereby shall have been
obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened
by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the Transactions or the financing
contemplated hereby.




     (f) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Administrative Agent),
true and correct copies, certified as to authenticity by the Borrower, of
(i) all documentation related to the Restructuring and the CMBS Financing
and (ii) such other documents or instruments as may be reasonably
requested by the Administrative Agent, including, without limitation, a
copy of any debt instrument, security agreement or other material
contract to which the Loan Parties may be a party.




     (g) Fees. The Lenders, the Administrative Agent and the
Arrangers shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including reasonable
fees, disbursements and other charges of counsel to the Agents), on or
before the Closing Date. All such amounts will be paid with proceeds of
Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or
before the Closing Date.




     (h) Solvency Analysis. The Lenders shall have received a
reasonably satisfactory solvency analysis certified by the chief
financial officer of the Borrower which shall document the solvency of
the Borrower and its Subsidiaries considered as a whole after giving
effect to the transactions contemplated hereby.




     (i) Budget. The Lenders shall have received a budget for the
Borrower and its Subsidiaries for the 2005 fiscal year.




     (j) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the jurisdictions
in which Uniform Commercial Code financing statement or other filings or
recordations should be made to evidence or perfect



55









 





     security interests in
all assets of the Loan Parties, and such search shall reveal no liens on
any of the assets of the Loan Party, except for Liens permitted by
Section 8.3.




     (k) Environmental Matters. The Administrative Agent shall
have received, with a copy for each Lender, a written environmental audit
regarding the real property of the Borrower and its Subsidiaries included
in the Borrowing Base on the Closing Date, prepared by an environmental
consultant acceptable to the Administrative Agent, in form, scope, and
substance satisfactory to the Administrative Agent, together with a
letter from the environmental consultant permitting the Agents and the
Lenders to rely on the environmental audit as if addressed to and
prepared for each of them.




     (l) Expenses. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in
connection with the Restructuring, the IPO and the financing thereof
shall not exceed $45,000,000.




     (m) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.




     (n) Legal Opinion. The Administrative Agent shall have
received the executed legal opinion of Hogan & Hartson L.L.P., counsel to
the REIT, the Borrower and its Subsidiaries, substantially in the form of
Exhibit F. Such legal opinion shall cover such other matters incident to
the transactions contemplated by this Agreement as the Administrative
Agent may reasonably require and shall be addressed to the Administrative
Agent and the Lenders.




     (o) Pledged Stock; Stock Powers; Acknowledgment and Consent;
Pledged Notes. The Administrative Agent shall have received (i) the
certificates representing the shares of Capital Stock pledged pursuant to
the Guarantee and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof, (ii) an Acknowledgment and Consent,
substantially in the form of Annex II to the Guarantee and Collateral
Agreement, duly executed by any issuer of Capital Stock pledged pursuant
to the Guarantee and Collateral Agreement that is not itself a party to
the Guarantee and Collateral Agreement and (iii) each promissory note
pledged pursuant to the Guarantee and Collateral Agreement endorsed
(without recourse) in blank (or accompanied by an executed transfer form
in blank satisfactory to the Administrative Agent) by the pledgor
thereof.




     (p) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded
in order to create in favor of the Administrative Agent, for the benefit
of the Secured Parties, a perfected Lien on the
Collateral described therein, prior and superior in right to any
other Person (other than with respect to Liens expressly permitted by
Section 8.3), shall have been filed, registered or recorded or shall have
been delivered to the Administrative Agent be in proper form for filing,
registration or recordation.



56









 






     (q) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement.




     (r) PATRIOT Act. The Lenders shall have received,
sufficiently in advance of the Closing Date, all documentation and other
information required by bank regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including
without limitation the United States PATRIOT Act.




     (s) Borrowing Base. The Borrowing Base availability shall not
be less than $100,000,000 on the Closing Date, and the Administrative
Agent shall have received a satisfactory pro forma Borrowing
Base Report for the period of two fiscal quarters ending immediately prior
to the Closing Date for which financial statements are available after
giving effect to the Transactions.




     (t) Senior Managers. The Lenders shall be satisfied that
senior managers acceptable to them shall be available to manage the
Borrower and its Subsidiaries.




     (u) Liquidity. The Lenders shall be satisfied with the
sufficiency of amounts available under the Facility to meet the ongoing
working capital needs of the Borrower and its Subsidiaries following the
Transactions and the consummation of the other transactions contemplated
hereby.



               6.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it hereunder on
any date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:




     (a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date.




     (b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.




     (c) Borrowing Base. Subject to Section 4.5(e), the then
Total Extensions of Credit, when added to the amount requested for such
borrowing, shall not exceed the Borrowing Base set forth in the most
recent Borrowing Base Report delivered pursuant to Sections 4.2(b),
6.1(s), 6.3(h) or 7.2(f), as the case may be.



               Each borrowing by and issuance of a Letter of Credit on behalf of the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 6.2 and in Section 6.3 have been satisfied.



57









 





               6.3 Conditions to Borrowing Base Properties. The agreement of each
Lender to include any Subject Property as a Borrowing Base Property is subject
to the satisfaction of the following conditions precedent:




     (a) Compliance with Section 4.1. (i) The Administrative
Agent shall have received all documents and instruments required to be
delivered pursuant to Section 4.1 and (ii) the Required Lenders shall
have approved of such Property as provided in, and to the extent required
by, Section 4.1.




     (b) Mortgage. The Administrative Agent shall have received a
Mortgage covering such Property, executed and delivered by a duly
authorized officer of the applicable Loan Party, with such modifications
as appropriate to conform to the laws of the jurisdiction in which such
Property is located and, if such Subject Property is to be included in
the Borrowing Base on and after the Recordation Date, an amount equal to
any mortgage filing tax required to be paid in connection with the filing
of such Mortgage.




     (c) Environmental Indemnity Agreement. The Administrative
Agent shall have received an Environmental Indemnity Agreement covering
such Property, executed and delivered by a duly authorized officer of the
applicable Loan Party.




     (d) Collateral Assignment of Contracts. To the extent
requested by the Administrative Agent, the Administrative Agent shall
have received collateral assignments of all material contracts and any
other rights or benefits of such Property, relating to the use,
occupancy, operation, maintenance, enjoyment or ownership of such
Property.




     (e) Subordination of Property Management Agreement. To the
extent requested by the Administrative Agent, the Administrative Agent
shall have received a subordination agreement with respect to any
Property Management Agreement to which such Property is subject, executed
by the applicable property manager.




     (f) Lien Searches. The Administrative Agent shall have
received satisfactory UCC, tax, judgment and lien search reports with
respect to the applicable Loan Party and such Property in all necessary
or appropriate jurisdictions and under all legal and appropriate trade
names indicating that there are no Liens of record on such Property or
any of the Collateral relating thereto other than Liens permitted by
Section 8.3(b) through (e).




     (g) Environmental Reports. The Administrative Agent shall
have received a satisfactory “Phase I” environmental assessment of such
Property not more than 12 months old (or such earlier date approved by
the Administrative Agents)
prepared by an environmental engineering firm acceptable to the
Administrative Agent, and any additional environmental studies or
assessments recommended by such assessment (including any “Phase II”
assessment) or otherwise available to the Borrower performed with respect
to such Property.



58









 






     (h) Borrowing Base Report. The Administrative Agent shall
have received a Borrowing Base Report calculated giving effect to the
inclusion of such Property as a Borrowing Base Property as of the end of
the most recent fiscal quarter for which financial statements are
available.




     (i) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:




     (i) an opinion of counsel admitted to practice law in the
jurisdiction in which such Property is located and acceptable to
the Administrative Agent, addressed to the Administrative Agent and
each Lender covering such legal matters relating to the
transactions contemplated hereby as the Administrative Agent may
reasonably request, in form and substance reasonably satisfactory
to the Administrative Agent; and




     (ii) an opinion of counsel admitted to practice law in the
jurisdiction in which the applicable Loan Party is formed and
acceptable to the Administrative Agent, addressed to the
Administrative Agent and each Lender covering such legal matters
relating to the formation and existence and power of the Person
executing documents, and the due authorization, execution and
delivery of the Security Documents and other documents for
consummating the transactions contemplated hereby as the
Administrative Agent may reasonably request, in form and substance
reasonably satisfactory to the Administrative Agent.




     (j) Insurance. The Administrative Agent shall have received
satisfactory evidence that the insurance required for such Property
pursuant to Section 5.3 of the Guarantee and Collateral Agreement is then
in effect.




     (k) Certificates of Occupancy. The Administrative Agent
shall have received final certificates of occupancy relating to such
Property, if in the possession of the Borrower.




     (l) Title Insurance; Surveys. The Administrative Agent shall
have received and be satisfied with:




     (i) if such Subject Property is to be added as a new Borrowing
Base Property prior to the Recordation Date, each of the following:




     (A) a copy of the most recent ALTA Owner’s Policy of
Title Insurance (or if such policy has not been issued, a
binding commitment to issue such policy) relating to such
Property available to the Borrower showing the fee simple
title to (or a valid leasehold interest in) such Property as
vested in the applicable Loan Party, subject only to such
restrictions, encumbrances, easements and reservations
as are acceptable to the Agent, together with copies of all
documents of record reflected in Schedule B of such Policy of
Title Insurance; and



59









 






     (B) the most current survey of such Property then
available to the Borrower, certified by a surveyor licensed
in the jurisdiction where such Property is located to have
been prepared in accordance with the then effective Minimum
Standard Detail Requirements for ALTA/ACSM Land Title
Surveys, and if not adequately covered by the survey
certification, a certificate from a licensed engineer or
other professional satisfactory to the Agent that such
Property is not located in a Special Flood Hazard Area as
defined by the Federal Insurance Administration; and




     (ii) if such Subject Property is to be added as a new
Borrowing Base Property after the Recordation Date, each of the
following:




     (A) an ALTA 1992 Form mortgagee’s Policy of Title
Insurance (with deletion of the creditor’s rights exclusion
and deletion of the mandatory arbitration provision) or other
form acceptable to the Administrative Agent in favor of the
Administrative Agent for the benefit of the Secured Parties
with respect to such Property, including endorsements with
respect to such items of coverage as the Administrative Agent
may request (and which endorsements are available in the
applicable state), in a coverage amount equal to no less than
100% of the Borrowing Base Value of such Property (excluding
the value of any personal property located at such Property),
issued by a title insurance company acceptable to the
Administrative Agent and with coinsurance or reinsurance
(with direct access agreements) with title insurance
companies acceptable to the Administrative Agent, showing the
fee simple title to (or a valid leasehold interest in) the
land and improvements described in the applicable Mortgage as
vested in the Borrower or a Subsidiary, and insuring that the
Lien granted by such Mortgage is a valid first priority Lien
against such Property, subject only to Liens permitted by
Sections 8.3(b) through (e);




     (B) copies of all documents of record reflected in
Schedule B of such Policy of Title Insurance;




     (C) a current or currently certified survey of such
Property certified to the Administrative Agent and the Lender
by a surveyor licensed in the jurisdiction where such
Property is located to have been prepared in accordance with
the then effective Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys, and if not adequately covered
by the survey certification, a certificate from a licensed
engineer or other professional satisfactory to the
Administrative Agent that such Property is not located in a
Special Flood Hazard Area as defined by the Federal Insurance
Administration; and




     (D) if such Property is located in a
Tie-In-Jurisdiction, endorsements to all other existing title
insurance policies issued to the Administrative Agent with
respect to all other Properties located in Tie-In



60









 





Jurisdictions reflecting an increase in the aggregate insured
amount under the “tie-in” endorsements to an amount equal to
the aggregate amount of the Borrowing Base Values of all such
Properties (including the Property to be included as a
Borrowing Base Property) but in no event in an amount in
excess of the aggregate amount of the Commitments.




          (m) Zoning. After the Recordation Date, the Administrative Agent
shall have received satisfactory evidence that such Property complies with
applicable zoning and land use laws.




          (n) Other Information. The Administrative Agent have received such
other due diligence materials, instruments, documents, agreements, financing
statements, certificates, opinions and other Security Documents as the
Administrative Agent may reasonably request, in form and substance reasonably
satisfactory to the Administrative Agent.



SECTION 7. AFFIRMATIVE COVENANTS





          The REIT and the Borrower hereby jointly and severally agree that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender or any Agent hereunder, each
of the REIT and the Borrower shall and shall cause each of its Subsidiaries to:



               7.1 Financial Statements. Furnish to the Administrative Agent and
each Lender:




     (a) as soon as available, but in any event within 90 days (or such
earlier date specified for annual reports under Section 13 of the
Exchange Act) after the end of each fiscal year of the REIT, a copy of
the audited consolidated balance sheet of the REIT and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures as of the end
of and for the previous year, reported on without a “going concern” or
like qualification or exception, or qualification arising out of the
scope of the audit, by Deloitte & Touche LLP or other independent
certified public accountants of nationally recognized standing; and




     (b) as soon as available, but in any event not later than 45 days
(or such earlier date specified for quarterly reports under Section 13 of
the Exchange Act) after the end of each of the first three quarterly
periods of each fiscal year of the REIT, the unaudited consolidated
balance sheet of the REIT and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in
comparative form the figures as of the end of and for the corresponding
period in the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments).



all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the





61









 








periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).




               7.2 Certificates; Other Information. Furnish to each Agent and
each Lender, or, in the case of clause (j), to the relevant Lender:




     (a) concurrently with the delivery of the financial statements
referred to in Section 7.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate
(it being understood that such certificate shall be limited to the items
that independent certified public accountants are permitted to cover in
such certificates pursuant to their professional standards and customs of
the profession);




     (b) concurrently with the delivery of any financial statements
pursuant to Section 7.1, (i) a certificate of a Responsible Officer
stating that, to the best of such Responsible Officer’s knowledge, each
Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to which it is a party to
be observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (ii) in the case of quarterly
or annual financial statements, (x) a Compliance Certificate containing
all information and calculations necessary for determining compliance by
the REIT, the Borrower and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or
fiscal year of the Borrower, as the case may be, and (y) any UCC
financing statements or other filings specified in such Compliance
Certificate as being required to be delivered therewith;




     (c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a projected
consolidated balance sheet of the Borrower and its Subsidiaries as of the
end of the following fiscal year, and the related consolidated statements
of projected cash flow, projected changes in financial position and
projected income and a description of the underlying assumptions
applicable thereto), and, as soon as available, significant revisions, if
any, of such budget and projections with respect to such fiscal year
(collectively, the “Projections”), which Projections shall in each
case be accompanied by a certificate of a Responsible Officer stating
that such Projections are based on reasonable estimates, information and
assumptions and that such Responsible Officer has no reason to believe
that such Projections are incorrect or misleading in any material
respect;




     (d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of
the Borrower and its Subsidiaries for such fiscal quarter and for
the period from the beginning of the then current fiscal year to the end
of such fiscal quarter, as compared to the portion of the Projections
covering such periods and to the comparable periods of the previous year;



62









 






     (e) within five days after the same are sent, copies of all
financial statements and reports that the REIT or the Borrower sends to
the holders of any class of its debt securities or public equity
securities and, within five days after the same are filed, copies of all
financial statements and reports that the REIT or the Borrower may make
to, or file with, the SEC;




     (f) no later than the 45th day of each fiscal quarter, a Borrowing
Base Report, as of the last day of the immediately preceding fiscal
quarter, provided that, with respect to the fourth quarter of each
fiscal year of the Borrower, concurrently with the delivery of the
financial statements referred to in Section 7.1(a), the Borrower shall
deliver to the Administrative Agent an updated Borrowing Base Report as
of the last day of such fiscal quarter, together with calculations
demonstrating differences, if any, from the Borrowing Base Report
previously delivered for such quarter with supporting detail reasonably
satisfactory to the Administrative Agent;




     (g) concurrently with the delivery of each Borrowing Base Report, a
compliance certificate duly executed by the chief financial officer or
treasurer of the general partner of the Borrower containing all
information and calculations necessary for determining the Borrowing Base
Leverage Ratio;




     (h) promptly after the occurrence thereof, notice of the failure of
the REIT to maintain REIT Status or of any existing Subsidiary of the
REIT to maintain its status as a qualified REIT subsidiary under the
Code, if and to the extent required by applicable law;




     (i) promptly (x) after any Borrowing Base Property shall be damaged
or destroyed and the reasonably estimated cost of repair or replacement
thereof would exceed $500,000, notice of such damage or destruction and
the reasonably estimated cost of repair or replacement thereof and (y)
upon obtaining knowledge of the institution of any proceedings for the
condemnation of any Borrowing Base Property, or any material portion
thereof, notice of such proceedings with a copy of all documentation
received by the Borrower or any of its Subsidiaries in connection
therewith and the reasonably estimated proceeds of such proceedings; and




     (j) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.



               7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all
its material obligations of whatever nature (including without limitation,
taxes), except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect
thereto have been provided on the books of the REIT, the Borrower or its
Subsidiaries, as the case may be.



               7.4 Conduct of Business and Maintenance of Existence; Compliance.
(a)(i) Preserve, renew and keep in full force and effect its organizational
existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 8.4 and



63









 





except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law, except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.




               7.5 Maintenance of Property; Insurance. (a) Keep all Property and
systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business, including any insurance required by any Mortgage subject to
the Escrow Agreement or any other Security Mortgage.



               7.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities and
(b) permit representatives of any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be desired during normal
business hours and to discuss the business, operations, properties and
financial and other condition of the REIT, the Borrower and its Subsidiaries
with officers and employees of the REIT, the Borrower and its Subsidiaries and
with its independent certified public accountants, provided that, so
long as no Event of Default has occurred and is continuing, the Borrower shall
only be required to pay the expenses of the Administrative Agent and any Lender
with respect to one such visit and inspection per calendar year.



               7.7 Notices. Promptly give notice to the Administrative Agent and
each Lender of:




     (a) the occurrence of any Default or Event of Default;




     (b) any (i) default or event of default under any Contractual
Obligation of the REIT, the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the REIT, the Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;




     (c) any litigation or proceeding affecting the REIT, the Borrower or
any of its Subsidiaries (i) in which the amount involved is $250,000 or
more and not covered by insurance, (ii) in which injunctive or similar
relief is sought or (iii) which relates to any Loan Document;




     (d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to



64









 






a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan;




     (e) as soon as possible and in any event within 30 days of obtaining
knowledge thereof: (i) any development, event, or condition that,
individually or in the aggregate with other developments, events or
conditions, could reasonably be expected to result in the payment by the
Borrower and its Subsidiaries, in the aggregate, of a Material
Environmental Amount; and (ii) any notice that any governmental authority
may deny any application for an Environmental Permit sought by, or revoke
or refuse to renew any Environmental Permit held by, the Borrower; and




     (f) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.



Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the REIT, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.




               7.8 Environmental Laws. (a) Comply in all material respects with,
and ensure compliance in all material respects by all tenants and subtenants,
if any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.



               (b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.



               7.9 Interest Rate Protection. In the case of the Borrower, within 30 days after the Closing Date,
enter into, and thereafter maintain for a period of not less than three years,
Hedge Agreements to the extent necessary to provide that at least 50% of the
aggregate principal amount of Consolidated Total Debt is subject to either a
fixed interest rate or interest rate protection for a period of not less than
three years, which Hedge Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.



               7.10 Additional Collateral, etc. (a) With respect to any Property
acquired after the Closing Date by the REIT, the Borrower or any Material
Subsidiary (other than (x) any real property, (y) any Property subject to a
Lien expressly permitted by Section 8.3(g) and (z) the Capital Stock of any
Excluded Foreign Subsidiary) as to which the Administrative Agent, for the
benefit of the Secured Parties, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the
Administrative Agent deems necessary or advisable to grant to the



65









 





Administrative Agent, for the benefit of the Secured Parties, a security
interest in such Property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in such Property, including without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or
by law or as may be requested by the Administrative Agent.




               (b) With respect to any new Material Subsidiary created or acquired after
the Closing Date (which, for the purposes of this paragraph, may include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary or an
Excluded Financing Subsidiary), by the REIT, the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for
the benefit of the Secured Parties, a perfected first priority security
interest in the Capital Stock of such new Subsidiary that is owned by the REIT,
the Borrower or, to the extent not prohibited by the terms of Indebtedness
permitted by Section 8.2, any of its Subsidiaries, (ii) deliver to the
Administrative Agent (for the benefit of the Secured Parties) the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the REIT, the Borrower
or such Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement and (B) to take such
actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Secured Parties a perfected first priority security interest in
the Collateral described in the Guarantee and Collateral Agreement with respect
to such new Subsidiary, including, without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may be requested by
the Administrative Agent, and (iv) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.



               (c) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the REIT, the Borrower or any Material
Subsidiary, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by the REIT, the Borrower or any Material Subsidiary (other than any
Excluded Foreign Subsidiaries), (provided that in no event shall more
than 65% of the total outstanding Capital Stock of any such new Excluded
Foreign Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the REIT, the Borrower or such Subsidiary, as the case
may be, and take such other action as may be necessary or, in the opinion of
the Administrative Agent, desirable to perfect the Lien of the Administrative
Agent thereon, and (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.



66









 





               7.11 Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates
or documents, and take such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or
proceeds thereof or with respect to any other property or assets hereafter
acquired by the Borrower or any Subsidiary which may be deemed to be part of
the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any
Governmental Authority, the Borrower will execute and deliver, or will cause
the execution and delivery of, all applications, certifications, instruments
and other documents and papers that the Administrative Agent or such Lender may
be required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.



               7.12 Maintenance of Occupancy Rate. Maintain at all times an
average Occupancy Rate at least 75% for all Borrowing Base Properties (other
than Borrowing Base Properties with a Borrowing Base Value of $0 and Lease-Up
Properties).



               7.13 Acquiport/Amsdell V, LLC and Acquiport/Amsdell VI, LLC. No
later than 15 days after the Closing Date, cause each of Acquiport/Amsdell V,
LLC and Acquiport/Amsdell VI, LLC to be dissolved.



SECTION 8. NEGATIVE COVENANTS




               The REIT and the Borrower hereby jointly and severally agree that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender or any Agent hereunder, each
of the REIT and the Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:



               8.1 Financial Condition Covenants.



               (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio on any date to exceed 65%.



               (b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of two consecutive fiscal quarters of
the REIT to be less than 2.00 to 1.00.



               (c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of two consecutive
fiscal quarters of the REIT to be less than 1.70 to 1.00.



               (d) Minimum Tangible Net Worth. Permit the Tangible Net Worth of
the REIT and its Subsidiaries determined on a consolidated basis in accordance
with GAAP on any date to be less than an amount equal to (x) $400,000,000
plus (y) 85% of the Net Proceeds of any



67









 





issuance of Capital Stock
consummated by the REIT or any of its Subsidiaries at any time after the
Closing Date.




               (e) Minimum Borrowing Base Value. Permit the Borrowing Base to be
less than $100,000,000 at any time.



               8.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:




     (a) Indebtedness of any Loan Party pursuant to any Loan Document;




     (b) Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;




     (c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 8.3(g) in an aggregate
principal amount not to exceed $5,000,000 at any one time outstanding;




     (d) Indebtedness outstanding on the date hereof and listed on
Schedule 8.2(d);




     (e) Guarantee Obligations made in the ordinary course of business by
the Borrower or any of its Subsidiaries of obligations of the Borrower or
any Subsidiary Guarantor; and




     (f) Indebtedness in respect of the Borrower and its Subsidiaries
secured by fee-owned or leasehold real property of the Borrower and its
Subsidiaries which is not subject to a Mortgage or owned by a Loan Party
(excluding any Recourse Indebtedness), including the CMBS Financing and
any extensions or renewals or restructurings (including any restructuring
that may be required by the lender thereunder) thereof and of the
Indebtedness permitted by Section 8.2(d), provided that, with
respect to any such Indebtedness (other than Indebtedness permitted by
Section 8.2(d) and the CMBS Financing, in each case, as in effect on the
date hereof) (x) such Indebtedness shall not mature prior to April 27,
2009, (y) none of the REIT, the Borrower or any of its Subsidiaries
provides credit support of any kind (including any undertaking, agreement
or instrument that would constitute Indebtedness) or is directly or
indirectly liable (as guarantor or otherwise), other than as primary
obligor or, in the case of the Borrower as guarantor on terms no less
favorable than those set forth on Schedule 8.2(f), and (z) as to
which the lenders thereunder will not have any recourse to the Capital
Stock or assets of the Borrower, the Borrower or any of its Subsidiaries
other than the asset financed by such Indebtedness, additions, accessions
and improvements thereto and proceeds thereof and, in the case of the
Borrower, recourse on terms no less favorable than those set forth on
Schedule 8.2(f).



               8.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its Property, whether now owned or hereafter acquired,
except for:




     (a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves
with respect thereto are



68









 






maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;




     (b) carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith by appropriate proceedings;




     (c) pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation;




     (d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;




     (e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;




     (f) Liens in existence on the date hereof listed on Schedule
8.3(f), securing Indebtedness permitted by Section 8.2(d),
provided that no such Lien is
spread to cover any additional Property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;




     (g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 8.2(c) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be
created substantially simultaneously with the acquisition of such fixed
or capital assets, (ii) such Liens do not at any time encumber any
Property other than the Property financed by such Indebtedness, (iii) the
amount of Indebtedness secured thereby is not increased and (iv) the
amount of Indebtedness initially secured thereby is not less than 80%, or
more than 100% of the purchase price of such fixed or capital asset;




     (h) Liens created pursuant to the Security Documents;




     (i) Liens on fee-owned property of the Borrower and its Subsidiaries
not subject to a Mortgage securing Indebtedness permitted by Section
8.2(f); and




     (j) any interest or title of a lessor under any lease entered into
by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased.



               8.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:



69









 






     (a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Wholly Owned
Subsidiary Guarantor (provided that (i) the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation or
(ii) simultaneously with such transaction, the continuing or surviving
corporation shall become a Wholly Owned Subsidiary Guarantor and the
Borrower shall comply with Section 7.10 in connection therewith);




     (b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor; and




     (c) the dissolution of Acquiport/Amsdell V, LLC and Acquiport/Amsdell
VII, LLC in accordance with Section 7.13.



               8.5 Limitation on Disposition of Property. Dispose of any of its
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary’s Capital Stock to any Person,
except:




     (a) the Disposition of obsolete or worn out property in the ordinary
course of business;




     (b) Dispositions permitted by Section 8.4(b);




     (c) the sale or issuance of any Subsidiary’s Capital Stock to the
Borrower or any Subsidiary Guarantor; and




     (d) the Disposition in any fiscal year of the Borrower of other
assets having an aggregate book value not to exceed an amount equal to
10% of Consolidated Total Asset Value as of the end of the immediately
preceding fiscal year, provided that, immediately prior to and
after giving effect to any such Disposition, no Default or Event of
Default shall have occurred and be continuing.



               8.6 Limitation on Restricted Payments. Declare or pay any dividend
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of the REIT, the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the REIT, the Borrower or any Subsidiary, or
enter into any derivatives or other transaction with any financial institution,
commodities or stock exchange or clearinghouse (a “Derivatives
Counterparty”) obligating the REIT, the Borrower or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of any such Capital Stock (collectively, “Restricted Payments”),
except that:




     (a) any Subsidiary may make Restricted Payments to the Borrower or
any Subsidiary Guarantor;



70









 






     (b) the REIT may make Restricted Payments in the form of common
stock of the REIT;




     (c) the Borrower may pay dividends to the REIT to permit the REIT to
pay corporate overhead expenses incurred in the ordinary course of
business not to exceed $12,000,000 in any fiscal year; and




     (d) the Borrowers and all such Subsidiaries may make Restricted
Payments to the REIT, and the REIT may make Restricted Payments, during
any period specified below in an aggregate amount equal to the greater
of:




                    (i) (A)for the quarter ending December 31, 2004, $11,200,000;




                    (B) for the quarter ending on March 31, 2005, 110% of
Funds From Operations for such period;




                    (C) for the two quarter period ending on June 30, 2005,
107% of Funds From Operations for such period;




                    (D) for the three quarter period ending on September 30,
2005, 105% of Funds From Operations for such period;




                    (E) for the four quarter period ending on December 31,
2005, 100% of Funds From Operations for such period; and




                    (F) for any four quarter period ending on or after March
31, 2006, 95% of Funds From Operations for such period;




                    (ii) such amount as may be necessary to maintain REIT Status,



provided that, in each case, immediately prior to, and after
giving effect to, any such Restricted Payment, no Default or Event of
Default shall have occurred and be continuing.



               8.7 Limitation on Investments. Make any advance, loan, extension
of credit (by way of guaranty or otherwise) or capital contribution to, or
purchase any Capital Stock, bonds, notes, debentures or other debt securities
of, or any assets constituting an ongoing business from, or make any other
investment in, any other Person (all of the foregoing, “Investments”),
except:




     (a) extensions of trade credit in the ordinary course of business;




     (b) Investments in Cash Equivalents;




     (c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 8.2(b), (e) and (f);



71









 






     (d) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 8.7(c)) by the REIT, the Borrower or
any of its Subsidiaries in the Borrower or any Person that, prior to such
Investment, is a Subsidiary Guarantor;




     (e) Investments in partnerships, joint ventures and other Persons
which are not corporations and which Investments are accounted for on an
equity basis in accordance with GAAP with an aggregate book value for any
fiscal quarter of the Borrower not exceeding an amount equal to 12.5% of
Consolidated Total Asset Value for the fiscal quarter most recently ended
for which financial statements are available;




     (f) Investments permitted by Section 8.15; and




     (g) Investments to acquire the Capital Stock of a Subsidiary or any
other Person who, after giving effect to such acquisition would be a
Subsidiary, so long as in each case, (i) immediately prior to such
Investment, and after giving effect thereto, no Default or Event of
Default is or would be in existence, (ii) such Person is in similar line
of business as those businesses in which the Borrower and its
Subsidiaries are engaged on as of the date hereof and (iii) to the extent
not previously satisfied, the terms and
conditions of Section 7.10 have been satisfied substantially
contemporaneously with such acquisition.



               8.8 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the REIT,
the Borrower or any Subsidiary Guarantor) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of
business of the REIT, the Borrower or such Subsidiary, as the case may be, and
(c) upon fair and reasonable terms no less favorable to the REIT, the Borrower
or such Subsidiary, as the case may be, than it would obtain in a comparable
arm’s length transaction with a Person that is not an Affiliate.



               8.9 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the REIT, the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the REIT, the Borrower or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of the REIT, the
Borrower or such Subsidiary.



               8.10 Limitation on Changes in Fiscal Periods. Permit the fiscal
year of the Borrower to end on a day other than December 31 or change the
Borrower’s method of determining fiscal quarters.



               8.11 Limitation on Negative Pledge Clauses. Enter into or suffer
to exist or become effective any agreement that prohibits or limits the ability
of the REIT, the Borrower or any Material Subsidiary to create, incur, assume
or suffer to exist any Lien upon any of its Property or revenues, whether now
owned or hereafter acquired, to secure the Obligations or, in the case of any
guarantor, its obligations under the Guarantee and Collateral Agreement, other
than (a) this Agreement and the other Loan Documents, (b) any agreements
governing any



72









 





purchase money Liens, Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby) and (c) with respect to
limitations on the pledge of the Capital Stock of (x) any Excluded Financing
Subsidiary and any direct or indirect parent of such Excluded Financing
Subsidiary, any agreements governing Indebtedness permitted by Sections 8.2(d)
and 8.2(f).




               8.12 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary, (b) make
Investments in the Borrower or any other Subsidiary or (c) transfer any of its
assets to the Borrower or any other Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents and (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement that has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary.



               8.13 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
that are reasonably related thereto.



               8.14 Limitation on Subject Property and Ground Leases. Make any
Investment in real property, or own or otherwise become liable in respect of:




     (a) unimproved real estate with an aggregate book value exceeding an
amount equal to 5% of Consolidated Total Asset Value for the fiscal
quarter most recently ended;




     (b) real property under construction, including, without limitation,
real property to be acquired by the Borrower or any of its Subsidiaries
upon the completion of construction pursuant to a contract in which the
seller of such real property is required to complete construction prior
to, and as a condition precedent to, such acquisition, such that the
Construction Budget for all such real property at any time exceeds an
amount equal to 10% of Consolidated Total Asset Value for the fiscal
quarter most recently ended; and




     (c) real property leased by the Borrower or any of its Subsidiaries
pursuant to a ground lease, such that the total revenues with respect to
all such real property at any time exceeds an amount equal to 5% of the
total revenues of the Borrower on a consolidated basis for the fiscal
quarter most recently ended;



provided that, the aggregate value of all the Investments referred to in
Section 8.7(e) and this Section 8.14 shall not at any time exceed 20% of
Consolidated Total Asset Value for the fiscal quarter most recently ended for
which financial statements are available.




               8.15 Special Covenants Relating to the REIT. With respect to the
REIT:




     (a) make any disposition of or encumber, pledge or hypothecate,
whether directly or indirectly, all or any portion of its interest in the
Borrower or any Subsidiary at



73









 





any time or any rights to distributions or
dividends therefrom other than to the Borrower or a Wholly-Owned
Subsidiary, other than any pledges of equity interests pursuant to the
Security Documents in connection with this Agreement;




     (b) fail for any reason whatsoever, whether voluntarily or
involuntarily, either directly or through one or more Wholly-Owned
Subsidiaries of the REIT, to be the sole general partner of the Borrower
at any time;




     (c) cease to have its common stock listed on the New York Stock
Exchange, the American Stock Exchange, or the Nasdaq Stock Exchange; or




     (d) cease to have REIT Status or fail to comply with the
requirements of the Code relating to qualified REIT subsidiaries in
respect of its ownership of any Subsidiary of the REIT to the extent
required under the Code and applicable law.



               8.16 Taxation of the Borrower. In the case of the Borrower, become
an association taxable as a corporation and not be taxed as a partnership under
the Code.



               8.17 Limitation on Hedge Agreements. Enter into any Hedge
Agreement other than Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes, to protect against changes in
interest rates or foreign exchange rates.



SECTION 9. EVENTS OF DEFAULT




     If any of the following events shall occur and be continuing:




     (a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount
becomes due in accordance with the terms hereof or thereof; or




     (b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other
Loan Document shall prove to have been inaccurate in any material respect
on or as of the date made or deemed made or furnished; or




     (c) any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 7.4(a) (with
respect to the REIT and the Borrower only), Section 7.7(a) or Section 8,
or in Section 5 of the Guarantee and Collateral Agreement; or




     (d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days; or



74









 






     (e) the REIT, the Borrower or any of its Subsidiaries shall (i)
default in making any payment of any principal of any Indebtedness
(including, without limitation, any Guarantee Obligation, but excluding
the Loans and Reimbursement Obligations) on the scheduled or original due
date with respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder
or beneficiary of such Indebtedness (or a trustee or agent on behalf of
such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or
to become subject to a mandatory offer to purchase by the obligor
thereunder or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a default,
event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default
unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate
$10,000,000; or




     (f) (i) the REIT, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or the REIT, the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall
be commenced against the REIT, the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in clause
(i) above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged
or unbonded for a period of 60 days; or (iii) there shall be commenced
against the REIT, the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets that results in the entry of an order for any such
relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the REIT,
the Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the REIT, the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or




     (g) (i) any Person shall engage in any “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any



75









 





“accumulated funding deficiency” (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders shall be likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case
in clauses (i) through (vi) above, such event or condition, together with
all other such events or conditions, if any, could, in the sole judgment
of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or




     (h) one or more judgments or decrees shall be entered against the
REIT, the Borrower or any of its Subsidiaries involving for the REIT, the
Borrower and its Subsidiaries taken as a whole a liability (not paid or
fully covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $5,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or




     (i) any of the Security Documents shall cease, for any reason (other
than by reason of the express release thereof pursuant to Section 11.15),
to be in full force and effect, or any Loan Party or any Affiliate of any
Loan Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or




     (j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than by reason of
the express release thereof pursuant to Section 11.15), to be in full
force and effect or any Loan Party or any Affiliate of any Loan Party
shall so assert; or




     (k) any Change of Control shall occur;



then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith,




76









 








whereupon the Commitments shall immediately terminate; and (ii) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable forthwith,
whereupon the same shall immediately become due and payable. In the case of
all Letters of Credit with respect to which presentment for honor shall not
have occurred at the time of an acceleration pursuant to this paragraph, the
Borrower shall at such time deposit in a cash collateral account opened by the
Administrative Agent (and maintained for the benefit of the Lenders) an amount
equal to the aggregate then undrawn and unexpired face amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by
the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the other Loan Documents shall
have been paid in full, the balance, if any, in such cash collateral account
shall be returned to the Borrower (or such other Person as may be lawfully
entitled thereto).




SECTION 10. THE AGENTS




               10.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.



               10.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.



               10.3 Exculpatory Provisions. Neither any Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except to the extent
that any of the foregoing are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from its or such Person’s own
gross negligence or willful misconduct) or (ii) responsible in any



77









 





manner to
any of the Lenders for any recitals, statements, representations or warranties
made by any Loan Party or any officer thereof contained in this Agreement or
any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agents under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party to
perform its obligations hereunder or thereunder. The Agents shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.




     
     10.4 Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. The Agents may deem and treat the payee
of any Note as the owner thereof for all purposes unless such Note shall have
been transferred in accordance with Section 11.6 and all actions required by
such Section in connection with such transfer shall have been taken. Each
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.




          10.5 Notice of Default. No Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
such Agent shall have received notice from a Lender, the REIT or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
Administrative Agent shall receive such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders or any other instructing group of Lenders specified by this Agreement);
provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.




          10.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents nor any of their
respective officers, directors,



78









 





employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents
to the Agents that it has, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.





          10.7 Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the REIT or the Borrower
and without limiting the obligation of the REIT or the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), for,
and to save each Agent harmless from and against, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Agent in any way relating
to or arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the
transactions contemplated hereby or thereby or any action taken or omitted
by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent’s gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.




          10.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the



79









 





same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
“Lender” and “Lenders” shall include each Agent in its individual capacity.





          10.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon ten days’ notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) or Section
9(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor
agent has accepted appointment as Administrative Agent by the date that is ten
days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. The Syndication Agent may, at
any time, by notice to the Lenders and the Administrative Agent, resign as
Syndication Agent hereunder, whereupon the duties, rights, obligations and
responsibilities of the Syndication Agent hereunder shall automatically be
assumed by, and inure to the benefit of, the Administrative Agent, without any
further act by the Syndication Agent, the Administrative Agent or any Lender.
After any retiring Agent’s resignation as Agent, the provisions of this Section
10 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement and the other Loan Documents.




          10.10 Authorization to Release Liens and Guarantees. The Administrative Agent is hereby irrevocably authorized by each of
the Lenders to effect any release of Liens or guarantee obligations
contemplated by Section 11.15.




          10.11 The Arrangers; the Syndication Agent; the Co-Documentation
Agents. None of the Arrangers, the Syndication Agent or the
Co-Documentation Agents, in their respective capacities as such, shall have any
duties or responsibilities, nor shall any such Person incur any liability,
under this Agreement and the other Loan Documents.



SECTION 11. MISCELLANEOUS





          11.1 Amendments and Waivers. Neither this Agreement or any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or (with the written consent of the Required Lenders) the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto



80









 





and to
the other Loan Documents (including amendments and restatements hereof or
thereof) for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall:





          (i) forgive the principal amount or extend the final scheduled
date of maturity of any Loan or Reimbursement Obligation, reduce
the stated rate of any interest or fee payable under this Agreement
(except (x) in connection with the waiver of applicability of any
post-default increase in interest rates (which waiver shall be
effective with the consent of the Required Lenders) and (y) that
any amendment or modification of defined terms used in the
financial covenants in this Agreement shall not constitute a
reduction in the rate of interest or fees for purposes of this
clause (i)) or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Commitment
of any Lender, in each case without the consent of each Lender
directly affected thereby;




          (ii) amend, modify or waive any provision of this Section or
reduce any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement and the
other Loan Documents or release all or substantially all of the
Subsidiary Guarantors from their guarantee obligations under the
Guarantee and Collateral Agreement, in each case without the
consent of all the Lenders;




          (iii) subject to Section 4.2 and Section 8.2(e), release all
or substantially all of the Collateral;




          (iv) amend, modify or waive any provision of Section 10, or
any other provision affecting the rights, duties or obligations of
any Agent, without the consent of any Agent directly affected
thereby;




          (v) amend, modify or waive any provision of Section 2.13
without the consent of each Lender directly affected thereby;




          (vi) amend, modify or waive any provision of Section 3 without
the consent of each Issuing Lender affected thereby; or




          (vii) impose restrictions on assignments and participations
that are more restrictive than, or additional to, those set forth
in Section 11.6.



Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of





81









 








Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an executed signature page of
any such instrument by facsimile transmission shall be effective as delivery of
a manually executed counterpart thereof.




               For the avoidance of doubt, this Agreement and any other Loan Document may
be amended (or amended and restated) with the written consent of the Required
Lenders, the Administrative Agent and each Loan Party to each relevant Loan
Document (x) to add one or more additional credit facilities to this Agreement
and to permit the extensions of credit from time to time outstanding thereunder
and the accrued interest and fees in respect thereof (collectively, the
“Additional Extensions of Credit”) to share ratably in the benefits of
this Agreement and the other Loan Documents with the Extensions of Credit and
the accrued interest and fees in respect thereof and (y) to include
appropriately the Lenders holding such credit facilities in any determination
of the Required Lenders.



               11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed (a) in the case of the REIT, the Borrower and the
Agents, as follows and (b) in the case of the Lenders, as set forth in an
administrative questionnaire delivered to the Administrative Agent or on
Schedule I to the Lender Addendum to which such Lender is a party or, in the
case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:



	 	 	 	 	 
	The REIT:

	 	 	 	U-Store-It Trust
	

	 	 	 	6745 Engle Road, Suite 300
	

	 	 	 	Cleveland, Ohio 44310
	

	 	 	 	Attention: Steve Osgood, President and Chief
	

	 	 	 	Financial Officer
	

	 	 	 	Telecopy: (440) 234-8776
	

	 	 	 	Telephone: (440) 260-2223
	 
	 	 	 	 
	with a copy to:

	 	 	 	Hogan & Hartson, L.L.P.
	

	 	 	 	8300 Greensboro Drive
	

	 	 	 	Suite 1100
	

	 	 	 	McLean, Virginia 22102
	

	 	 	 	Attention: Lee E. Berner, Esq.
	

	 	 	 	Telecopy: (703) 610-6200
	

	 	 	 	Telephone: (703) 610-6100







82









 






	 	 	 	 	 
	The Borrower:

	 	 	 	U-Store-It, L.P.
	

	 	 	 	6745 Engle Road, Suite 300
	

	 	 	 	Cleveland, Ohio 44310
	

	 	 	 	Attention: Steve Osgood, President and Chief
	

	 	 	 	Financial Officer
	

	 	 	 	Telecopy: (440) 234-8776
	

	 	 	 	Telephone: (440) 260-2223
	 
	 	 	 	 
	with a copy to:

	 	 	 	Hogan & Hartson, L.L.P.
	

	 	 	 	8300 Greensboro Drive
	

	 	 	 	Suite 1100
	

	 	 	 	McLean, Virginia 22102
	

	 	 	 	Attention: Lee E. Berner, Esq.
	

	 	 	 	Telecopy: (703) 610-6200
	

	 	 	 	Telephone: (703) 610-6100
	 
	 	 	 	 
	The Syndication Agent:

	 	 	 	Wachovia Capital Markets, LLC
	

	 	 	 	One Wachovia Center
	

	 	 	 	301 South College Street
	

	 	 	 	Charlotte, North Carolina 28288
	

	 	 	 	Attention: Rex E. Rudy
	

	 	 	 	Telecopy: (704) 383-6205
	

	 	 	 	Telephone: (704) 383-6506
	 
	 	 	 	 
	The Administ rative Agent:

	 	 	Lehman Commercial Paper Inc.
	

	 	 	 	745 Seventh Avenue
	

	 	 	 	16th Floor
	

	 	 	 	New York, New York 10019-6801
	

	 	 	 	Attention: Diane Albanese
	

	 	 	 	Telecopy: (646) 758-5130
	

	 	 	 	Telephone: (212) 526-4979
	 
	 	 	 	 
	

	 	 	 	and
	 
	 	 	 	 
	

	 	 	 	Attention: Tom Buffa
	

	 	 	 	Telecopy: (646) 758-4672
	

	 	 	 	Telephone: (212) 526-5153
	 
	 	 	 	 
	with a copy to:

	 	 	 	Trimont Real Estate Advisors
	

	 	 	 	Monarch Tower
	

	 	 	 	3424 Peachtree Road, N.E.
	

	 	 	 	Suite 2200
	

	 	 	 	Atlanta, GA 30326
	

	 	 	 	Attention: Eric Minton
	

	 	 	 	Telecopy: (404) 582-8928
	

	 	 	 	Telephone: (404) 954-5326







83









 






	 	 	 	 	 
	     Issuing Lender:

	 	 	 	As notified by such Issuing Lender to the
	

	 	 	 	Administrative Agent and the Borrower







provided that any notice, request or demand to or upon the any Agent,
any Issuing Lender or any Lender shall not be effective until received.




               Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by
the Administrative Agent; provided that the foregoing shall not apply to
notices pursuant to Section 2 unless otherwise agreed by the Administrative
Agent and the applicable Lender. The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular
notices or communications.



               11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.



               11.4 Survival of Representations and Warranties. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.



               11.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the syndication of the Facility (other than fees
payable to syndicate members) and the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements and other charges of counsel to the Administrative Agent
and the charges of Intralinks, (b) to pay or reimburse each Lender and the
Agents for all costs and expenses incurred in connection with the evaluation
and review of proposed Borrowing Base Properties pursuant to Section 4.1 (other
than the allocated cost of in-house review), regardless of whether the related
Subject Property is accepted as a Borrowing Base Property as a result of such
review, (c) to pay or reimburse each Lender and the Agents for all their costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any other documents
prepared in connection herewith or therewith, including, without limitation,
the fees and disbursements of counsel (including the allocated fees and
disbursements and other charges of in-house counsel) to each Lender and of
counsel to the Agents, (d) to pay, indemnify, or reimburse each Lender and the
Agents for, and hold each Lender and the Agents harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if



84









 





any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (e) to pay, indemnify or reimburse
each Lender, each Agent, their respective affiliates, and their respective
officers, directors, trustees, employees, advisors, agents and controlling
persons (each, an “Indemnitee”) for, and hold each Indemnitee harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever incurred by an Indemnitee or asserted against any
Indemnitee by any third party or by the Borrower or any other Loan Party
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
hereto or thereto of their respective obligations hereunder or thereunder or
the consummation of the transactions contemplated hereby or thereby, (ii) any
Loan or Letter of Credit or the use or proposed use of the proceeds thereof
(including any refusal by any Issuing Bank to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Materials of Environmental Concern on or from
any property owned, occupied or operated by the Borrower
or any of its Subsidiaries, or any actual or alleged violation of, or
liability or other obligation under, any Environmental Law related in any way
to the Borrower or any of its Subsidiaries or any or their respective
properties, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by any third party or by the Borrower or
any other Loan Party, and regardless of whether any Indemnitee is a party
thereto (all the foregoing in this clause (e), collectively, the
“Indemnified Liabilities”), provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee. No
Indemnitee shall be liable for any damages arising from the use by unauthorized
persons of Information or other materials sent through electronic,
telecommunications or other information transmission systems that are
intercepted by such persons or for any special, indirect, consequential or
punitive damages in connection with the Facility. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives
and agrees to cause its Subsidiaries so to waive, all rights for contribution
or any other rights of recovery with respect to all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature, under or related to Environmental Laws, that any of them might have
by statute or otherwise against any Indemnitee, other than any such claims,
demands, penalties, fines, liabilities, settlements, damages, costs or expenses
which are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of such Indemnitee. All amounts due under this Section shall be payable not
later than
30 days after written demand therefor. Statements payable by the
Borrower pursuant to this Section shall be submitted to Steve Osgood, President
and Chief Financial Officer (Telephone No. (440) 260-2223) (Fax No. (440)
234-8776), at the address of the Borrower set forth in Section 11.2, or to such
other Person or address as may be hereafter designated by the Borrower in a
notice to the




85









 








Administrative Agent. The agreements in this Section shall
survive repayment of the Loans and all other amounts payable hereunder.




               11.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the REIT, the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agents and each Lender.



               (b) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a “Participant”) participating
interests in any Loan owing to such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan Documents.
In the event of any such sale by a Lender of a participating interest to a
Participant, such Lender’s obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Agents shall
continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except
to the extent that such amendment, waiver or consent would require the consent
of all Lenders pursuant to Section 11.1. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 11.7(a) as
fully as if such Participant were a Lender hereunder. The Borrower also agrees
that each Participant shall be entitled to the benefits of Sections 2.14, 2.15
and 2.16 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if such Participant were a Lender;
provided that, in the case of Section 2.15, such Participant shall have
complied with the requirements of said Section, and provided,
further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer occurred.



               (c) Any Lender (an “Assignor”) may, in accordance with applicable
law and upon written notice to the Administrative Agent, at any time and from
time to time assign to any Lender or any affiliate, Related Fund or Control
Investment Affiliate thereof or, with the consent of the Borrower, the
Administrative Agent and the Issuing Lender (which, in each case, shall not be
unreasonably withheld or delayed) (provided that no such consent need be
obtained by any Lehman Entity), to an additional bank, financial institution or
other entity (an “Assignee”) all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and



86









 





Acceptance,
substantially in the form of Exhibit E, executed by such Assignee and such
Assignor (and, where the consent of the Borrower, the Administrative Agent and
the Issuing Lender is required pursuant to the foregoing provisions, by the
Borrower and such other Persons) and delivered to the Administrative Agent for
its acceptance and recording in the Register; provided that no such
assignment to an Assignee (other than any Lender or any affiliate thereof)
shall be in an aggregate principal amount of less than $1,000,000 (other than
in the case of an assignment of all of a Lender’s interests under this
Agreement) and, the applicable Assignor (if it shall retain any Commitment or
Loans) shall have a Commitment (or in the case the Commitments have been
terminated, Loans) of at least $1,000,000, unless otherwise agreed by the
Borrower and the Administrative Agent. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with Commitments and/or Loans as
set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor’s rights and obligations under this Agreement, such
Assignor shall cease to be a party hereto, except as to Section 2.14, 2.15
and 11.5 in respect of the period prior to such effective date).
Notwithstanding any provision of this Section, the consent of the Borrower
shall not be required for any assignment that occurs at any time when any Event
of Default shall have occurred and be continuing. For purposes of the minimum
assignment amounts set forth in this paragraph, multiple assignments by two or
more Related Funds shall be aggregated.




               (d) The Administrative Agent shall, on behalf of the Borrower, maintain at
its address referred to in Section 11.2 a copy of each Assignment and
Acceptance delivered to it and a register (the “Register”) for the
recordation of the names and addresses of the Lenders and the Commitment of,
and principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of
a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing
such Loan, accompanied by a duly executed Assignment and Acceptance; thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked “canceled”. The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender’s Loans) at any reasonable time and from time to
time upon reasonable prior notice.



               (e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 11.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (treating multiple, simultaneous assignments by or to two or more
Related Funds as a single assignment) (except that no such registration and
processing fee shall be payable (y) in connection with an assignment by or to a
Lehman Entity or



87









 





(z) in the case of an Assignee which is already a Lender or is
an affiliate or Related Fund of a Lender or a Person under common management
with a Lender), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give
notice of such acceptance and recordation to the Borrower. On or prior to such
effective date, the Borrower, at its own expense, upon request, shall execute
and deliver to the Administrative Agent (in exchange for the Notes of the
assigning Lender) a new Note to the order of such Assignee in an amount equal
to the Commitment assumed or acquired by it pursuant to such Assignment and
Acceptance and, if the Assignor has retained a Commitment, upon request, a new
Note to the order of the Assignor in an amount equal to the Commitment retained
by it hereunder. Such new Note or Notes shall be dated the Closing Date and
shall otherwise be in the form of the Note or Notes replaced thereby.




               (f) For avoidance of doubt, the parties to this Agreement acknowledge that
the provisions of this Section concerning assignments of Loans and Notes relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests in
Loans and Notes, including, without limitation, any pledge or assignment
by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with
applicable law.



               (g) Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle (an
“SPC”), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any
SPC to make any Loan and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making
of a Loan by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender. Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability for
which shall remain with the Granting Lender). In furtherance of the foregoing,
each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or
any state thereof. In addition, notwithstanding anything to the contrary in
this Section 11.6(g), any SPC may (A) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loans to the Granting Lender, or with the prior written consent of the
Borrower and the Administrative Agent (which consent shall not be unreasonably
withheld) to any financial institutions providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans, and (B) disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC;
provided that non-public information with respect to the Borrower may be
disclosed only with the Borrower’s consent which will not be unreasonably
withheld. This



88









 





paragraph (g) may not be amended without the written consent of
any SPC with Loans outstanding at the time of such proposed amendment.




               11.7
Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to
the Lenders under a particular Facility, if any Lender (a “Benefitted
Lender”) shall at any time receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 9(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender’s Obligations, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender’s Obligations, or shall provide such other
Lenders with the benefits of any such collateral, as shall be necessary to
cause such Benefitted Lender to share the excess payment or benefits of such
collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.



               (b) In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the REIT or the
Borrower, any such notice being expressly waived by the REIT and the Borrower
to the extent permitted by applicable law, upon any amount becoming due and
payable by the REIT or the Borrower hereunder (whether at the stated maturity,
by acceleration or otherwise), to set off and appropriate and apply against
such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the REIT or
the Borrower, as the case may be. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall
not affect the validity of such setoff and application.



               11.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. Delivery of an executed signature page of this Agreement
or of a Lender Addendum by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.



               11.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.



89









 





               11.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the REIT, the Borrower, the Agents, the
Arranger and the Lenders with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Arranger, any Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.



               11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.



               11.12 Submission To Jurisdiction; Waivers. Each of the REIT and
the Borrower hereby irrevocably and unconditionally:




     (a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;




     (b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;




     (c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the REIT
or the Borrower, as the case may be, at its address set forth in Section
11.2 or at such other address of which the Administrative Agent shall
have been notified pursuant thereto;




     (d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and




     (e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.



               11.13 Acknowledgments. Each of the REIT and the Borrower hereby
acknowledges that:




     (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;




     (b) neither the Arranger, any Agent nor any Lender has any fiduciary
relationship with or duty to the REIT or the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents, and
the relationship between the



90









 





Arranger, the Agents and the Lenders, on one
hand, and the REIT and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and




     (c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Arranger, the Agents and the Lenders or among the REIT,
the Borrower and the Lenders.



               11.14 Confidentiality. Each of the Agents and the Lenders agrees
to keep confidential all non-public information provided to it by any Loan
Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or
any Lender from disclosing any such information (a) to the Arranger, any Agent,
any other Lender or any affiliate of any thereof, (b) to any Participant or
Assignee (each, a “Transferee”) or prospective Transferee that agrees to
comply with the provisions of this Section or substantially equivalent
provisions, (c) to any of its employees, directors, agents, attorneys,
accountants and other professional advisors, (d) to any financial institution
that is a direct or indirect contractual counterparty in swap agreements or
such contractual counterparty’s professional advisor (so long as such
contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon
the request or demand of any Governmental Authority having jurisdiction over
it, (f) in response to any order of any court or other Governmental Authority
or as may otherwise be required pursuant to any Requirement of Law, (g) in
connection with any litigation or similar proceeding, (h) that has been
publicly disclosed other than in breach of this Section, (i) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender’s investment portfolio in connection with ratings issued with respect to
such Lender or (j) in connection with the exercise of any remedy hereunder or
under any other Loan Document.



               11.15 Release of Collateral and Guarantee Obligations. 




     (a) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, upon request of the Borrower in connection with
any Disposition of Property permitted by the Loan Documents, the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any affiliate of any Lender that is a party to any Specified
Hedge Agreement) take such actions as shall be required to release its
security interest in any Collateral being Disposed of in such
Disposition, and to release any guarantee obligations under any Loan
Document of any Person being Disposed of in such Disposition, to the
extent necessary to permit consummation of such Disposition in accordance
with the Loan Documents.




     (b) Notwithstanding anything to the contrary contained herein or any
other Loan Document, when all Obligations (other than obligations in
respect of any Specified Hedge Agreement) have been paid in full, all
Commitments have terminated or expired and no Letter of Credit shall be
outstanding, upon request of the Borrower, the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any affiliate
of any Lender that is a party to any Specified Hedge Agreement) take such
actions as shall be required to release its security interest in all
Collateral, and to release



91









 





all guarantee obligations under any Loan
Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge Agreements.
Any such release of guarantee obligations shall be deemed subject to
the provision that such guarantee obligations shall be reinstated if
after such release any portion of any payment in respect of the
Obligations guaranteed thereby shall be rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon
or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as
though such payment had not been made.



               11.16 Accounting Changes. In the event that any “Accounting
Change” (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating the Borrower’s financial condition shall be the same
after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Accounting Change had not occurred.
“Accounting Change” refers to any change in accounting principles required by
the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC.



               11.17 Delivery of Lender Addenda. Each initial Lender and New
Lender shall become a party to this Agreement by delivering to the
Administrative Agent a Lender Addendum duly executed by such Lender, the
Borrower and the Administrative Agent.



               11.18 WAIVERS OF JURY TRIAL. THE REIT, THE BORROWER, THE AGENTS
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.



92









 





               IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.



	 	 	 	 	 
	 

	 	U-STORE-IT TRUST
	 
	 	 	 	 
	

	 	By:
	 	/s/ Steven G. Osgood
	

	 	 	 	
 
	

	 	 	 	 Name: Steven G. Osgood
	

	 	 	 	 Title: President
	 
	 	 	 	 
	

	 	U-STORE-IT, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	U-STORE-IT TRUST, its general
	

	 	 	 	partner
	 
	 	 	 	 
	

	 	By:
	 	/s/ Steven G. Osgood
	

	 	 	 	
 
	

	 	 	 	 Name: Steven G. Osgood
	

	 	 	 	 Title: President
	 
	 	 	 	 
	

	 	LEHMAN BROTHERS INC.,
	

	 	as an Arranger
	 
	 	 	 	 
	

	 	By:
	 	/s/ Francis X. Gilhool
	

	 	 	 	
 
	

	 	 	 	 Name: Francis X Gilhool
	

	 	 	 	 Title: Authorized Signatory
	 
	 	 	 	 
	

	 	WACHOVIA CAPITAL MARKETS, LLC,
	

	 	as an Arranger and as Syndication Agent
	 
	 	 	 	 
	

	 	By:
	 	/s/ Rex E. Rudy
	

	 	 	 	
 
	

	 	 	 	 Name: Rex E. Rudy
	

	 	 	 	 Title: Managing Director
	 
	 	 	 	 
	

	 	SUNTRUST BANK,
	

	 	as Co-Documentation Agent
	 
	 	 	 	 
	

	 	By:
	 	/s/ Nancy B. Richards
	

	 	 	 	
 
	

	 	 	 	 Name: Nancy B. Richards
	

	 	 	 	 Title: Vice President







 









 






	 	 	 	 	 
	

	 	LASALLE BANK NATIONAL ASSOCIATION,
	

	 	as Co-Documentation Agent
	 
	 	 	 	 
	

	 	By:
	 	/s/ Luke D. Elsass
	

	 	 	 	
 
	

	 	 	 	 Name: Luke D. Elsass
	

	 	 	 	 Title: Assistant Vice President
	 
	 	 	 	 
	

	 	LEHMAN COMMERCIAL PAPER INC.,
	

	 	as Administrative Agent
	 
	 	 	 	 
	

	 	By:
	 	/s/ Francis X. Gilhool
	

	 	 	 	
 
	

	 	 	 	 Name: Francis X Gilhool
	

	 	 	 	 Title: Authorized Signatory







 









 






Annex A




PRICING GRID FOR LOANS AND COMMITMENT FEES




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ratio of Consolidated	 	 	 	 	 	 
	Total Debt to	 	 	 	 	 	 
	Consolidated Total	 	Applicable Margin	 	Applicable Margin	 	 
	Asset Value
	 	for Eurodollar Loans
	 	for Base Rate Loans
	 	Commitment Fee Rate

	< 30%
	 	 	1.500	%	 	 	0.500	%	 	 	0.25	%
	> 30% but < 50%
	 	 	1.750	%	 	 	0.750	%	 	 	0.25	%
	> 50% but < 60%
	 	 	2.125	%	 	 	1.125	%	 	 	0.30	%
	> 60%
	 	 	2.500	%	 	 	1.500	%	 	 	0.30	%







Changes in the Applicable Margin with respect to Loans or in the Commitment Fee
Rate resulting from changes in the ratio of Consolidated Total Debt to
Consolidated Total Asset Value shall become effective on the date (the “Adjustment Date”) on which financial statements are delivered to the Lenders pursuant to
Section 7.1 (but in any event not later than the 45th day after the end of each
of the first three quarterly periods of each fiscal year or the 90th day after
the end of each fiscal year, as the case may be) and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time
periods specified above, then, until such financial statements are delivered,
the ratio of Consolidated Total Debt to Consolidated Total Asset Value as at
the end of the fiscal period that would have been covered thereby shall for the
purposes of this definition be deemed to be greater than 50%. In addition, at
all times while an Event of Default shall have occurred and be continuing, the
ratio of Consolidated Total Debt to Consolidated Total Asset Value shall for
the purposes of this Pricing Grid be deemed to be greater than 50%. Each
determination of the ratio of Consolidated Total Debt to Consolidated Total
Asset Value pursuant to this Pricing Grid shall be made for the periods and in
the manner contemplated by Section 8.1(a)